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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
-----------------------------
Date of Report (date of earliest event reported): November 5, 1997
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
File 33-64249 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
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Matters.
On November 5, 1997, 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 October 1, 1997 of $408,527,638.36 (collectively, the "Initial
Receivables") from NFC for a purchase price equal to the principal balance of
the Initial Receivables as of October 1, 1997.
On November 13, 1997, the Registrant 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 8, 1997 of $91,466,751.20 (collectively, the
"Subsequent Receivables" and collectively with the Initial Receivables, the
"Receivables") from NFC for a purchase price equal to the principal balance of
the Subsequent Receivables as of November 8, 1997.
The Registrant paid a portion of the purchase price of the Receivables
from the net cash proceeds of the issuance of the securities (as described
below) and paid the remainder with an intercompany advance from NFC.
Upon the transfer of the Initial Receivables, the Registrant
immediately transferred the Initial Receivables to the Navistar Financial 1997-B
Owner Trust (the "Trust"). The Trust issued five classes of notes (the "Notes")
backed by the Receivables. The net cash proceeds of the issuance of the Notes
were $498,792,146.88, which were transferred to the Registrant. A portion of the
net cash proceeds were used to pay approximately $450,000 of transaction fees
and expenses, to fund a $21,447,701.01 deposit into a reserve account as credit
support for the Receivables and to fund a $91,472,361.64 deposit into a
pre-funding account as funds for the purchase of the Subsequent Receivables. The
balance of the net cash proceeds was paid to NFC as part of the purchase price
for the Initial Receivables.
Upon the transfer of the Subsequent Receivables, the Registrant
immediately transferred the Subsequent Receivables to the Trust. In return for
the Subsequent Receivables, the Trust transferred an amount of cash equal to the
principal balance of the Subsequent Receivables as of November 8, 1997 to the
Registrant from the pre-funding account. The Registrant then transferred that
same amount to NFC as the purchase price for the Subsequent Receivables.
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
See attached Exhibit Index.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NAVISTAR FINANCIAL RETAIL
RECEIVABLES CORPORATION
Date: December 18, 1997 By: /s/ R. Wayne Cain
------------------------------------
Name: R. Wayne Cain
Title: Vice President and Treasurer
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EXHIBIT INDEX
Exhibit No. Description
1.1 Underwriting Agreement between the Registrant, NFC and Credit
Suisse First Boston Corporation, as Representative of the several
Underwriters named on Schedule I thereto, dated October 22, 1997
4.1 Indenture between the Trust and the Indenture Trustee, dated
November 5, 1997
4.2 Trust Agreement between the Registrant and the Owner Trustee,
dated November 5, 1997
10.1 Purchase Agreement between NFC and the Registrant, dated
November 5, 1997
10.2 Pooling and Servicing Agreement among the Registrant, NFC and
the Trust, dated November 5, 1997
10.3 Custodian Agreement between NFC and the Registrant, dated
November 5, 1997
10.4 Administration Agreement among NFC, the Trust and the Indenture
Trustee, dated November 5, 1997
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Exhibit 1.1
EXECUTION COPY
NAVISTAR FINANCIAL 1997-B OWNER TRUST
$500,000,000 Asset Backed Notes
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
(SELLER)
UNDERWRITING AGREEMENT
----------------------
October 22, 1997
CREDIT SUISSE FIRST BOSTON CORPORATION
As Representative of the
Several Underwriters named
on Schedule I hereto,
Eleven Madison Avenue
New York, New York 10010 3629
Dear Sirs:
Navistar Financial Retail Receivables Corporation, a Delaware
corporation (the "Seller"), proposes to form an owner trust, Navistar Financial
1997-B Owner Trust (the "Trust"), pursuant to a Trust Agreement (the "Trust
Agreement") to be dated as of the Closing Date (as hereinafter defined), between
the Seller and Chase Manhattan Bank Delaware, as owner trustee (the "Owner
Trustee"), which will issue (i) $107,000,000 principal amount of its 5.722%
Class A-1 Asset Backed Notes (the "Class A-1 Notes"), (ii) $94,000,000 principal
amount of its 5.956% Class A-2 Notes (the "Class A-2 Notes"), (iii) $132,000,000
principal amount of its 6.200% Class A-3 Notes (the "Class A-3 Notes"), (iv)
$149,500,000 principal amount of its 6.300% Class A-4 Notes (the Class A-4
Notes; together with the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes, the "Class A Notes") and (v) $17,500,000 principal amount of its 6.300%
Class B Notes (the "Class B Notes"; together with the Class A Notes, the
"Notes") pursuant to an Indenture to be dated as of the Closing Date (the
"Indenture") between the Trust and The Bank of New York, as trustee (the
"Indenture Trustee"). The Trust will also issue a certificate (the
"Certificate") to the Seller representing the equity of the Trust. The assets of
the Trust will include, among other things, a pool of retail installment sale
contracts for and retail notes evidencing loans secured by new and used medium
and heavy duty trucks, buses and trailers (the "Receivables"), certain monies
due or received thereunder on or after (i) for the Initial Receivables, October
1, 1997 and (ii) for any Subsequent Receivables, the date preceding the related
Subsequent Transfer Date that is designated as such by the Seller (in each case,
the "Cutoff Date"), security interests in the vehicles financed thereby, certain
accounts, including monies on deposit in the Pre-Funding Account and the
Negative Carry Account and the proceeds thereof, the proceeds, if any, of Dealer
Liability, NITC Purchase Obligations and any Guaranties, the proceeds from
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claims on certain insurance policies, the benefits of any lease assignments and
certain rights of the Seller under the Purchase Agreement. The Initial
Receivables will be transferred to the Trust by the Seller in exchange for the
Notes and the Certificate and the Receivables will be serviced for the Trust by
Navistar Financial Corporation (in its capacity as Servicer, the "Servicer")
pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") to be dated as of the Closing Date 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 Notes
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. 33-64249) 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) of the Rules and Regulations a
prospectus supplement (the "Prospectus Supplement") to the prospectus dated
October 21, 1996, relating to the Notes and the method of distribution
thereof. Copies of such registration statement, any amendment or supplement
thereto, including the Term Sheet dated October 20, 1997 relating to the
Notes (the "Term Sheet") disseminated by the Underwriters, such prospectus
and the Prospectus Supplement have been delivered to you. Such registration
statement, including exhibits thereto, and the Term Sheet as incorporated
by reference therein, 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. The
Seller filed the Term Sheet on Form 8-K with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), within
two business days of its dissemination by the Underwriters.
(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
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Indenture Act"), and the rules and regulations of the Commission thereunder
and did not include any untrue statement of a material fact and, in the
case of the Registration Statement and any post-effective amendment
thereto, did not omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and, in
the case of the Prospectus, did not omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; on the Closing
Date, 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.
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(h) 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.
(i) 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
Notes 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
Notes 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.
(j) 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
Notes, (ii) seeking to prevent the issuance of any of the Notes 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 Notes or this Agreement, or (iv)
that may adversely affect the federal or state income, excise, franchise or
similar tax attributes of the Notes.
(k) 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.
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(l) 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.
(m) 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.
(n) 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.
(o) 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 the Notes 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,
99.880000% of the principal amount thereof, (ii) with respect to the Class A-2
Notes, 99.800000% of the principal amount thereof, (iii) with respect to the
Class A-3 Notes, 99.743750% of the principal amount thereof, (iv) with respect
to the Class A-4 Notes, 99.703125% of the principal amount thereof and (v) with
respect to the Class B Notes, 99.375000% of the principal amount thereof.
The Seller shall not be obligated to sell or deliver any of the Notes
except upon payment for all the Notes to be purchased as provided herein.
3. DELIVERY OF AND PAYMENT FOR THE NOTES. Delivery of and payment for
the Notes shall be made at the office of Simpson Thacher & Bartlett, or at such
other place as shall be agreed upon by Credit Suisse First Boston Corporation,
as representative of the Underwriters (the "Representative") and the Seller, at
10:00 A.M.,
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New York City time, on November 5, 1997, or at such other date or time, not
later than five full business days thereafter, as shall be agreed upon by the
Representative and the Seller (such date and time being referred to herein as
the "Closing Date"). On the Closing Date, the Seller shall deliver or cause to
be delivered to the Representative for the account of each Underwriter the Notes
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
Notes 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 Notes will be represented by book-
entries on the records of DTC and participating members thereof. Definitive
certificates representing the Notes will be available only under limited
circumstances.
4. FURTHER AGREEMENTS OF THE SELLER. The Seller agrees with each of
the several Underwriters:
(a) To file the Prospectus Supplement with the Commission pursuant to
and in accordance with Rule 424(b)(5) of the Rules and Regulations within
the time period prescribed by such rule and provide evidence satisfactory
to the Representative of such timely filing.
(b) During any period in which a prospectus relating to the Notes is
required to be delivered under the Securities Act: to advise the
Representative promptly of any proposal to amend the Registration Statement
or amend or supplement the Prospectus and not to effect any such amendment
or supplementation without the consent of the Representative; to advise the
Representative promptly of (i) the effectiveness of any post-effective
amendment to the Registration Statement, (ii) any request by the Commission
for any amendment of the Registration Statement or the Prospectus or for
any additional information, (iii) the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the initiation or threatening of any proceedings for that purpose, (iv) the
issuance by the Commission of any order preventing or suspending the use of
any prospectus relating to the Notes 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
Notes 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 Notes 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 Notes, any event shall have occurred as a result of which
the
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Prospectus, as then amended or supplemented, would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
when such Prospectus is delivered to a purchaser, not misleading, or if for
any other reason it shall be necessary at such time to amend or supplement
the Prospectus in order to comply with the Securities Act, to notify the
Representative immediately thereof, and to promptly prepare and file with
the Commission, subject to paragraph (b) of this Section 4, an amendment or
a supplement to the Prospectus such that the statements in the Prospectus,
as so amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to a purchaser, be misleading, or such
that the Prospectus will comply with the Securities Act.
(d) To furnish promptly to each of the Representative and counsel for
the Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith; and during
the period described in paragraph (c) of this Section 4, to deliver
promptly without charge to the Representative such number of the following
documents as the Representative may from time to time reasonably request:
(i) conformed copies of the Registration Statement as originally filed with
the Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement, the Purchase Agreement, the Custodian Agreement,
the Administration Agreement and the Further Transfer and Servicing
Agreements) and (ii) any preliminary prospectus supplement, the Term Sheet,
the Prospectus and any amendment or supplement thereto.
(e) During the period described in paragraph (c) of this Section 4, to
file promptly with the Commission any amendment to the Registration
Statement or the Prospectus or any supplement to the Prospectus that may,
in the judgment of the Seller, or, in the reasonable judgment of the
Representative, be required by the Securities Act or requested by the
Commission.
(f) For so long as any of the Notes are outstanding, to furnish to the
Underwriters (i) copies of all materials furnished by the Trust to the
Noteholders and all reports and financial statements furnished by the Trust
to the Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder and (ii) from time to time, such other
information concerning the Seller and the Trust as the Representative may
reasonably request.
(g) Promptly from time to time to take such action as the
Representative may reasonably request to qualify the Notes for offering and
sale under the securities laws of such jurisdictions as the Representative
may request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Notes; provided that in
connection therewith the Seller shall not
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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 Notes and retail notes sold under NFC's
retail purchase facility) without the prior written consent of the
Representative.
(i) For a period from the date of this Agreement until the retirement
of the Notes, or until such time as no Underwriter shall maintain a
secondary market in the Notes, 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 Notes by the Standard & Poor's Ratings Services ("S&P") and Moody's
Investors Service ("Moody's") are conditional upon the furnishing of
documents or the taking of any other actions by NFC or the Seller, to
furnish such documents and take any such other actions.
(k) On or prior to each Subsequent Transfer Date, to deliver to the
Representative (i) a duly executed Subsequent Transfer Assignment including
a schedule of the Subsequent Receivables to be transferred to the Trust on
such Subsequent Transfer Date, (ii) a copy of the Officer's Certificate
delivered to the Indenture Trustee and the Owner Trustee confirming the
satisfaction of the conditions specified in Section 2.02(b) of the Pooling
and Servicing Agreement, (iii) a copy of the Opinion of Counsel with respect
to the transfer of the Subsequent Receivables to be transferred to the Trust
on such Subsequent Transfer Date to be delivered to the Rating Agencies
pursuant to Section 2.02(b)(ix) of the Pooling and Servicing Agreement, (iv)
a copy of the written confirmation from a firm of independent nationally
recognized certified public accountants to be delivered to the Trust and the
Indenture Trustee pursuant to Section 2.02(b)(x) of the Pooling and
Servicing Agreement and (v) a copy of the written confirmation of S&P
received by the Seller pursuant to Section 2.02(b)(xi) of the Pooling and
Servicing Agreement.
5. REPRESENTATION OF THE UNDERWRITERS. Each Underwriter hereby
represents and warrants that the Term Sheet constitutes the only "Series Term
Sheet" (as such term is defined in the no-action letter addressed to Greenwood
Trust Company, Discover Card Master Trust I dated April 5, 1996) and the only
"Computational
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Materials," "ABS Term Sheets," "Structural Term Sheets" or "Collateral Term
Sheet" (as such terms are defined in the no-action letters addressed to Kidder,
Peabody Acceptance Corporation I, et al. dated May 20, 1994 and to the Public
Securities Association dated February 17, 1995) disseminated by it in connection
with offering of the Notes contemplated hereunder.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations
of the several Underwriters hereunder are subject to the accuracy, when made and
on the Closing Date, of the representations and warranties of NFC and the Seller
contained herein, to the accuracy of the statements of NFC or the Seller made in
any certificates pursuant to the provisions hereof, to the performance by the
Seller of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with to the reasonable
satisfaction of the Representative; and the Seller shall have filed the
Prospectus Supplement with the Commission pursuant to Rule 424(b) 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 Notes, the Purchase
Agreement, the Custodian Agreement, the Administration Agreement, the
Further Transfer and Servicing Agreements, the Registration Statement and
the Prospectus, and all other legal matters relating to such agreements and
the transactions contemplated hereby and thereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and
the Seller shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon
such matters.
(c) Kirkland & Ellis shall have furnished to the Representative their
written opinion, as counsel to the Seller, addressed to the Underwriters
and dated the Closing Date, in substantially the form of Exhibit A hereto.
(d) Kirkland & Ellis shall have furnished to the Representative their
written opinion, as counsel to the Seller, addressed to the Underwriters
and dated the Closing Date, in form and substance reasonably satisfactory
to the Representative, with respect to the characterization of the transfer
of the Receivables by NFC to the Seller pursuant to the Purchase Agreement
as a sale and the non-consolidation of NFC and the Seller.
(e) The Representative shall have received from Simpson Thacher &
Bartlett, counsel for the Underwriters, such opinion or opinions, dated
the Closing
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10
Date, with respect to such matters as the Representative may require, and
the Seller shall have furnished to such counsel such documents as they
reasonably request for enabling them to pass upon such matters.
(f) Pryor, Cashman, Sherman & Flynn shall have furnished to the
Representative their written opinion, as counsel to the Owner Trustee,
addressed to the Underwriters and dated the Closing Date, in substantially
the form of Exhibit B hereto.
(g) Emmet, Marvin & Martin shall have furnished to the Representative
their written opinion, as counsel to the Indenture Trustee, addressed to
the Underwriters and dated the Closing Date, in substantially the form of
Exhibit C hereto.
(h) The Representative shall have received a letter dated the date
hereof (the "Procedures Letter") from a firm of independent nationally
recognized certified public accountants acceptable to the Representative
verifying the accuracy of such financial and statistical data contained in
the Prospectus as the Representative shall deem advisable. In addition, if
any amendment or supplement to the Prospectus made after the date hereof
contains financial or statistical data, the Representative shall have
received a letter dated the Closing Date confirming the Procedures Letter
and providing additional comfort on such new data.
(i) The Representative shall have received certificates, dated the
Closing Date, of any two of the Chairman of the Board, the President, any
Vice President and the chief financial officer of each of NFC and the
Seller stating that (A) the representations 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, 1997, 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.
<PAGE>
11
(j) The Notes 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
Notes 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
Notes on the terms and in the manner contemplated in the Prospectus.
(l) The Certificate shall have been delivered to the Seller in
accordance with the Trust Agreement.
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.
7. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representative, in its absolute discretion, by notice given to
and received by the Seller prior to delivery of and payment for the Notes 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.
8. Defaulting Underwriters. (a) If, any one or more of the
Underwriters shall fail to purchase and pay for any of the Notes agreed to be
purchased by such Underwriter hereunder on the Closing Date, and such failure
constitutes a default in the performance of its or their obligations under this
Agreement, the Representative may make arrangements for the purchase of such
Notes by other persons satisfactory to the Seller and the Representative,
including any of the Underwriters, but if no such arrangements are made by the
Closing Date, then each remaining nondefaulting Underwriter shall be severally
obligated to purchase the Notes which the defaulting Underwriter or Underwriters
agreed but failed to purchase on the Closing Date in the respective proportions
which the principal amount of the Notes set forth
<PAGE>
12
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the aggregate principal amount of the Notes 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 Notes on the Closing Date if the aggregate
principal amount of the Notes which the defaulting Underwriter or Underwriters
agreed but failed to purchase on such date exceeds one-eleventh of the aggregate
principal amount of the Notes 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 Notes 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 the Representative and the Seller do not elect to purchase the
Notes which the defaulting Underwriter or Underwriters agreed but failed to
purchase, this Agreement shall terminate without liability on the part of any
nondefaulting 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 9
and 13 and except that the provisions of Sections 10 and 11 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 8, purchases Notes 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 Notes of a defaulting
Underwriter, either the Representative or the Seller may postpone the Closing
Date for up to seven full business days in order to effect any changes that in
the opinion of counsel for the Seller or counsel for the Underwriters may be
necessary in the Registration Statement, the Prospectus or in any other document
or arrangement, and the Seller agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus that effects any such
changes.
9. Reimbursement of Underwriters' Expenses. If (a) notice shall have
been given pursuant to Section 7 terminating the obligations of the Underwriters
hereunder, (b) the Seller shall fail to tender the Notes for delivery to the
Underwriters for any reason permitted under this Agreement or (c) the
Underwriters shall decline to purchase the Notes 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 Notes, and upon demand the Seller shall pay the full
amount thereof to the Representative.
10. 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 16 of the Securities
Act (collectively referred to for the purposes of this Section 10 and Section 11
as the Underwriter) against
<PAGE>
13
any loss, claim, damage or liability, joint or several, to which that
Underwriter may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage or liability (or any action in respect thereof)
arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus supplement,
the Registration Statement or the Prospectus or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading, and
shall reimburse each Underwriter for any legal or other expenses reasonably
incurred by that Underwriter in connection with investigating or preparing to
defend or defending against or appearing as a third party witness in connection
with any such loss, claim, damage or liability (or any action in respect
thereof) as such expenses are incurred; provided, however, that neither NFC nor
the Seller shall be liable in any such case to the extent that any such loss,
claim, damage or liability (or any action in respect thereof) arises out of or
is based upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any preliminary prospectus supplement, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with the Underwriters' Information.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Seller, each of its directors, each officer of the Seller who
signed the Registration Statement and each person, if any, who controls the
Seller within the meaning of Section 16 of the Securities Act (collectively
referred to for the purposes of this Section 10 and Section 11 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
through the Representative by or on behalf of the Underwriters (the
"Underwriters' Information") consists solely of the paragraph below the
footnotes on the cover page of the Prospectus Supplement concerning the terms of
the offering and the second paragraph of text and the following table under the
caption "Underwriting" in the Prospectus Supplement.
<PAGE>
14
(c) Promptly after receipt by an indemnified party under this Section
10 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 10, 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 10 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 10.
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 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representative shall have the right to employ one counsel to represent
jointly the Representative and those other Underwriters and their respective
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Underwriters against NFC or the
Seller under this Section 10 if, in the reasonable judgment of the
Representative, it is advisable for the Representative and those Underwriters
and controlling persons to be jointly represented by separate counsel because
there may be one or more legal defenses available to such parties which are
different from or additional to those available to the indemnifying party, and
in that event the fees and expenses of such separate counsel shall be paid by
NFC or the Seller. Each indemnified party, as a condition of the indemnity
agreements contained in Sections 10(a) and 10(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 10 and in Section 11 are in addition to any other liability which NFC,
the Seller or the Underwriters, as the case may be, may otherwise have.
11. Contribution. If the indemnification provided for in Section 10
is unavailable or insufficient to hold harmless an indemnified party under
Section 10(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
<PAGE>
15
Underwriters on the other from the offering of the Notes 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 Notes 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 Notes 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 11 were to be determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability referred to above in this Section 11 shall be deemed to include,
subject to the limitations on the fees and expenses of separate counsel set
forth in Section 10, for purposes of this Section 11, 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 11, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Notes 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 12(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 10 and contribute as provided in this Section 11 are several
in proportion to their respective underwriting obligations and not joint.
12. 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 10 and 11 and their heirs and
<PAGE>
16
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
13. Expenses. The Seller agrees with the Underwriters to pay (a) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Notes 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
printing, reproducing and distributing this Agreement and any other underwriting
and selling group documents by mail, telex or other means of communications; (d)
the fees and expenses of qualifying the Notes under the securities laws of the
several jurisdictions as provided in Section 4(g) and of preparing, printing and
distributing Blue Sky Memoranda and Legal Investment Surveys (including related
fees and expenses of counsel to the Underwriters); (e) any fees charged by S&P
and Moody's for rating the Notes; (f) all fees and expenses of the Owner Trustee
and the Indenture Trustee and their respective counsel; and (g) all other costs
and expenses incident to the performance of the obligations of the Seller under
this Agreement; provided that, except as otherwise provided in this Section 13
and in Section 9, the Underwriters shall pay their own costs and expenses,
including the costs and expenses of their counsel, any transfer taxes on the
Notes which they may sell and the expenses of advertising any offering of the
Notes made by the Underwriters.
14. 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 Notes 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 Notes.
15. 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 Credit Suisse First Boston
Corporation, Eleven Madison Avenue, New York, New York 10010-3629
Attention: Investment Banking Department--Transactions Advisory Group;
(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 10(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representative, which address will be
<PAGE>
17
supplied to any other party hereto by the Representative upon request. Any such
statements, requests, notices or agreements shall take effect at the time of
receipt thereof. The Seller shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by the
Representative.
16. 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.
17. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
18. 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.
19. 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:
CREDIT SUISSE FIRST BOSTON CORPORATION
For Itself and as Representative
of the Several Underwriters
By
-----------------------------------
Authorized Signatory
<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 /s/ R. W. Cain
-------------------------------------
Name: R. W. Cain
Title: Vice President and Treasurer
NAVISTAR FINANCIAL CORPORATION
By /s/ R. W. Cain
-------------------------------------
Name: R. W. Cain
Title: Vice President and Treasurer
Accepted:
CREDIT SUISSE FIRST BOSTON CORPORATION
For Itself and as Representative
of the Several Underwriters
By
-----------------------------------
Authorized Signatory
<PAGE>
SCHEDULE 1
UNDERWRITERS
<TABLE>
<CAPTION>
Credit Suisse BancAmerica
First Boston Chase Robertson
Principal Amount Corporation Securities Inc. Stephens
---------------- ------------- --------------- -----------
<S> <C> <C> <C>
Class A-1 Notes $17,850,000 $17,830,000 $17,830,000
Class A-2 Notes $15,670,000 $15,666,000 $15,666,000
Class A-3 Notes $22,000,000 $22,000,000 $22,000,000
Class A-4 Notes $24,920,000 $24,916,000 $24,916,000
Class B Notes $17,500,000 -- --
</TABLE>
<TABLE>
<CAPTION>
NationsBanc
First Chicago J.P. Morgan & Montgomery
Principal Amount Capital Markets, Inc. Co. Incorporated Securities, Inc.
- ------------------- --------------------- ---------------- ----------------
<S> <C> <C> <C>
Class A-1 Notes $17,830,000 $17,830,000 $17,830,000
Class A-2 Notes $15,666,000 $15,666,000 $15,666,000
Class A-3 Notes $22,000,000 $22,000,000 $22,000,000
Class A-4 Notes $24,916,000 $24,916,000 $24,916,000
Class B Notes -- -- --
</TABLE>
<PAGE>
Exhibit 4.1
===============================================================================
NAVISTAR FINANCIAL 1997-B OWNER TRUST
Class A-1 5.722% Asset Backed Notes
Class A-2 5.956% Asset Backed Notes
Class A-3 6.200% Asset Backed Notes
Class A-4 6.300% Asset Backed Notes
Class B 6.300% Asset Backed Notes
-----------------------------------------------------
INDENTURE
Dated as of November 5, 1997
-----------------------------------------------------
The Bank of New York,
a New York banking corporation,
Indenture Trustee
===============================================================================
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
==============================================================================================
TIA Indenture
Section Section
------- -------
- ----------------------------------------------------------------------------------------------
<S> <C>
310(a)(1) 6.11
(a)(2) 6.11
(a)(3) 6.10
(a)(4) 6.14
(b) 6.11
(c) N.A.
311(a) 6.12
(b) 6.12
(c) N.A.
312(a) 7.1, 7.2
(b) 7.2
(c) 7.2
313(a) 7.4(a), 7.4(b)
(b)(1) 7.4(a)
(b)(2) 7.4(a)
(c) 7.4(a)
(d) 7.4(a)
314(a) 7.3(a), 3.9
(b) 3.6
(c)(1) 2.2, 2.9, 4.1, 11.1(a)
(c)(2) 11.1(a)
(c)(3) 11.1(a)
(d) 2.9, 11.1(b)
(e) 11.1(a)
(f) 11.1(a)
315(a) 6.1(b)
(b) 6.5
(c) 6.1(a)
(d) 6.2, 6.1(c)
(e) 5.13
316(a)last
sentence 1.1
(a)(1)(A) 5.11
(a)(1)(B) 5.12
(a)(2) Omitted
316(b),(c) 5.7
317(a)(1) 5.3(b)
(a)(2) 5.3(d)
(b) 3.3
318(a) 11.7
N.A. means Not Applicable.
==============================================================================================
</TABLE>
Note: This cross reference table shall not, for any purpose, be deemed to be
part of this Indenture.
i
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
SECTION 1.1 Definitions.................................................. 2
SECTION 1.2 Incorporation by Reference of Trust Indenture Act............ 3
ARTICLE II
THE NOTES
SECTION 2.1 Form......................................................... 3
SECTION 2.2 Execution, Authentication and Delivery....................... 4
SECTION 2.3 Temporary Notes.............................................. 4
SECTION 2.4 Registration; Registration of Transfer and Exchange of Notes. 5
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......................................... 10
SECTION 2.14 Tax Treatment................................................ 10
ARTICLE III
COVENANTS
SECTION 3.1 Payment of................................................... 11
SECTION 3.2 Maintenance of Agency Office................................. 11
SECTION 3.3 Money for Payments To Be Held in Trust....................... 11
SECTION 3.4 Existence.................................................... 13
SECTION 3.5 Protection of Trust Estate; Acknowledgment of Pledge......... 13
SECTION 3.6 Opinions as to Trust Estate.................................. 13
SECTION 3.7 Performance of Obligations; Servicing of Receivables......... 14
SECTION 3.8 Negative Covenants........................................... 15
SECTION 3.9 Annual Statement as to Compliance............................ 16
SECTION 3.10 Consolidation, Merger, etc., of Issuer; Disposition of
Trust Assets................................................ 16
SECTION 3.11 Successor or Transferee...................................... 18
SECTION 3.12 No Other Business............................................ 18
SECTION 3.13 No Borrowing................................................. 19
SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities............ 19
SECTION 3.15 Servicer's Obligations....................................... 19
SECTION 3.16 Capital Expenditures......................................... 19
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 3.17 Removal of Administrator.................................... 19
SECTION 3.18 Restricted Payments......................................... 19
SECTION 3.19 Notice of Events of Default................................. 20
SECTION 3.20 Further Instruments and Acts................................ 20
SECTION 3.21 Indenture Trustee's Assignment of Administrative Receivables
and Warranty Receivables................................... 20
SECTION 3.22 Representations and Warranties by the Issuer to the
Indenture Trustee.......................................... 20
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture..................... 21
SECTION 4.2 Application of Trust Money.................................. 22
SECTION 4.3 Repayment of Monies Held by Paying Agent.................... 22
SECTION 4.4 Duration of Position of Indenture Trustee for Benefit of
Certificateholders......................................... 22
ARTICLE V
DEFAULT AND REMEDIES
SECTION 5.1 Events of Default........................................... 23
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.......... 24
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.......................................... 24
SECTION 5.4 Remedies; Priorities........................................ 27
SECTION 5.5 Optional Preservation of the Trust Estate................... 28
SECTION 5.6 Limitation of Suits......................................... 28
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal
and Interest 29
SECTION 5.8 Restoration of Rights and Remedies.......................... 29
SECTION 5.9 Rights and Remedies Cumulative.............................. 29
SECTION 5.10 Delay or Omission Not a Waiver.............................. 29
SECTION 5.11 Control by Noteholders...................................... 29
SECTION 5.12 Waiver of Past Defaults..................................... 30
SECTION 5.13 Undertaking for Costs....................................... 30
SECTION 5.14 Waiver of Stay or Extension Laws............................ 31
SECTION 5.15 Action on Notes 31
SECTION 5.16 Performance and Enforcement of Certain Obligations.......... 31
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee................................. 32
SECTION 6.2 Rights of Indenture Trustee................................. 33
SECTION 6.3 Indenture Trustee May Own Notes............................. 34
SECTION 6.4 Indenture Trustee's Disclaimer.............................. 34
SECTION 6.5 Notice of Defaults.......................................... 34
iii
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 6.6 Reports by Indenture Trustee to Holders...................... 35
SECTION 6.7 Compensation; Indemnity...................................... 35
SECTION 6.8 Replacement of Indenture Trustee............................. 35
SECTION 6.9 Merger or Consolidation of Indenture Trustee................. 36
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate Indenture
Trustee..................................................... 37
SECTION 6.11 Eligibility; Disqualification................................ 38
SECTION 6.12 Preferential Collection of Claims Against Issuer............. 39
SECTION 6.13 Representations and Warranties of Indenture Trustee.......... 39
SECTION 6.14 Indenture Trustee May Enforce Claims Without Possession of
Notes....................................................... 40
SECTION 6.15 Suit for Enforcement......................................... 40
SECTION 6.16 Rights of Noteholders to Direct Indenture Trustee............ 40
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders................................................. 41
SECTION 7.2 Preservation of Information, Communications to Noteholders... 41
SECTION 7.3 Reports by Issuer............................................ 41
SECTION 7.4 Reports by Indenture Trustee................................. 42
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money.......................................... 42
SECTION 8.2 Designated Accounts; Payments................................ 42
SECTION 8.3 General Provisions Regarding Accounts........................ 45
SECTION 8.4 Release of Trust Estate...................................... 45
SECTION 8.5 Opinion of Counsel........................................... 46
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders....... 46
SECTION 9.2 Supplemental Indentures With Consent of Noteholders.......... 47
SECTION 9.3 Execution of Supplemental Indentures......................... 49
SECTION 9.4 Effect of Supplemental Indenture............................. 49
SECTION 9.5 Conformity with Trust Indenture Act.......................... 49
SECTION 9.6 Reference in Notes to Supplemental Indentures................ 49
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption................................................... 49
SECTION 10.2 Form of Redemption Notice.................................... 50
SECTION 10.3 Notes Payable on Redemption Date............................. 50
</TABLE>
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<TABLE>
<CAPTION>
ARTICLE XI
MISCELLANEOUS
<S> <C> <C>
SECTION 11.1 Compliance Certificates and Opinions, etc................... 51
SECTION 11.2 Form of Documents Delivered to Indenture Trustee............ 52
SECTION 11.3 Acts of Noteholders......................................... 53
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies............................................ 54
SECTION 11.5 Notices to Noteholders; Waiver.............................. 54
SECTION 11.6 Alternate Payment and Notice Provisions..................... 54
SECTION 11.7 Conflict with Trust Indenture Act........................... 55
SECTION 11.8 Effect of Headings and Table of Contents.................... 55
SECTION 11.9 Successors and Assigns...................................... 55
SECTION 11.10 Separability................................................ 55
SECTION 11.11 Benefits of Indenture....................................... 55
SECTION 11.12 Legal Holidays.............................................. 56
SECTION 11.13 Governing Law............................................... 56
SECTION 11.14 Counterparts................................................ 56
SECTION 11.15 Recording of Indenture...................................... 56
SECTION 11.16 No Recourse................................................. 56
SECTION 11.17 No Petition................................................. 57
SECTION 11.18 Inspection.................................................. 57
</TABLE>
Exhibit A - Locations of Schedule of Receivables
Exhibit B - Form of Class A-1 and Class A-2 Asset Backed Note
Exhibit C - Form of Class A-3, Class A-4 and Class B Asset
Exhibit D - Form of Note Depository Agreement
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INDENTURE, dated as of November 5, 1997 between NAVISTAR FINANCIAL
1997-B OWNER TRUST, a Delaware business trust (the "Issuer"), and THE BANK OF
NEW YORK, a New York banking corporation, as trustee and not in its individual
capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Notes and (only to the
extent expressly provided herein) the Certificateholders:
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as trustee for the benefit of the Noteholders and (only to the extent expressly
provided herein) the Certificate holders, all of the Issuer's right, title and
interest in, to and under (a) the Receivables listed on the Schedule of
Receivables which is on file at the locations listed on Exhibit A hereto and all
monies paid thereon (including Liquidation Proceeds) and due thereunder on and
after the applicable Cutoff Date, whether now existing or hereafter acquired and
including, without limitation, Subsequent Receivables acquired by the Issuer
pursuant to the Pooling and Servicing Agreement listed on the schedules to the
Subsequent Transfer Assignments with respect to such Subsequent Receivables and
all monies due thereon on and after the applicable Cutoff Dates; (b) the
security interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and, where permitted by law, any accessions thereto which are
financed by NFC; (c) the benefits of any lease assignments with respect to the
Financed Vehicles; (d) any proceeds from any Insurance Policies with respect to
the Receivables; (e) any proceeds from Dealer Liability with respect to the
Receivables, proceeds from any NITC Purchase Obligations with respect to the
Receivables (subject to the limitations set forth in Section 2.04 of the Pooling
and Servicing Agreement) and proceeds of any Guaranties with respect to the
Receivables; (f) all funds on deposit from time to time in the Collection
Account and the Note Distribution Account; (g) the Pooling and Servicing
Agreement (including all rights of NFRRC under the Purchase Agreement, the
Assignment and any Subsequent Transfer Assignments 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, investments and investment property held from time to time in the
Reserve Account (whether in the form of deposit accounts, Physical Property,
Certificated Securities, Security Entitlements, Uncertificated Securities or
otherwise); (i) the Reserve Account Initial Deposit with respect to the Closing
Date and each Subsequent Transfer Date and all proceeds thereof (other than the
Investment Earnings thereon) ((h) and (i), collectively, the "Reserve Account
Property"); (j) all funds on deposit from time to time in the Pre-Funding
Account and all proceeds thereof, including all other amounts and investments
held from time to time in the Pre-Funding Account (whether in the form of
deposit accounts, Physical Property, Certificated Securities, Security
Entitlements, Uncertificated Securities or otherwise) (collectively, the "Pre-
Funding Account Property") and the Negative Carry Account, (other than the
Investment Earnings thereon); (k) the Negative Carry Account and all proceeds
thereof (other than the Investment Earnings thereon), including all other
amounts, investments and investment property held from time to time in the
Negative Carry Account (whether in the form of deposit accounts, Physical
Property, Certificated Securities, Security Entitlements,
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Uncertificated Securities or otherwise); and (l) 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 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 (a) first, the payment
of principal of and interest on, and any other amounts owing in respect of, the
Class A Notes, equally and ratably without prejudice, priority or distinction,
and (b) second, the payment of principal of and interest on, and any other
amounts owing in respect of, the Class B 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 and 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
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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.
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 security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"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 Class A-2 Notes, and each of the
Class A-3 Notes, Class A-4 Notes and Class B Notes, with the Indenture Trustee's
certificate of authentication, shall be substantially in the form set forth in
Exhibit B and Exhibit C, respectively, 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.
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(c) Each Note shall be dated the date of its authentication. The
terms of each class of Notes as provided for in Exhibit B and Exhibit C hereto
are part of the terms of this Indenture.
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 $500,000,000.00, comprised of (i) Class A-1 Notes
in the aggregate principal amount of $107,000,000.00, (ii) Class A-2 Notes in
the aggregate principal amount of $94,000,000.00, (iii) Class A-3 Notes in the
aggregate principal amount of $132,000,000.00, (iv) Class A-4 Notes in the
aggregate principal amount of $149,500,000.00 and (v) Class B Notes in the
aggregate principal amount of $17,500,000.00. The aggregate principal amount of
all Notes outstanding at any time may not exceed $500,000,000.00 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 the case
of the Class A-1 Notes and Class A-2 Notes, in Exhibit B, and in the case of the
Class A-3 Notes, Class A-4 Notes and Class B Notes, in Exhibit C, 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.
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(b) If Temporary Notes are issued, the Issuer shall cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the Temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the Temporary Notes at the Agency Office of the Issuer to be
maintained as provided in Section 3.2, without charge to the Noteholder. Upon
surrender for cancellation of any one or more Temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor a like principal amount of Definitive Notes of authorized
denominations. Until so delivered in exchange, the Temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as Definitive
Notes.
SECTION 2.4 Registration; Registration of Transfer and Exchange of
Notes.
(a) The Issuer shall cause to be kept the Note Register, comprising
separate registers for each class of Notes, in which, subject to such reasonable
regulations as the Issuer may prescribe, the Issuer shall provide for the
registration of the Notes and the registration of transfers and exchanges of the
Notes. The Indenture Trustee shall initially be the Note Registrar for the
purpose of registering the Notes and transfers of the Notes as herein provided.
Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a
successor Note Registrar or, if it elects not to make such an appointment,
assume the duties of the Note Registrar.
(b) If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register. The Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof. The Indenture Trustee shall have the right to rely upon
a certificate executed on behalf of the Note Registrar by an Executive Officer
thereof as to the names and addresses of the Noteholders and the principal
amounts and number of such Notes.
(c) Upon surrender for registration of transfer of any Note at the
Corporate Trust Office of the Indenture Trustee or the Agency Office of the
Issuer (and following the delivery, in the former case, of such Notes to the
Issuer by the Indenture Trustee), the Issuer shall execute, the Indenture
Trustee shall authenticate and the Noteholder shall obtain from the Indenture
Trustee, in the name of the designated transferee or transferees, one or more
new Notes in any authorized denominations, of a like aggregate principal amount.
(d) At the option of the Noteholder, Notes may be exchanged for other
Notes of the same class in any authorized denominations, of a like aggregate
principal amount, upon surrender of the Notes to be exchanged at the Corporate
Trust Office of the Indenture Trustee or the Agency Office of the Issuer (and
following the delivery, in the former case, of such Notes to the Issuer by the
Indenture Trustee), the Issuer shall execute, and the Indenture Trustee shall
authenticate and the Noteholder shall obtain from the Indenture Trustee, the
Notes which the Noteholder making the exchange is entitled to receive.
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(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 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
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Note from the Person to whom such replacement Note was delivered or (iii) any
assignee of such Person, except any bona fide purchaser, and the Issuer and the
Indenture Trustee shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
(c) In connection with the issuance of any replacement Note under this
Section 2.5, the Issuer may require the payment by the Holder of such Note of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including all fees and
expenses of the Indenture Trustee) connected therewith.
(d) Any duplicate Note issued pursuant to this Section 2.5 in
replacement for any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be found at any time or be
enforced by any Person, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Notes duly issued
hereunder.
(e) The provisions of this Section 2.5 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6 Persons Deemed Noteholders. Prior to due presentment
for registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in whose
name any Note is registered (as of the day of determination) as the Noteholder
for the purpose of receiving payments of principal of and interest on such Note
and for all other purposes whatsoever, whether or not such Note be overdue, and
neither the Issuer, the Indenture Trustee nor any agent of the Issuer or the
Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.7 Payment of Principal and Interest.
(a) Interest on the Class A-1 Notes and Class A-2 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, in
accordance with the priorities set forth in Section 8.2(c), as specified in the
form of Note set forth in Exhibit B. Interest on the Class A-3 Notes, Class A-4
Notes and Class B Notes shall accrue in the manner set forth in Exhibit C at the
applicable Interest Rate for each class, and such interest shall be payable on
each Distribution Date, in accordance with the priorities set forth in Section
8.2(c), as specified in the form of Note set forth in Exhibit C. 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
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be made by wire transfer in immediately available funds to the account
designated by the Note Depository.
(b) Prior to the occurrence of an Event of Default and a declaration
in accordance with Section 5.2(a) that the Notes have become immediately due and
payable, the principal of each class of Notes shall be payable in full on the
Final Scheduled Distribution Date for such class and, to the extent of funds
available therefor, in instalments on the Distribution Dates (if any) preceding
the Final Scheduled Distribution Date for such class, in the amounts and in
accordance with the priorities set forth in Section 8.2(c)(ii) and, if
applicable, in Section 8.2(d). All principal payments on each class of Notes
shall be made pro rata to the Noteholders of such class entitled thereto. Any
instalment of principal payable on any Note shall be punctually paid or duly
provided for by a deposit by or at the direction of the Issuer into the Note
Distribution Account prior to the applicable Distribution Date and shall be paid
to the Person in whose name such Note (or one or more Predecessor Notes) is
registered on the applicable Record Date, by check mailed first-class, postage
prepaid to such Person's address as it appears on the Note Register on such
Record Date; provided, however, that, unless and until Definitive Notes have
been issued pursuant to Section 2.12, with respect to Notes registered on the
Record Date in the name of the Note Depository, payment shall be made by wire
transfer in immediately available funds to the account designated by the Note
Depository, except for: (i) the final instalment of principal on any Note; and
(ii) the Redemption Price for the Notes redeemed pursuant to Section 10.1,
which, in each case, shall be payable as provided herein. The funds represented
by any such checks in respect of interest or principal returned undelivered
shall be held in accordance with Section 3.3.
(c) [Reserved.]
(d) From and after the occurrence of an Event of Default and a
declaration in accordance with Section 5.2(a) that the Notes have become
immediately due and payable, principal on the Notes shall be payable as provided
in Section 8.2(c)(iv).
(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 canceled.
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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 canceled and retained or destroyed, as the case
may be.
SECTION 2.9 Release of Collateral. The Indenture Trustee shall
release property from the lien of this Indenture, other than as permitted by
Sections 3.21, 8.2, 8.4 and 11.1, only upon receipt of an Issuer Request
accompanied by an Officers' Certificate, an Opinion of Counsel (to the extent
required by the TIA) and Independent Certificates in accordance with TIA
(S)(S)314(c) and 314(d)(1).
SECTION 2.10 Book-Entry Notes. The Notes, upon original issuance,
shall be issued in the form of a typewritten Note or Notes representing the
Book-Entry Notes, to be delivered to The Depository Trust Company, the initial
Clearing Agency by or on behalf of the Issuer. Such Note or Notes shall be
registered on the Note Register in the name of the Note Depository (initially,
Cede & Co.), and no Note Owner shall receive a Definitive Note representing such
Note Owner's interest in such Note, except as provided in Section 2.12. Unless
and until Definitive Notes have been issued to the Note Owners pursuant to
Section 2.12:
(a) the provisions of this Section 2.10 shall be in full force
and effect;
(b) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the Notes
and the giving of instructions or directions hereunder) as the sole holder
of the Notes and shall have no obligation to the Note Owners;
(c) to the extent that the provisions of this Section 2.10
conflict with any other provisions of this Indenture, the provisions of
this Section 2.10 shall control;
(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
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(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 Voting Notes, the
Clearing Agency shall be deemed to represent such percentage only to the
extent that it has (i) received written instructions to such effect from
Note Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
Notes and (ii) has delivered such instructions to the Indenture Trustee.
SECTION 2.11 Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Noteholders to the Clearing Agency and shall
have no other obligation to the Note Owners.
SECTION 2.12 Definitive Notes.
If (i) the Administrator advises the Indenture Trustee in writing that
the Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Notes and the Issuer is unable to locate a
qualified successor; (ii) the Administrator, at its option, advises the
Indenture Trustee in writing that it elects to terminate the book-entry system
through the Clearing Agency; or (iii) after the occurrence of an Event of
Default or a Servicer Default, Note Owners representing beneficial interests
aggregating at least a majority of the Outstanding Amount of the Voting 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 income
taxes, state and local income and franchise taxes, and any other taxes imposed
upon, measured by or based upon gross or net income.
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ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest. The Issuer shall
duly and punctually pay the principal of and interest on the Notes in accordance
with the terms of the Notes and this Indenture. On each Distribution Date and
on the Redemption Date (if applicable), the Indenture Trustee shall distribute
amounts on deposit in the Note Distribution Account to the Noteholders in
accordance with Sections 2.7 and 8.2, less amounts properly withheld under the
Code by any Person from a payment to any Noteholder of interest and/or
principal. Any amounts so withheld shall be considered as having been paid by
the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.2 Maintenance of Agency Office. As long as any of the
Notes remains outstanding, the Issuer shall maintain in the Borough of
Manhattan, the City of New York, an office (the "Agency Office"), being an
office or agency where Notes may be surrendered to the Issuer for registration
of transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. The Issuer shall give prompt written notice to the Indenture Trustee
of the location, and of any change in the location, of the Agency Office. If at
any time the Issuer shall fail to maintain any such office or agency or shall
fail to furnish the Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Indenture Trustee, and the Issuer hereby appoints the Indenture Trustee as its
agent to receive all such surrenders, notices and demands.
SECTION 3.3 Money for Payments To Be Held in Trust.
(a) As provided in Section 8.2, all payments of amounts due and
payable with respect to any Notes that are to be made from amounts withdrawn
from the Note Distribution Account pursuant to Section 8.2(c), (d) or (e) shall
be made on behalf of the Issuer by the Indenture Trustee or by another Paying
Agent, and no amounts so withdrawn from the Note Distribution Account for
payments of Notes shall be paid over to the Issuer except as provided in this
Section 3.3.
(b) Before each Distribution Date or the Redemption Date (if
applicable), the Indenture Trustee shall deposit in the Note Distribution
Account an aggregate sum sufficient to pay the amounts then becoming due with
respect to the Notes, such sum to be held in trust for the benefit of the
Persons entitled thereto.
(c) The Issuer shall cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section 3.3, that such Paying Agent shall:
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(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 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
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Holders whose Notes have been called but have not been surrendered for
redemption or whose right to or interest in monies due and payable but not
claimed is determinable from the records of the Indenture Trustee or of any
Paying Agent, at the last address of record for each such Holder).
SECTION 3.4 Existence. The Issuer shall keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Issuer shall keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and shall obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.5 Protection of Trust Estate; Acknowledgment of Pledge.
The Issuer shall from time to time execute and deliver all such supplements and
amendments hereto and all such financing statements, amendments thereto,
continuation statements, assignments, certificates, instruments of further
assurance and other instruments, and shall take such other action as may be
determined to be necessary or advisable in an Opinion of Counsel to the Owner
Trustee delivered to the Indenture Trustee to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the purposes
hereof including by making the necessary filings of financing statements or
amendments thereto within sixty days after the occurrence of any of the
following: (A) any change in the Issuer's name, (B) any change in the location
of the Issuer's principal place of business and (C) any merger or consolidation
or other change in the Issuer's identity or organizational structure and by
promptly notifying the Indenture Trustee of any such filings;
(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
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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,
1999, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain the lien and security interest created by this Indenture. Such Opinion
of Counsel shall also describe the recording, filing, re-recording and refiling
of this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture until April 15 in
the following calendar year.
SECTION 3.7 Performance of Obligations; Servicing of Receivables.
(a) The Issuer shall not take any action and shall use its reasonable
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Trust Estate or that would result in the
amendment, hypothecation, subordination, termination 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
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and the Rating Agencies thereof, and shall specify in such notice the response
or action, if any, the Issuer has taken or is taking with respect of such
default. If a Servicer Default shall arise from the failure of the Servicer to
perform any of its duties or obligations under the Pooling and Servicing
Agreement with respect to the Receivables, the Issuer and the Indenture Trustee
shall take all reasonable steps available to them pursuant to the Pooling and
Servicing Agreement to remedy such failure.
(e) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it shall not, without the
prior written consent of the Indenture Trustee or the Holders of at least a
majority in Outstanding Amount of the Voting 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,
marshaling 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
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(d) either (i) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person
to be released from any covenants or obligations with respect to the Notes
under this Indenture except as may be expressly permitted hereby, (ii)
permit any lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be created on
or extend to or otherwise arise upon or burden the Trust Estate or any part
thereof or any interest therein or the proceeds thereof (other than tax
liens, mechanics' liens and other liens that arise by operation of law, in
each case on a Financed Vehicle and arising solely as a result of an action
or omission of the related Obligor), or (iii) permit the lien of this
Indenture not to constitute a valid first priority security interest in the
Trust Estate (other than with respect to any such tax, mechanics' or other
lien).
SECTION 3.9 Annual Statement as to Compliance. The Issuer shall
deliver to the Indenture Trustee, with a copy to each of the Rating Agencies, on
or before February 1 of each year, beginning February 1, 1999, 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;
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(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
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(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 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
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Trust Agreement. After the end of the Funding Period, the Issuer shall not fund
the purchase of any new Retail Notes.
SECTION 3.13 No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness for money borrowed other than indebtedness for money borrowed in
respect of the Notes or in accordance with the Basic Documents.
SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by this Indenture or the other Basic Documents, the Issuer shall
not make any loan or advance or credit to, or guarantee (directly or indirectly
or by an instrument having the effect of assuring another's payment or
performance on any obligation or capability of so doing or otherwise), endorse
or otherwise become contingently liable, directly or indirectly, in connection
with the obligations, stocks or dividends of, or own, purchase, repurchase or
acquire (or agree contingently to do so) any stock, obligations, assets or
securities of, or any other interest in, or make any capital contribution to,
any other Person.
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;
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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, 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, 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
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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.
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
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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 Dates 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
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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 the Certificates 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 Voting Notes, a written notice
specifying such default, demanding that it be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(c) failure to pay in full the outstanding principal balance of any
class of Notes by the Final Scheduled Distribution Date for such class; or
(d) default in the observance or performance in any material respect
of any covenant or agreement of the Issuer made in this Indenture (other
than a covenant or agreement, a default in the observance or performance of
which is specifically dealt with elsewhere in this Section 5.1) which
failure materially and adversely affects the rights of the Noteholders, and
such default shall continue or not be cured for a period of thirty (30)
days after there shall have been given, by registered or certified mail, to
the Issuer and the Seller (or the Servicer, as applicable) by the Indenture
Trustee or to the Issuer and the Seller (or the Servicer, as applicable)
and the Indenture Trustee by the Holders of at least 25% of the Outstanding
Amount of the Voting 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
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(f) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Trust Estate, or the
making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of action by the Issuer in furtherance of
any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five (5) Business Days
after learning of the occurrence thereof, written notice in the form of an
Officer's Certificate of any Default under Section 5.1(d), its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.
(a) If an Event of Default should occur and be continuing, then and in
every such case, unless the principal amount of the Notes shall have already
become due and payable, either the Indenture Trustee or the Holders of Notes
representing not less than a majority of the Outstanding Amount of the Voting
Notes may declare all the Notes to be immediately due and payable, by a notice
in writing to the Issuer (and to the Indenture Trustee if given by the Note
holders) setting forth the Event or Events of Default, and upon any such
declaration the unpaid principal amount of the 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 Voting Notes, by written notice to the
Issuer and the Indenture Trustee, may rescind and annul such declaration and its
consequences with respect to the Notes; 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
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demand of the Indenture Trustee, pay to the Indenture Trustee, for the benefit
of the Noteholders in accordance with their respective outstanding principal
amounts, the entire amount then due and payable on the Notes for principal and
interest, with interest through the date of such payment on the overdue
principal amount of each class of Notes, at the rate applicable to such class of
Notes, and in addition thereto such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee and
its agents and counsel.
(b) If the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the monies adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.4, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders, by
such appropriate Proceedings as the Indenture Trustee shall deem most effective
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by
applicable law.
(d) If there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or if a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
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;
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(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable
or deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the Indenture Trustee
on their behalf; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Holders of Notes allowed in any judicial
proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, if the Indenture Trustee shall consent
to the making of payments directly to such Noteholders, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Indenture Trustee, each predecessor trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor trustee, except as
a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such 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 first for the
ratable benefit of the Class A Noteholders until the Class A Notes have been
paid full and then for the benefit of the Class B 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.
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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 such 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 Noteholders are sufficient to discharge in
full the principal of and the accrued interest on the Notes 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 Voting
Notes. In determining such sufficiency or insufficiency with respect to
clauses (B) and (C), the Indenture Trustee may, but need not, obtain and
rely upon an opinion of an Independent investment banking or accounting
firm of national reputation as to the feasibility of such proposed action
and as to the sufficiency of the Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant
to this Article V, it shall pay out or deposit such money or property in the
following order:
FIRST: to the Indenture Trustee for amounts due under Section
6.7; and
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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 Voting 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;
(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 Voting 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
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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 Voting Notes,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture (or, in
the case of redemption, if applicable, on or after the Redemption Date) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
SECTION 5.8 Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally to their respective former positions
hereunder, and thereafter all rights and remedies of the Indenture Trustee and
the Noteholders shall continue as though no such Proceeding had been instituted.
SECTION 5.9 Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder 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 Voting 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
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Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided, however, that:
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) subject to the express terms of Section 5.4, any direction
to the Indenture Trustee to sell or liquidate the Trust Estate shall be by
the Holders of Notes representing 100% of the Outstanding Amount of the
Notes;
(iii) if the conditions set forth in Section 5.5 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to Section 5.5, then any direction to the Indenture Trustee by
Holders of Notes representing less than 100% of the Outstanding Amount of
the Notes to sell or liquidate the Trust Estate shall be of no force and
effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction;
provided, however, that, subject to Section 6.1, the Indenture Trustee need not
take any action that it determines might cause it to incur any liability (a)
with respect to which the Indenture Trustee shall have reasonable grounds to
believe that adequate indemnity against such liability in not assured to it and
(b) which might materially adversely affect the rights of any Noteholders not
consenting to such action.
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 Voting 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,
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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 Voting Notes; or
(c) any Proceeding instituted by any Noteholder for the enforcement of the
payment of principal of or interest on any Note on or after the respective due
dates expressed in such Note and in this Indenture (or, in the case of
redemption, on or after the Redemption Date).
SECTION 5.14 Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may adversely affect the covenants or the performance
of this Indenture. The Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but 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
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proceedings to compel or secure performance by the Seller, the Servicer or NFC
of each of their respective obligations under the Pooling and Servicing
Agreement and the Purchase Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and, at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of 66-2/3% of the Outstanding Amount of the Voting 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 Voting Notes shall, exercise
all rights, remedies, powers, privileges and claims of the Seller against NFC
under or in connection with the Purchase Agreement, including the right or power
to take any action to compel or secure performance or observance by NFC of each
of its obligations to the Seller thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Purchase Agreement,
and any right of the Seller to take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and the
Pooling and Servicing Agreement and no implied covenants or obligations
shall be read into this Indenture, the Pooling and Servicing Agreement or
any other Basic Document against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions ex-
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pressed 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.
(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.
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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 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
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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.
(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 Voting 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
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(iv) the Indenture Trustee otherwise becomes incapable of acting.
(b) If the Indenture Trustee gives notice of its intent to resign or
is removed or if a vacancy exists in the office of the Indenture Trustee for any
reason (the Indenture Trustee in such event being referred to herein as the
retiring Indenture Trustee), the Issuer shall promptly appoint and designate a
successor Indenture Trustee.
(c) A successor Indenture Trustee shall deliver a written acceptance
of its appointment and designation to the retiring Indenture Trustee and to the
Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession to Noteholders
and to each of the Rating Agencies. The retiring Indenture Trustee shall
promptly transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.
(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 Voting 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
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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 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
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given to each of them. Every instrument appointing any separate trustee or co-
trustee shall refer to this Indenture and the conditions of this Article VI.
Each separate trustee and co-trustee, upon its acceptance of the trusts
conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Indenture Trustee or
separately, as may be provided therein, subject to all the provisions of this
Indenture, specifically including every provision of this Indenture relating to
the conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or co-
trustee shall die, become incapable of acting, resign or be removed, 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.
(a) The Indenture Trustee shall at all times satisfy the requirements
of TIA (S) 310(a). The Indenture Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition and (unless waived by Moody's) it shall have a long term
unsecured debt rating of Baa3 or better by Moody's Investors Service, Inc. The
Indenture Trustee shall comply with TIA (S) 310(b); provided, however, that
there shall be excluded from the operation of TIA (S) 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA (S) 310(b)(1) are met.
(b) If a Default occurs and is continuing, and the Indenture Trustee
is deemed to have a conflicting interest as a result of acting as trustee for
both the Class A Notes and the Class B Notes, the Issuer shall appoint a
successor Indenture Trustee for one or both of such classes, so that there will
be separate Indenture Trustees for the Class A Notes and the Class B Notes. No
such event shall alter the voting rights of the Class A Noteholders or Class B
Noteholders under this Indenture or any other Basic Document. However, so long
as any amounts remain unpaid with respect to the Class A Notes, only the
Indenture Trustee for the Class A Noteholders will have the right to exercise
remedies under this Indenture (but subject to the express provisions of Section
5.4 and to the right of the Class B Noteholders to receive their share of any
proceeds of enforcement, subject to the subordination of the Class B Notes to
the Class A Notes as described herein) to make deposits to and withdrawals from
the Designated Accounts , hold Designated Account Property and to make
distributions to Noteholders from the Note Distribution Account. Upon repayment
of the Class A Notes in full, all rights to exercise remedies under the
Indenture will transfer to the Indenture Trustee for the Class B Notes.
(c) In the case of the appointment hereunder of a successor Indenture
Trustee with respect to any class of Notes, the Issuer, the retiring Indenture
Trustee and the successor Indenture Trustee with respect to such class of Notes
shall execute and deliver an indenture supplemental hereto wherein the successor
Indenture Trustee shall accept such appointment and
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which (i) shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, the successor Indenture Trustee all the
rights, powers, trusts and duties of the retiring Indenture Trustee with respect
to the Notes of the class to which the appointment of such successor Indenture
Trustee relates, (ii) if the retiring Indenture Trustee is not retiring with
respect to all classes of Notes, shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Indenture Trustee with respect to the Notes of each class
as to which the retiring Indenture Trustee is not retiring shall continue to be
vested in the retiring Indenture Trustee, and (iii) shall add to or change any
of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Indenture
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Indenture Trustees co-trustees of the same trust
and that each such Indenture Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Indenture Trustee; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Indenture
Trustee shall become effective to the extent provided therein.
SECTION 6.12 Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
SECTION 6.13 Representations and Warranties of Indenture Trustee. The
Indenture Trustee represents and warrants as of the Closing Date that:
(a) the Indenture Trustee is a New York banking corporation duly
organized, validly existing and in good standing under the laws of the State of
New York and the eligibility requirements set forth in Section 6.11 are
satisfied with respect to the Indenture Trustee;
(b) the Indenture Trustee has full power, authority and legal right to
execute, deliver and perform this Indenture, and has taken all necessary action
to authorize the execution, delivery and performance by it of this Indenture;
(c) the execution, delivery and performance by the Indenture Trustee
of this Indenture (i) shall not violate any provision of any law or regulation
governing the banking and trust powers of the Indenture Trustee or any order,
writ, judgment or decree of any court, arbitrator, or governmental authority
applicable to the Indenture Trustee or any of its assets, (ii) shall not violate
any provision of the corporate charter or by-laws of the Indenture Trustee or
(iii) shall not violate any provision of, or constitute, with or without notice
or lapse of time, a default under, or result in the creation or imposition of
any lien on any properties included in the Trust Estate pursuant to the
provisions of any mortgage, indenture, contract, agreement or other undertaking
to which it is a party, which violation, default or lien could reasonably be
expected to have a materially adverse effect on the Indenture Trustee's
performance or ability to perform its duties under this Indenture or on the
transactions contemplated in this Indenture;
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(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.
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 Voting Notes shall have the right to direct in writing the time, method
and place of conducting any Proceeding for any remedy available to the Indenture
Trustee or exercising any trust or power conferred on the Indenture Trustee;
provided, however, that subject to Section 6.1, the Indenture Trustee shall have
the right to decline to follow any such direction if the Indenture Trustee being
advised by counsel determines that the action so directed may not lawfully be
taken, or if the Indenture Trustee in good faith shall, by a Responsible
Officer, determine that the proceedings so directed would be illegal or subject
it to personal liability or be unduly prejudicial to the rights of Noteholders
not parties to such direction; and provided, further, that nothing in this
Indenture shall impair the right of the Indenture Trustee to take any action
deemed proper by the Indenture Trustee and which is not inconsistent with such
direction by the Noteholders.
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ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer shall furnish or cause to be furnished by the Servicer
to the Indenture Trustee (a) not more than five days before each Distribution
Date, a list, in such form as the Indenture Trustee may reasonably require, of
the names and addresses of the Holders of Notes as of the close of business on
the Record Date, and (b) at such other times as the Indenture Trustee may
request in writing, within 14 days after receipt by the Issuer of any such
request, a list of similar form and content as of a date not more than 10 days
prior to the time such list is furnished; provided, however, that so long as the
Indenture Trustee is the Note Registrar, no such list shall be required to be
furnished.
SECTION 7.2 Preservation of Information, Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.1 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.1 upon receipt of
a new list so furnished.
(b) Noteholders may communicate pursuant to TIA (S) 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA (S) 312(c).
SECTION 7.3 Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
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(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA (S) 313(c)) such
summaries of any information, documents and reports required to be filed by
the Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a) as may
be required by rules and regulations prescribed from time to time by the
Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on October 31 of such year.
SECTION 7.4 Reports by Indenture Trustee.
(a) If required by TIA (S) 313(a), within 60 days after each February
1, beginning with February 1, 1998, the Indenture Trustee shall mail to each
Noteholder as required by TIA (S) 313(c) a brief report dated as of such date
that complies with TIA (S) 313(a). The Indenture Trustee also shall comply with
TIA (S) 313(b). A copy of any report delivered pursuant to this Section 7.4(a)
shall, at the time of its mailing to Noteholders, be filed by the Indenture
Trustee with the Commission and each stock exchange, if any, on which the Notes
are listed. The Issuer shall notify the Indenture Trustee if and when the Notes
are listed on any stock exchange.
(b) On each Distribution Date, the Indenture Trustee shall include
with each payment to each Noteholder a copy of the statement for the related
Monthly Period as required pursuant to Section 4.09 of the Pooling and Servicing
Agreement.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture
and the Pooling and Servicing Agreement. Except as otherwise expressly provided
in this Indenture or in Article III of the Pooling and Servicing Agreement, if
any default occurs in the making of any payment or performance under any
agreement or instrument that is part of the Trust Estate, the Indenture Trustee
may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim an
Event of Default under this Indenture and any right to proceed thereafter as
provided in Article V.
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.
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(b) Before each Distribution Date, the Indenture Trustee shall cause
all withdrawals, deposits, transfers and distributions provided for in Section
4.06(b) and Section 5.02(b) of the Pooling and Servicing Agreement to be made.
Before each Distribution Date, the Indenture Trustee shall make the
distributions from the Collection Account provided for in Section 4.06(c) of the
Pooling and Servicing Agreement. Notwithstanding the preceding sentence, to the
extent permitted and as provided by Section 4.08 of the Pooling and Servicing
Agreement, deposits may be netted against amounts owing to the depositor.
(c) On each Distribution Date, the Indenture Trustee shall distribute
all amounts on deposit in the Note Distribution Account, other than amounts
deposited in the Note Distribution Account pursuant to Section 5.02(b)(i) or
5.02(b)(ii) of the Pooling and Servicing Agreement (subject to the Seller's
rights under Section 5.05 of the Pooling and Servicing Agreement to Investment
Earnings), to the Noteholders to the extent of amounts due and unpaid on the
Notes for principal and interest, in the following amounts, and in the following
order of priority:
(i) (A) first, to accrued and unpaid interest on the Class A
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 Class A Notes, the amount in the Note Distribution
Account shall be applied to the payment of such interest on each Note of
each class of the Class A Notes pro rata on the basis of the respective
aggregate amount of interest due on each such class of Class A Notes; and
(B) second, unless otherwise provided in clause (iv) below, to accrued and
unpaid interest on the Class B Notes; provided, however, that if there are
not sufficient funds in the Note Distribution Account (after the payment of
all accrued and unpaid interest on the Class A Notes) to pay the entire
amount of accrued and unpaid interest then due on the Class B Notes, the
amount in the Note Distribution Account shall be applied to the payment of
such interest on each of the Class B Notes pro rata on the basis of the
aggregate amount of interest due on each such Class B Note;
(ii) Unless otherwise provided in clause (iii) or (iv) below, the
Principal Payment Amount shall be applied on each Distribution Date, as
follows:
(A) first, 100% of the Principal Payment Amount to principal
of the Class A-1 Notes until the Class A-1 Notes are paid in
full;
(B) second, 100% of the Principal Payment Amount remaining
after application pursuant to clause (A), to principal of the
Class B Notes, until the principal balance of the Class B Notes
has been reduced to 3.5% of the aggregate principal balance of
all outstanding Notes (following such payment); and
(C) thereafter, 96.5% of the Principal Payment Amount
remaining after the application pursuant to clauses (A) and (B),
to principal of the Class A Notes (all of which shall be paid to
principal of the Class A-2 Notes until paid in full, then to
principal of the Class A-3 Notes until
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paid in full, and then to principal of the Class A-4 Notes until
paid in full) and 3.5% of the Principal Payment Amount remaining
after the application pursuant to Clauses (A) and (B), to
principal of the Class B Notes; and
(iii) if the amount on deposit in the Reserve Account on any
Distribution Date would be, after giving effect to the distribution of the
Principal Payment Amount in accordance with the foregoing priorities, less
than 1.0% of the Aggregate Starting Receivables Balance, then on each
Distribution Date thereafter until either the Class A Notes are paid in
full or the amount on deposit in the Reserve Account equals or exceeds the
Specified Reserve Account Balance, 100% of the Principal Payment Amount to
principal of the Class A Notes (all of which shall be paid to principal of
the Class A-1 Notes until paid in full, then to principal of the Class A-2
Notes until paid in full, then to principal of the Class A-3 Notes until
paid in full, and then to principal of the Class A-4 Notes until paid in
full). When principal payments on the Class B Notes resume in accordance
with the preceding sentence, the Principal Payment Amount for such
Distribution Date shall be distributed in accordance with Section
8.2(c)(ii)(C) hereof until the Class A-4 Notes have been paid in full, and
thereafter 100% of the Principal Payment Amount for such Distribution Date
shall be paid to the Class B Notes until the Class B Notes are paid in
full.
(iv) 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 the Class A Notes have been paid in full and
this Indenture has been discharged with respect to the Class A Notes, any
amounts remaining in the Note Distribution Account after the application
described in Section 8.2(c)(i) (A) and any amounts deposited into the Note
Distribution Account thereafter shall be applied in the following priority:
(1) to the repayment of principal on each of the Class A Notes pro rata on
the basis of the respective unpaid principal amount of each such Class A
Note; (2) to the repayment of interest on each of the Class B Notes pro
rata on the basis of the amount of interest due and unpaid on each such
Class B Note and (3) to the repayment of principal on each of the Class B
Notes pro rata on the basis of the unpaid principal amount of each such
Class B Note.
(d) Subject to Section 8.2(c)(iv) hereof, on the Distribution Date on
which the Funding Period ends (or, if the Funding Period does not end on a
Distribution Date, on the first Distribution Date following the end of the
Funding Period), the Indenture Trustee shall apply any and all amounts deposited
in the Note Distribution Account pursuant to Section 5.02(b) of the Pooling and
Servicing Agreement to the repayment of principal on the Notes in accordance
with the priorities set forth in Section 8.2(c)(ii) hereof.
(e) On the Distribution Date on which the Funding Period ends (or, if
the Funding Period does not end on a Distribution Date, on the first
Distribution Date following the end of the Funding Period), the Indenture
Trustee shall distribute to the Noteholders the Noteholders' Prepayment Premiums
deposited in the Note Distribution Account pursuant to Section 5.02(b) of the
Pooling and Servicing Agreement on the basis of each Noteholder's pro rata
portion of the
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Noteholders' Prepayment Premium (or portion thereof) payable with respect to the
class of Notes held by such Noteholder.
SECTION 8.3 General Provisions Regarding Accounts.
(a) Subject to Section 6.1(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Designated
Accounts resulting from any loss on any Eligible Investment included therein
except for losses attributable to the Indenture Trustee's failure to make
payments on such Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as trustee, in accordance with
their terms.
(b) If (i) the Servicer shall have failed to give investment
directions for any funds on deposit in the Designated Accounts to the Indenture
Trustee by 11:00 a.m., New York City time (or such other time as may be agreed
by the Servicer and the Indenture Trustee) on any Business Day; or (ii) a
Default shall have occurred and be continuing with respect to the Notes but the
Notes shall not have been declared due and payable pursuant to Section 5.2(a),
or, if such Notes shall have been declared due and payable following an Event of
Default, but amounts collected or receivable from the Trust Estate are being
applied in accordance with Section 5.5 as if there had not been such a
declaration, then the Indenture Trustee shall, to the fullest extent
practicable, invest and reinvest funds in the Designated Accounts in one or more
Eligible Investments selected by the Indenture Trustee.
SECTION 8.4 Release of Trust Estate.
(a) Subject to the payment of its fees and expenses pursuant to
Section 6.7, the Indenture Trustee may, and when required by the provisions of
this Indenture shall, execute instruments to release property in the Trust
Estate from the lien of this Indenture, or convey the 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) deposit in the Certificate Distribution Account any funds then on deposit
in the Reserve Account or the Collection Account only at such time as (y) there
are no Notes Outstanding 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
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by copies of any instruments involved, and the Indenture Trustee shall also
require as a condition to such action, an Opinion of Counsel, in form and
substance satisfactory to the Indenture Trustee, stating the legal effect of any
such action, outlining the steps required to complete the same, and concluding
that all conditions precedent to the taking of such action have been complied
with and such action shall not materially and adversely impair the security for
the Notes or the rights of the Noteholders in contravention of the provisions of
this Indenture; provided, however, that such Opinion of Counsel shall not be
required to express an opinion as to the fair value of the Trust Estate. Counsel
rendering any such opinion may rely, without independent investigation, on the
accuracy and validity of any certificate or other instrument delivered to the
Indenture Trustee in connection with any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior
notice to the Rating Agencies, the Issuer and the Indenture Trustee, when
authorized by an Issuer Order, at any time and from time to time, may enter into
one or more indentures supplemental hereto (which shall conform to the
provisions of the TIA as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(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 or additional Indenture Trustee with respect to
the Notes or any class thereof and to add to or change any of the
provisions of this Indenture as shall be
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necessary to facilitate the administration of the trusts hereunder by more
than one trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA, and the Indenture Trustee is hereby
authorized to join in the execution of any such supplemental indenture and
to make any further appropriate agreements and stipulations that may be
therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Noteholders but with prior
notice to the Rating Agencies, at any time and from time to time enter into one
or more indentures supplemental hereto for the purpose of adding any provisions
to, changing in any manner, or eliminating any of the provisions of, this
Indenture or modifying in any manner the rights of the Noteholders under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.
SECTION 9.2 Supplemental Indentures With Consent of Noteholders.
(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
Voting 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
Voting Notes, the consent of the Holders of which is required for (a) any
such supplemental indenture, (b) any waiver of compliance with certain
provisions of this Indenture, certain defaults hereunder and their
consequences as provided for in this Indenture or (c) any action described
in Sections 2.12, 3.7(e), 5.2, 5.6, 5.11, 5.12(a), 6.8, or 6.16;
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(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 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
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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.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption.
(a) The Class A-4 Notes and Class B 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 of the Pooling and Servicing
Agreement. Such redemption shall occur on any Distribution Date after all Class
A-1 Notes, the Class A-2 Notes and the Class A-3 Notes have been paid in full.
The purchase price for the Class A-4 Notes and Class B 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-4 Notes and Class B
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
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aggregate Redemption Price of the Class A-4 Notes and Class B Notes to be
redeemed, whereupon all such Notes shall be due and payable on the Redemption
Date.
(b) [Reserved.]
(c) Within sixty days after the redemption in full pursuant to this
Section 10.1 of any class of Notes, the Indenture Trustee shall provide each of
the Rating Agencies with written notice stating that all of such Notes have been
redeemed.
SECTION 10.2 Form of Redemption Notice.
(a) Notice of redemption of the Class A-4 Notes and Class B Notes
under Section 10.1(a) shall be given by the Indenture Trustee by first-class
mail, postage prepaid, mailed not less than five days prior to the applicable
Redemption Date to each Holder of the Class A-4 Notes and Class B Notes of
record, respectively, 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;
(iii) the place where Class A-4 Notes and Class B 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 numbers.
(c) Notice of redemption of the Class A-4 Notes and Class B 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-4 Note or Class B Note to be redeemed shall not impair or
affect the validity of the redemption of any other Class A-4 Note or Class B
Note to be redeemed.
(d) [Reserved.]
SECTION 10.3 Notes Payable on Redemption Date.
The Class A Notes or Class B Notes to be redeemed shall, following
notice of redemption as required by Section 10.2, 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.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee: (i) an Officer's Certificate stating
that all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with, (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with and (iii) (if required by the TIA) an Independent
Certificate from a firm of certified public accountants meeting the applicable
requirements of this Section 11.1, except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished. Every certificate or opinion with
respect to compliance with a condition or covenant provided for in this
Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the judgment of each such signatory,
such signatory has made such examination or investigation as is necessary
to enable such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit with the Indenture Trustee of any
Collateral or other property or securities that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 11.1(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each Person signing such
certificate as to the fair value (within 60 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (b)(i) above, the
Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer of the
securities
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to be so deposited and of all other such securities made on the basis of
any such withdrawal or release since the commencement of the then current
fiscal year of the Issuer, as set forth in the certificates delivered
pursuant to clause (i) above and this clause (b)(ii), is 10% or more of the
Outstanding Amount of the Notes, but such a certificate need not be
furnished with respect to any securities so deposited if the fair value
thereof to the Issuer as set forth in the related Officer's Certificate is
less than $25,000 or less than one percent of the Outstanding Amount of the
Notes.
(iii) Other than with respect to the release of any Warranty
Receivables, Administrative Receivables or Liquidating Receivables,
whenever any property or securities are to be released from the lien of
this Indenture, the Issuer shall also furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of each Person
signing such certificate as to the fair value (within 60 days of such
release) of the property or securities proposed to be released and stating
that in the opinion of such Person the proposed release will not impair the
security under this Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signatory thereof as to the matters described in clause (b)(iii) above, the
Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than Warranty Receivables,
Administrative Receivables and Liquidating Receivables, or securities
released from the lien of this Indenture since the commencement of the then
current calendar year, as set forth in the certificates required by clause
(b)(iii) above and this clause (b)(iv), equals 10% or more of the
Outstanding Amount of the Notes, but such certificate need not be furnished
in the case of any release of property or securities if the fair value
thereof as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the then Outstanding Amount of the
Notes.
(v) Notwithstanding Section 2.9 or any other provision of this
Section 11.1, the Issuer may (A) collect, liquidate, sell or otherwise
dispose of Receivables as and to the extent permitted or required by the
Basic Documents, (B) make cash payments out of the Designated Accounts and
the Certificate Distribution Account as and to the extent permitted or
required by the Basic Documents and (C) take any other action not
inconsistent with the TIA.
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.
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(b) Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer
or Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or officers
of the Servicer, the Seller, the Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller, the Issuer or the Administrator, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
(d) Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
SECTION 11.3 Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders or a class of Noteholders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Noteholders in
person or by agents duly appointed in writing; and except as herein otherwise
expressly provided such action shall become effective when such instrument or
instruments are delivered to the Indenture Trustee, and, where it is hereby
expressly required, to the Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.1) conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section 11.3.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
53
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(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.
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.
54
<PAGE>
SECTION 11.7 Conflict with Trust Indenture Act.
(a) If any provision hereof limits, qualifies or conflicts with
another provision hereof that is required to be included in this Indenture by
any of the provisions of the TIA, such required provision shall control.
(b) The provisions of TIA (S)(S) 310 through 317 that impose duties
on any Person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns.
(a) All covenants and agreements in this Indenture and the Notes by
the Issuer shall bind its successors and assigns, whether so expressed or not.
(b) All covenants and agreements of the Indenture Trustee in this
Indenture shall bind its successors and assigns, whether so expressed or not.
SECTION 11.10 Separability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.11 Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, the Noteholders and the Note Owners and (only to the extent expressly
provided herein) the Certificateholders, 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.
55
<PAGE>
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.
56
<PAGE>
SECTION 11.17 No Petition.
The Indenture Trustee, by entering into this Indenture, and each
Noteholder and Note Owner, by accepting a Note (or interest therein) issued
hereunder, hereby covenant and agree that they shall not, prior to the date
which is one year and one day after the termination of this Indenture with
respect to the Issuer pursuant to Section 4.1, acquiesce, petition or otherwise
invoke or cause the Seller or the Issuer to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Seller or the Issuer under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Seller or the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Seller or the Issuer.
SECTION 11.18 Inspection.
The Issuer agrees that, on reasonable prior notice, it shall permit
any representative of the Indenture Trustee, during the Issuer's normal business
hours, to examine all the books of account, records, reports and other papers of
the Issuer, to make copies and extracts therefrom, to cause such books to be
audited by Independent certified public accountants, and to discuss the Issuer's
affairs, finances and accounts with the Issuer's officers, employees and
Independent certified public accountants, all at such reasonable times and as
often as may be reasonably requested. The Indenture Trustee shall and shall
cause its representatives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
57
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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 1997-B OWNER TRUST
By: CHASE MANHATTAN BANK DELAWARE, not in its
individual capacity but solely as Owner
Trustee
By:
-------------------------
Name: John J. Cashin
Title: Vice President
THE BANK OF NEW YORK,
as Indenture Trustee
By:
-------------------------
Name: Reyne Macadaeg
Title: Assistant Vice President
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared John J. Cashin, known to me to
be the person and officer whose name is subscribed to the foregoing instrument
and acknowledged to me that the same was the act of the said Navistar Financial
1997-B Owner Trust, a Delaware business trust, and that he executed the same as
the act of said business trust for the purpose and consideration therein
expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 5th day of November,
1997.
------------------------------------------------
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 Reyne Macadaeg, 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 5th day of November,
1997.
------------------------------------------------
Notary Public in and for the State of New York.
My commission expires:
- ----------------------------
<PAGE>
EXHIBIT A
LOCATIONS OF
SCHEDULE OF RECEIVABLES
The Schedule of Receivables is on file at the offices of:
1. The Indenture Trustee
2. The Owner Trustee
3. Navistar Financial Corporation
4. Navistar Financial Retail Receivables Corporation
<PAGE>
EXHIBIT B
REGISTERED $____________/1/
No. R-__
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. __________
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
NAVISTAR FINANCIAL 1997-B OWNER TRUST
CLASS ___ _____% ASSET BACKED NOTES
NAVISTAR FINANCIAL 1997-B OWNER TRUST, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of _______________ DOLLARS ($_________)
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 such class of Notes pursuant to Sections 2.7, 3.1 and 8.2 of the
Indenture; provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on ______________ (the "Final Scheduled
Distribution Date"). The Issuer shall pay interest on this Note at the rate per
annum shown above on each Distribution Date until
- ---------------------------------
/1/ Denominations of $1,000 and integral multiples thereof.
1
<PAGE>
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 November 5, 1997. Interest will be calculated on the
actual number of days elapsed from the most recent Distribution Date on which
interest has been paid (or the Closing Date, in the case of the initial
Distribution Date) to but excluding the then current Distribution Date divided
by 360. Such principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, at the time of payment, is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: NAVISTAR FINANCIAL 1997-B OWNER TRUST,
By: CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement
By:
--------------------------------------
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK, not in its
individual capacity but solely as
Indenture Trustee
By:
--------------------------------------
Name:
Title:
3
<PAGE>
REVERSE OF NOTE
This Note, designated as a Class ____ ____% Asset Backed Note, is one
of a duly authorized issue of Notes of the Issuer (herein called the "Notes"),
all issued under an Indenture, dated as of ____________, 1997 (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 Indenture secures (a) first, the payment of principal and interest
on, and any other amounts owing in respect of the Class A Notes, equally and
ratably without prejudice, priority or distinction and (b) second, the payment
of principal of and interest on, and any other amounts owing in respect of the
Class B Notes, equally and ratably without prejudice, priority or distinction,
and to secure compliance with the provisions of the Indenture, as provided
therein.
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.
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,
4
<PAGE>
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 the Voting Notes. The Indenture also contains provisions
permitting the Holders of Notes representing specified percentages of the
Outstanding Amount of the Voting 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.
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.
5
<PAGE>
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither the Seller, the Servicer, the Indenture
Trustee nor the Owner Trustee in their respective individual capacities, any
owner of a beneficial interest in the Issuer, nor any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns, shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on, or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in this Note or the Indenture, it being expressly understood that said
covenants, obligations and indemnifications have been made by the Owner Trustee
solely as the Owner Trustee in the assets of the Issuer. The Holder of this Note
by the acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
6
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________________________, as attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.
Dated:__________________ __________________________________/2/
Signature Guaranteed:
________________________ __________________________________
- ------------
/2/ NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
7
<PAGE>
EXHIBIT C
REGISTERED $_________________/1/
No. R-__
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. ___________
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
NAVISTAR FINANCIAL 1997-B OWNER TRUST
CLASS ___ _____% ASSET BACKED NOTES
NAVISTAR FINANCIAL 1997-B OWNER TRUST, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of _______________ DOLLARS ($_________)
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 such class of Notes pursuant to Sections 2.7, 3.1 and 8.2 of the
Indenture; provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the earlier of ______________ (the "Final
Scheduled Distribution Date") and the Redemption Date, if any, pursuant to
Section 10.1(a) of the Indenture. The Issuer shall pay
1
<PAGE>
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 and including November 5, 1997. Interest will be computed on
the basis of a 360-day year of twelve 30-day months (or, in the case of the
initial Distribution Date, 12/30ths of a month). Such principal of and interest
on this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, at the time of payment, is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: NAVISTAR FINANCIAL 1997-B OWNER TRUST,
By: CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement
By:
--------------------------------------
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK, not in its
individual capacity but solely as
Indenture Trustee
By:
--------------------------------------
Name:
Title:
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REVERSE OF NOTE
This Note, designated as a Class ____ ____% Asset Backed Note, is one
of a duly authorized issue of Notes of the Issuer (herein called the "Notes"),
all issued under an Indenture, dated as of ____________, 1997 (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 Indenture secures (a) first, the payment of principal and interest
on, and any other amounts owing in respect of the Class A Notes, equally and
ratably without prejudice, priority or distinction and (b) second, the payment
of principal of and interest on, and any other amounts owing in respect of the
Class B Notes, equally and ratably without prejudice, priority or distinction,
and to secure compliance with the provisions of the Indenture, as provided
therein.
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.
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,
4
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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 the Voting Notes. The Indenture also contains provisions
permitting the Holders of Notes representing specified percentages of the
Outstanding Amount of the Voting 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.
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.
5
<PAGE>
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither the Seller, the Servicer, the Indenture
Trustee nor the Owner Trustee in their respective individual capacities, any
owner of a beneficial interest in the Issuer, nor any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns, shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on, or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in this Note or the Indenture, it being expressly understood that said
covenants, obligations and indemnifications have been made by the Owner Trustee
solely as the Owner Trustee in the assets of the Issuer. The Holder of this Note
by the acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
6
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________________________, as attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.
Dated:__________________ __________________________________/2/
Signature Guaranteed:
________________________ __________________________________
- ------------
/2/ NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
7
<PAGE>
EXHIBIT D
FORM OF NOTE DEPOSITORY AGREEMENT
8
<PAGE>
Exhibit 4.2
================================================================================
TRUST AGREEMENT
BETWEEN
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
SELLER
AND
CHASE MANHATTAN BANK DELAWARE
OWNER TRUSTEE
DATED AS OF NOVEMBER 5, 1997
================================================================================
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<C> <S> <C>
ARTICLE I
DEFINITIONS............................................................................. 1
1.1 Definitions........................................................................ 1
ARTICLE II
ORGANIZATION............................................................................ 1
2.1 Name............................................................................... 1
2.2 Office............................................................................. 1
2.3 Purposes and Powers................................................................ 1
2.4 Appointment of Owner Trustee....................................................... 2
2.5 Initial Capital Contribution of Owner Trust Estate................................. 2
2.6 Declaration of Trust............................................................... 2
2.7 Liability of the Certificateholders................................................ 3
2.8 Title to Trust Property............................................................ 3
2.9 Situs of Trust..................................................................... 3
2.10 Representations and Warranties of the Seller....................................... 3
ARTICLE III
THE CERTIFICATES........................................................................ 5
3.1 Initial Certificate Ownership...................................................... 5
3.2 Form of the Certificates........................................................... 5
3.3 Execution, Authentication and Delivery............................................. 5
3.4 Registration; Registration of Transfer and Exchange of Certificates................ 6
3.5 Mutilated, Destroyed, Lost or Stolen Certificates.................................. 7
3.6 Persons Deemed Certificateholders.................................................. 8
3.7 Access to List of Certificateholders' Names and Addresses.......................... 8
3.8 Maintenance of Corporate Trust Office.............................................. 8
3.9 Appointment of Paying Agent........................................................ 8
3.10 Seller as Certificateholder........................................................ 9
ARTICLE IV
ACTIONS BY OWNER TRUSTEE................................................................ 9
4.1 Prior Notice to Certificateholders with Respect to Certain Matters................. 9
4.2 Action by Certificateholders with Respect to Certain Matters.......................10
4.3 Action by Certificateholders with Respect to Bankruptcy............................10
4.4 Restrictions on Certificateholders' Power..........................................10
4.5 Majority Control...................................................................10
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES.............................................10
</TABLE>
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<TABLE>
<C> <S> <C>
5.1 [Reserved]........................................................................ 10
5.2 Application of Trust Funds........................................................ 11
5.3 Method of Payment................................................................. 12
5.4 Accounting and Reports to the Certificateholders, the Internal Revenue
Service and Others................................................................ 12
5.5 Signature on Returns; Tax Matters Partner......................................... 12
ARTICLE VI
THE OWNER TRUSTEE...................................................................... 12
6.1 Duties of Owner Trustee........................................................... 12
6.2 Rights of Owner Trustee........................................................... 13
6.3 Acceptance of Trusts and Duties................................................... 14
6.4 Action upon Instruction by Certificateholders..................................... 15
6.5 Furnishing of Documents........................................................... 16
6.6 Representations and Warranties of Owner Trustee................................... 16
6.7 Reliance; Advice of Counsel....................................................... 17
6.8 Owner Trustee May Own Certificates and Notes...................................... 17
6.9 Compensation and Indemnity........................................................ 18
6.10 Replacement of Owner Trustee...................................................... 18
6.11 Merger or Consolidation of Owner Trustee.......................................... 19
6.12 Appointment of Co-Trustee or Separate Trustee..................................... 19
6.13 Eligibility Requirements for Owner Trustee........................................ 21
ARTICLE VII
TERMINATION OF TRUST AGREEMENT......................................................... 21
7.1 Termination of Trust Agreement.................................................... 21
ARTICLE VIII
AMENDMENTS............................................................................. 22
8.1 Amendments Without Consent of Certificateholders or Noteholders................... 22
8.2 Amendments With Consent of Certificateholders and Noteholders..................... 23
8.3 Form of Amendments................................................................ 23
ARTICLE IX
MISCELLANEOUS.......................................................................... 24
9.1 No Legal Title to Owner Trust Estate.............................................. 24
9.2 Limitations on Rights of Others................................................... 24
9.3 Notices........................................................................... 24
9.4 Severability...................................................................... 24
9.5 Counterparts...................................................................... 24
9.6 Successors and Assigns............................................................ 24
9.7 No Petition Covenant.............................................................. 25
9.8 No Recourse....................................................................... 25
9.9 Headings.......................................................................... 25
9.10 Governing Law..................................................................... 25
9.11 Certificate Transfer Restrictions................................................. 25
</TABLE>
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<TABLE>
<C> <S> <C>
9.12 Administrator.................................................................... 26
9.13 Amended and Restated Trust Agreement............................................. 26
</TABLE>
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
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<PAGE>
TRUST AGREEMENT, dated as of November 5, 1997 between Navistar
Financial Retail Receivables Corporation, a Delaware corporation, as Seller, and
Chase Manhattan 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 1997-B Owner Trust" in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued on behalf of the Trust.
SECTION 2.2 Office. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in Delaware
as the Owner Trustee may designate by written notice to the Certificateholders
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, to sell, transfer or exchange the
Notes and to transfer and exchange the Certificates;
(iii) to acquire property and assets from the Seller pursuant to
the Pooling and Servicing Agreement, to make payments or distributions on
the Securities to the Securityholders, to make deposits into and
withdrawals from the Reserve Account, the Pre-
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<PAGE>
Funding Account, the Negative Carry Account and other accounts established
pursuant to the Basic Documents and to pay the organizational, start-up and
transactional expenses of the Trust;
(iv) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the terms of the Indenture and to hold, manage and
distribute to the Certificateholders pursuant to the terms of this
Agreement and the Pooling and Servicing Agreement any portion of the Trust
Estate released from the lien of, and remitted to the Trust pursuant to,
the Indenture;
(v) to enter into and perform its obligations and exercise its
rights under the Basic Documents to which it is to be a party;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable, desirable or convenient to
accomplish the foregoing or are incidental thereto or connected therewith;
and
(vii) subject to compliance with the Basic Documents, to engage
in such other activities as may be required in connection with conservation
of the Owner Trust Estate and the making of payments or distributions to
the Securityholders.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the Basic Documents.
SECTION 2.4 Appointment of Owner Trustee. The Seller hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.5 Initial Capital Contribution of Owner Trust Estate. The
Seller hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Seller, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Certificate Distribution Account. The Seller
shall pay organizational expenses of the Trust as they may arise or shall, upon
the request of the Owner Trustee, promptly reimburse the Owner Trustee for any
such expenses paid by the Owner Trustee.
SECTION 2.6 Declaration of Trust. The Owner Trustee hereby declares
that it shall hold the Owner Trust Estate in trust upon and subject to the
conditions and obligations set forth herein and in the Pooling and Servicing
Agreement for the use and benefit of the Certificateholders, subject to the
obligations of the Trust under the Basic Documents. It is the intention of the
parties hereto that the Trust constitute a business trust under the Business
Trust Statute, that this Agreement constitute the governing instrument of such
business trust and that the Certificates represent the equity interests therein.
The rights of the Certificateholders shall be determined as set forth herein and
in the Business Trust Statute and the relationship between the parties hereto
created by this Agreement shall not constitute indebtedness for any purpose. It
is the intention of the parties hereto that, solely for purposes of federal
income taxes, state and local income and franchise taxes, and any
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<PAGE>
other taxes imposed upon, measured by, or based upon gross or net income, the
Trust shall be treated as a division or branch of the Seller. 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 a division or branch
of the Seller for such tax purposes; provided, however, that until the Seller
receives a ruling from the Illinois Department of Revenue or an opinion of
counsel reasonably acceptable to the Owner Trustee that the Trust will be
treated as a branch or division of the Seller for purposes of the Illinois
Income Tax Act and the Illinois Personal Property Tax Replacement Tax Act, for
purposes of the Illinois Income Tax Act and the Illinois Personal Property Tax
Replacement Tax Act, the Seller will (i) include the taxable income of the Trust
in the combined tax return filed by the combined group that includes the Seller,
(ii) take all steps necessary to treat the Trust as a member of the same
combined group of which the Seller is a member and (iii) provide information to
the Owner Trustee to confirm that the actions required by clauses (i) and (ii)
have been effected. 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 Certificateholders. No
Certificateholder 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.
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<PAGE>
(b) The Seller is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualifications.
(c) The Seller has the power and authority to execute and deliver
this Agreement and to carry out its terms, the Seller has full power and
authority to sell and assign the property to be sold and assigned to and
deposited with the Issuer as part of the Trust and the Seller has duly
authorized such sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery and performance of this
Agreement have been duly authorized by the Seller by all necessary
corporate action.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms of this Agreement do not
conflict with, result in any breach of any of the terms and provisions of
or constitute (with or without notice or lapse of time) a default under,
the certificate of incorporation or by-laws of the Seller, or any
indenture, agreement or other instrument to which the Seller is a party or
by which it is bound, or result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic Documents),
or violate any law or, to the Seller's knowledge, any order, rule or
regulation applicable to the Seller of any court or of any federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or any of its
properties.
(e) This Agreement, when duly executed and delivered, shall
constitute a legal, valid and binding obligation of the Seller enforceable
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights in general and by general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(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.
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<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. 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 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 and
shall be in definitive form only. The terms of the Certificates set forth in
Exhibit A shall form part of this Agreement.
SECTION 3.3 Execution, Authentication and Delivery. Concurrently
with the sale of the Initial Receivables to the Trust pursuant to the Pooling
and Servicing Agreement, the Owner Trustee shall cause the Certificates 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 The Chase
Manhattan 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. The Chase Manhattan Bank shall be
the initial Certificate Registrar. Upon any resignation of a Certificate
Registrar, the Owner
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<PAGE>
Trustee shall promptly appoint a successor or, if it elects not to make such an
appointment, assume the duties of Certificate Registrar.
(b) The initial Certificateholders may at any time, without consent
of the Noteholders, sell, transfer, convey or assign in any manner its rights to
and interests in the Certificates, 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, (ii) the Certificateholders
provide 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, (iii) such transferee or assignee agrees to take
positions for tax purposes consistent with the tax positions agreed to be taken
by the Certificateholders and (iv) the conditions set forth in Section 9.11 have
been satisfied. In addition, no transfer of a Certificate shall be registered
unless the transferee shall have provided to the Owner Trustee and the
Certificate Registrar an opinion of counsel that in connection with such
transfer no registration of the Certificates is required under the Securities
Act or applicable state law or that such transfer is otherwise being made in
accordance with all applicable federal and state securities laws.
(c) Subject to Section 3.4(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 The Chase Manhattan 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.
(d) At the option of a Holder, Certificates may be exchanged for
other Certificates of a like aggregate percentage interest 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 The Chase Manhattan 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.
(e) 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 canceled and
subsequently destroyed or otherwise disposed of by the Owner Trustee or
Certificate Registrar in accordance with its customary practice.
(f) 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.
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<PAGE>
(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 The Chase Manhattan Bank as its
authenticating agent to authenticate and deliver), in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a replacement
Certificate in authorized denominations of a like amount; provided, however,
that if any such destroyed, lost or stolen Certificate, but not a mutilated
Certificate, shall have become or within seven days shall be due and payable,
then instead of issuing a replacement Certificate the Owner Trustee may pay such
destroyed, lost or stolen Certificate when so due or payable.
(b) If, after the delivery of a replacement Certificate or
distribution in respect of a destroyed, lost or stolen Certificate pursuant to
subsection 3.5(a), a bona fide purchaser of the original Certificate in lieu of
which such replacement Certificate was issued presents for payment such original
Certificate, the Owner Trustee shall be entitled to recover such replacement
Certificate (or such distribution) from the Person to whom it was delivered or
any Person taking such replacement Certificate from such Person to whom such
replacement Certificate was delivered or any assignee of such Person, except a
bona fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expense
incurred by the Owner Trustee in connection therewith.
(c) In connection with the issuance of any replacement Certificate
under this Section 3.5, the Owner Trustee may require the payment by the Holder
of such Certificate of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable expenses
(including the fees and expenses of the Owner Trustee and the Certificate
Registrar) connected therewith.
(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.
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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 The Chase
Manhattan Bank, 55 Water Street, New York, New York, as its principal office for
such purposes. The Owner Trustee shall give prompt written notice to the Seller
and to the Certificateholders of any change in the location of the Certificate
Register or any such office or agency.
SECTION 3.9 Appointment of Paying Agent. The Paying Agent shall
make distributions to Certificateholders from the Certificate Distribution
Account pursuant to Section 5.2 and shall report the amounts of such
distributions to the Owner Trustee. Any Paying Agent shall have the revocable
power to withdraw funds from the Certificate Distribution Account for the
purpose of making the distributions referred to above. The Owner Trustee may
revoke such power and remove the Paying Agent if the Owner Trustee determines in
its sole discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect. The Paying Agent
shall initially be The Chase Manhattan Bank, and any co-paying agent chosen by
The Chase Manhattan Bank, and acceptable to the Owner Trustee. The Chase
Manhattan Bank shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Owner Trustee. If The Chase Manhattan 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.
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SECTION 3.10 Seller as Certificateholder. The Seller in its
individual or any other capacity may 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 or an action by the Indenture Trustee
pursuant to the Indenture) and the compromise of any action, claim or
lawsuit brought by or against the Trust (other than an action to collect on
a Receivable or an action by the Indenture Trustee pursuant to the
Indenture);
(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;
(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; or
(g) the amendment of the Pooling and Servicing Agreement in
circumstances where the consent of any Noteholder is required.
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,
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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 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 a majority of the
ownership interest in the Trust outstanding as of the close of the preceding
Distribution Date. 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 a majority of the ownership interest in the Trust 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 The Chase Manhattan Bank in the name of the Owner
Trustee an Eligible Deposit Account known as the Navistar Financial 1997-B Owner
Trust Certificate Distribution Account (the "Certificate Distribution Account"),
bearing an additional designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders.
(b) The Owner Trustee shall possess all right, title and interest in
and to all funds on deposit from time to time in the Certificate Distribution
Account and in all proceeds thereof. Except as otherwise provided herein or in
the Pooling and Servicing Agreement, the Certificate Distribution Account shall
be under the sole dominion and control of the Owner Trustee for the benefit of
the Certificateholders. If, at any time, the Certificate Distribution Account
ceases to be an Eligible Deposit Account, the Servicer shall within 10 Business
Days (or such longer period, not
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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 (based on the
information contained in the Servicer's Certificate delivered on the related
Determination Date) distribute to the Certificateholders, on a pro rata basis,
amounts deposited in the Certificate Distribution Account pursuant to Sections
4.07(b), 5.01(b)(i), 5.03(b), 5.05, 9.02(a) and 9.02(d) of the Pooling and
Servicing Agreement.
(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 Section 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 or, where
possible, by intra-bank book entry credit, if 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 Certificateholders exceeds $100,000 or (ii) by
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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
division or branch of the Seller 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.
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.
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
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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, Chase
Manhattan 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
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all monies actually received by it constituting part of the Owner Trust Estate
upon the terms of this Agreement. The Owner Trustee shall not be liable or
accountable hereunder or under any Basic Document under any circumstances,
except (i) for its own negligent action, its own negligent failure to act or its
own willful misconduct or (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 6.6 and expressly made by the
Owner Trustee. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability
of any Receivable or the perfection and priority of any security interest
created by any Receivable in any Financed Vehicle or the maintenance of any
such perfection and priority, or for or with respect to the sufficiency of
the Owner Trust Estate or its ability to generate the distributions and
payments to be made to Certificateholders under this Agreement or to
Noteholders under the Indenture, including, without limitation: the
existence, condition and ownership of any Financed Vehicle; the existence
and enforceability of any insurance thereon; the existence and contents of
any Receivable on any computer or other record thereof; the validity of the
assignment of any Receivable to the Trust or of any intervening assignment;
the completeness of any Receivable; the performance or enforcement of any
Receivable; the compliance by the Seller or the Servicer with any warranty
or representation made under any Basic Document or in any related document
or the accuracy of any such warranty or representation or any action
of the Administrator, the Trustee or the Servicer or any subservicer taken
in the name of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of
the Administrator or any Certificateholder;
(c) no provision of this Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers
hereunder or under any Basic Document, if the Owner Trustee shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or
provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes or any amounts payable
with respect to 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;
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(f) the Owner Trustee shall not be liable for the default or
misconduct of the Administrator, the Indenture Trustee, the Seller or the
Servicer under any of the Basic Documents or otherwise and the Owner
Trustee shall have no obligation or liability to perform the obligations of
the Trust under this Agreement or the Basic Documents that are required to
be performed by the Administrator under the Administration Agreement, the
Indenture Trustee under the Indenture, the Servicer under the Pooling and
Servicing Agreement or NFC under the Purchase Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document, at the request, order or
direction of any of the Certificateholders, unless such Certificateholders
have offered to the Owner Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities that may be incurred by the
Owner Trustee therein or thereby. The right of the Owner Trustee to perform
any discretionary act enumerated in this Agreement or in any Basic Document
shall not be construed as a duty, and the Owner Trustee shall not be
answerable for other than its negligence or willful misconduct in the
performance of any such act.
SECTION 6.4 Action upon Instruction by Certificateholders.
(a) Subject to Section 4.4, the Certificateholders may by written
instruction direct the Owner Trustee in the management of the Trust. Such
direction may be exercised at any time by written instruction of the
Certificateholders pursuant to Section 4.5.
(b) Notwithstanding the foregoing, the Owner Trustee shall not be
required to take any action hereunder or under any Basic Document if the Owner
Trustee shall have reasonably determined, or shall have been advised by counsel,
that such action is likely to result in liability on the part of the Owner
Trustee or is contrary to the terms hereof or of any Basic Document or is
otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Basic Document, or is unsure as to the application, intent,
interpretation or meaning of any provision of this Agreement or the Basic
Documents, the Owner Trustee shall promptly give notice (in such form as shall
be 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.
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SECTION 6.5 Furnishing of Documents. The Owner Trustee shall
furnish to the Certificateholders, promptly upon receipt of a written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee under the Basic Documents.
SECTION 6.6 Representations and Warranties of Owner Trustee. The
Owner Trustee hereby represents and warrants to the Seller, for the benefit of
the Certificateholders, that:
(a) It is a banking corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation. The
eligibility requirements set forth in Section 6.13 (a) - (c) are satisfied
with respect to it.
(b) It has full power, authority and legal right to execute, deliver
and perform this Agreement, and has taken all necessary action to authorize
the execution, delivery and performance by it of this Agreement.
(c) The execution, delivery and performance by it of this Agreement
(i) shall not violate any provision of any law or regulation governing the
banking and trust powers of the Owner Trustee or any order, writ, judgment
or decree of any court, arbitrator or governmental authority applicable to
the Owner Trustee or any of its assets, (ii) shall not violate any
provision of the corporate charter or by-laws of the Owner Trustee, or
(iii) shall not violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the creation or
imposition of any lien on any properties included in the Trust pursuant to
the provisions of any mortgage, indenture, contract, agreement or other
undertaking to which it is a party, which violation, default or lien could
reasonably be expected to have a materially adverse effect on the Owner
Trustee's performance or ability to perform its duties as Owner Trustee
under this Agreement or on the transactions contemplated in this Agreement.
(d) The execution, delivery and performance by the Owner Trustee of
this Agreement shall not require the authorization, consent or approval of,
the giving of notice to, the filing or registration with, or the taking of
any other action in respect of, any governmental authority or agency
regulating the corporate trust activities of Chase Manhattan 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
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or other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties and need not investigate any fact or
matter in any such document. The Owner Trustee may accept a certified copy of a
resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter the
method of the determination of which is not specifically prescribed herein, the
Owner Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer or other authorized officers
of the relevant party, as to such fact or matter, and such certificate shall
constitute full protection to the Owner Trustee for any action taken or omitted
to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee: (i) may act directly or through its agents,
attorneys, custodians or nominees pursuant to agreements entered into with any
of them, and the Owner Trustee shall not be liable for the conduct or misconduct
of such agents, attorneys, custodians or nominees if such agents, attorneys,
custodians or nominees shall have been selected by the Owner Trustee with
reasonable care; and (ii) may consult with counsel, accountants and other
skilled professionals to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the opinion or advice of any such counsel,
accountants or other such Persons and not contrary to this Agreement or any
Basic Document.
SECTION 6.8 Owner Trustee May Own Certificates and Notes. The
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates or Notes and may deal with the Seller, the
Administrator, the Indenture Trustee and the Servicer in transactions in the
same manner as it would have if it were not the Owner Trustee.
SECTION 6.9 Compensation and Indemnity. The Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Seller and the Owner
Trustee, and the Owner Trustee shall be entitled to be reimbursed by the
Servicer for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, custodians, nominees,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder. The Servicer shall indemnify the Owner Trustee 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
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written instrument, in duplicate, to the resigning Owner Trustee and the
successor Owner Trustee. If no successor Owner Trustee shall have been appointed
and have accepted appointment within 30 days after the giving of such notice,
the resigning Owner Trustee giving such notice may petition any court of
competent jurisdiction for the appointment of a successor Owner Trustee. The
Administrator shall remove the Owner Trustee if:
(i) the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 6.13 and shall fail to resign after written
request therefor by the Administrator;
(ii) the Owner Trustee shall be adjudged bankrupt or insolvent;
(iii) a receiver or other public officer shall be appointed or
take charge or control of the Owner Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation; or
(iv) the Owner Trustee shall otherwise be incapable of acting.
(b) If the Owner Trustee gives notice of its intent to resign or is
removed or if a vacancy exists in the office of Owner Trustee for any reason,
the Administrator shall promptly appoint a successor Owner Trustee by written
instrument, in duplicate (one copy of which instrument shall be delivered to the
outgoing Owner Trustee so removed and one copy to the successor Owner Trustee)
and shall pay all fees owed to the outgoing Owner Trustee.
(c) Any resignation or removal of the Owner Trustee and appointment
of a successor Owner Trustee pursuant to any of the provisions of this Section
6.10 shall not become effective and no such resignation shall be deemed to have
occurred until a written acceptance of appointment is delivered by the successor
Owner Trustee to the outgoing Owner Trustee and the Administrator and all fees
and expenses due to the outgoing Owner Trustee are paid. Any successor Owner
Trustee appointed pursuant to this Section 6.10 shall be eligible to act in such
capacity in accordance with Section 6.13 and, following compliance with the
preceding sentence, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor under this Agreement, with like
effect as if originally named as Owner Trustee. The Administrator shall provide
notice of such resignation or removal of the Owner Trustee to each of the Rating
Agencies.
(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.
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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
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.
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(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 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. The bankruptcy, liquidation, dissolution, death or incapacity of
any Certificateholder 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
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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 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 Paying Agent 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; (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 Paying Agent 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 canceled 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 canceled or such funds have been so
paid to the Seller.
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ARTICLE VIII
AMENDMENTS
SECTION 8.1 Amendments Without Consent of Certificateholders or
Noteholders. This Agreement may be amended by the Seller and the Owner Trustee
without the consent of any of the Noteholders or the Certificateholders (but
with prior notice to each of the Rating Agencies) to (i) cure any ambiguity,
(ii) correct or supplement any provision in this Agreement that may be defective
or inconsistent with any other provision in this Agreement or any other Basic
Document, (iii) add or supplement any credit enhancement for the benefit of the
Noteholders or the Certificate holders (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 Voting Notes as of the close of
business on the preceding Distribution Date and the consent of the Holders of
Certificates evidencing not less than a majority of the ownership interest in
the Trust 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
the Specified Reserve Account Balance, (b) reduce the aforesaid percentage
required to consent to any such amendment or (c) amend Section 4.3, without the
consent of the Holders of all of the Notes and the Holders of all of the
Certificates then outstanding. The Administrator shall furnish notice of the
substance of any proposed amendment, supplement or consent under this Section
8.2 to each of the Rating Agencies prior to obtaining consent thereto.
SECTION 8.3 Form of Amendments.
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(a) Promptly after the execution of any amendment, supplement or
consent pursuant to Section 8.1 or 8.2, the Owner Trustee shall furnish written
notification of the substance of such amendment or consent to each
Certificateholder and the Indenture Trustee.
(b) It shall not be necessary for the consent of Certificateholders,
the Noteholders or the Indenture Trustee pursuant to Section 8.2 to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof. The manner of obtaining
such consents (and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders and Noteholders shall be subject to
such reasonable requirements as the Owner Trustee may prescribe.
(c) Promptly after the execution of any amendment to the Certificate
of Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
(d) Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
such execution have been satisfied. The Owner Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee's
own rights, duties or immunities under this Agreement or otherwise.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 No Legal Title to Owner Trust Estate. The
Certificateholders shall not have legal title to any part of the Owner Trust
Estate. The Certificateholders shall be entitled to receive distributions with
respect to their undivided ownership interest therein only in accordance with
Articles V and VII. No transfer, by operation of law or otherwise, of any right,
title, and interest of the Certificateholders to and in their ownership interest
in the Owner Trust Estate shall operate to terminate this Agreement or the
trusts hereunder or entitle any transferee to an accounting or to the transfer
to it of legal title to any part of the Owner Trust Estate.
SECTION 9.2 Limitations on Rights of Others. Except for Section 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.
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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, 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 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 any amount with respect to 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 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.
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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 shall be deemed to have represented and
warranted that it is not a Benefit Plan.
SECTION 9.12 Administrator. The Administrator is authorized to
execute on behalf of the Trust all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the Trust to
prepare, file or deliver pursuant to the Basic Documents. Upon request, the
Owner Trustee shall execute and deliver to the Administrator a power of attorney
appointing the Administrator its agent and attorney-in-fact to execute all such
documents, reports, filings, instruments, certificates and opinions.
SECTION 9.13 Amended and Restated Trust Agreement. This Trust
Agreement is the amended and restated trust agreement contemplated by the Trust
Agreement dated as of October 24, 1997 between the Seller and the Owner Trustee.
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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.
CHASE MANHATTAN BANK DELAWARE
as Owner Trustee
By:
--------------------------------------
Name: John J. Cashin
Title: Vice President
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION, as Seller
By:
--------------------------------------
Name: R. Wayne Cain
Title: Vice President and Treasurer
Acknowledged and Accepted:
NAVISTAR FINANCIAL CORPORATION,
as Servicer
By:
----------------------------------
Name: R. Wayne Cain
Title: Vice President and Treasurer
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EXHIBIT A
NUMBER
R-1
OWNERSHIP INTEREST: 100%
SEE REVERSE FOR CERTAIN DEFINITIONS
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.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON NOVEMBER 5, 1997, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION THEREUNDER.
Navistar Financial 1997-B Owner Trust
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.)
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THIS CERTIFIES THAT Navistar Financial Retail Receivables Corporation
is the registered owner of a nonassessable, fully-paid, fractional undivided
interest in Navistar Financial 1997-B Owner Trust (the "Trust").
The Trust was created pursuant to a trust agreement, dated as of
October 24, 1997 (as amended and restated as of November 5, 1997 and as further
amended, restated or supplemented from time to time, the "Trust Agreement"),
between the Seller and Chase Manhattan 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 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.
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.
Each Certificateholder with respect to a Certificate, by its
acceptance of a Certificate, covenants and agrees that such Certificateholder
with respect to a Certificate, shall not, prior to the date which is one year
and one day after the termination of the Trust Agreement, acquiesce, petition or
otherwise invoke or cause the Seller to invoke the process of any court or
governmental authority for the purpose of commencing or sustaining a case
against the Seller under any federal or state bankruptcy, insolvency,
reorganization or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Seller or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Seller.
Distributions on this Certificate shall be made as provided in the
Trust Agreement by the Owner Trustee by wire transfer, check mailed or, where
possible, intra-bank book entry 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 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.
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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.
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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.
Dated: November 5, 1997
NAVISTAR FINANCIAL 1997-B OWNER TRUST
By: CHASE MANHATTAN BANK DELAWARE, not in its
individual capacity but solely as Owner
Trustee
By:
--------------------------------
Name: John J. Cashin
Title: Vice President
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
CHASE MANHATTAN BANK DELAWARE CHASE MANHATTAN BANK DELAWARE,
not in its individual not in its individual
capacity but solely capacity but solely
as Owner Trustee OR as Owner Trustee
by The Chase Manhattan Bank,
as Authenticating Agent
By:
-------------------------- By:
Authorized Officer -------------------------
Authorized Officer
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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
Voting Notes, and (ii) Certificateholders whose Certificates evidence not less
than a majority of the ownership interest in the Trust, 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 registration
of 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) certain opinions required by
Section 3.4 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 The Chase Manhattan Bank, New York, New
York.
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
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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.
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<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.
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<PAGE>
EXHIBIT B
CERTIFICATE OF TRUST OF
Navistar Financial 1997-B Owner Trust
-------------------------------------
THIS Certificate of Trust of Navistar Financial 1997-B Owner Trust
(the "Trust"), dated as of October 24, 1997 is being duly executed and filed by
CHASE MANHATTAN BANK DELAWARE, a Delaware banking corporation, as trustee, to
form a business trust under the Delaware Business Trust Act (12 Del. C. (S)3801
et seq.).
1. Name. The name of the business trust formed hereby is Navistar
Financial 1997-B Owner Trust.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is CHASE MANHATTAN BANK DELAWARE, 1201 Market
Street, Wilmington, Delaware 19801.
3. This Certificate of Trust shall be effective on October 24, 1997.
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.
CHASE MANHATTAN BANK DELAWARE, not in its
individual capacity but solely as trustee of the
Trust.
By:
-----------------------------------------
Name:
Title:
<PAGE>
Exhibit 10.1
PURCHASE AGREEMENT
BETWEEN
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
AND
NAVISTAR FINANCIAL CORPORATION
DATED AS OF NOVEMBER 5, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE I
DEFINITIONS.................................................................... 1
SECTION 1.01. Definitions.............................................. 1
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES............................................... 2
SECTION 2.01. Purchase and Sale of Receivables......................... 2
SECTION 2.02. Purchase Price........................................... 2
SECTION 2.03. The Closings............................................. 2
SECTION 2.04. Covenant Regarding Subsequent Receivables................ 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES................................................. 3
SECTION 3.01. Representations and Warranties as to Receivables......... 3
SECTION 3.02. Additional Representations and Warranties of NFC......... 7
SECTION 3.03. Representations and Warranties of NFRRC.................. 8
ARTICLE IV
CONDITIONS..................................................................... 9
SECTION 4.01. Conditions to Obligation of NFRRC........................ 9
SECTION 4.02. Conditions To Obligation of NFC.......................... 10
ARTICLE V
ADDITIONAL AGREEMENTS.......................................................... 11
SECTION 5.01. Conflicts With Further Transfer and Servicing Agreements. 11
SECTION 5.02. Protection of Title...................................... 11
SECTION 5.03. Other Liens or Interests................................. 11
SECTION 5.04. Repurchase Events........................................ 11
SECTION 5.05. Indemnification.......................................... 12
SECTION 5.06. Further Assignments...................................... 12
SECTION 5.07. Pre-Closing Collections.................................. 12
SECTION 5.08. Limitation on Transfer of NITC Purchase Obligations...... 12
SECTION 5.09. Sale Treatment........................................... 12
ARTICLE VI
MISCELLANEOUS PROVISIONS....................................................... 13
SECTION 6.01. Amendment................................................ 13
SECTION 6.02. Survival................................................. 13
SECTION 6.03. Notices.................................................. 13
SECTION 6.04. Governing Law............................................ 13
SECTION 6.05. Waivers.................................................. 13
SECTION 6.06. Costs and Expenses....................................... 13
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
SECTION 6.07. Confidential Information................................ 13
SECTION 6.08. Headings................................................ 13
SECTION 6.09. Counterparts............................................ 13
SECTION 6.10. Severability of Provisions.............................. 14
SECTION 6.11. Further Assurances...................................... 14
SECTION 6.12. No Third-Party Beneficiaries............................ 14
SECTION 6.13. Merger and Integration.................................. 14
Exhibits
Exhibit A - Form of Initial Assignment
Exhibit B - Form of Subsequent Transfer Assignment
</TABLE>
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<PAGE>
PURCHASE AGREEMENT, dated as of November 5, 1997, between NAVISTAR
FINANCIAL RETAIL RECEIVABLES CORPORATION, a Delaware corporation ("NFRRC"), and
NAVISTAR FINANCIAL CORPORATION, a Delaware corporation ("NFC").
WHEREAS, NFRRC desires to purchase from time to time during the Funding
Period a portfolio of retail instalment sale contracts for, and retail loans
evidenced by notes and secured by new and used medium and heavy duty trucks,
buses and trailers (collectively, the "Retail Notes"), together with related
rights owned by NFC;
WHEREAS, NFC is willing to sell such Retail Notes and related rights to
NFRRC;
WHEREAS, NFRRC may wish to sell or otherwise transfer such Retail Notes and
related rights, or interests therein, to a trust, corporation, partnership or
other entity (any such entity being the "Issuer"); and
WHEREAS, the Issuer may issue debentures, notes, participations,
certificates of beneficial interest, partnership interests or other interests or
securities (collectively, any such issued interests or securities being
"Securities") to fund its acquisition of such Retail Notes and related rights.
NOW, THEREFORE, in consideration of the foregoing, the other good and
valuable consideration and the mutual terms and covenants herein contained, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Capitalized terms used but not otherwise
defined in this Agreement shall have the respective meanings assigned them in
Part I of Appendix A to the Pooling and Servicing Agreement of even date
herewith by and among NFC, NFRRC and Navistar Financial 1997-B Owner Trust, as
it may be amended, supplemented or modified from time to time. All references
herein to "the Agreement" or "this Agreement" are to this Purchase Agreement as
it may be amended, supplemented or modified from time to time, the exhibits
hereto and the capitalized terms used herein which are defined in such Appendix
A, and all references herein to Articles, Sections and subsections are to
Articles, Sections or subsections of this Agreement unless otherwise specified.
The rules of construction set forth in Part II of such Appendix A shall be
applicable to this Agreement.
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<PAGE>
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
SECTION 2.01. Purchase and Sale of Receivables. Subject to the
satisfaction of the conditions specified in Article IV, NFC agrees to sell,
transfer, assign and otherwise convey to NFRRC, without recourse, pursuant to a
written assignment substantially in the form of Exhibit A (an "Assignment"), and
NFRRC agrees to purchase on the Closing Date and, up to the Available Purchase
Amount, on any Subsequent Transfer Date (each, a "Purchase Date"), all right,
title and interest of NFC in, to and under:
(a) the Retail Notes, secured by one or more Financed Vehicles, that are
identified in a schedule to the Assignment delivered to NFRRC on such Purchase
Date (the "Designated Receivables") and all monies paid thereon (including
Liquidation Proceeds) and due thereunder on and after the applicable Cutoff
Date;
(b) the security interests in the Financed Vehicles granted by Obligors
pursuant to the Designated Receivables and, to the extent permitted by law, any
accessions thereto which are financed by NFC;
(c) the benefits of any lease assignments with respect to the related
Financed Vehicles;
(d) any proceeds from any Insurance Policies with respect to the Designated
Receivables;
(e) any proceeds from Dealer Liability with respect to the Designated
Receivables, proceeds from any NITC Purchase Obligations with respect to the
Designated Receivables (subject to the limitations set forth in Section 5.08
hereof) and proceeds from any Guaranties of Designated Receivables; and
(f) any proceeds of the property described in clauses (a), (b) and (c)
above (the property described in clauses (b) through (f) hereof are referred to
as the "Related Security").
SECTION 2.02. Purchase Price. In consideration for the purchase of any
Designated Receivables and the Related Security, NFRRC shall, on the related
Purchase Date, pay to NFC an amount equal to the Aggregate Starting Receivables
Balance for such Designated Receivables (the "Purchase Price") and NFC shall
execute and deliver to NFRRC an Assignment with respect to such Designated
Receivables. On the Closing Date, a portion of the Purchase Price payable on
such date equal to approximately $385,219,563.23 shall be paid to NFC in
immediately available funds, and the balance of the Purchase Price shall be
recorded as an advance from NFC to NFRRC. On each subsequent Purchase Date, a
portion of the Purchase Price payable on such date equal to the amount received
by NFRRC pursuant to Section 5.02(a) of the Pooling and Servicing Agreement
shall be paid to NFC in immediately available funds, and the balance of the
Purchase Price payable on such date shall be recorded as an advance from NFC to
NFRRC.
SECTION 2.03. The Closings. Each sale and purchase of the Designated
Receivables (each, a "Closing"), shall take place at such a place, on a date and
at a time mutually agreeable to
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NFC and NFRRC, and may occur simultaneously with the closing of any related
transactions contemplated by the Further Transfer and Servicing Agreements.
SECTION 2.04. Covenant Regarding Subsequent Receivables. NFC covenants to
deliver and sell to NFRRC pursuant to Section 2.01 on or prior to the end of the
Funding Period Subsequent Receivables with an aggregate Starting Receivable
Balance equal to $91,472,361.64. If on the Distribution Date on which the
Funding Period ends (or, if the Funding Period does not end on a Distribution
Date, the first Distribution Date following the end of the Funding Period), the
Pre-Funded Amount is equal to or greater than $100,000, NFC shall be obligated
to pay to NFRRC an amount equal to the Noteholders' Prepayment Premium with
respect to each class of Notes on the Transfer Date immediately preceding the
Distribution Date on which the Funding Period ends (or, if the Funding Period
does not end on a Distribution Date, on the first Distribution Date following
the end of the Funding Period); provided, however, that the foregoing shall be
the sole remedy of NFRRC, the Issuer, the Owner Trustee, the Indenture Trustee
or the Noteholders with respect to a failure of NFC to comply with this
covenant.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties as to Receivables. NFC makes
the following representations and warranties as to the Designated Receivables on
which NFRRC relies in accepting such Receivables. Such representations and
warranties speak as of the Purchase Date for such Designated Receivables, and as
of the related transfer of such Designated Receivables under the Further
Transfer and Servicing Agreements, and shall survive the sale, transfer and
assignment of such Designated Receivables to NFRRC and the subsequent assignment
and transfer thereof pursuant to the Further Transfer and Servicing Agreements :
(a) Characteristics of Receivables. Each Designated Receivable:
(i) was originated by (A) a Dealer for the retail sale of one or more
Financed Vehicles in the ordinary course of such Dealer's business, was
fully and properly executed by the parties thereto, was purchased by NFC
from such Dealer under an existing agreement with NFC and was validly
assigned by such Dealer to NFC in accordance with its terms, (B) a
Distributor for the retail sale of one or more Financed Vehicles in the
ordinary course of such Distributor's business, and was fully and properly
executed by the parties thereto, was purchased by NFC from such Distributor
under an existing agreement with NFC and was validly assigned by such
Distributor to NFC in accordance with its terms, or (C) NFC to finance a
retail purchase by a retail customer or a refinancing of a Financed Vehicle
or Financed Vehicles by a retail customer and was fully and properly
executed by the parties thereto;
(ii) has created or shall create a valid, binding and enforceable
first priority security interest in favor of NFC in each Financed Vehicle
related thereto, which security interest will be validly assigned by NFC to
NFRRC and will be assignable by NFRRC to a subsequent purchaser;
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<PAGE>
(iii) contains customary and enforceable provisions such as to render
the rights and remedies of the holder thereof adequate for realization
against the collateral of the benefits of the security;
(iv) 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 (as supplemented by the schedules to the related Subsequent Transfer
Assignment, if applicable) relating to such Designated Receivables is true and
correct in all material respects;
(c) Compliance With Law. All requirements of applicable federal, state and
local laws, and regulations thereunder, including the Equal Credit Opportunity
Act, the Federal Reserve Board's Regulation "B", the Soldiers' and Sailors'
Civil Relief Act of 1940, and any applicable bulk sales or bulk transfer law and
other equal credit opportunity and disclosure laws, in respect of any of the
Designated Receivables, have been complied with in all material respects, and
each such Designated Receivable and the sale of the Financed Vehicle or Financed
Vehicles evidenced thereby complied at the time it was originated or made and
now complies in all material respects with all legal requirements of the
jurisdiction in which it was originated or made;
(d) Binding Obligation. Each Designated Receivable represents the genuine,
legal, valid and binding payment obligation in writing of the Obligor thereon,
enforceable against the Obligor by the holder thereof in accordance with its
terms, except as enforceability may be limited by
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<PAGE>
applicable bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights in general and by equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law;
(e) Security Interest in Financed Vehicle. Immediately prior to the sale,
transfer and assignment thereof pursuant hereto, each Designated Receivable was
secured by a validly perfected first priority security interest in the related
Financed Vehicle or, in the event any such Receivable was secured by more than
one Financed Vehicle, in each related Financed Vehicle, each in favor of NFC as
secured party, or all necessary and appropriate action had been commenced that
will result, within 100 days following the applicable Cutoff Date, in the valid
perfection of a first priority security interest in each related Financed
Vehicle in favor of NFC as secured party in each case (except for first priority
security interests which may exist in any accessions not financed by NFC);
(f) Receivables In Force. No Designated Receivable has been satisfied,
subordinated or rescinded, and no Financed Vehicle securing any Designated
Receivable has been released from the Lien of the related Receivable in whole or
in part;
(g) No Waiver. Since the applicable Cutoff Date, no provision of any
Designated Receivable has been waived, altered or modified in any respect;
(h) No Amendments. Since the applicable Cutoff Date, no Designated
Receivable has been amended or otherwise modified such that the total number of
the Obligor's Scheduled Payments is increased or the Starting Receivable Balance
thereof is increased;
(i) No Defenses. No right of rescission, setoff, counterclaim or defense
has been asserted or threatened with respect to any Designated Receivable;
(j) No Liens. There are, to NFC's knowledge, no Liens or claims that have
been filed for work, labor or materials affecting any Financed Vehicle securing
any Designated Receivable that are or may be prior to, or equal or coordinate
with, the security interest in each Financed Vehicle granted by the Designated
Receivable (except for Liens or claims which may exist in any accessions to the
Financed Vehicles not financed by NFC);
(k) No Default. There has been no default, breach, violation or event
permitting acceleration under the terms of any Designated Receivable, and no
event has occurred and is continuing that with notice or the lapse of time would
constitute a default, breach, violation or event permitting acceleration under
the terms of any Designated Receivable, and NFC has not waived any of the
foregoing, in each case except for payments on any Designated Receivables which
are not more than 60 days past due (measured from the date of any Scheduled
Payment) as of the applicable Cutoff Date;
(l) Insurance. Each Obligor on a Designated Receivable is required to
maintain a physical damage insurance policy for each Financed Vehicle of the
type that NFC requires in accordance with its customary underwriting standards
for the purchase of medium and heavy duty truck, bus and trailer receivables,
unless NFC has in accordance with its customary procedures permitted an Obligor
to self-insure such Financed Vehicle;
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(m) Good Title. No Designated Receivable has been sold, transferred,
assigned or pledged by NFC to any Person other than NFRRC; immediately prior to
the conveyance of any Designated Receivables pursuant to this Agreement, NFC had
good and marketable title thereto, free of any Lien (except for any Lien which
may exist in accessions to the Financed Vehicles not financed by NFC); and, upon
execution and delivery of this Agreement and the related Assignment by NFC, and
satisfaction of the conditions set forth in Section 4.02 hereof relating to such
Designated Receivables, NFRRC shall have all of the right, title and interest of
NFC in and to the Designated Receivables and the Related Security, free of any
Lien (except for any Lien which may exist in accessions to the Financed Vehicles
not financed by NFC);
(n) Lawful Assignment. No Designated Receivable was originated in, or is
subject to the laws of, any jurisdiction the laws of which would make unlawful
the sale, transfer and assignment of such Designated Receivable under this
Agreement or any Further Transfer and Servicing Agreements;
(o) All Filings Made. All filings necessary under the UCC in any
jurisdiction to give NFRRC a first priority perfected security or ownership
interest in the Designated Receivables and the Related Security (to the extent
it constitutes Code Collateral) shall have been made, and the Designated
Receivables constitute Code Collateral;
(p) One Original. There is only one original executed copy of each
Designated Receivable;
(q) No Documents or Instruments. No Designated Receivable, or constituent
part thereof, constitutes a "negotiable instrument" or "negotiable document of
title" (as such terms are used in the UCC);
(r) Maturity of Receivables. Each Designated Receivable has an original
term to maturity of not less than 12 months and not greater than 84 months and,
as of the related Cutoff Date, had a remaining term to maturity of not less than
12 months and not greater than 72 months;
(s) Annual Percentage Rate. The Annual Percentage Rate of each Designated
Receivable is not less than 7.00%;
(t) Scheduled Payments; Delinquency. As of the applicable Cutoff Date, each
Designated Receivable being purchased on the Closing Date had a first scheduled
payment that was due on or before October 31, 1997; as of the applicable Cutoff
Date, each Designated Receivable being purchased after the Closing Date had a
first scheduled payment that was due on or before the last day of the Monthly
Period next following the Monthly Period in which such Cutoff Date occurs; as of
the applicable Cutoff Date, no Designated Receivable had a payment that was more
than 60 days past due; as of the related Purchase Date, no Designated Receivable
had a final scheduled payment that is due later than July 31, 2004.
(u) Vehicles. Each Financed Vehicle to which a Designated Receivable
relates was a new or used medium or heavy duty truck, bus or trailer at the time
the related Obligor executed the Retail Note;
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(v) Origin. Each Designated Receivable was originated in the United States;
(w) Beginning Receivable Balance. The Starting Receivable Balance of each
Designated Receivable as of its applicable Cutoff Date shall be $1,000 or more;
(x) Concentration. After giving effect to the transfer of such Designated
Receivables to the Trust under the Further Transfer and Servicing Agreements,
(i) the aggregate Receivables Balance of all Receivables from a single Obligor
shall not be more than 2.00% of the aggregate Receivables Balance of all
Receivables in the Trust, (ii) the weighted average Annual Percentage Rate of
the Receivables in the Trust shall not be less than 9.5%, and (iii) the weighted
average remaining maturity of the Receivables in the Trust shall not be greater
than 54 months;
(y) Selection Criteria. The Designated Receivables were selected on a
random basis from all Retail Notes satisfying the selection criteria described
herein, and no selection procedures believed to be adverse to NFRRC or to
holders of the Securities issued under the Further Transfer and Servicing
Agreements were utilized in selecting the Designated Receivables from those
Retail Notes of NFC which meet the selection criteria under this Agreement; and
(z) No Government Contracts. No Obligor under any of the Designated
Receivables is a governmental authority of the United States or any state or
political subdivision thereof.
SECTION 3.02. Additional Representations and Warranties of NFC. NFC
hereby represents and warrants to NFRRC as of the date hereof, and as of each
Purchase Date occurring hereunder and as of the related closing under the
Further Transfer and Servicing Agreements, in its capacity as the seller of the
Receivables hereunder, that:
(a) Organization and Good Standing. NFC has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority to own its properties and to conduct its
business as such properties are presently owned and such business is presently
conducted, and had at all relevant times, and now has, power, authority and
legal right to acquire and own the Receivables;
(b) Due Qualification. NFC is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of property or
the conduct of its business requires or shall require such qualification;
(c) Power and Authority. NFC has the power and authority to execute and
deliver this Agreement and to carry out its terms; NFC has full power and
authority to sell and assign the Designated Receivables and the Related Security
to NFRRC, has duly authorized such sale and assignment to NFRRC by all necessary
corporate action; and the execution, delivery and performance of this Agreement
have been duly authorized by NFC by all necessary corporate action;
(d) Valid Sale; Binding Obligation. This Agreement, together with the
applicable Assignment, when duly executed and delivered, shall (upon
satisfaction of the conditions set forth in Section 4.02(b) hereof relating to
the related Designated Receivables) constitute a valid sale, transfer and
assignment of the such Designated Receivables and Related Security, enforceable
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against creditors of and purchasers from NFC; and this Agreement, together with
the applicable Assignment, when duly executed and delivered, shall (upon
satisfaction of the conditions set forth in Section 4.02(b) hereof relating to
such Designated Receivables) constitute a legal, valid and binding obligation of
NFC enforceable against NFC in accordance with its respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights in general and by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law;
(e) No Violation. The consummation of the transactions contemplated by this
Agreement and any Assignment, and the fulfillment of the terms of this Agreement
and any Assignment, shall not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse of time)
a default under, the certificate of incorporation or by-laws of NFC, or any
indenture, agreement, mortgage, deed of trust or other instrument to which NFC
is a party or by which it is bound, or result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument (other than this
Agreement, any Assignment or any Further Transfer and Servicing Agreement), or
violate any law or, to NFC's knowledge, any order, rule or regulation applicable
to NFC of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumental ity having jurisdiction over NFC or
any of its properties;
(f) No Proceedings. There are no proceedings or, to NFC's knowledge,
investigations pending or, to NFC's knowledge, threatened, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over NFC or its properties (i) asserting the
invalidity of this Agreement or any Assignment, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or any
Assignment, or (iii) seeking any determination or ruling that might materially
and adversely affect the perfor mance by NFC of its obligations under, or the
validity or enforceability of, this Agreement or any Assignment; and
(g) No Consent. No permit, consent, approval or authorization of, or
declaration to or filing with, any governmental authority is required in
connection with the execution, delivery and performance by NFC of this Agreement
or any Assignment or the consummation by NFC of the transactions contemplated
hereby or thereby except as expressly contemplated herein or therein.
SECTION 3.03. Representations and Warranties of NFRRC. NFRRC hereby
represents and warrants to NFC as of the date hereof and as of each Purchase
Date:
(a) Organization and Good Standing. NFRRC has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority to own its properties and to conduct its
business as such properties are presently owned and such business is presently
conducted, and had at all relevant times, and now has, power, authority and
legal right to acquire and own the Receivables;
(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;
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<PAGE>
(c) Power and Authority. NFRRC has the power and authority to execute and
deliver this Agreement and to carry out its terms and the execution, delivery
and performance of this Agreement have been duly authorized by NFRRC by all
necessary corporate action;
(d) No Violation. The consummation by NFRRC of the transactions
contemplated by this Agreement and the fulfillment of the terms of this
Agreement shall not conflict with, result in any breach of any of the terms and
provisions of or constitute (with or without notice or lapse of time) a default
under, the certificate of incorporation or by-laws of NFRRC, or any indenture,
agreement, mortgage, deed of trust or other instrument to which NFRRC is a party
or by which it is bound, or result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than this Agreement, any Assignment or any
Further Transfer and Servicing Agreement), or violate any law or, to NFRRC's
knowledge, any order, rule or regulation applicable to NFRRC of any court or of
any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over NFRRC or any of its
properties;
(e) No Proceedings. There are no proceedings or, to NFRRC's knowledge,
investigations pending or, to NFRRC's knowledge, threatened, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over NFRRC or its properties (i) asserting
the invalidity of this Agreement or any Assignment, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by NFRRC of its obligations under, or the validity or
enforceability of, this Agreement or any Assignment;
(f) Binding Obligation. This Agreement shall constitute a legal, valid and
binding obligation of NFRRC enforceable against NFRRC in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, or other similar laws affecting the enforcement of
creditors' rights in general and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law;
and
(g) No Consent. No permit, consent, approval or authorization of, or
declaration to or filing with, any governmental authority is required in
connection with the execution, delivery and performance by NFRRC of this
Agreement, or the consummation by NFRRC of the transactions contemplated hereby
except as expressly contemplated herein.
ARTICLE IV
CONDITIONS
SECTION 4.01. Conditions to Obligation of NFRRC. The obligation of NFRRC
to purchase Designated Receivables and the Related Security hereunder on any
Purchase Date is subject to the satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and warranties
of NFC in Section 3.01 regarding such Designated Receivables and the Related
Security being transferred on such Purchase Date, and the representations and
warranties of NFC in Section 3.02, shall be true
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<PAGE>
and correct as of such Purchase Date, with the same effect as if then made, and
NFC shall have performed all obligations to be performed by it hereunder on or
prior to such Purchase Date.
(b) No Repurchase Event. No Repurchase Event (as defined in Section 5.04
below) shall have occurred on or prior to such Purchase Date with respect to any
of such Designated Receivables.
(c) Computer Files Marked. NFC shall, at its own expense, on or prior to
such Purchase Date, (i) indicate in its computer files created in connection
with such Designated Receivables that such Designated Receivables have been sold
to NFRRC pursuant to this Agreement and the related Assignment and (ii) deliver
to NFRRC the Schedule of Receivables certified by an officer of NFC to be true,
correct and complete (as supplemented by the schedules to the related Subsequent
Transfer Assignment).
(d) Documents to be Delivered By NFC.
(i) The Assignment. On such Purchase Date, NFC shall execute and
deliver to NFRRC the Assignment of the Designated Receivables and the
Related Security.
(ii) Evidence of UCC Filing. On or prior to such Purchase Date, NFC
shall record and file, at its own expense, a UCC-1 financing statement in
each jurisdiction in which required by applicable law, executed by NFC as
seller or debtor, naming NFRRC as purchaser or secured party, naming such
Designated Receivables and Related Security as collateral, meeting the
requirements of the laws of each such jurisdiction and in such manner as is
necessary to perfect under the UCC the sale, transfer, assignment and
conveyance of such Designated Receivables and the Related Security (to the
extent it constitutes Code Collateral) to NFRRC. NFC shall deliver a file-
stamped copy, or other evidence satisfactory to NFRRC of such filing, to
NFRRC on or prior to such Purchase Date.
(iii) Other Documents. On such Purchase Date, NFC shall provide such
other documents as NFRRC may reasonably request.
(e) Funding Period. The Funding Period shall not have terminated.
(f) Other Transactions. The related transactions contemplated by the
Further Transfer and Servicing Agreements shall be consummated on or prior to
each Closing (and all conditions precedent thereto shall be satisfied) to the
extent that such transactions are intended to be substan tially contemporaneous
with the transactions hereunder.
SECTION 4.02. Conditions To Obligation of NFC. The obligation of NFC to
sell the Designated Receivables to NFRRC hereunder on any Purchase Date is
subject to the satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and warranties
of NFRRC hereunder shall be true and correct as of such Purchase Date, with the
same effect as if then made, and NFRRC shall have performed all obligations to
be performed by it hereunder on or prior to such Purchase Date.
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<PAGE>
(b) Purchase Price. On each Purchase Date, NFRRC shall pay to NFC the
Purchase Price, payable on such date as provided in Section 2.02 of this
Agreement.
ARTICLE V
ADDITIONAL AGREEMENTS
NFC agrees with NFRRC as follows:
SECTION 5.01. Conflicts With Further Transfer and Servicing Agreements. To
the extent that any provision of Sections 5.02 through 5.04 of this Agreement
conflicts with any provision of the Further Transfer and Servicing Agreements,
the Further Transfer and Servicing Agreements shall govern.
SECTION 5.02. Protection of Title.
(a) Filings. NFC shall execute and file such financing statements and cause
to be executed and filed such continuation and other statements, all in such
manner and in such places as may be required by law fully to preserve, maintain
and protect the interest of NFRRC under this Agreement in the Receivables and
the Related Security and in the proceeds thereof. NFC shall deliver (or cause to
be delivered) to NFRRC file-stamped copies of, or filing receipts for, any
document filed as provided above, as soon as available following such filing.
(b) Name Change. NFC shall not change its name, identity or corporate
structure in any manner that would, could or might make any financing statement
or continuation statement filed by NFC in accordance with Section 5.02(a)
seriously misleading within the meaning of Section 9-402(7) of the UCC, unless
it shall have given NFRRC at least 60 days prior written notice thereof and
shall file such financing statements or amendments as may be necessary to
continue the perfection of NFRRC's security interest in the Receivables and the
Related Security.
(c) Executive Office; Maintenance of Offices. NFC shall give NFRRC at least
60 days prior written notice of any relocation of its principal executive office
if, as a result of such 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 Receivables and the Related
Security to any other Person, or grant, create, incur, assume or suffer to exist
any Lien (except any Lien which may exist in accessions to the Financed Vehicles
not financed by NFC) on any interest therein, and NFC shall defend the right,
title and interest of NFRRC in, to and under the Receivables and Related
Security against all claims of third parties claiming through or under NFC.
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
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<PAGE>
by NFRRC of such of its right, title and interest in, to and under this
Agreement to the Issuer as shall be provided in the Further Transfer and
Servicing Agreements. NFC hereby covenants and agrees with NFRRC for the benefit
of NFRRC and the Interested Parties, that in the event of a breach of any of
NFC's representations and warranties contained in Section 3.01 hereof with
respect to any Receivable (a "Repurchase Event") as of the second Accounting
Date following NFC's discovery or its receipt of notice of breach (or, at NFC's
election, the first Accounting Date following such discovery), unless such
breach shall have been cured in all material respects, NFC will repurchase such
Receivable from the Issuer (if the Issuer is then the Owner of such Receivable)
on the related Distribution Date for an amount equal to the Warranty Payment,
without further notice from NFRRC hereunder. Upon the occurrence of a Repurchase
Event with respect to a Receivable for which NFRRC is the Owner, NFC agrees to
repurchase such Receivable from NFRRC for an amount and upon the same terms as
NFC would be obligated to repurchase such Receivable from the Issuer if the
Issuer was then the Owner thereof, and upon payment of such amount, NFC shall
have such rights with respect to such Receivable as if NFC had purchased such
Receivable from the Issuer as the Owner thereof. It is understood and agreed
that the obligation of NFC to repurchase any Receivable as to which a breach has
occurred and is continuing shall, if such obligation is fulfilled, constitute
the sole remedy against NFC for such breach available to NFRRC or any Interested
Party.
SECTION 5.05. Indemnification. NFC shall indemnify NFRRC for any liability
as a result of the failure of a Receivable to be originated in compliance with
all requirements of law and for any breach of any of its representations and
warranties contained herein. This indemnity obligation shall be in addition to
any obligation that NFC may otherwise have.
SECTION 5.06. Further Assignments. NFC acknowledges that NFRRC shall,
pursuant to the Further Transfer and Servicing Agreements, sell Designated
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
Designated Receivables and this Agreement. NFC further acknowledges that NFRRC
may assign its rights under the Custodian Agreement to the Issuer.
SECTION 5.07. Pre-Closing Collections. Within two Business Days after each
Closing, NFC shall transfer to the account or accounts designated by NFRRC (or
by the Issuer under the Further Transfer and Servicing Agreements) all
collections (from whatever source) on or with respect to the Designated
Receivables and the Related Security conveyed by NFC to NFRRC at the time of
such Closing pursuant to Section 2.01.
SECTION 5.08. Limitation on Transfer of NITC Purchase Obligations. NFRRC
acknowledges and agrees that the rights pursuant to the NITC Purchase
Obligations are personal to NFC, and only the proceeds of such rights have been
assigned to NFRRC. NFRRC is not and is not intended to be a third-party
beneficiary of such rights and, accordingly, such rights will not be exercisable
by, enforceable by or for the benefit of, or preserved for the benefit of,
NFRRC.
SECTION 5.09. Sale Treatment. NFC intends to treat each transfer and
assignment described herein as a sale for accounting and tax purposes.
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<PAGE>
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.01. Amendment. This Agreement may be amended from time to time
(subject to any expressly applicable amendment provision of the Further Transfer
and Servicing Agreements) by a written amendment duly executed and delivered by
NFC and NFRRC. Prior to the execution of any such amendment, NFC shall furnish
written notification of the substance of such amendment to each of the Rating
Agencies.
SECTION 6.02. Survival. The representations, warranties and covenants of
NFC set forth in Article III and Article V of this Agreement shall remain in
full force and effect and shall survive each Closing and each closing under the
Further Transfer and Servicing Agreements.
SECTION 6.03. Notices. All demands, notices and communications under this
Agreement shall be delivered as specified in Appendix B to the Pooling and
Servicing Agreement.
SECTION 6.04. Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement and each 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 any 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.
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<PAGE>
SECTION 6.10. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed enforceable to the fullest extent permitted, and if not
so permitted, shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Agreement or of any
Securities or rights of any Owner.
SECTION 6.11. Further Assurances. NFC and NFRRC agree to do and perform,
from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the other more fully to effect
the purposes of this Agreement, including the execution of any financing
statements or continuation statements relating to the Receivables for filing
under the provisions of the UCC of any applicable jurisdiction.
SECTION 6.12. No Third-Party Beneficiaries. This Agreement shall inure to
the benefit of and be binding upon the parties hereto, the Owners and their
respective successors and permitted assigns. Except as otherwise expressly
provided in this Agreement, no other Person shall have any right or obligation
hereunder.
SECTION 6.13. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived, or supplemented except as provided herein.
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 and Treasurer
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
By:
-----------------------------------------------
R. Wayne Cain, Vice President and Treasurer
<PAGE>
EXHIBIT A
FORM OF ASSIGNMENT
------------------
For value received, in accordance with the Purchase Agreement, dated as of
November 5, 1997 (the "Purchase Agreement"), between Navistar Financial
Corporation, a Delaware corporation ("NFC"), and Navistar Financial Retail
Receivables Corporation a Delaware corporation ("NFRRC"), NFC does hereby sell,
assign, transfer and otherwise convey unto NFRRC, without recourse, all right,
title and interest of NFC in, to and under (i) the Receivables listed on
Schedule I hereto, (having an aggregate Starting Receivables Balance of
$_______) (the "Designated Receivables") and all monies paid thereon (including
Liquidation Proceeds) and due thereunder on and after _________________, 199_
(the "Cutoff Date"); (ii) the security interests in the Financed Vehicles
granted by Obligors pursuant to the Designated Receivables and, to the extent
permitted by law, any accessions thereto which are financed by NFC; (iii) the
benefits of any lease assignments with respect to the Financed Vehicles; (iv)
any proceeds from any Insurance Policies with respect to the Designated
Receivables; (v) any proceeds from Dealer Liability with respect to the
Designated Receivables, proceeds from any NITC Purchase Obligations with respect
to the Designated Receivables (subject to the limitations set forth in Section
5.08 of the Purchase Agreement) and proceeds from any Guaranties of Designated
Receivables; and (vi) any proceeds of the property described in clauses (i),
(ii) and (iii) above.
The foregoing sale does not constitute and is not intended to result in any
assumption by NFRRC of any obligation of the undersigned to the Obligors,
Dealers, insurers or any other Person in connection with the Designated
Receivables, the agreements with Dealers, any Insurance Policies or any
agreement or instrument relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Purchase Agreement and is to be governed by the Purchase Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Purchase Agreement.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of November 5, 1997.
NAVISTAR FINANCIAL CORPORATION
By:
--------------------------------------
Name:
Title:
-2-
<PAGE>
Exhibit 10.2
POOLING AND SERVICING AGREEMENT
AMONG
NAVISTAR FINANCIAL CORPORATION
SERVICER
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
SELLER
AND
NAVISTAR FINANCIAL 1997-B OWNER TRUST
ISSUER
DATED AS OF NOVEMBER 5, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
<S> <C> <C>
CERTAIN DEFINITIONS................................................................ 1
SECTION 1.01. Definitions........................................................ 1
ARTICLE II CONVEYANCE OF RECEIVABLES; ORIGINAL ISSUANCE
OF CERTIFICATES.................................................................... 1
SECTION 2.01. Conveyance of Initial Receivables.................................. 1
SECTION 2.02. Conveyance of Subsequent Receivables............................... 3
SECTION 2.03. Custody of Receivable Files........................................ 6
SECTION 2.04. Acceptance by Issuer; Limitation on Transfer of NITC Purchase
Obligations........................................................ 6
SECTION 2.05. Representations and Warranties as to the Receivables............... 7
SECTION 2.06. Repurchase of Receivables Upon Breach of Warranty.................. 7
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES........................................ 8
SECTION 3.01. Duties of the Servicer............................................. 8
SECTION 3.02. Collection of Receivables Payments................................. 9
SECTION 3.03. [Reserved.]........................................................ 9
SECTION 3.04. Realization Upon Liquidating Receivables........................... 9
SECTION 3.05. Maintenance of Insurance Policies.................................. 9
SECTION 3.06. Maintenance of Security Interests in Vehicles...................... 9
SECTION 3.07. Covenants of the Servicer..........................................10
SECTION 3.08. Purchase of Receivables Upon Breach of Covenant....................10
SECTION 3.09. Total and Supplemental Servicing Fees; Payment of Certain
Expenses by Servicer...............................................10
SECTION 3.10. Servicer's Certificate.............................................11
SECTION 3.11. Application of Collections.........................................11
</TABLE>
i
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<TABLE>
ARTICLE IV
<S> <C> <C> <C>
SERVICER'S COVENANTS; DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS.................... 11
SECTION 4.01. Annual Statement as to Compliance: Notice of Servicer Default............................................. 11
SECTION 4.02. Annual Independent Accountants' Report.................................................................... 12
SECTION 4.03. Access to Certain Documentation and Information Regarding Receivables..................................... 13
SECTION 4.04. Amendments to Schedule of Receivables..................................................................... 13
SECTION 4.05. Assignment of Administrative Receivables and Warranty Receivables......................................... 13
SECTION 4.06. Distributions............................................................................................. 14
SECTION 4.07. Reserve Account........................................................................................... 15
SECTION 4.08. Net Deposits.............................................................................................. 16
SECTION 4.09. Statements to Securityholders............................................................................. 16
SECTION 4.10. Information Provided to Rating Agencies................................................................... 18
ARTICLE V
ACCOUNTS; COLLECTIONS, DEPOSITS AND INVESTMENTS; ADVANCES................................................................. 18
SECTION 5.01. Establishment of Accounts................................................................................. 18
SECTION 5.02. Pre-Funding Account....................................................................................... 21
SECTION 5.03. Negative Carry Account.................................................................................... 22
SECTION 5.04. Collections............................................................................................... 22
SECTION 5.05. Investment Earnings and Supplemental Servicing Fees....................................................... 23
SECTION 5.06. Monthly Advances.......................................................................................... 23
SECTION 5.07. Additional Deposits....................................................................................... 23
ARTICLE VI
THE SELLER; REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE SERVICER................................................. 24
SECTION 6.01. Representations and Warranties of the Seller and the Servicer............................................. 24
SECTION 6.02. Liability of Seller....................................................................................... 26
SECTION 6.03. Merger or Consolidation of, or Assumption of the Obligations
of, Seller; Amendment of Certificate of Incorporation..................................................... 26
SECTION 6.04. Limitation on Liability of Seller and Others.............................................................. 27
SECTION 6.05. Seller May Own Securities................................................................................. 27
ARTICLE VII
LIABILITIES OF SERVICER AND OTHERS........................................................................................ 27
SECTION 7.01. Liability of Servicer; Indemnities........................................................................ 27
SECTION 7.02. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer............................. 28
SECTION 7.03. Limitation on Liability of Servicer and Others............................................................ 29
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
SECTION 7.04. Delegation of Duties...................................................................................... 29
SECTION 7.05. Servicer Not to Resign.................................................................................... 30
ARTICLE VIII
DEFAULT................................................................................................................... 30
SECTION 8.01. Servicer Defaults......................................................................................... 30
SECTION 8.02. Consequences of a Servicer Default........................................................................ 31
SECTION 8.03. Indenture Trustee to Act; Appointment of Successor........................................................ 31
SECTION 8.04. Notification to Securityholders........................................................................... 32
SECTION 8.05. Waiver of Past Defaults................................................................................... 32
SECTION 8.06. Repayment of Advances..................................................................................... 32
ARTICLE IX
TERMINATION............................................................................................................... 33
SECTION 9.01. Optional Purchase of All Receivables...................................................................... 33
SECTION 9.02. Sale of Assets; Termination............................................................................... 33
ARTICLE X
MISCELLANEOUS PROVISIONS.................................................................................................. 35
SECTION 10.01. Amendment................................................................................................. 35
SECTION 10.02. Protection of Title to Owner Trust Estate................................................................. 36
SECTION 10.03. Notices................................................................................................... 38
SECTION 10.04. Governing Law............................................................................................. 38
SECTION 10.05. Severability of Provisions................................................................................ 38
SECTION 10.06. Assignment................................................................................................ 38
SECTION 10.07. Third-Party Beneficiaries................................................................................. 38
SECTION 10.08. Separate Counterparts..................................................................................... 38
SECTION 10.09. Headings and Cross-References............................................................................. 39
SECTION 10.10. Assignment to Indenture Trustee........................................................................... 39
SECTION 10.11. No Petition Covenants..................................................................................... 39
SECTION 10.12. Limitation of Liability of the Trustees................................................................... 39
SECTION 10.13. Business Day Certificate.................................................................................. 39
</TABLE>
EXHIBIT A Form of Initial Assignment
EXHIBIT B Form of Subsequent Assignment
EXHIBIT C Locations of Schedule of Receivables
APPENDIX A PART I - DEFINITIONS
PART II - RULES OF CONSTRUCTION
iii
<PAGE>
APPENDIX B
Notice Addresses and Procedures..........................................1
EXHIBIT A Form of Initial Assignment
EXHIBIT B Form of Subsequent Assignment
EXHIBIT C Locations of Schedule of Receivables
APPENDIX A Defined Terms and Rules of Construction
APPENDIX B Notice Addresses and Procedures
iv
<PAGE>
THIS POOLING AND SERVICING AGREEMENT is made as of November 5, 1997 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 1997-B Owner Trust,
a Delaware business trust (the "Issuer").
WHEREAS, NFC has sold the Initial Receivables, and has agreed to sell
Subsequent Receivables, to the Seller pursuant to the Purchase Agreement.
WHEREAS, the Seller desires to sell the Initial Receivables and Subsequent
Receivables (collectively, the "Receivables"), to the Issuer in exchange for the
Securities and the payment of funds withdrawn from the Pre-Funding Account
pursuant to the terms of this Agreement, and the Servicer desires to perform the
servicing obligations set forth herein for and in consideration of the fees and
other benefits set forth in this Agreement.
WHEREAS, the Seller and the Issuer wish to set forth the terms pursuant to
which the Receivables are to be sold by the Seller to the Issuer and serviced by
the Servicer.
NOW, THEREFORE, in consideration of the foregoing, the other good and
valuable consideration and the mutual terms and covenants contained herein, the
parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01. Definitions. Certain capitalized terms used in the above
recitals and in this Agreement are defined in and shall have the respective
meanings assigned them in Part I of Appendix A to this Agreement. All
references herein to "the Agreement" or "this Agreement" are to this Pooling and
Servicing Agreement as it may be amended, supplemented (whether by Subsequent
Transfer Assignment or otherwise) or modified from time to time, the exhibits
hereto and the capitalized terms used herein which are defined in such Appendix
A, and all references herein to Articles, Sections and subsections are to
Articles, Sections or subsections of this Agreement unless otherwise specified.
The rules of construction set forth in Part II of such Appendix A shall be
applicable to this Agreement.
ARTICLE II
CONVEYANCE OF RECEIVABLES; ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Initial Receivables. In consideration of the
Issuer's delivery of the Securities to, or upon the order of, the Seller, the
Seller does hereby enter into this Agreement and agree to fulfill all of its
obligations hereunder and to sell, transfer, assign, set over
1
<PAGE>
and otherwise convey to the Issuer, without recourse, pursuant to an assignment
in the form attached hereto as Exhibit A (the "Assignment"), all right, title
and interest of the Seller in, to and under:
(a) the Initial Receivables and all monies paid thereon (including
Liquidation Proceeds) and due thereunder on and after the Initial Cutoff Date;
(b) the security interests in the Financed Vehicles granted by Obligors
pursuant to the Initial Receivables and, to the extent permitted by law, any
accessions thereto which are financed by NFC;
(c) the benefits of any lease assignments with respect to the related
Financed Vehicles;
(d) any proceeds from any Insurance Policies with respect to the Initial
Receivables;
(e) any proceeds from Dealer Liability with respect to the Initial
Receivables, proceeds from any NITC Purchase Obligations with respect to the
Initial Receivables (subject to the limitations set forth in Section 2.04) and
proceeds from any Guaranties of Initial Receivables;
(f) the Purchase Agreement, the assignment pursuant to Section 2.01 of the
Purchase Agreement with respect to the Initial Receivables and the Custodian
Agreement, including the right of the Seller to cause NFC to perform its
obligations thereunder (including the obligation to repurchase Initial
Receivables under certain circumstances); and
(g) any proceeds of the property described in clauses (a), (b), (c) and (f)
above.
It is the intention of the Seller that the transfer and assignment contemplated
by this Section 2.01 shall constitute a sale of the Initial Receivables from the
Seller to the Issuer and the beneficial interest in and title to the assets
conveyed pursuant to this Section 2.01 shall not be part of the Seller's estate
in the event of the filing of a bankruptcy petition by or against the Seller
under any bankruptcy law. Within two Business Days after the Closing Date, the
Seller shall cause to be deposited into the Collection Account all collections
(from whatever source) on or with respect to the assets conveyed pursuant to
this Section 2.01 received by the Seller pursuant to Section 5.07 of the
Purchase Agreement. The Seller and the Servicer intend to treat such transfer
and assignment as a sale for accounting and tax purposes. Notwithstanding the
foregoing, in the event a court of competent jurisdiction determines that such
transfer and assignment did not constitute such a sale or that such beneficial
interest is a part of the Seller's estate, then (i) the Seller shall be deemed
to have granted to the Issuer a first priority perfected security interest in
all of the Seller's right title and interest in, to and under the assets
conveyed pursuant to this Section 2.01, and the Seller hereby grants such
security interest and (ii) the assets conveyed pursuant to this Section 2.01
shall be deemed to include all rights, powers and options (but none of the
obligations, if any) of the Seller under any agreement or instrument included in
the assets conveyed pursuant to this Section 2.01, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Initial Receivables included in the
assets conveyed pursuant to this Section 2.01 and all other monies payable under
the Initial Receivables conveyed
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pursuant to this Section 2.01, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Seller or otherwise and
generally to do and receive anything that the Seller is or may be entitled to do
or receive under or with respect to the assets conveyed pursuant to this Section
2.01. For purposes of such grant, this Agreement shall constitute a security
agreement under the UCC.
SECTION 2.02. Conveyance of Subsequent Receivables. (a) Subject to
satisfaction of the conditions set forth in Section 2.02(b) below, in
consideration of the Issuer's delivery on the related Subsequent Transfer Date
to or upon the order of the Seller of the amount described in Section 5.02(a) to
be delivered to the Seller, the Seller does hereby agree to sell, transfer,
assign, set over and otherwise convey to the Issuer, without recourse, pursuant
to an assignment in substantially the form of Exhibit B (a "Subsequent Transfer
Assignment"), all right, title and interest of the Seller in, to and under:
(i) the Subsequent Receivables described in such Subsequent Transfer
Assignment and all monies paid thereon (including Liquidation Proceeds) and
due thereunder on and after the applicable Subsequent Cutoff Date;
(ii) the security interests in the Financed Vehicles granted by
Obligors pursuant to such Subsequent Receivables and, to the extent
permitted by law, any accessions thereto which are financed by NFC;
(iii) the benefits of any lease assignments with respect to the
related Financed Vehicles;
(iv) any proceeds from any Insurance Policies with respect to such
Subsequent Receivables;
(v) any proceeds from Dealer Liability with respect to such Subsequent
Receivables, proceeds from any NITC Purchase Obligations with respect to
such Subsequent Receivables (subject to the limitations set forth in
Section 2.04) and proceeds from any Guaranties of Subsequent Receivables;
(vi) the Purchase Agreement, the assignment pursuant to Section 2.01
of the Purchase Agreement with respect to such Subsequent Receivables and
the Custodian Agreement, including the right of the Seller to cause NFC to
perform its obligations thereunder (including the obligation to repurchase
Subsequent Receivables under certain circumstances); and
(vii) any proceeds of the property described in clauses (i),
(ii), (iii) and (vi) above.
It is the intention of the Seller that each transfer and assignment contemplated
by this Section 2.02 shall constitute a sale of the related Subsequent
Receivables from the Seller to the Issuer and the beneficial interest in and
title to the assets conveyed pursuant to the Subsequent Transfer
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Assignment shall not be part of the Seller's estate in the event of the filing
of a bankruptcy petition by or against the Seller under any bankruptcy law.
Within two Business Days after each Subsequent Transfer Date, the Seller shall
cause to be deposited into the Collection Account all collections (from whatever
source) on or with respect to the assets conveyed pursuant to the related
Subsequent Transfer Assignment received by the Seller pursuant to Section 5.07
of the Purchase Agreement. The Seller and the Servicer intend to treat each such
transfer and assignment as a sale for accounting and tax purposes.
Notwithstanding the foregoing, in the event a court of competent jurisdiction
determines that any such transfer and assignment did not constitute such a sale
or that such beneficial interest is a part of the Seller's estate, then (i) the
Seller shall be deemed to have granted to the Issuer a first priority perfected
security interest in all of the Seller's right, title and interest in, to and
under the assets conveyed pursuant to the related Subsequent Transfer
Assignment, and the Seller hereby grants such security interest and (ii) the
assets conveyed pursuant to such Subsequent Transfer Assignment shall be deemed
to include all rights, powers and options (but none of the obligations, if any)
of the Seller under any agreement or instrument included in the assets conveyed
pursuant to such Subsequent Transfer Assignment, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Subsequent Receivables included in the
assets conveyed pursuant to such Subsequent Transfer Assignment and all other
monies payable under the Subsequent Receivables conveyed pursuant to such
Subsequent Transfer Assignment, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Seller or otherwise and
generally to do and receive anything that the Seller is or may be entitled to do
or receive under or with respect to the assets conveyed pursuant to such
Subsequent Transfer Assignment. For purposes of such grant, each such
Subsequent Transfer Assignment, together with this Agreement, shall constitute a
security agreement under the UCC.
(b) The Seller shall transfer to the Issuer Subsequent Receivables and
the other property and rights related thereto described in Section 2.02(a) above
only upon the satisfaction of each of the following conditions precedent on or
prior to the related Subsequent Transfer Date:
(i) the Funding Period shall not have terminated;
(ii) each of the representations and warranties made by the Seller
pursuant to Section 2.05 with respect to such Subsequent Receivables shall
be true and correct as of the related Subsequent Transfer Date with the
same effect as if then made, and the Seller shall have performed all
obligations to be performed by it hereunder on or prior to such Subsequent
Transfer Date;
(iii) the Seller shall have delivered to the Owner Trustee, the
Indenture Trustee and the Rating Agencies a duly executed Subsequent
Transfer Assignment, including a schedule of such Subsequent Receivables
(which schedule shall be deemed to supplement the Schedule of Receivables);
(iv) the applicable Reserve Account Initial Deposit for such
Subsequent Transfer Date shall have been deposited in the Reserve Account
pursuant to Section 5.02(a)(ii);
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(v) the Seller shall, at its own expense, on or prior to each
Subsequent Transfer Date indicate in its computer files that the Subsequent
Receivables conveyed on such date have been sold to the Issuer pursuant to
this Agreement and the related Subsequent Transfer Assignment;
(vi) the Seller shall have taken any action required to maintain the
first perfected ownership interest of the Issuer in the Owner Trust Estate
and the first perfected security interest of the Indenture Trustee in the
Collateral;
(vii) The Receivables in the Trust (after giving effect to the
conveyance of the Subsequent Receivables to the Trust on such Subsequent
Transfer Date) shall meet the following criteria: (A) the weighted average
Annual Percentage Rate of the Receivables in the Trust shall not be less
than 9.5%, (B) the weighted average remaining maturity of the Receivables
in the Trust shall not be greater than 54 months and (C) the aggregate
Receivables Balance of all Receivables from a single Obligor shall not be
more than 2.00% of the aggregate Receivables Balance of all Receivables in
the Trust;
(viii) the Seller shall have delivered to the Indenture Trustee and
the Owner Trustee an Officers' Certificate confirming the satisfaction of
the conditions specified in this Section 2.02(b);
(ix) the Seller shall have delivered to the Rating Agencies an Opinion
of Counsel with respect to the transfer of such Subsequent Receivables
substantially in the form of the Opinion of Counsel delivered to the Rating
Agencies on the Closing Date;
(x) The Seller shall have delivered to the Owner Trustee and the
Indenture Trustee written confirmation from an independent public
accounting firm that, as of the applicable Cutoff Date, such Subsequent
Receivables satisfied the eligibility criteria described in Sections
3.01(a)(v), (r), (s), (t), (w) and (x) of the Purchase Agreement; and
(xi) Standard & Poor's Ratings Services ("S&P") shall have notified
the Seller in writing that, following the addition of all such Subsequent
Receivables to the Trust, the Notes will be rated by S&P in the same rating
category as they were rated by S&P prior to such addition.
(c) The Seller covenants to transfer to the Issuer pursuant to Section
2.02(a) before the termination of the Funding Period, Subsequent Receivables
with an aggregate Starting Receivable Balance equal to $91,472,361.64. If on
the Distribution Date on which the Funding Period ends (or, if the Funding
Period does not end on a Distribution Date, the first Distribution Date
following the end of the Funding Period) the Pre-Funded Amount is equal to or
greater than $100,000, the Seller shall be obligated to pay to the Issuer on the
Transfer Date immediately preceding such Distribution Date an amount equal to
the Noteholders' Prepayment Premium with respect to each class of Notes or such
lesser amount that the Seller actually receives from NFC under Section 2.04 of
the Purchase Agreement in respect of NFC's breach thereof; provided, however,
that
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the foregoing shall be the sole remedy of the Issuer, the Owner Trustee, the
Indenture Trustee or the Noteholders with respect to a failure of the Seller to
comply with this covenant.
SECTION 2.03. Custody of Receivable Files. In connection with the sale,
transfer and assignment of Receivables by NFC 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, as of the Closing Date with
respect to each Initial Receivable, and as of the related Subsequent Transfer
Date with respect to each Subsequent Receivable:
(a) the fully executed original of the Retail Note for such Receivable;
(b) documents evidencing or related to any Insurance Policy;
(c) the original credit application of each Obligor, fully executed by each
such Obligor on NFC's customary form, or on a form approved by NFC, for such
application;
(d) where permitted by law, the original certificate of title (when
received) and otherwise such documents, if any, that NFC keeps on file in
accordance with its customary procedures 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 Sections 2.01(f) and 2.02(a)(vi), the rights of the Seller under the
Custodian Agreement are being assigned to the Issuer.
SECTION 2.04. Acceptance by Issuer; Limitation on Transfer of NITC
Purchase Obligations. The Issuer does hereby accept all consideration conveyed
by the Seller pursuant to Sections 2.01 and 2.02, and declares that the Issuer
shall hold such consideration upon the trust set forth in the Trust Agreement
for the benefit of Certificateholders, subject to the terms and conditions of
the Trust Agreement, Indenture and this Agreement; provided, however, that the
Issuer acknowledges and agrees that (a) the rights pursuant to the NITC Purchase
Obligations are personal to NFC, and only the proceeds of such rights are being
assigned to the Issuer pursuant to the terms hereof, (b) the Issuer is not or is
not intended to be a third-party beneficiary of such rights, and (c) accordingly
such rights are not exercisable by, enforceable by or for the benefit of, or
preserved for the benefit of, the Issuer. The Issuer hereby agrees and accepts
the appointment and authorization of NFC as Servicer under Section 3.01. The
parties agree that this Agreement (including any Subsequent Transfer
Assignments), the Indenture and the Trust Agreement constitute the Further
Transfer and Servicing Agreements for purposes of the Purchase Agreement.
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SECTION 2.05. Representations and Warranties as to the Receivables.
Pursuant to Sections 2.01(f) and 2.02(a)(vi), the Seller assigns to the Issuer
all of its right, title and interest in, to and under the Purchase Agreement.
Such assigned right, title and interest includes the representations and
warranties of NFC made to the Seller pursuant to Section 3.01 of the Purchase
Agreement. The Seller hereby represents and warrants to the Issuer that the
Seller has taken no action which would cause such representations and warranties
to be false in any material respect as of the Closing Date, in the case of the
Initial Receivables, and as of the related Subsequent Transfer Date, in the case
of Subsequent Receivables. The Seller further acknowledges that the Issuer
relies on the representations and warranties of the Seller under this Agreement
and of NFC under the Purchase Agreement in accepting the Receivables in trust
and executing and delivering the Securities. The foregoing representation and
warranty speaks as of the Closing Date, in the case of the Initial Receivables,
and as of the related Subsequent Transfer Date, in the case of Subsequent
Receivables, but shall survive the sale, transfer and assignment of such
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
SECTION 2.06. Repurchase of Receivables Upon Breach of Warranty. Upon
discovery by the Seller, the Servicer or either Trustee of a breach of any of
the representations and warranties in Section 3.01 of the Purchase Agreement
(and, with respect to subsection 3.01(j) of the Purchase Agreement, irrespective
of any limitation regarding knowledge of NFC) or in Section 2.05 or Section 6.01
of this Agreement that materially and adversely affects the interests of the
Securityholders in any Receivable, the party discovering such breach shall give
prompt written notice thereof to the others. As of the second Accounting Date
following its discovery or its receipt of notice of breach (or, at the Seller's
election, the first Accounting Date following such discovery), unless such
breach shall have been cured in all material respects, in the event of a breach
of the representations and warranties made by the Seller in Section 2.05 or
Section 6.01, the Seller shall repurchase such Receivable from the Issuer on the
related Distribution Date. The Owner Trustee shall have no affirmative duty to
conduct any investigation as to the occurrence of any event requiring the
repurchase of any Receivable pursuant to this Section 2.06.
The repurchase price to be paid by any Warranty Purchaser shall be an
amount equal to the Warranty Payment. It is understood and agreed that the
obligation of the Warranty Purchaser to repurchase any Receivable as to which a
breach has occurred and is continuing shall, if such repurchase obligations are
fulfilled, constitute the sole remedy against the Seller, the Servicer or NFC
for such breach available to any Interested Party. The Servicer acknowledges
its obligations to repurchase Administrative Receivables from the Issuer
pursuant to Section 3.08 hereof and to repurchase Warranty Receivables pursuant
to Section 5.04 of the Purchase Agreement.
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ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01. Duties of the Servicer. The Servicer is hereby appointed
and authorized to act as agent for the Owner of the Receivables and in such
capacity shall manage, service, administer and make collections on the
Receivables with reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to comparable medium and heavy duty truck,
bus and trailer receivables that it services for itself or others. The Servicer
hereby accepts such appointment and authorization and agrees to perform the
duties of Servicer with respect to the Receivables set forth herein. The
Servicer's duties shall include collection and posting of all payments,
responding to inquiries of Obligors on the Receivables, investigating
delinquencies, sending payment coupons to Obligors, reporting tax information to
Obligors, policing the collateral, accounting for collections and furnishing
monthly and annual statements to the Owner of any Receivables with respect to
distributions, generating federal income tax information and performing the
other duties specified herein. Subject to the provisions of Section 3.02, the
Servicer shall follow its customary standards, policies and procedures and shall
have full power and authority, acting alone, to do any and all things in
connection with such managing, servicing, administration and collection that it
may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer is
hereby authorized and empowered by the Owner of the Receivables, pursuant to
this Section 3.01, to execute and deliver, on behalf of all Interested Parties,
or any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments, with
respect to the Receivables and the Financed Vehicles. The Servicer is hereby
authorized to commence in the name of the Owner of such Receivable or, to the
extent necessary, in its own name, a legal proceeding to enforce a Liquidating
Receivable as contemplated by Section 3.04, to enforce all obligations of NFC
and NFRRC, in its capacity as the Seller or otherwise, under each of the
Purchase Agreement and the Further Transfer and Servicing Agreements or to
commence or participate in a legal proceeding (including a bankruptcy
proceeding) relating to or involving a Receivable or a Liquidating Receivable.
If the Servicer commences or participates in such a legal proceeding in its own
name, the Owner of such Receivable shall thereupon be deemed to have
automatically assigned such Receivable to the Servicer for purposes of
commencing or participating in any such proceeding as a party or claimant, the
Servicer is hereby authorized and empowered by the Owner of a Receivable to
execute and deliver in the Servicer's name any notices, demands, claims,
complaints, responses, affidavits or other documents or instruments in
connection with any such proceeding. Any Owner of Receivables, upon the written
request of the Servicer, shall furnish the Servicer with any powers of attorney
and other documents and take any other steps which the Servicer may deem
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties under this Agreement and the other Further Transfer and
Servicing Agreements. Except to the extent required by the preceding two
sentences, the authority and rights granted to the Servicer in this Section 3.01
shall be nonexclusive and shall not be construed to be in derogation of the
retention by the Owner of a Receivable of equivalent authority and rights.
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SECTION 3.02. Collection of Receivables Payments. The Servicer shall
make reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same shall become due, and shall
follow such collection practices, policies and procedures as it follows with
respect to comparable medium and heavy duty truck, bus and trailer receivables
that it services for itself or others. Except as provided in subsection
3.07(c), the Servicer is hereby authorized to grant extensions, rebates or
adjustments on a Receivable without the prior consent of the Owner of such
Receivable and to rewrite, in its ordinary course of business, a Receivable to
reflect the Full Prepayment of a Receivable with respect to any Financed Vehicle
without the prior consent of the Owner of such Receivable. The Servicer is
authorized in its discretion to waive any prepayment charge, late payment charge
or any other fees that may be collected in the ordinary course of servicing such
Receivable.
SECTION 3.03. [Reserved.]
SECTION 3.04. Realization Upon Liquidating Receivables. The Servicer
shall use reasonable efforts, consistent with its customary servicing
procedures, to repossess or otherwise comparably convert the ownership of each
Financed Vehicle that it has reasonably determined should be repossessed or
otherwise converted following a default under the Receivable secured by each
such Financed Vehicle. The Servicer is authorized to follow such practices,
policies and procedures as it shall deem necessary or advisable and as shall be
customary and usual in its servicing of medium and heavy duty truck, bus and
trailer receivables that it services for itself or others, which practices,
policies and procedures may include reasonable efforts to realize upon or obtain
benefits of any lease assignments, proceeds from any Dealer Liability, proceeds
from any NITC Purchase Obligations, proceeds from any Insurance Policies and
proceeds from any Guaranties, in each case with respect to the Receivables,
selling the related Financed Vehicle or Financed Vehicles at public or private
sale or sales and other actions by the Servicer in order to realize upon such a
Receivable. The foregoing is subject to the provision that, in any case in
which the Financed Vehicle shall have suffered damage, the Servicer shall not
expend funds in connection with any repair or towards the repossession of such
Financed Vehicle unless it shall determine in its discretion that such repair
and/or repossession shall increase the proceeds of liquidation of the related
Receivable by an amount greater than the amount of such expenses. The Servicer
shall be entitled to receive Liquidation Expenses with respect to each
Liquidating Receivable at such time as the Receivable becomes a Liquidating
Receivable in accordance with subsection 4.06(b)(i).
SECTION 3.05. Maintenance of Insurance Policies. The Servicer shall,
in accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering each Financed Vehicle as
of the execution of the related Receivable, unless the Servicer has in
accordance with its customary procedures permitted an Obligor to self-insure the
Financed Vehicle or Financed Vehicles securing such Receivable. The Servicer
shall, in accordance with its customary servicing procedures, monitor such
physical damage insurance with respect to each Financed Vehicle that secures
each Receivable.
SECTION 3.06. Maintenance of Security Interests in Vehicles. The
Servicer shall, in accordance with its customary servicing procedures and at its
own expense, take such steps as are
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necessary to maintain perfection of the first priority security interest created
by each Receivable in the related Financed Vehicle or Financed Vehicles. The
Owner of each Receivable hereby authorizes the Servicer to re-perfect such
security interest as necessary because of the relocation of a Financed Vehicle
or for any other reason.
SECTION 3.07. Covenants of the Servicer. The Servicer hereby makes
the following covenants on which the Issuer is relying in acquiring the
Receivables hereunder and issuing the Securities under the other Further
Transfer and Servicing Agreements. The Servicer covenants that from and after
the Closing Date (with respect to the Initial Receivables) or the related
Subsequent Transfer Date (with respect to Subsequent Receivables):
(a) Liens in Force. Except as contemplated in this Agreement, the
Servicer shall not release in whole or in part any Financed Vehicle from the
security interest securing such related Receivable;
(b) No Impairment. The Servicer shall do nothing to impair the rights
of NFRRC or any Interested Party in and to such Receivables; and
(c) No Modifications. The Servicer shall not amend or otherwise
modify any such Receivable such that the Starting Receivable Balance, the Annual
Percentage Rate or the total number of Scheduled Payments is altered or such
that the final scheduled payment on such Receivable will be due later than July
31, 2004.
SECTION 3.08. Purchase of Receivables Upon Breach of Covenant. Upon
discovery by any of the Seller, the Servicer or any party under the Further
Transfer and Servicing Agreements of a breach of any of the covenants set
forth in Sections 3.06 and 3.07, the party discovering such breach shall give
prompt written notice thereof to the others. As of the second Accounting Date
following its discovery or receipt of notice of such breach (or, at the
Servicer's election, the first Accounting Date so following), the Servicer
shall, unless it shall have cured such breach in all material respects, purchase
from the Owner thereof any Receivable materially and adversely affected by such
breach as determined by such Owner and, on the related Distribution Date, the
Servicer shall pay the Administrative Purchase Payment. It is understood and
agreed that the obligation of the Servicer to purchase any Receivable with
respect to which such a breach has occurred and is continuing shall, if such
obligation is fulfilled, constitute the sole remedy against the Servicer for
such breach available to the Seller or any Interested Party. Each of the Owner
Trustee and the Indenture Trustee shall have no affirmative duty to conduct any
investigation as to the occurrence of any event requiring the repurchase of any
Receivable pursuant to this Section 3.08.
SECTION 3.09. Total and Supplemental Servicing Fees; Payment of
Certain Expenses by Servicer. The Servicer is entitled to receive the Total
Servicing Fee and Supplemental Servicing Fees out of collections in respect of
the Receivables as provided herein. Subject to any limitations on the
Servicer's liability hereunder, the Servicer shall be required to pay all
expenses incurred by it in connection with its activities under this Agreement
(including fees and disbursements of the Issuer, any trustees and independent
accountants, taxes imposed on the Servicer, expenses incurred
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in connection with distributions and reports to Securityholders and all other
fees and expenses not expressly stated under this Agreement to be for the
account of the Securityholders, but excluding federal, state and local income
and franchise taxes, if any, of the Issuer or any Securityholder).
SECTION 3.10. Servicer's Certificate. Not later than 10:00 a.m.
(Chicago, Illinois time) on each Determination Date, the Servicer shall deliver
to each Trustee and the Rating Agencies a Servicer's Certificate with respect to
the immediately preceding Monthly Period executed by the President or any Vice
President of the Servicer containing all information necessary to each such
party for making the calculations, withdrawals, deposits, transfers and
distributions required by Section 4.06, and all information required to be
provided to Certificateholders and Noteholders under subsection 4.09(a).
Receivables to be purchased by the Servicer under Section 3.08 hereof or Section
5.04 of the Purchase Agreement as of the last day of any Monthly Period shall be
identified by Receivable number (as set forth in the Schedule of Receivables).
With respect to any Receivables for which the Seller is the Owner, the Servicer
shall deliver to the Seller such accountings relating to such Receivables and
the actions of the Servicer with respect thereto as the Seller may reasonably
request.
SECTION 3.11. Application of Collections. For the purposes of this
Agreement, as of each Accounting Date, all collections for the related Monthly
Period with respect to each Receivable shall be applied by the Servicer as
follows:
(a) All payments by or on behalf of the Obligor (excluding
Supplemental Servicing Fees and Investment Earnings) shall be applied (i) first
to reduce Outstanding Monthly Advances, if any, with respect to such Receivable,
as described in Section 5.06, (ii) second, to the Scheduled Payment for such
Monthly Period with respect to such Receivable, and (iii) third, the remainder
shall constitute, with respect to such Receivable, a Full Prepayment or Partial
Prepayment; and
(b) A Partial Prepayment made on a Receivable is applied to reduce the
final Scheduled Payment and will thereafter, to the extent the Partial
Prepayment exceeds the final Scheduled Payment, reduce Scheduled Payments in
reverse chronological order beginning with the penultimate Scheduled Payment.
The Rebate related to such Partial Prepayment will reduce the final Scheduled
Payment and will thereafter, to the extent the Rebate exceeds the final
Scheduled Payment, reduce Scheduled Payments in reverse chronological order
beginning with the penultimate Scheduled Payment.
ARTICLE IV
SERVICER'S COVENANTS; DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 4.01. Annual Statement as to Compliance:
Notice of Servicer Default.
(a) The Servicer shall deliver to each Trustee, on or before February
1 of each year, beginning February 1, 1999, an officer's certificate signed by
the President or any Vice President
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of the Servicer, dated as of the immediately preceding October 31, stating that
(i) a review of the activities of the Servicer during the preceding 12-month
period (or, with respect to the first such certificate, such period as shall
have elapsed from the Closing Date to the date of such certificate) and of its
performance under this Agreement has been made under such officer's supervision
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 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, 1999 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.
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(c) A copy of the Accountants' Report may be obtained by any Noteholder or
any Certificateholder by a request in writing to the Issuer addressed to the
Corporate Trust Office of the Indenture Trustee or the Owner Trustee,
respectively.
SECTION 4.03. Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to each Trustee reasonable access to the
documentation regarding the Receivables. The Servicer shall provide such access
to any Securityholder only in such cases where a Securityholder is required by
applicable statutes or regulations to review such documentation. In each case,
such access shall be afforded without charge but only upon reasonable request
and during normal business hours at offices of the Servicer designated by the
Servicer. Nothing in this Section 4.03 shall derogate from the obligation of the
Servicer to observe any applicable law prohibiting disclosure of information
regarding Obligors, and the failure of the Servicer to provide access as
provided in this Section 4.03 as a result of such obligation shall not
constitute a breach of this Section 4.03.
SECTION 4.04. Amendments to Schedule of Receivables. On or before each
Subsequent Transfer Date occurring during the Funding Period, the Seller will
deliver to each Trustee a schedule of the Subsequent Receivables being
transferred to the Trust (and such schedule shall be deemed to supplement the
Schedule of Receivables). If the Servicer, during a Monthly Period, assigns to a
Receivable an account number that differs from the account number previously
identifying such Receivable on the Schedule of Receivables, the Servicer shall
deliver to the Seller and each Trustee on or before the Distribution Date
related to such Monthly Period an amendment to the Schedule of Receivables to
report the newly assigned account number. Each such amendment shall list all new
account numbers assigned to Receivables during such Monthly Period and shall
show by cross reference the prior account numbers identifying such Receivables
on the Schedule of Receivables.
SECTION 4.05. Assignment of Administrative Receivables and Warranty
Receivables. Upon receipt of the Administrative Purchase Payment or the Warranty
Payment with respect to an Administrative Receivable or a Warranty Receivable,
respectively, each Trustee shall assign, without recourse, representation or
warranty, to the Servicer or the Warranty Purchaser, as applicable, all of such
Person's right, title and interest in, to and under (a) such Administrative
Receivable or Warranty Receivable and all monies due thereon, (b) the security
interests in the related Financed Vehicle and, to the extent permitted by law,
any accessions thereto which are financed by NFC, (c) benefits of any lease
assignments with respect to the Financed Vehicles, (d) proceeds from any
Insurance Policies with respect to such Receivable, (e) proceeds from Dealer
Liability with respect to such Receivable, proceeds from any NITC Purchase
Obligations with respect to such Receivable and proceeds from any Guaranties of
such Receivable, (f) the interests of such Person or the Issuer, as applicable,
in certain rebates of premiums and other amounts relating to the Insurance
Policies and any document relating thereto and (g) the rights of such Person
under the Purchase Agreement and the Custodian Agreement with respect to such
Receivable, such assignment being an assignment outright and not for security.
Upon the assignment of such Receivable described in the preceding sentence, the
Servicer or the Warranty Purchaser, as applicable, shall own such Receivable,
and all such security and documents, free of any further
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obligations to either Trustee or the Securityholders with respect thereto. If in
any Proceeding it is held that the Servicer may not enforce a Receivable on the
ground that it is not a real party in interest or a holder entitled to enforce
the Receivable, the applicable Trustee shall, at the Servicer's expense, take
such steps as the Servicer deems necessary to enforce the Receivable, including
bringing suit in the name of such Person or the names of the Securityholders.
SECTION 4.06. Distributions.
(a) On or before 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 Class A Noteholders' Interest Distributable Amount,
the Class B Noteholders' Interest Distributable Amount, the Principal Payment
Amount, the Noteholders' Principal Distributable Amount and all other amounts
required to determine the amounts to be deposited in or paid from each of the
Collection Account, the Pre-Funding Account, the Negative Carry Account, the
Note Distribution Account, the Certificate Distribution Account and the Reserve
Account on the next succeeding Distribution Date.
(b) On or before the day preceding each Distribution Date, the Indenture
Trustee shall cause to be made the following withdrawals, deposits, transfers
and distributions in the amounts set forth in the Servicer's Certificate for
such Distribution Date pursuant to Section 3.10:
(i) from the Collection Account to the Servicer, in immediately
available funds, reimbursement of Outstanding Monthly Advances pursuant to
Section 5.06, payments of Liquidation Expenses with respect to Receivables
which became Liquidating Receivables during the related Monthly Period
pursuant to Section 3.04 and any unpaid Liquidation Expenses from prior
periods;
(ii) from the Pre-Funding Account to the Collection Account, the
Investment Earnings on the Pre-Funding Account for the related Monthly
Period;
(iii) from the Negative Carry Account to the Collection Account, the
Negative Carry Amount for such Distribution Date; and
(iv) from the Reserve Account to the Collection Account, the lesser of
(A) the amount of cash or other immediately available funds therein on the
day preceding such Distribution Date and (B) the amount, if any, by which
(I) the sum of the Total Servicing Fee, the Aggregate Class A Noteholders'
Interest Distributable Amount, the Class B Noteholders' Interest
Distributable Amount and the Noteholders' Principal Distributable Amount
exceeds (II) the sum of the Available Amount for such Distribution Date
plus the amounts deposited to the Collection Account on such date pursuant
to Sections 4.06(b)(ii) and 4.06(b)(iii).
(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
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contained in the Servicer's Certificate delivered on the related Determination
Date pursuant to Section 3.10) shall make the following distributions from the
Collection Account (after the withdrawals, deposits and transfers specified in
Section 4.06(b) have been made) in the following order of priority:
(i) first, to the Servicer, to the extent of the Total Available
Amount, the Total Servicing Fee;
(ii) second, to the Note Distribution Account, to the extent of the
Total Available Amount (as such amount has been reduced by the
distributions described in clause (c) (i) above), the Aggregate Class A
Noteholders' Interest Distributable Amount;
(iii) third, to the Note Distribution Account, to the extent of the
Total Available Amount (as such amount has been reduced by the
distributions described in clauses (c) (i) and (ii) above), the Class B
Noteholders' Interest Distributable Amount;
(iv) fourth, to the Note Distribution Account, to the extent of the
Total Available Amount (as such amount has been reduced by the
distributions described in clauses (c) (i), (ii) and (iii) above), the
Noteholders' Principal Distributable Amount; and
(v) fifth, to the Reserve Account, any portion of the Total Available
Amount remaining after the distributions described in clauses (c) (i)
through (iv), inclusive, above.
(d) Notwithstanding the foregoing, at any time that the Class A 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 Class A
Notes have been paid in full and the Indenture has been discharged with respect
to the Class A Notes, no amounts shall be deposited in or distributed to the
Note Distribution Account as payments on the Class B Notes. Any such amounts
otherwise distributable on the Class B Notes shall be deposited instead to the
Note Distribution Account as payments of principal on the Class A 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 1997-B 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), Section 4.06(c) and Section
5.02(a). On the Closing Date, the Seller shall deposit the Reserve Account
Initial Deposit with respect to the Closing Date into the Reserve Account. The
Reserve Account shall be the property of the Issuer subject to the rights of the
Indenture Trustee in the Reserve Account Property.
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(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 deposit
into the Certificate Distribution Account an amount equal to any such excess for
distribution to the Certificateholders.
(c) If the Servicer, pursuant to Section 5.06, determines on any
Determination Date that it is required to make a Monthly Advance and does not do
so from its own funds, the Servicer shall instruct the Indenture Trustee to
withdraw funds from the Reserve Account and deposit them in the Collection
Account to cover any shortfall. Such payment shall be deemed to have been made
by the Servicer pursuant to Section 5.06 for purposes of making distributions
pursuant to this Agreement, but shall not otherwise satisfy the Servicer's
obligation to deliver the amount of the Monthly Advances to the Collection
Account, and the Servicer shall within two Business Days replace any funds in
the Reserve Account so used. The Servicer shall not be entitled to reimbursement
for any such deemed Monthly Advances unless and until the Servicer shall have
replaced such funds in the Reserve Account.
SECTION 4.08. Net Deposits. At any time that (i) NFC shall be the Servicer
and (ii) the Servicer shall be permitted by Section 5.04 to remit collections on
a basis other than a daily basis, the Servicer, the Seller and each Trustee may
make any remittances pursuant to this Article IV net of amounts to be
distributed by the applicable recipient to such remitting party. Nonetheless,
each such party shall account for all of the above described remittances and
distributions as if the amounts were deposited and/or transferred separately.
SECTION 4.09. Statements to Securityholders.
(a) On each Distribution Date, the Owner Trustee shall include with each
distribution to each Certificateholder, and the Indenture Trustee shall include
with each distribution to each Noteholder, a statement (which statement shall
also be provided to the Rating Agencies) based on information in the Servicer's
Certificate furnished pursuant to Section 3.10. Each such statement shall set
forth the following information as to the Securities with respect to such
Distribution Date or the preceding Monthly Period, as applicable:
(i) the amount of the distribution allocable to interest on or with
respect to each class of Notes;
(ii) the Aggregate Receivables Balance as of the close of business on
the last day of such Monthly Period;
(iii) the amount of Outstanding Monthly Advances with respect to all
Receivables on such Distribution Date;
(iv) the amount of the Total Servicing Fee paid or payable to the
Servicer with respect to the related Monthly Period;
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(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;
(ix) the Note Principal Balance and the Note Pool Factor for each
class of Notes, 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
Noteholders from amounts on deposit in the Reserve Account;
(xi) the amount of the Class A Noteholders' Interest Carryover
Shortfall, the Noteholders' Principal Carryover Shortfall and the Class B
Noteholders' Interest Carryover Shortfall if any, and the change in such
amounts from the preceding Distribution Date;
(xii) the balance (if any) of the Reserve Account on such date, after
giving effect to distributions, withdrawals, transfers and deposits made on
such date, and the change in such balance from that of the prior
Distribution Date;
(xiii) the Negative Carry Amount and the Investment Earnings on the
Pre-Funding Account (if any) for the related Monthly Period and the
balance, if any, of the Negative Carry Account on such date, after giving
effect to the withdrawals made on such date;
(xiv) for Distribution Dates during the Funding Period, the Starting
Receivables Balance of all Subsequent Receivables transferred to the Issuer
since the preceding Distribution Date and the remaining Pre-Funded Amount;
(xv) for the first Distribution Date occurring on or after the last
day of the Funding Period, the amount of any remaining Pre-Funded Amount
that has not been used to fund the purchase of Subsequent Receivables; and
(xvi) the amount, if any, to be deposited in the Certificate
Distribution Account for distribution to the Certificateholders.
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. 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.
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(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
amounts set forth in each of clauses (i), (iv), (viii), (x), (xi) and (xvi), 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 Notes. Promptly, but
in no event later than five Business Days, after obtaining knowledge of an
Insolvency Event with respect to the Servicer or the Trust, the Servicer shall
deliver to each of the Ratings Agencies notice of such Insolvency Event. Failure
by the Servicer to comply with the terms of this Section 4.10 shall not
constitute a "Servicer Default," an "Event of Default" or a default under any
Basic Document.
ARTICLE V
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 1997-B Owner Trust Collection Account
(the "Collection Account"), bearing an additional designation clearly indicating
that the funds deposited therein are held for the benefit of the
Securityholders.
(ii) The Servicer, for the benefit of the Noteholders, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit Account
known as the Navistar Financial 1997-B Owner Trust Note Distribution Account
(the "Note Distribution Account"), bearing an additional designation clearly
indicating that the funds deposited therein are held for the benefit of the
Noteholders.
(iii) Pursuant to the Trust Agreement, the Servicer, for the benefit
of the Certificateholders, shall establish and maintain in the name of the Owner
Trustee an Eligible Deposit Account known as the Navistar Financial 1997-B Owner
Trust Certificate Distribution Account (the "Certificate Distribution Account"),
bearing an additional designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders.
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(iv) 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 1997-B Owner Trust Pre-Funding Account
(the "Pre-Funding Account"), bearing an additional designation clearly
indicating that the funds deposited therein are held for the benefit of the
Noteholders.
(v) 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 1997-B Owner Trust Negative Carry Account (the
"Negative Carry Account") bearing an additional designation clearly indicating
that the funds deposited therein are held for the benefit of the
Securityholders.
(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 5.04)
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 Services of "A-1" rather than "A-1+," if such
investments otherwise constitute Eligible Investments. Such written direction
shall constitute certification by the Servicer that any such investment is
authorized by this Section 5.01. Funds deposited in the Reserve Account, the
Negative Carry Account and the Pre-Funding Account shall be invested in Eligible
Investments which mature prior to the next Distribution Date except, and then
only to the extent, as shall be otherwise permitted by the Rating Agencies.
Investments in Eligible Investments shall be made in the name of the Indenture
Trustee or its nominee, and such investments shall not be sold or disposed of
prior to their maturity. Should the short-term unsecured debt obligations of the
Indenture Trustee (or any other bank or trust company with which the Designated
Accounts are maintained) no longer have the Required Deposit Rating, then the
Servicer shall within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency shall consent), with the Indenture
Trustee's assistance as necessary, cause the Designated Accounts (A) to be moved
to a bank or trust company, the short-term unsecured debt obligations of which
shall have the Required Deposit Rating, or (B) to be moved to the corporate
trust department of the Indenture Trustee. Except with respect to Investment
Earnings on the Pre-Funding Account, Investment Earnings on funds deposited in
the Designated Accounts shall be deposited into the Certificate Distribution
Account for distribution to the Certificateholders, 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:
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(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 or a Certicated Security (and that is not either a Federal
Book Entry Security or a Security Entitlement) 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;
(C) any Designated Account Property that is an Uncertificated
Security and that is not a Federal Book-Entry Security shall be
delivered to the Indenture Trustee in accordance with paragraph (ii)
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;
(D) with respect to any Designated Account Property that
constitutes a Security Entitlement or a Federal Book-Entry Security,
the Indenture Trustee shall maintain Control over such Designated
Account Property; and
(E) the Indenture Trustee shall maintain each item of Designated
Account Property in the particular Designated Account in 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
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
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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
Distribution Account is maintained waives any right of set-off, counterclaim,
security interest or bankers' lien to which it might otherwise be entitled.
SECTION 5.02. Pre-Funding Account. (a) On the Closing Date, the Seller
shall deposit in the Pre-Funding Account $91,472,361.64 from the net proceeds of
the sale of the Notes. On each Subsequent Transfer Date, the Servicer shall
instruct the Indenture Trustee to withdraw from the Pre-Funding Account an
amount equal to (i) the aggregate Starting Receivable Balance of the Subsequent
Receivables transferred to the Issuer on such Subsequent Transfer Date less the
Reserve Account Initial Deposit with respect to such Subsequent Transfer Date
and distribute such amount to or upon the order of the Seller upon satisfaction
of the conditions set forth in Section 2.02(b) with respect to such transfer,
and (ii) the Reserve Account Initial Deposit with respect to such Subsequent
Transfer Date and, on behalf of the Seller, deposit such amount in the Reserve
Account.
(b) If the Pre-Funded Amount has not been reduced to zero on or prior
to the Distribution Date on which the Funding Period ends (or, if the
Funding Period does not end on a Distribution Date, on the first
Distribution Date following the end of the Funding Period), the
Servicer shall instruct the Indenture Trustee to transfer from the
Pre-Funding Account on such Distribution Date any amount then
remaining in the Pre-Funding Account to the Note Distribution Account
and, if such amount is greater than $100,000, the Seller, on behalf of
the Issuer, will deposit into the Note Distribution Account for each
class of Notes an amount equal to the Noteholders' Prepayment Premiums
for such class of Notes provided, however, that the Issuer's
obligation to pay the Noteholders' Prepayment Premiums shall be
limited to funds which are received by the Issuer from the Seller
pursuant to Section 2.02(c) hereof as liquidated damages for the
failure to deliver the Subsequent Receivables, and no other assets of
the Trust will be available for making such payments. If the amount of
funds available for payment of the Noteholders' Prepayment Premiums is
less than
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the sum of the Noteholders' Prepayment Premium for each class of
Notes, then the available funds will be allocated among each class of
Notes in accordance with their respective prepayment premiums.
SECTION 5.03. Negative Carry Account. (a) On the Closing Date, the Seller
shall deposit in the Negative Carry Account $652,521.00 (the "Negative Carry
Account Initial Deposit") from the net proceeds of the sale of the Notes. On or
before the Transfer Date preceding each Distribution Date occurring on or prior
to the first Distribution Date that occurs on or after the end of the Funding
Period, the Servicer will instruct the Indenture Trustee to withdraw from the
Negative Carry Account and deposit into the Collection Account an amount equal
to the Negative Carry Amount for such Distribution Date.
(b) On each Distribution Date during the Funding Period, the Servicer will
instruct the Indenture Trustee to withdraw from the Negative Carry Account an
amount equal to the excess, if any, of the amount on deposit in the Negative
Carry Account over the Required Negative Carry Account Balance and deposit it in
the Certificate Distribution Account for distribution to the Certificateholders,
and on the Distribution Date on or immediately following the last day of the
Funding Period, the Servicer will instruct the Indenture Trustee to withdraw
from the Negative Carry Account the amount remaining on deposit in the Negative
Carry Account and deposit it in the Certificate Distribution Account for
distribution to the Certificateholders.
SECTION 5.04. Collections. The Servicer shall remit to the Collection
Account all payments by or on behalf of the Obligors on the Receivables, all
Insurance Proceeds, all Liquidation Proceeds, proceeds from any Dealer
Liability, proceeds from any NITC Purchase Obligations and proceeds from any
Guaranties within two Business Days after receipt thereof. Notwithstanding the
foregoing, the Servicer shall not be required to remit such collections within
such two Business Days but may remit collections received during a Monthly
Period to the Collection Account in immediately available funds on the Business
Day immediately preceding the related Distribution Date but only for so long as
(i) NFC is the Servicer, (ii) (x) the Servicer satisfies the requirements for
monthly remittances established by the Rating Agencies initially rating the
Securities, and upon the satisfaction of such requirements, the Rating Agencies
which initially rated the Securities reaffirm the rating of the Securities at
the level at which they would be rated if collections were remitted within two
Business Days or (y) the short-term unsecured debt obligations of NFC are rated
at least A-1+ by Standard & Poor's Ratings Services 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 Voting Notes as of the close of the preceding
Distribution Date 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.
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SECTION 5.05. Investment Earnings and Supplemental Servicing Fees. The
Servicer shall be entitled to receive all Supplemental Servicing Fees, and,
except as otherwise provided in Section 5.01(b)(1) hereof, the
Certificateholders (via the Certificate Distribution Account) shall be entitled
to receive all Investment Earnings (other than Investment Earnings on the Pre-
Funding Account), when and as paid without any obligation to (a) either Trustee,
(b) with respect to the Supplemental Servicing Fees, the Certificateholders or
(c) with respect to the Investment Earnings, the Servicer, in respect thereof.
The Servicer will not 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 (other than, with respect to amounts to be distributed to the
Certificateholders, the Certificate Distribution Account) held by either
Trustee, or otherwise established hereunder, such amount will be withdrawn
therefrom and paid to the Servicer or deposited in the Certificate Distribution
Account for distribution to the Certificateholders, as applicable, upon
presentation of a certificate signed by a Responsible Officer of such Person
setting forth, in reasonable detail, the amount of such Supplemental Servicing
Fees or such Investment Earnings, respectively.
SECTION 5.06. Monthly Advances. Subject to the following sentence, as of
each Accounting Date, if the payments during the related Monthly Period by or on
behalf of the Obligor on a Receivable (other than an Administrative Receivable,
a Warranty Receivable or a Liquidating Receivable) after application under
subsection 3.11(a) shall be less than the Scheduled Payment, whether as a result
of any extension granted to the Obligor or otherwise, then the Servicer shall,
subject to the following sentence, advance any such shortfall (such amount, a
"Monthly Advance"). The Servicer shall be obligated to make a Monthly Advance in
respect of a Receivable only to the extent that the Servicer, in its sole
discretion, shall determine that such advance shall be recoverable (in
accordance with the two immediately following sentences) from subsequent
collections or recoveries on such Receivable. Subject to Section 4.07(c), the
Servicer shall be reimbursed for Outstanding Monthly Advances with respect to a
Receivable from the following sources with respect to such Receivable, in each
case as set forth in this Agreement: (i) subsequent payments by or on behalf of
the Obligor, (ii) collections of Liquidation Proceeds, (iii) the Administrative
Purchase Payment and (iv) the Warranty Payment. At such time as the Servicer
shall determine that any Outstanding Monthly Advances with respect to any
Receivable shall not be recoverable from payments with respect to such
Receivable, the Servicer shall be reimbursed from any collections made on other
Receivables held by the Issuer.
SECTION 5.07. Additional Deposits. The Servicer shall deposit in the
Collection Account the aggregate Monthly Advances pursuant to Section 5.06. The
Servicer and the Seller shall deposit in the Collection Account the aggregate
Administrative Purchase Payments and Warranty Payments with respect to
Administrative Receivables and Warranty Receivables, respectively. All such
deposits with respect to a Monthly Period shall be made in immediately available
funds on the day before the Distribution Date related to such Monthly Period.
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ARTICLE VI
THE SELLER; REPRESENTATIONS AND WARRANTIES
OF THE SELLER AND THE SERVICER
SECTION 6.01. Representations and Warranties of the Seller and the
Servicer. The Seller and the Servicer each make the following representations
and warranties as to itself on which the Issuer is relying in acquiring the
Receivables hereunder and issuing the Securities under the other Further
Transfer and Servicing Agreements. The following representations and warranties
are made severally by each of the Seller and the Servicer (for purposes of this
Section 6.01, each, a "Party") and speak as of the Closing Date, in the case of
the Initial Receivables, and as of the applicable Subsequent Transfer Date, in
the case of the Subsequent Receivables, but shall survive the sale, transfer and
assignment of the Receivables to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(a) Representations and Warranties as to each Party.
(i) Organization and Good Standing. Such Party has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Delaware, with power and authority to own its properties and
to conduct its business as such properties are presently owned and such
business is presently conducted, and had at all relevant times, and now
has, power, authority and legal right (A) in the case of the Seller, to
acquire and own the Receivables and (B) in the case of the Servicer, to
service the Receivables as provided in this Agreement;
(ii) Due Qualification. Such Party is duly qualified to do business as
a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease
of property or the conduct of its business (including, in the case of the
Servicer, the servicing of the Receivables as required by this Agreement)
requires or shall require such qualification;
(iii) Power and Authority. Such Party (A) has the power and authority
to execute and deliver the Further Transfer and Servicing Agreements to
which it is a party (as used in this Section 6.01(a), the "applicable
Further Transfer and Servicing Agreements") and to carry out the respective
terms of such agreements and, (B) in the case of the Seller, has the power
and authority to sell and assign the property to be sold and assigned to
and deposited with the Issuer as part of the Owner Trust Estate and has
duly authorized such sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery and performance by such Party
of the applicable Further Transfer and Servicing Agreements have been duly
authorized by such Party by all necessary corporate action;
(iv) Binding Obligations. 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
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other similar laws affecting the enforcement of creditors' rights in
general and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
(v) No Violation. The consummation by such Party of the transactions
contemplated by the applicable Further Transfer and Servicing Agreements
and the fulfillment of the terms of such agreements by such Party shall not
conflict with, result in any breach of any of the terms and provisions of
or constitute (with or without notice or lapse of time) a default under,
the certificate of incorporation or by-laws of such Party, or any
indenture, agreement or other instrument to which such Party is a party or
by which it is bound, or result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument, other than the applicable Further Transfer
and Servicing Agreements, or violate any law or, to such Party's knowledge,
any order, rule or regulation applicable to such Party of any court or of
any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over such Party or any of
its properties; and
(vi) No Proceedings. There are no proceedings or, to such Party's
knowledge, investigations pending or, to such Party's knowledge, threatened
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality having jurisdiction over such Party or its
properties (i) asserting the invalidity of the applicable Further Transfer
and Servicing Agreements, any Securities issued pursuant thereto and, in
the case of the Seller, the Custodian Agreement or the Administration
Agreement, (ii) seeking to prevent the issuance of such Securities or the
consummation of any of the transactions contemplated by the applicable
Further Transfer and Servicing Agreements and, in the case of the Seller,
the Custodian Agreement or the Administration Agreement, or (iii) seeking
any determination or ruling that might materially and adversely affect the
performance by such Party of its obligations under, or the validity or
enforceability of, such Securities, the applicable Further Transfer and
Servicing Agreements or, in the case of the Seller, the Custodian Agreement
or the Administration Agreement.
(b) Representations and Warranties of the Seller Only.
(i) Good Title. No Receivable has been sold, transferred, assigned or
pledged by the Seller to any Person other than the Issuer; immediately
prior to the conveyance of the Receivables pursuant to this Agreement the
Seller had good and marketable title thereto, free of any Lien (except for
any Lien which may have existed in accessions to the Financed Vehicles not
financed by NFC); and, upon execution and delivery of this Agreement, with
respect to the Initial Receivables, the Assignment, and, with respect to
any Subsequent Receivables, the related Subsequent Transfer Assignment by
the Seller, the Issuer shall have all of the right, title and interest of
the Seller in, to and under the Purchased Property transferred thereby free
of any Lien (except for any Lien which may exist in accessions to the
Financed Vehicles not financed by NFC);
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(ii) All Filings Made. All filings (including UCC filings) necessary
in any jurisdiction to give the Issuer a first priority perfected security
or ownership interest in the Purchased Property (to the extent it
constitutes Code Collateral) shall have been made, and the Receivables
constitute Code Collateral; and
(iii) Valid Sale. This Agreement, and each Subsequent Transfer
Assignment when duly executed and delivered, shall constitute a valid sale,
transfer and assignment of the Purchased Property transferred thereby,
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 Date and each Subsequent Transfer Date.
SECTION 6.02. Liability of Seller. The Seller shall be liable in accordance
with this Agreement only to the extent of the obligations in this Agreement
specifically undertaken by the Seller.
SECTION 6.03. Merger or Consolidation of, or Assumption of the Obligations
of, Seller; Amendment of Certificate of Incorporation.
(a) Any corporation (i) into which the Seller may be merged or
consolidated, (ii) resulting from any merger or consolidation to which the
Seller shall be a party, (iii) succeeding to the business of the Seller, or (iv)
more than 50% of the voting stock of which is owned directly or indirectly by
NIC, which corporation in any of the foregoing cases executes an agreement of
assumption to perform every obligation of the Seller under this Agreement, shall
be the successor to the Seller under this Agreement without the execution or
filing of any document or any further act on the part of any of the parties to
this Agreement. The Seller shall provide 10 days' prior notice of any merger,
consolidation or succession pursuant to this Section 6.03 to the Rating
Agencies.
(b) The Seller hereby agrees that during the term of this Agreement it
shall not amend Articles Third, Fourth, Fifth, Twelfth or Fourteenth of its
Restated Certificate of Incorporation without obtaining the prior written
consent of the Rating Agencies or without obtaining the prior written consent of
Noteholders whose Notes evidence not less than a majority of the Outstanding
Amount of the Voting Notes as of the close of the preceding Distribution Date
and the prior written consent of the Holders of Certificates evidencing not less
than a majority of the ownership interest in the Trust as of the close of the
preceding Distribution Date.
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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.
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, Illinois corporate income, 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
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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.
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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
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 Certificate Distribution Account 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.
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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 Voting 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
Certificateholders whose Certificates evidence not less than 25% of the
ownership interest in the Trust as of the close of the preceding Distribution
Date);
(c) the entry of a decree or order by a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator, receiver or liquidator for the Seller or the Servicer, in any
insolvency, readjustment of debt, marshaling 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,
marshaling of assets and liabilities, or similar proceedings of or relating to
the Seller or the Servicer or of or relating to substantially all
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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
Voting 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 the Holders of Certificates evidencing
not less than a majority of the ownership interest in the Trust 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
Negative Carry Account, the Pre-Funding Account, the Reserve Account, the Note
Distribution Account or the Certificate Distribution Account or thereafter
received with respect to the Receivables that shall at that time be held by the
Servicer. In addition to any other amounts that are then payable to the Servicer
under this Agreement, the Servicer shall be entitled to receive from the
successor Servicer reimbursements for any Outstanding Monthly Advances made
during the period prior to the notice pursuant to this Section 8.02 which
terminates the obligation and rights of the Servicer under this Agreement.
SECTION 8.03. Indenture Trustee to Act; Appointment of Successor. On and
after the time the Servicer receives a notice of termination pursuant to Section
8.02, the Indenture Trustee shall be the successor in all respects to the
Servicer in its capacity as servicer under this Agreement and the transactions
set forth or provided for in this Agreement, and shall be subject to all the
responsibilities, restrictions, duties and liabilities relating thereto placed
on the Servicer by the terms and provisions of this Agreement; provided,
however, that the predecessor Servicer shall remain liable for, and the
successor Servicer shall have no liability for, any indemnification obligations
of the Servicer arising as a result of acts, omissions or occurrences during the
period in which the predecessor Servicer was the Servicer; and provided,
further, that NFC shall remain liable for all such indemnification obligations
of the Servicer without regard to whether it is still Servicer hereunder. As
compensation therefor, the Indenture Trustee shall be entitled to such
compensation
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(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
truck, bus 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 Voting 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,
Holders of Certificates evidencing not less than a majority of the ownership
interest in the Trust as of the close of the preceding Distribution Date) may,
on behalf of all Securityholders, waive any default by the Servicer in the
performance of its obligations hereunder and its consequences, except a default
in making any required deposits to or payments from any of the accounts in
accordance with this Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Default arising therefrom shall
be deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
SECTION 8.06. Repayment of Advances. If the identity of the Servicer shall
change, the predecessor Servicer shall be entitled to receive, to the extent of
available funds, reimbursement for Outstanding Monthly Advances pursuant to
Section 5.06 in the manner specified in Section 4.06, with respect to all
Monthly Advances made by such predecessor Servicer.
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ARTICLE IX
TERMINATION
SECTION 9.01. Optional Purchase of All Receivables. On the last day of
any Monthly Period as of which the Aggregate Receivables Balance is 10% or less
of the Aggregate Starting Receivables Balance and the Class A-1 Notes, the Class
A-2 Notes and the Class A-3 Notes have been paid in full, the Servicer shall
have the option to purchase the assets of the Trust other than the Designated
Accounts and the Certificate Distribution Account. If the Servicer's long term
unsecured debt rating from Moody's Investors Service, Inc. is equal to or higher
than Baa3 at the time that it seeks to exercise such option, then to exercise
such option, the Servicer shall deposit in the Collection Account an amount
equal to the aggregate Administrative Purchase Payments for the Receivables
(including Liquidating Receivables), plus the appraised value of any such other
property held by the Trust (less the Liquidation Expenses to be incurred in
connection with the recovery thereof), such value to be determined by an
appraiser mutually agreed upon by the Servicer and each Trustee. If the
Servicer's long term unsecured debt rating from Moody's Investors Service, Inc.
is less than Baa3 at the time that it seeks to exercise such option, then to
exercise such option, the Servicer shall deposit in the Collection Account an
amount equal to the appraised value of the Receivables (including Liquidating
Receivables), plus the appraised value of any such other property held by the
Trust (less the Liquidation Expenses to be incurred in connection with the
recovery thereof), such values to be determined by an appraiser mutually agreed
upon by the Servicer and each Trustee; provided, that such amount (when added to
any funds then on deposit in the Designated Accounts) must be at least equal to
the aggregate Redemption Price of the outstanding Notes to be redeemed with such
proceeds 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 Article V of the Indenture (an "Event of Default Sale"), the Servicer shall
instruct the Applicable Trustee to deposit the proceeds from such disposition
after all payments and reserves therefrom have been made or the amount specified
in clause SECOND of Section 5.4(b) of the Indenture (the "Event of Default
Proceeds") in the Collection Account. On the day preceding the Distribution Date
on which the Event of Default 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 Indenture 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 Event of Default 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:
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(i) to the Note Distribution Account, any portion of the Aggregate
Class A Noteholders' Interest Distributable Amount not otherwise deposited
into the Note Distribution Account on the day preceding such Distribution
Date for payment of interest on the Class A Notes;
(ii) to the Note Distribution Account, an amount equal to the Note
Principal Balance of the Class A Notes (after giving effect to the
reduction therein 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) for payment of principal of the
Class A Notes;
(iii) to the Note Distribution Account, any portion of the Class B
Noteholders' Interest Distributable Amount not otherwise deposited into the
Note Distribution Account on the day preceding such Distribution Date for
payment of interest on the Class B Notes; and
(iv) to the Note Distribution Account, an amount equal to the Note
Principal Balance of the Class B Notes (after giving effect to the
reduction therein 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) for payment of principal of the
Class B Notes.
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 Event of Default Proceeds
remaining after the deposits described above shall be deposited into the
Certificate Distribution Account for distribution to the Certificateholders.
(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 Noteholders and the Servicer of all
amounts required to be paid under this Agreement and the Indenture, 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
deposited into the Certificate Distribution Account for
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distribution to the Certificateholders and any other assets remaining in the
Trust shall be distributed to the Certificate Distribution Account for
distribution to the Certificateholders.
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 Voting 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 ownership interest in the Trust as of
the close of the preceding Distribution Date (which consents, whether given
pursuant to this Section 10.01 or pursuant to any other provision of this
Agreement, shall be conclusive and binding on such Person and on all future
holders of such 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 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 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 Voting Notes as of the preceding Distribution Date
or of the Holders of Certificates evidencing greater than a majority of the
ownership interest in the Trust as of the preceding Distribution Date, in each
case without the consent of the Indenture Trustee and the numbers of
Securityholders described in such Section.
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(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 Note
Depository Agreement.
(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 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
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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.
(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
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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 Notes 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 Securities 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 Voting Notes as of the close of the
preceding Distribution Date and of Holders of Certificates evidencing not less
than 66% of the ownership interest in the Trust 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.
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SECTION 10.09. Headings and Cross-References. The various headings in this
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement.
SECTION 10.10. Assignment to Indenture Trustee. The Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders and (to the extent expressly
provided therein) 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 Chase Manhattan Bank Delaware not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall Chase Manhattan 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.
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On the Closing Date (with respect to the remainder of calendar year
1997) 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 executive order to be closed.
* * * * *
40
<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 1997-B OWNER TRUST
By: CHASE MANHATTAN BANK DELAWARE, not in
its individual capacity but solely as
Owner Trustee on behalf of the Trust
By:
---------------------------------
Name: John J. Cashin
Title: Vice President
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION, as Seller
By:
-------------------------------------
Name: R. Wayne Cain
Title: Vice President and Treasurer
NAVISTAR FINANCIAL CORPORATION, as
Servicer
By:
-------------------------------------
Name: R. Wayne Cain
Title: Vice President and Treasurer
Acknowledged and Accepted:
THE BANK OF NEW YORK, not in
its individual capacity but
solely as Indenture Trustee
By:
---------------------------
Name: Reyne Macadaeg
Title: Assistant Vice President
<PAGE>
EXHIBIT A
Form of Initial Assignment
For value received, in accordance with the Pooling and Servicing Agreement,
dated as of November 5, 1997 (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 1997-B Owner Trust (the "Issuer"), the Seller does hereby
sell, assign, transfer and otherwise convey unto the Issuer, without recourse,
all right, title and interest of the Seller in, to and under (i) the Initial
Receivables and all monies paid thereon (including Liquidation Proceeds) and due
thereunder on and after the Initial Cutoff Date; (ii) the security interests in
the Financed Vehicles granted by Obligors pursuant to the Initial Receivables
and, to the extent permitted by law, any accessions thereto which are financed
by NFC; (iii) the benefits of any lease assignments with respect to the related
Financed Vehicles; (iv) any proceeds from any Insurance Policies with respect to
the Initial Receivables; (v) any proceeds from Dealer Liability with respect to
the Initial Receivables, proceeds from any NITC Purchase Obligations with
respect to the Initial Receivables (subject to the limitations set forth in
Section 2.04 of the Pooling and Servicing Agreement) and proceeds from any
Guaranties of Initial Receivables; (vi) the Purchase Agreement, the assignment
pursuant to Section 2.01 of the Purchase Agreement with respect to the Initial
Receivables and the Custodian Agreement, including the right of the Seller to
cause NFC to perform its obligations thereunder (including the obligation to
repurchase Initial Receivables under certain circumstances) and (vii) any
proceeds of the property described in clauses (i), (ii), (iii) and (vi) above.
The foregoing sale does not constitute and is not intended to result in any
assumption by the Issuer of any obligation of the undersigned to the Obligors,
Dealers, insurers or any other Person in connection with the Initial
Receivables, the agreements with Dealers, any Insurance Policies or any
agreement or instrument relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Pooling and Servicing Agreement and is to be governed by the Pooling and
Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Pooling and Servicing Agreement.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of November 5, 1997.
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION
By:
-------------------------------------
Name: R. Wayne Cain
Title: Vice President and Treasurer
2
<PAGE>
EXHIBIT B
Form of Subsequent Assignment
For value received, in accordance with the Pooling and Servicing Agreement,
dated as of November 5, 1997 (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 1997-B Owner Trust (the "Issuer"), the Seller does hereby
sell, assign, transfer and otherwise convey unto the Issuer, without recourse,
all right, title and interest of the Seller in, to and under (i) the Subsequent
Receivables, having an aggregate Receivable Balance equal to
$_____________________, set forth on the schedule hereto (which shall supplement
the Schedule of Receivables) and all monies paid thereon (including Liquidation
Proceeds) and due thereunder on and after _____________________ (the "Subsequent
Cutoff Date"); (ii) the security interests in the Financed Vehicles granted by
Obligors pursuant to such Subsequent Receivables and, to the extent permitted by
law, any accessions thereto which are financed by NFC; (iii) the benefits of any
lease assignments with respect to the related Financed Vehicles; (iv) any
proceeds from any Insurance Policies with respect to such Subsequent
Receivables; (v) any proceeds from Dealer Liability with respect to such
Subsequent Receivables, proceeds from any NITC Purchase Obligations with respect
to such Subsequent Receivables (subject to the limitations set forth in Section
2.04 of the Pooling and Servicing Agreement) and proceeds from any Guaranties of
such Subsequent Receivables; (vi) the Purchase Agreement, the assignment
pursuant to Section 2.01 of the Purchase Agreement with respect to such
Subsequent Receivables and the Custodian Agreement, including the right of the
Seller to cause NFC to perform its obligations thereunder (including the
obligation to repurchase Initial Receivables under certain circumstances) and
(vii) any proceeds of the property described in clauses (i), (ii), (iii) and
(vi) above.
The foregoing sale does not constitute and is not intended to result in any
assumption by the Issuer of any obligation of the undersigned to the Obligors,
Dealers, insurers or any other Person in connection with the Subsequent
Receivables assigned hereby, the agreements with Dealers, any Insurance Policies
or any agreement or instrument relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Pooling and Servicing Agreement and is to be governed by the Pooling and
Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Pooling and Servicing Agreement.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of __________________, 199_.
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
2
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EXHIBIT C
Locations of Schedule of Receivables
The Schedule of Receivables is
on file at the offices of:
1. The Indenture Trustee
2. The Owner Trustee
3. Navistar Financial Corporation
4. Navistar Financial Retail Receivables Corporation
3
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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 Distribution
Date occurring after the date such Receivable is transferred to the Trust, all
payments received by the Servicer from or for the account of the Obligor on or
after the applicable Cutoff Date) except for any Overdue Payments or
Supplemental Servicing Fees.
Administration Agreement: That certain Administration Agreement, dated as
of November 5, 1997 among NFC, as Administrator, the Trust and the Indenture
Trustee, as amended and supplemented from time to time.
Administrative Purchase Payment: With respect to a Distribution Date and to
an Administrative Receivable purchased as of the related Accounting Date, a
release of all claims for reimbursement of Monthly Advances made on such
Administrative Receivable plus a payment equal to the sum of (i) the sum of the
Scheduled Payments on such Administrative Receivable due after the Accounting
Date minus the Rebate, (ii) any reimbursement made pursuant to the last sentence
of Section 5.06 of the Pooling and Servicing Agreement with respect to such
Receivable, and (iii) all past due Scheduled Payments with respect to which a
Monthly Advance has not been made.
Administrative Receivable: A Receivable which the Servicer is required to
purchase as of an Accounting Date pursuant to Section 3.08 of the Pooling and
Servicing Agreement or which the Servicer has elected to repurchase as of an
Accounting Date pursuant to Section 9.01 of the Pooling and Servicing Agreement.
Administrator: NFC or any successor Administrator under the Administration
Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
<PAGE>
Agency Office: The office of the Issuer maintained pursuant Section 3.2 of
the Indenture.
Aggregate Losses: With respect to a Monthly Period, the sum of (i) the
aggregate of the Receivable Balances of all Receivables newly designated during
such Monthly Period as Liquidating Receivables, plus (ii) the aggregate
principal portion of Scheduled Payments due but not received with respect to all
such Receivables prior to the date any such Receivable was designated a
Liquidating Receivable minus (iii) Liquidation Proceeds collected during such
Monthly Period with respect to all Liquidating Receivables.
Aggregate Class A Noteholders' Interest Distributable Amount: With respect
to any Distribution Date, the sum of the Class A Noteholders' Interest
Distributable Amounts for all classes of Class A Notes and the Class A
Noteholders' Interest Carryover Shortfall as of the preceding Distribution Date.
Aggregate Note Principal Balance: With respect to the close of a
Distribution Date, the sum of the Note Principal Balances for all classes of
Notes.
Aggregate Receivables Balance: As of any date, the sum of the Receivable
Balances of all outstanding Receivables (other than Liquidating Receivables)
held by the Trust on such date.
Aggregate Starting Receivables Balance: As of any date of determination,
the sum of the Starting Receivable Balances of the Initial Receivables as of the
Initial Cutoff Date, which is $408,527,638.36, plus the aggregate Starting
Receivable Balances (as of the related Subsequent Cutoff Date) for all
Subsequent Receivables sold to the Issuer on or prior to such date of
determination.
Annual Percentage Rate: With respect to a Receivable, the annual rate of
finance charges stated in such Receivable.
Applicable Trustee: So long as the Aggregate Note Principal Balance is
greater than zero and the Indenture has not been discharged in accordance with
its terms, the Indenture Trustee, and thereafter, the Owner Trustee.
Assignment: The Assignment described in Section 2.01 of the Pooling and
Servicing Agreement.
Authorized Officer: With respect to the Issuer, any officer of the Owner
Trustee who is authorized to act for the Owner Trustee in matters relating to
the Issuer and who is identified on the list of Authorized Officers delivered by
the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter) and, so long as the
Administration Agreement is in effect, any Vice President or more senior officer
of the Administrator who is authorized to act for the Administrator in matters
relating to the Issuer and to be acted upon by the Administrator pursuant to the
Administration Agreement and who is identified on the list of Authorized
Officers delivered by the Administrator to the Indenture Trustee on the Closing
Date (as such list may be modified or supplemented from time to time
thereafter).
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Available Amount: With respect to a Distribution Date, the sum of the
Collected Interest and the Collected Principal for such Distribution Date.
Available Purchase Amount: As of any Subsequent Transfer Date, the amount
by which $500,000,000 exceeds the Aggregate Starting Receivables Balance on (and
before giving effect to any transfers of Receivables on) such Subsequent
Transfer Date.
Basic Documents: The Certificate of Trust, the Trust Agreement, the
Purchase Agreement, each assignment pursuant to Section 2.01 of the Purchase
Agreement, the Pooling and Servicing Agreement, the Assignment, each Subsequent
Transfer Assignment, the Custodian Agreement, the Administration Agreement, the
Indenture, the Note 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 Notes: A beneficial interest in the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.10 of the Indenture.
Business Day: Any day other than a Saturday, a Sunday or any other day on
which banking institutions in New York, New York or Chicago, Illinois may, or
are required to, remain closed.
Business Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code (S) 3801 et seq., as the same may be amended from time to time.
Certificate: Any one of the certificates executed by the Owner Trustee and
authenticated by or on behalf of the Owner Trustee in substantially the form set
forth in Exhibit A to the Trust Agreement.
Certificateholder: A Person in whose name a Certificate is registered
pursuant to the terms of the Trust Agreement.
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 Register: The register of Certificates specified in Section 3.4
of the Trust Agreement.
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Certificate Registrar: The registrar at any time of the Certificate
Register, appointed pursuant to Section 3.4(a) of the Trust Agreement.
Certificated Security: As of any date, has the meaning given to such term
under the applicable UCC in effect on such date.
Class A Noteholders' Interest Carryover Shortfall: As of the close of
any Distribution Date, the excess of the Aggregate Class A 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 on the Class A Notes.
Class A Noteholders' Interest Distributable Amount: With respect to the
Class A-1 Notes and the Class A-2 Notes and any Distribution Date, the product
of (1) the outstanding principal balance of such class of Class A Notes on the
preceding Distribution Date after giving effect to all payments of principal in
respect of such class of Class A Notes on such preceding Distribution Date (or,
in the case of the first Distribution Date, the outstanding principal balance on
the Closing Date) and (2) the product of the Interest Rate for such class and a
fraction, the numerator of which is the actual number of days elapsed from the
most recent Distribution Date on which interest has been paid (or the Closing
Date, in the case of the initial period) and the denominator of which is 360,
and with respect to the Class A-3 Notes and the Class A-4 Notes and any
Distribution Date, the product of (i) the outstanding principal balance of such
class of Class A Notes on the preceding Distribution Date after giving effect to
all payments of principal in respect of such class of Class A Notes on such
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, (or,
in the case of the first Distribution Date, the number of days from the Closing
Date to but excluding such Distribution Date), and the denominator of which is
360.
Class A Notes: Collectively, the Class A-1 Notes, Class A-2 Notes,
Class A-3 Notes and Class A-4 Notes.
Class A-1 Notes: The Class A-1 5.722% Asset Backed Notes in the aggregate
principal amount of $107,000,000.00 issued pursuant to the Indenture.
Class A-2 Notes: The Class A-2 5.956% Asset Backed Notes in the aggregate
principal amount of $94,000,000.00 issued pursuant to the Indenture.
Class A-3 Notes: The Class A-3 6.200% Asset Backed Notes in the aggregate
principal amount of $132,000,000.00 issued pursuant to the Indenture.
Class A-4 Notes: The Class A-4 6.300% Asset Backed Notes in the aggregate
principal amount of $149,500,000.00 issued pursuant to the Indenture.
Class B Notes: The Class B 6.300% Assets Backed Notes in the aggregate
principal amount of $17,500,000.00 issued pursuant to the Indenture.
Class B Noteholders' Interest Carryover Shortfall: As of the close of any
Distribution Date, the excess of (i) the Class B Noteholders' Interest
Distributable Amount for such Distribution Date,
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<PAGE>
over (ii) the amount that was actually deposited in the Note Distribution
Account on the day preceding such current Distribution Date in respect of
interest on the Class B Notes.
Class B Noteholders' Interest Distributable Amount: With respect to any
Distribution Date, the sum of (i) the Class B Noteholders' Monthly Interest
Distributable Amount for such Distribution Date and (ii) the Class B
Noteholders' Interest Carryover Shortfall as of the preceding Distribution Date.
Class B Noteholders' Monthly Interest Distributable Amount: With respect to
any Distribution Date, the product of (i) the outstanding principal balance of
the Class B Notes on the preceding Distribution Date after giving effect to all
payments of principal in respect of the Class B 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 the Class B Notes and a fraction, the numerator of which is 30
(or, in the case of the first Distribution Date, the number of days from the
Closing Date to but excluding such Distribution Date) and the denominator of
which is 360.
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: The "Closing" as defined in Section 2.03 of the Purchase
Agreement.
Closing Date: November 5, 1997.
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.
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<PAGE>
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(b)(i) of the Pooling and Servicing
Agreement.
Collection Account: The account designated as such, established and
maintained pursuant to Section 5.01(a)(i) of the Pooling and Servicing
Agreement.
Control: (x) The Indenture Trustee shall have obtained "Control" over a
Security Entitlement if:
(i) (a) the Indenture Trustee is the Securities Intermediary for the
Designated Account in which such Security Entitlement is held, or
(b) the Indenture Trustee
(1) is identified in the records of the Securities Intermediary
as the person having such a Security Entitlement against the
Securities Intermediary, or
(2) has obtained the agreement, in writing, of the Securities
Intermediary for such Security Entitlement that it will
comply with orders of the Indenture Trustee regarding the
sale or redemption of the Security Entitlement without
further consent of any other person, and
(ii) the Securities Intermediary for such Security Entitlement
(a) is the registered owner of the related Financial Asset,
(b) is the holder of the Security Certificate for the related
Financial Asset, or
(c) holds its interest in the related Financial Asset directly
through a clearing corporation (as defined in Revised Article 8);
and
(y) the Indenture Trustee shall have obtained "Control" over a Federal
Book-Entry Security if:
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(i) (a) the Indenture Trustee is a participant in the book entry system
maintained by the Federal Reserve Bank that is acting as fiscal
agent for the issuer of such Federal Book-Entry Security; and
(b) such Federal Reserve Bank has indicated by book entry that such
Federal Book-Entry Security has been credited to the Indenture
Trustee's securities account in such book entry system; or
(ii) (a) the Indenture Trustee
(1) is identified in the records of a Securities Intermediary as
the Person having a Security Entitlement in respect of such
Federal Book-Entry Security against such Securities
Intermediary; or
(2) has obtained the agreement, in writing, of the Securities
Intermediary for such Security Entitlement that it will
comply with orders of the Trustee regarding the sale or
redemption of the Security Entitlement without further
consent of any other Person; and
(b) the Securities Intermediary for such Security Entitlement is a
participant in the book entry system maintained by the Federal
Reserve Bank that is acting as fiscal agent for the issuer of
such Federal Book-Entry Security; and
(c) such Federal Reserve Bank has indicated by book entry that such
Federal Book-Entry Security has been credited to the Securities
Intermediary's securities account in such book entry system.
Corporate Trust Office: With respect to the Indenture Trustee or the Owner
Trustee, the principal office at which at any particular time the corporate
trust business of the Indenture Trustee or Owner Trustee, respectively, shall be
administered, which offices at the Closing Date are located, in the case of the
Indenture Trustee, at The Bank of New York, 101 Barclay Street, New York, New
York, 10286, Attn: Corporate Trust Administration, and in the case of the Owner
Trustee, at Chase Manhattan Bank Delaware, 1201 Market Street, Wilmington,
Delaware 19801, Attn: Corporate Trustee Administration.
Custodian: NFC, as Servicer, or another custodian named from time to time
in the Custodian Agreement.
Custodian Agreement: The Custodian Agreement, dated as of November 5, 1997
between the Custodian and the Seller, as amended or supplemented from time to
time.
Cutoff Date: With respect to an Initial Receivable, the Initial Cutoff
Date, and with respect to a Subsequent Receivable, the related Subsequent Cutoff
Date.
Dealer: (i) A Person with whom NITC has a valid dealer sales/maintenance
agreement to sell NITC vehicles, (ii) a Person with whom NFC has an agreement to
extend new or used truck
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<PAGE>
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 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 Physical Property or any Certificated Security,
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
(ii) with respect to any Uncertificated Security that is not a Federal
Book-Entry Security:
(a) if the issuer of such Uncertificated Security is organized
under the laws of an Old Article 8 Jurisdiction,
registration on the books and records of the issuer thereof
in the name of the financial intermediary, the sending of a
confirmation by the financial intermediary of the transfer
to the Indenture Trustee or its nominee or custodian of such
Uncertificated Security and the making by such financial
intermediary of entries on its books and records identifying
such Uncertificated Securities as belonging to the Indenture
Trustee or its nominee or custodian; and
(b) if the issuer of such Uncertificated Security is organized
under the laws of a jurisdiction that has adopted Revised
Article 8, (x) the issuer registers the Indenture Trustee as
the registered owner or (y) the Indenture Trustee otherwise
satisfies the requirements for obtaining "control" under
Section 8-106(c) of Revised Article 8.
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
8
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Property, Certificated Securities, Security Entitlements, Uncertificated
Securities or otherwise), including the Reserve Account Initial Deposit, and all
proceeds of the foregoing.
Designated Accounts: The Collection Account, the Note Distribution Account,
the Reserve Account, the Negative Carry Account and the Pre-Funding Account,
collectively.
Designated Receivables: The "Designated Receivables" as defined in Section
2.01 of the Purchase Agreement.
Determination Date: The day that is two Business Days prior to the
Distribution Date.
Distribution Date: With respect to a Monthly Period, the 15th day of the
next succeeding calendar month or, if such 15th day is not a Business Day, the
next succeeding Business Day, commencing November 17, 1997.
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
Services 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 Services 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
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<PAGE>
or trust company) thereof shall have a credit rating from each of the
Rating 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 (x) with respect to any security that
is a direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of which
are backed by the full faith and credit of the United States of America, in
either case entered into with (A) a depository institution or trust company
(acting as principal) described in clause (ii) or (B) a depository
institution or trust company the deposits of which are insured by FDIC or
(y) the counterparty for which has a rating from each of the Rating
Agencies in the highest investment category for short-term unsecured debt
obligations, the collateral for which is held by a custodial bank for the
benefit of the Trust or the Indenture Trustee, is marked to market daily
and is maintained in an amount that exceeds the amount of such repurchase
obligation, and which requires liquidation of the collateral immediately
upon the amount of such collateral being less than the amount of such
repurchase obligation (unless the counterparty immediately satisfies the
repurchase obligation upon being notified of such shortfall);
(vii) commercial paper master notes 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; and
(viii) 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.
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<PAGE>
Executive Officer: With respect to any corporation, the Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer, President, Executive
Vice President, any Vice President, the Secretary or the Treasurer of such
corporation; and with respect to any partnership, any general partner thereof.
Expenses: The expenses described in Section 6.9 of the Trust Agreement.
FDIC: Federal Deposit Insurance Corporation or any successor agency.
Federal Book-Entry Security: An obligation issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or the Federal National Mortgage
Association, or any other direct obligation of, or obligation fully guaranteed
as to timely payment of principal and interest by, the United States of America,
that is a book-entry security held through the Federal Reserve System pursuant
to Federal Book-entry regulations.
Final Scheduled Distribution Date: With respect to a class of Securities,
the date set forth below opposite such Securities:
<TABLE>
<CAPTION>
<S> <C>
Class A-1 Notes: November 16, 1998
Class A-2 Notes: January 18, 2000
Class A-3 Notes: March 15, 2001
Class A-4 Notes: August 16, 2004
Class B Notes: August 16, 2004
</TABLE>
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.
Financial Asset: Has the meaning given such term in Revised Article 8. As
used herein, the Financial Asset "related to" a Security Entitlement is the
Financial Asset in which the entitlement holder (as defined in Revised article
8) holding such Security Entitlement has the rights and property interest
specified in Revised Article 8.
Full Prepayment: With respect to a Distribution Date, that portion of an
Actual Payment (other than the Scheduled Payment), which with respect to (i) any
Receivable, is sufficient to prepay such Receivable in full (after application
of the Scheduled Payment), or (ii) a Receivable secured by multiple Financed
Vehicles, equals the unpaid principal amount of the Receivable relating to any
Financed Vehicle, as determined by the Servicer in accordance with its customary
servicing procedures.
Funding Percentage: With respect to any Distribution Date, the percentage
derived from the fraction the numerator of which is the Pre-Funded Amount and
the denominator of which is the sum of the Aggregate Receivables Balance and the
Pre-Funded Amount, in each case, as of the last day of the related Monthly
Period.
Funding Period: The period beginning on and including the Closing Date and
ending on the first to occur of (a) the Distribution Date on which the amount on
deposit in the Pre-Funding
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Account (after giving effect to any transfers therefrom in connection with the
transfer of Subsequent Receivables to the Issuer on such Distribution Date) is
not greater than $100,000, (b) the date on which an Event of Default or a
Servicer Default occurs, (c) the date on which an Insolvency Event occurs with
respect to the Seller or NFC or (d) the close of business on the January 1998
Distribution Date.
Further Transfer and Servicing Agreements: The Pooling and Servicing
Agreement, including any Subsequent Transfer Assignments, the Trust Agreement
and the Indenture.
Grant: To mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of, the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
Guaranties: With respect to any Receivable, personal or commercial
guaranties of an Obligor's performance with respect thereto.
Holder: The Person in whose name a Note or Certificate is registered on the
Note Register or the Certificate Register, as applicable.
Indemnified Parties: The Persons specified in Section 6.9 of the Trust
Agreement.
Indenture: The Indenture, dated as of November 5, 1997 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
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<PAGE>
opinion or certificate shall state that the signer has read the definition of
"Independent" in the Indenture and that the signer is Independent within the
meaning thereof.
Indirect Participant: A securities broker, dealer, bank, trust company or
other Person that clears through or maintains a custodial relationship with a
Clearing Agency Participant, either directly or indirectly.
Initial Cutoff Date: October 1, 1997.
Initial Receivables: The Receivables transferred to the Trust on the
Closing Date.
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, marshaling 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, marshaling of assets and liabilities or similar
proceedings of or relating to such Person or of or relating to substantially all
of such Person's property, or (iii) such Person shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations.
Insurance Policy: With respect to a Receivable, an insurance policy
covering physical damage, credit life, credit disability, theft, mechanical
breakdown or similar event to each Financed Vehicle securing such Receivable.
Insurance Proceeds: With respect to any Receivable, proceeds of any
Insurance Policy with respect to such Receivable.
Interest Rate: With respect to the Class A-1 Notes, 5.722 % per annum, with
respect to the Class A-2 Notes, 5.956 % per annum, with respect to the Class A-3
Notes, 6.200 % per annum, with respect to the Class A-4 Notes, 6.300 % per annum
and with respect to the Class B Notes, 6.300 % 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.
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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.
Maximum Negative Carry Amount: With respect to any Distribution Date, the
product of (i) the excess of (a) the weighted average of the Interest Rates on
the Notes over (b) 2.5%, multiplied by (ii) the amount on deposit in the Pre-
Funding Account as of the Determination Date related to such Distribution Date
multiplied by (iii) the fraction of a year represented by the number of days
until the end of the Funding Period (calculated on the basis of a 360-day year
of twelve 30-day months).
Monthly Advance: The amount, as of an Accounting Date, which the Servicer
is required to advance on the respective Receivable pursuant to Section 5.06 of
the Pooling and Servicing Agreement.
Monthly Period: With respect to a Determination Date, a Record Date and a
Distribution Date, the calendar month preceding the month in which such date
occurs. With respect to an Accounting Date, the calendar month in which such
Accounting Date occurs.
Negative Carry Account: The account designated as such, established and
maintained pursuant to Section 5.01(a)(v) of the Pooling and Servicing
Agreement.
Negative Carry Account Initial Deposit: Has the meaning set forth in
Section 5.03(a) of the Pooling and Servicing Agreement.
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Negative Carry Account Property: As defined in the Granting Clause of the
Indenture.
Negative Carry Amount: With respect to any Distribution Date, the excess
(if any) between (i) the product of (a) the sum of the Aggregate Class A
Noteholders' Interest Distributable Amount and the Class B Noteholders' Interest
Distributable Amount for such Distribution Date multiplied by (b) the Funding
Percentage for such Distribution Date over (ii) the Investment Earnings on the
Pre-Funding Account during the related Monthly Period.
NIC: Navistar International Corporation, a Delaware corporation, and its
successors.
NFC: Navistar Financial Corporation, a Delaware corporation, and its
successors.
NFRRC: Navistar Financial Retail Receivables Corporation, a Delaware
corporation, and its successors.
NITC: Navistar International Transportation Corp., a Delaware corporation,
and its successors.
NITC Purchase Obligations: Certain obligations of NITC, subject to
limitations, to purchase Financed Vehicles securing Liquidating Receivables
pursuant to Article VI, "NFC/NITC Retail Repossession Purchase and Remarketing
Agreement" and other provisions of the Master Intercompany Agreement by and
between NFC and NITC dated as of April 26, 1993, as such Master Intercompany
Agreement may be amended, supplemented, restated or otherwise modified.
Noteholders: Holders of record of the Notes pursuant to the Indenture and,
with respect to any class of Notes, holders of record of such class of Notes
pursuant to the Indenture.
Noteholders' Prepayment Premium: With respect to (i) the Class A-1 Notes,
an amount equal to the excess, if any, discounted as described below, of (a) the
amount of interest that would have accrued on the portion of the remaining Pre-
Funded Amount to be paid to the Noteholders of the Class A-1 Notes pursuant to
Section 8.2(c)(ii) of the Indenture (the "Class A-1 Note Prepayment Amount") at
the Interest Rate of such class during the period commencing on and including
the Distribution Date on which such Class A-1 Note Prepayment Amount is required
to be paid to but excluding March 15, 1998, over (b) the amount of interest that
would have accrued on such Class A-1 Note Prepayment Amount over the same period
at a per annum rate of interest equal to the bond equivalent yield to maturity
on the Determination Date preceding such Distribution Date on the United States
Treasury Bill due March 14, 1998 (such excess to be discounted on a monthly
basis to present value to such Distribution Date at the yield described in
clause (i)(b) above), (ii) the Class A-2 Notes, an amount equal to the excess,
if any, discounted as described below, of (a) the amount of interest that would
have accrued on the portion of the remaining Pre-Funded Amount to be paid to the
Noteholders of the Class A-2 Notes pursuant to Section 8.2(c)(ii) of the
Indenture (the "Class A-2 Note Prepayment Amount") at the Interest Rate of such
class during the period commencing on and including the Distribution Date on
which such Class A-2 Note Prepayment Amount is required to be paid to but
excluding November 15, 1998, over (b) the amount of interest that would have
accrued on such Class A-2 Note Prepayment Amount over the same period at a per
annum rate of interest equal to the bond equivalent yield to maturity on the
Determination Date preceding such Distribution Date on the 5.875% United States
Treasury Note due October 31, 1998 (such excess
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to be discounted on a monthly basis to present value to such Distribution Date
at the yield described in clause (ii)(b) above), (iii) the Class A-3 Notes, an
amount equal to the excess, if any, discounted as described below, of (a) the
amount of interest that would have accrued on the portion of the remaining Pre-
Funded Amount to be paid to the Noteholders of the Class A-3 Notes pursuant to
Section 8.2(c)(ii) of the Indenture (the "Class A-3 Note Prepayment Amount") at
the Interest Rate of such class during the period commencing on and including
the Distribution Date on which such Class A-3 Note Prepayment Amount is required
to be paid to but excluding September 15, 1999, over (b) the amount of interest
that would have accrued on such Class A-3 Note Prepayment Amount over the same
period at a per annum rate of interest equal to the bond equivalent yield to
maturity on the Determination Date preceding such Distribution Date on the
5.875% United States Treasury Note due August 31, 1999 (such excess to be
discounted on a monthly basis to present value to such Distribution Date at the
yield described in clause (iii)(b) above), (iv) the Class A-4 Notes, an amount
equal to the excess, if any, discounted as described below, of (a) the amount of
interest that would have accrued on the portion of the of remaining Pre-Funded
Amount to be paid to the Noteholders of the Class A-4 Notes pursuant to Section
8.2(c)(ii) of the Indenture (the "Class A-4 Note Prepayment Amount") at the
Interest Rate of such class during the period commencing on and including the
Distribution Date on which such Class A-4 Note Prepayment Amount is required to
be paid to but excluding December 15, 2000, over (b) the amount of interest that
would have accrued on such Class A-4 Note Prepayment Amount over the same period
at a per annum rate of interest equal to the bond equivalent yield to maturity
on the Determination Date preceding such Distribution Date on the 5.625% United
States Treasury Note due November 30, 2000 (such excess to be discounted on a
monthly basis to present value to such Distribution Date at the yield described
in clause (iv)(b) above) and (v) the Class B Notes, an amount equal to the
excess, if any, discounted as described below, of (a) the amount of interest
that would have accrued on the portion of the remaining Pre-Funded Amount to be
paid to the Noteholders of the Class B Notes pursuant to Section 8.2(c)(ii) of
the Indenture (the "Class B Notes Prepayment Amount") at the Interest Rate of
such class during the period commencing on and including the Distribution Date
on which such Class B Notes Prepayment Amount is required to be paid to but
excluding August 15, 1999, over (b) the amount of interest that would have
accrued on such Class B Notes Prepayment Amount over the same period at a per
annum rate of interest equal to the bond equivalent yield to maturity on the
Determination Date preceding such Distribution Date on the 5.875% United States
Treasury Note due August 31, 1999 (such excess to be discounted on a monthly
basis to present value to such Distribution Date at the yield described in
clause (v)(b) above).
Noteholders' Principal Carryover Shortfall: As of the close of any
Distribution Date, the excess, if any, of the Noteholders' Principal
Distributable Amount for such Distribution Date over the Total Available Amount
with respect to such Distribution Date remaining after payment of the Total
Servicing Fee, the Aggregate Class A Noteholders' Interest Distributable Amount
and the Class B Noteholders' Interest Distributable Amount on such Distribution
Date.
Noteholders' Principal Distributable Amount: For any Distribution Date,
the sum of (i) the Principal Distributable Amount, (ii) the Noteholders'
Principal Carryover Shortfall as of the preceding Distribution Date and (iii) on
the Final Scheduled Distribution Date for a class of Notes, the amount necessary
to reduce the outstanding principal balance of such class of Notes to zero.
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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.
Note Owner: With respect to a Book-Entry Note, the Person who is the
beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an Indirect
Participant, in each case in accordance with the rules of such Clearing Agency).
Note Pool Factor: With respect to any class of Notes and any Distribution
Date, a seven-digit decimal figure computed by the Servicer which is equal to
the Note Principal Balance for such class as of the close of such Distribution
Date divided by the initial Note Principal Balance for such class.
Note Principal Balance: With respect to any class of Notes and any
Distribution Date, the initial aggregate principal balance of such class of
Notes, reduced by all previous payments to the Noteholders of such class in
respect of principal of such Notes, other than the Noteholders' Prepayment
Premium.
Note Register: With respect to any class of Notes, the register of such
Notes specified in Section 2.4 of the Indenture.
Note Registrar: The registrar at any time of the Note Register, appointed
pursuant to Section 2.4 of the Indenture.
Notes: Collectively, the Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes, the Class A-4 Notes and the Class B Notes.
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.
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Old Article 8 Jurisdiction: A jurisdiction that has not adopted Revised
Article 8.
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 canceled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation;
(ii) Notes or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes;
provided, however, that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to the Indenture or provision
therefor, satisfactory to the Indenture Trustee, has been made; and
(iii) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
provided, however, that in determining whether the Holders of the requisite
Outstanding Amount of the Voting Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any Basic
Document, Notes owned by the Issuer, any other obligor upon the Notes, the
Seller or any Affiliate of any of the foregoing Persons shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Indenture
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that the
Indenture Trustee knows to be so owned shall be so disregarded. Notes so owned
that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Indenture Trustee the pledgor's
right so to act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes, the Seller or any Affiliate of any of
the foregoing Persons.
Outstanding Amount: As of any date, the aggregate principal amount of all
Notes, or a class of Notes, as applicable, Outstanding at such date. Payment of
Noteholders' Prepayment Premium to Holders of Outstanding Notes will not reduce
the Outstanding Amount of the Notes.
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Outstanding Monthly Advances: As of an Accounting Date with respect to a
Receivable, the sum of all Monthly Advances made as of or prior to such
Accounting Date minus all payments or collections as of or prior to such
Accounting Date which are specified in Section 5.06 of the Pooling and Servicing
Agreement as reducing Outstanding Monthly Advances with respect to such
Receivable.
Overdue Payment: With respect to a Distribution Date and to a Receivable,
all payments received during the related Monthly Period in excess of any
Supplemental Servicing Fees, to the extent of the Outstanding Monthly Advances
relating to such Receivable.
Owner: For purposes of the Purchase Agreement, the Custodian Agreement and
the Pooling and Servicing Agreement, the "Owner" of a Receivable means (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 acquired by 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: Chase Manhattan Bank Delaware, a Delaware banking
corporation, not in its individual capacity but solely as trustee under the
Trust Agreement, or any successor trustee under the Trust Agreement.
Partial Prepayment: With respect to a Distribution Date and to any
Receivable, the portion of an Actual Payment in excess of the Scheduled Payment
which equals one or more future Scheduled Payments but does not constitute a
Full Prepayment and results in a Rebate in accordance with the Servicer's
customary procedures.
Party: A Party as defined in Section 6.01 of the Pooling and Servicing
Agreement.
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 The Chase Manhattan Bank.
Person: Any legal person, including any individual, corporation, limited
liability company, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
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Physical Property: Means 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.
Pooling and Servicing Agreement: The Pooling and Servicing Agreement,
dated as of November 5, 1997, 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.
Pre-Funding Account: The account designated as such, established and
maintained pursuant to Section 5.02(a) of the Pooling and Servicing Agreement.
Pre-Funding Account Property: As defined in the Granting Clause of the
Indenture.
Pre-Funded Amount: With respect to any Distribution Date, the amount on
deposit in the Pre-Funding Account.
Pre-Funded Percentage: With respect to a class of Notes, the quotient
(expressed as a percentage) of (i) the initial principal balance of such class
of Notes as of the Closing Date and (ii) the sum of the initial principal
balances of each class of Notes as of the Closing Date.
Prepayment: With respect to a Distribution Date and to a Receivable, the
portion of an Actual Payment in excess of the Scheduled Payment.
Prepayment Surplus: With respect to any Distribution Date on which a
Prepayment is to be applied with respect to a Receivable, that portion of such
Prepayment, net of any Rebate to the Obligor of the portion of the Scheduled
Payments attributable to unearned finance charges, which is not allocable to
principal in accordance with the actuarial method.
Principal Distributable Amount: With respect to any Distribution Date, the
sum of: (i) the principal portion of all Scheduled Payments due with respect to
the related Monthly Period on the Receivables held by the Trust (other than
Liquidating Receivables), (ii) the principal portion of all Prepayments received
during the related Monthly Period (except to the extent included in (i) above)
and (iii) the Receivable Balance of each Receivable that the Servicer purchased,
the Seller repurchased or that became a Liquidating Receivable during the
related Monthly Period (except to the extent included in (i) or (ii) above).
Principal Payment Amount: With respect to any Distribution Date, the
amount distributed to the Note Distribution Account pursuant to Section
4.06(c)(iv) of the Pooling and Servicing Agreement.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
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Program: As defined in subsection 4.02(a) of the Pooling and Servicing
Agreement.
Purchase Agreement: The Purchase Agreement, dated as of November 5, 1997,
between NFC and the Seller, as amended and supplemented from time to time.
Purchase Date: The "Purchase Date" as defined in Section 2.01 of the
Purchase Agreement.
Purchase Price: As defined in subsection 2.02 of the Purchase Agreement.
Purchased Property: As of any date, means all of the Designated
Receivables and the Related Security transferred by NFC to NFRRC pursuant to
Section 2.01 of the Purchase Agreement as of such date.
Rating Agencies: As of any date, the nationally recognized statistical
rating organizations requested by the Seller to provide ratings on the Notes
which are rating the Notes 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 Notes.
Rebate: With respect to a given date and to a Receivable, the rebate under
such Receivable that is or would be payable to the Obligor for unearned finance
charges or any other charges that are or would be subject to a rebate to the
Obligor upon the payment of a Partial Prepayment or a Full Prepayment.
Receivable: A Retail Note secured by one or more Financed Vehicles that is
transferred to the Trust pursuant to the Pooling and Servicing Agreement and all
rights and obligations thereunder.
Receivable Balance: With respect to any Receivable, as of an Accounting
Date, the Starting Receivable Balance thereof minus the sum of the following
amounts, in each case computed in accordance with the actuarial method: (i) that
portion of all Scheduled Payments allocated to principal due on or after the
Cutoff Date and on or prior to the Accounting Date, (ii) that portion of all
Warranty Payments or Administrative Purchase Payments allocated to principal,
(iii) that portion of all Prepayments allocated to principal, and (iv) that
portion of the following received and allocated to principal by the Servicer:
benefits of any lease assignments, proceeds from any Insurance Policies,
Liquidation Proceeds, proceeds from any Dealer Liability, proceeds from any NITC
Purchase Obligations and proceeds from any Guaranties.
Receivable File: The documents listed in Section 2.02 of the Pooling and
Servicing Agreement pertaining to a particular Receivable.
Record Date: (i) with respect to the Notes and with respect to any
Distribution Date, the close of business on the day immediately preceding such
Distribution Date, or if Definitive Notes are issued, the last day of the
preceding Monthly Period; and (ii) with respect to the Certificates and with
respect to any Distribution Date, the last day of the preceding monthly period.
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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: An amount equal to the aggregate of the Outstanding
Amount of such Notes, together with all accrued and unpaid interest thereon as
of the Redemption Date.
Registered Holder: The Person in whose name a Note is registered on the
Note Register on the applicable Record Date.
Related Securities: The "Related Securities" as defined in Section 2.01 of
the Purchase Agreement.
Remaining Gross Balance: With respect to any Receivable (other than a
Liquidating Receivable) and as of an Accounting Date, the Starting Gross
Receivable Balance thereof minus the sum of (i) the portion of all Actual
Payments with respect to such Receivable, (ii) any Warranty Payment or
Administrative Purchase Payment with respect to any such Receivable, (iii) any
Prepayments applied to reduce the Starting Gross Receivable Balance of any such
Receivable and (iv) proceeds from any Insurance Policies with respect to such
Receivable, plus for any Receivable not classified by the Servicer as a "finance
charge - included contract," the portion of the payments specified in the
preceding clauses (i), (ii), (iii) or (iv) above allocable in accordance with
the actuarial method to finance charges; provided, however, that the Remaining
Gross Balance of any Receivable that has been designated a Liquidating
Receivable during the related Monthly Period shall equal zero.
Repurchase Event: A Repurchase Event described in Section 5.04 of the
Purchase Agreement.
Required Negative Carry Account Balance: As of any Determination Date, an
amount equal to the lesser of (a) the Negative Carry Account Initial Deposit
minus all previous withdrawals from the Negative Carry Account (other than
Investment Earnings, if any, withdrawn to pay the Seller pursuant to Section
5.03(b) of the Pooling and Servicing Agreement) and (b) the Maximum Negative
Carry Amount as of such date.
Required Deposit Rating: A rating on short-term unsecured debt obligations
of P-1 by Moody's Investors Service, Inc. and A-1+ by Standard & Poor's Ratings
Services. Any requirement that short-term unsecured debt obligations have the
"Required Deposit Rating" means that such short-term unsecured debt obligations
have the foregoing required ratings from each of such rating agencies.
Reserve Account: The account designated as such, established and
maintained pursuant to Section 4.07(a) of the Pooling and Servicing Agreement.
Reserve Account Initial Deposit: (a) With respect to the Closing Date,
cash or Eligible Investments having a value of at least $21,447,701.01, and (b)
with respect to each Subsequent Transfer Date, cash or Eligible Investments
having a value of at least equal to 5.25% of the aggregate Starting Receivable
Balance of the Subsequent Receivables transferred to the Issuer on
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such Subsequent Transfer Date, which shall be deposited in the Reserve Account
on such Subsequent Transfer Date pursuant to Section 5.02(a) of the Pooling and
Servicing Agreement.
Reserve Account Property: As defined in the Granting Clause of the
Indenture.
Responsible Officer: With respect to the Indenture Trustee or the Owner
Trustee, any officer within the Corporate Trust Office of such trustee, and,
with respect to the Servicer, the President, any Vice President, Assistant Vice
President, Secretary, Assistant Secretary or any other officer or assistant
officer of such Person customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the 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.
Revised Article 8: Revised Article 8 (1994 Version) (and corresponding
amendments to Article 9) as promulgated in 1994 by the National Conference of
Commissioners on Uniform State Laws, in the form in which it has been adopted in
the State of New York.
Schedule of Receivables: The schedule of all Receivables transferred to
the Trust, annexed to the Pooling and Servicing Agreement and on file at the
locations listed on Exhibit C to the Pooling and Servicing Agreement, as it may
be amended from time to time in accordance with any Subsequent Transfer
Assignment or the Pooling and Servicing Agreement.
Scheduled Payment: A payment which (i) is in the amount required under the
terms of a Receivable in effect as of its applicable Cutoff Date, except, in the
case of any Receivable secured by more than one Financed Vehicle, including any
changes in the terms of such Receivable resulting from a Full Prepayment with
respect to any Financed Vehicle related thereto, (ii) is payable by the Obligor
and (iii) includes finance charges equivalent to the Annual Percentage Rate.
When Scheduled Payment is used with reference to a Distribution Date, it means
the payment which is due in the related Monthly Period; provided, however, that
in the case of the first Distribution Date after the date such Receivable is
transferred to the Trust, the Scheduled Payment shall include all such payments
due from the Obligor on or after its applicable Cutoff Date.
Secretary of State: The Secretary of State of the State of Delaware.
Securities: The Notes and the Certificates.
Securities Act: The Securities Act of 1933, as amended.
Security Certificate: Has the meaning given such term in Revised Article
8.
Security Entitlement: Has the meaning given such term in Revised Article
8.
Securityholder: Any of the Noteholders or Certificateholders.
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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,
the lesser of (i) the Note Principal Balance for all classes of Notes as of such
Distribution Date, and (ii) the greater of:
(a) the sum of 5.25% of the Aggregate Receivables Balance as of the
close of business on the last day of the related Monthly Period plus 5.25%
of the aggregate Starting Receivables Balance of all Subsequent Receivables
acquired after the related Accounting Date and on or before such
Distribution Date, except that if on any Distribution Date (i) the product
(expressed as a percentage) of (A) twelve and (B) a fraction, the numerator
of which 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 in which such
Distribution Date occurs, minus the sum of the Liquidation Proceeds for the
Monthly Periods which are the first, second and third Monthly Periods
preceding the Monthly Period in which such Distribution Date occurs, 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 in which such
Distribution Date occurs, exceeds 1.5% or (ii) the average of the
Delinquency Percentages for the preceding three months exceeds 2.0%, then
the percentage of the Aggregate Receivables Balance and of the aggregate
Starting Receivables Balance of all Subsequent Receivables acquired after
the related Accounting Date and on or before such Distribution Date, in
each case as referred to in this clause (a), shall be equal to 10%; and
(b) 2.0% of the Aggregate Starting Receivables Balance.
Starting Gross Receivable Balance: With respect to any Receivable as of
the applicable Cutoff Date, the Starting Receivable Balance plus, in the case of
Receivables classified by the Servicer as "finance charge - included contracts,"
the finance charges included in the Scheduled Payments.
Starting Receivable Balance: With respect to a Receivable, the aggregate
principal amount advanced under such Receivable toward the purchase price of the
Financed Vehicle or Financed Vehicles, including insurance premiums, service and
warranty contracts, federal excise and sales taxes and other items customarily
financed as part of a Retail Note and related costs, less payments received from
the Obligor prior to the Cutoff Date with respect to such Receivable allocable
on the basis of the actuarial method to principal.
24
<PAGE>
State: Any one of the 50 States of the United States of America or the
District of Columbia.
Subsequent Cutoff Date: Any date designated by the Seller within the
period beginning on the first day of the Monthly Period preceding the Monthly
Period in which the related Subsequent Transfer Date occurs and ending on the
Subsequent Transfer Date.
Subsequent Receivables: The Receivables transferred from the Seller to the
Issuer pursuant to Section 2.02 of the Pooling and Servicing Agreement, which
shall be listed on a schedule to the related Subsequent Transfer Assignment.
Subsequent Transfer Assignment: With respect to Subsequent Receivables
transferred to the Issuer pursuant to Section 2.02 of the Pooling and Servicing
Agreement, has the meaning assigned thereto in Section 2.02(a) of the Pooling
and Servicing Agreement.
Subsequent Transfer Date: Any date during the Funding Period on which
Subsequent Receivables are to be transferred to the Issuer and a related
Subsequent Transfer Assignment is executed and delivered to the Owner Trustee
and the Indenture Trustee pursuant to Section 2.02 of the Pooling and Servicing
Agreement.
Supplemental Servicing Fee: All late fees, prepayment charges and other
administrative fees and expenses or similar charges allowed by applicable law
with respect to Receivables, collected (from whatever source) on the Receivables
held by the Trust during the applicable Monthly Period.
Temporary Notes: The Notes specified in Section 2.3 of the Indenture.
Total Available Amount: With respect to a Distribution Date, the sum of
the Available Amount, all amounts deposited to the Collection Account pursuant
to Sections 4.06(b)(ii) and 4.06(b)(iii) of the Pooling and Servicing Agreement
for such Distribution Date and the amount of all cash and other immediately
available funds in the Reserve Account immediately prior to such date.
Total Servicing Fee: The sum of the Basic Servicing Fee and any unpaid
Basic Servicing Fees from all prior Distribution Dates.
Transfer and Servicing Agreements: The Purchase Agreement, the assignments
pursuant to Section 2.01 of the Purchase Agreement, the Pooling and Servicing
Agreement, the Assignment, the Subsequent Transfer Assignments, the Trust
Agreement, the Indenture, the Administration Agreement and the Custodian
Agreement.
Transfer Date: With respect to any Distribution Date, the Business Day
immediately preceding such Distribution Date.
Treasury Regulations: The regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
25
<PAGE>
Trust: Navistar Financial 1997-B Owner Trust, a Delaware business trust
created by the Trust Agreement.
Trust Agreement: The Trust Agreement, dated as of November 5, 1997,
between the Seller and the Owner Trustee, as amended and supplemented from time
to time; such agreement being the Amended and Restated Trust Agreement
contemplated by the Trust Agreement dated October 23, 1997 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.
Uncertificated Security: As of any date, has the meaning given to such
term under the applicable UCC as in effect on such date.
Underwriting Agreement: The Underwriting Agreement, dated October 22,
1997, among Credit Suisse First Boston Corporation, as representative of the
several underwriters party thereto, the Servicer and the Seller with respect to
the sale of the Notes.
Voting Notes: Whenever any request, demand, authorization, direction,
notice, consent, waiver or other act of a specified percentage in Outstanding
Amount of the Notes is required to be obtained from, given by or furnished to or
filed with the Indenture Trustee, the Issuer or the Rating Agencies, such
requirement shall be satisfied as to the "Voting Notes" if the specified
percentage of the Outstanding Amount of each of the following two voting classes
acts in such fashion: (a) first, the Class A Notes and the Class B Notes voting
together as a single class and (b) second, the Class A Notes voting as a single
class.
Warranty Payment: With respect to a Distribution Date and to a Warranty
Receivable repurchased as of the related Accounting Date, the sum of (i) the sum
of all remaining Scheduled Payments on such Warranty Receivable due after the
Accounting Date, (ii) all past due Scheduled Payments with respect to which a
Monthly Advance has not been made, (iii) any reimbursement made pursuant to the
last sentence of Section 5.06 of the Pooling and Servicing Agreement with
respect to such Warranty Receivable, and (iv) all Outstanding Monthly Advances
made on such Warranty Receivable, minus (x) the rebate, calculated in accordance
with the actuarial method, that would be payable to the Obligor on such Warranty
Receivable were the Obligor to prepay such Receivable in full on such day and
(y) any Liquidation Proceeds (to the extent applied to reduce the Receivable
Balance of such Warranty Receivable) previously received with respect to such
Warranty Receivable.
26
<PAGE>
Warranty Purchaser: Either (i) the Seller pursuant to Section 2.06 of the
Pooling and Servicing Agreement or (ii) NFC pursuant to Section 5.04 of the
Purchase Agreement.
Warranty Receivable: A Receivable which the Warranty Purchaser has become
obligated to repurchase pursuant to Section 2.06 of the Pooling and Servicing
Agreement or Section 5.04 of the Purchase Agreement.
27
<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.
28
<PAGE>
APPENDIX B
----------
Notice Addresses and Procedures
All requests, demands, directions, consents, waivers, notices,
authorizations and communications provided or permitted under any Basic Document
to be made upon, given or furnished to or filed with the Seller, the Servicer,
the Administrator, the Indenture Trustee, the Issuer, the Owner Trustee or the
Rating Agencies shall be in writing, personally delivered, sent by facsimile
with a copy to follow via first class mail or mailed by certified mail-return
receipt requested, and shall be deemed to have been duly given upon receipt:
(a) in the case of the Seller, at the following address:
Navistar Financial Retail Receivables Corporation
c/o Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
with a copy to:
Navistar Financial Retail Receivables Corporation
2850 West Golf Road
Rolling Meadows, Illinois 60008
Attention: General Counsel
(b) in the case of the Servicer or the Custodian, at the following
address:
Navistar Financial Corporation
2850 West Golf Road
Rolling Meadows, Illinois 60008
Attention: Treasurer
with a copy to:
Navistar Financial Corporation
2850 West Golf Road
Rolling Meadows, Illinois 60008
Attention: General Counsel
(c) in the case of the Indenture Trustee, at its Corporate Trust
Office
1
<PAGE>
(d) in the case of the Issuer or the Owner Trustee, to the Owner
Trustee at its Corporate Trust Office, with copies to:
Navistar Financial Retail Receivables Corporation
c/o Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
and:
Navistar Financial Retail Receivables Corporation
2850 West Golf Road
Rolling Meadows, Illinois 60008
Attention: General Counsel
The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee and the Indenture Trustee shall
likewise promptly 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 Services, to
Standard & Poor's Ratings Services
26 Broadway (15th Floor)
New York, New York 10004
Attention: Asset Backed Surveillance Department
or at such other address as shall be designated by such party in a written
notice to the other parties to this Agreement.
Where any Basic Document provides for notice to Securityholders of any
condition or event, such notice shall be sufficiently given (unless otherwise
herein expressly provided) if it is in writing and mailed, first-class, postage
prepaid to each Securityholder affected by such condition or event, at such
Person's address as it appears on the Note Register or Certificate Register, as
applicable, not later than the latest date, and not earlier than the earliest
date, prescribed in such Basic Document for the giving of such notice. If
notice to Securityholders is given by mail, neither the failure to mail such
notice nor any defect in any notice so mailed to any particular Securityholder
shall affect the sufficiency of such notice with respect to other
Securityholders, and any notice that is mailed in the manner herein provided
shall conclusively be presumed to have been duly given regardless of whether
such notice is in fact actually received.
2
<PAGE>
Exhibit 10.3
================================================================================
CUSTODIAN AGREEMENT
BETWEEN
NAVISTAR FINANCIAL CORPORATION
CUSTODIAN
AND
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
SELLER
DATED AS OF NOVEMBER 5, 1997
================================================================================
<PAGE>
THIS CUSTODIAN AGREEMENT, dated as of November 5, 1997 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; Acknowledgment of Receipt. Subject to the
terms and conditions hereof, the Seller hereby appoints the Custodian, and the
Custodian hereby accepts such appointment, to act as agent of the Seller as
Custodian to maintain custody of the Receivable Files pertaining to the
Receivables for which from time to time the Seller is the Holder thereof. The
Custodian hereby acknowledges that the Seller may sell, transfer and assign all
of its right, title and interest under this Agreement to the Issuer pursuant to
the Further Transfer and Servicing Agreements. The Custodian hereby agrees, in
connection with any such sale, transfer and assignment, to act as Custodian for
the benefit of the Issuer with respect to those Receivables of which from time
to time the Issuer is the Holder. In performing its duties hereunder, the
Custodian agrees to act with reasonable care, using that degree of skill and
attention that the Custodian exercises with respect to receivable files relating
to comparable medium and heavy duty truck, bus
-1-
<PAGE>
and trailer receivables that the Custodian services and holds for itself or
others. The Custodian hereby acknowledges receipt of the Receivable File for
each Receivable listed on the Schedule of Receivables.
3. Maintenance at Office. The Custodian agrees to maintain each
Receivable File at its principal office at Navistar Financial Corporation, 2850
West Golf Road, Rolling Meadows, Illinois 60008, or at such other office of the
Custodian as shall from time to time be identified to the Holder of the related
Receivable upon 30 days' prior written notice.
4. Duties of Custodian.
(a) Safekeeping. The Custodian shall hold each Receivable File described
herein on behalf of the Holder of the related Receivable for the use and benefit
of such Holder and, if applicable, Interested Parties and shall maintain such
accurate and complete accounts, records and computer systems pertaining to each
Receivable File described herein as shall enable the Seller and the Issuer to
comply with their respective obligations under the Purchase Agreement and the
Further Transfer and Servicing Agreements. Each Receivable shall be identified
as such on the books and records of the Custodian to the extent the Custodian
reasonably determines to be necessary to comply with the terms and conditions of
the Purchase Agreement and, if applicable, the Further Transfer and Servicing
Agreements. The Custodian shall conduct, or cause to be conducted, periodic
physical inspections of the Receivable Files held by it under this Agreement,
and of the related accounts, records and computer systems, in such a manner as
shall enable the Issuer and the Custodian to verify the accuracy of the
Custodian's inventory and record keeping. The Custodian shall promptly report
to the Holder of a Receivable any failure on its part to hold the related
Receivable File described herein and maintain its accounts, records and computer
systems as herein provided and promptly take appropriate action to remedy any
such failure.
(b) Access to Records. Subject only to the Custodian's security
requirements applicable to its own employees having access to similar records
held by the Custodian, the Custodian shall permit the Holder of a Receivable or
its duly authorized representatives, attorneys or auditors to inspect the
related Receivable File described herein and the related accounts, records and
computer systems maintained by the Custodian pursuant hereto at such times as
such Holder may reasonably request.
(c) Release of Documents. The Custodian shall release any Receivable (and
its related Receivable File) in the Receivable Files described herein to the
Seller, the Servicer or the Issuer, as appropriate, under the circumstances
provided in the Purchase Agreement and the Further Transfer and Servicing
Agreements.
(d) Administration; Reports. In general, the Custodian shall attend to all
non-discretionary details in connection with maintaining custody of the
Receivable Files described herein. In addition, the Custodian shall assist the
Issuer generally in the preparation of routine reports to the holders of
Securities, if any, or to regulatory bodies, to the extent necessitated by the
Custodian's custody of the Receivable Files described herein.
5. Instructions; Authority to Act. The Custodian shall be deemed to have
received proper instructions from the Issuer with respect to the Receivable
Files described herein
-2-
<PAGE>
upon its receipt of written instructions signed by an Authorized Officer. A
certified copy of a by-law or of a resolution of the appropriate governing body
of the Issuer (or, as appropriate, the Owner Trustee on behalf of the Issuer)
may be received and accepted by the Custodian as conclusive evidence of the
authority of any such officer to act and may be considered as in full force and
effect until receipt of written notice to the contrary. Such instructions may
be general or specific in terms.
6. Indemnification By the Custodian. The Custodian agrees to indemnify
the Issuer and each Trustee with respect to any Securities for any and all
liabilities, obligations, losses, damage, payments, costs or expenses of any
kind whatsoever that may be imposed on, incurred or asserted against the Issuer
or any such Trustee as the result of any act or omission in any way relating to
the maintenance and custody by the Custodian of the Receivable Files described
herein; provided, however, that the Custodian shall not be liable to the Issuer
or any such Trustee, respectively, for any portion of any such amount resulting
from the willful misfeasance, bad faith or gross negligence of the Issuer or any
such Trustee, respectively.
7. Advice of Counsel. The Custodian, the Seller and, upon execution of
the Further Transfer and Servicing Agreements, the Issuer further agree that the
Custodian shall be entitled to rely and act upon advice of counsel with respect
to its performance hereunder and shall be without liability for any action
reasonably taken pursuant to such advice, provided that such action is not in
violation of applicable federal or state law.
8. Effective Period, Termination, and Amendment; Interpretive and
Additional Provisions. This Agreement shall become effective as of the date
hereof, shall continue in full force and effect until terminated as hereinafter
provided, may be amended at any time by mutual agreement of the parties hereto
and may be terminated by either party by written notice to the other party, such
termination to take effect no sooner than sixty (60) days after the date of such
notice. Notwithstanding the foregoing, if Navistar Financial Corporation resigns
as Servicer under the Further Transfer and Servicing Agreements or if all of the
rights and obligations of the Servicer have been terminated under the Further
Transfer and Servicing Agreements, this Agreement may be terminated by the
Issuer or by any Persons to whom the Issuer has assigned its rights hereunder.
As soon as practicable after the termination of this Agreement, the Custodian
shall deliver the Receivable Files described herein to the Issuer or the
Issuer's agent at such place or places as the Issuer may reasonably designate.
9. Governing Law. All questions concerning the construction, validity and
interpretation of this Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of Illinois, without giving
effect to any choice of law or conflict provision or rule (whether of the State
of Illinois or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Illinois.
10. Notices. All demands, notices and communications upon or to the
Custodian or the Seller under this Agreement shall be delivered as specified in
Appendix B to the Pooling and Servicing Agreement.
11. Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the Seller, the Issuer, the Custodian and their respective
successors and assigns, including the Issuer.
-3-
<PAGE>
12. Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
13. Assignment. Notwithstanding anything to the contrary contained in
this Agreement, this Agreement may not be assigned by the Custodian without the
prior written consent of the Seller or any Persons to whom the Seller has
assigned its rights hereunder, as applicable.
14. Headings. The headings of the various Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
15. Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be an
original but all such counterparts shall together constitute but one and the
same instrument.
16. No Third-Party Beneficiaries. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, the Owners and their
respective successors and permitted assigns. Except as otherwise expressly
provided in this Agreement, no other Person shall have any right or obligation
hereunder.
17. Merger and Integration. Except as specifically stated otherwise
herein, this Agreement sets forth the entire understanding of the parties
relating to the subject matter hereof, and all prior understandings, written or
oral, are superseded by this Agreement. This Agreement may not be modified,
amended, waived, or supplemented except as provided herein.
* * * * *
-4-
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed 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: R. Wayne Cain
Title: Vice President and Treasurer
NAVISTAR FINANCIAL CORPORATION,
as Custodian
By:
----------------------------------------
Name: R. Wayne Cain
Title: Vice President and Treasurer
-5-
<PAGE>
Exhibit 10.4
================================================================================
ADMINISTRATION AGREEMENT
AMONG
NAVISTAR FINANCIAL 1997-B OWNER TRUST
ISSUER
AND
NAVISTAR FINANCIAL CORPORATION
ADMINISTRATOR
AND
THE BANK OF NEW YORK
INDENTURE TRUSTEE
DATED AS OF NOVEMBER 5, 1997
================================================================================
<PAGE>
ADMINISTRATION AGREEMENT, dated as of November 5, 1997 among NAVISTAR
FINANCIAL 1997-B OWNER TRUST, a Delaware business trust (the "Issuer"), NAVISTAR
FINANCIAL CORPORATION, a Delaware corporation, as administrator (the
"Administrator"), and THE BANK OF NEW YORK, a New York banking corporation, not
in its individual capacity but solely as Indenture Trustee (the "Indenture
Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer is issuing Notes pursuant to an Indenture, dated as of
November 5, 1997 (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 and
(iii) the Indenture;
WHEREAS, pursuant to the Basic Documents, the Issuer and Chase Manhattan
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
-1-
<PAGE>
Owner Trustee under the Indenture and the Note Depository Agreement. In
addition, the Administrator shall consult with the Owner Trustee regarding the
duties of the Issuer and the Owner Trustee under the Indenture or the Note
Depository Agreement. 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 or the Owner Trustee under the Indenture or the
Note Depository Agreement. The Administrator shall prepare for execution by the
Issuer or the Owner Trustee or shall cause the preparation by other appropriate
persons of all such documents, reports, filings, instruments, certificates,
notices and opinions as it shall be the duty of the Issuer or the Owner Trustee,
as applicable, to prepare, file or deliver pursuant to the Indenture or the Note
Depository Agreement. 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
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<PAGE>
accordance with Section 3.5 of the Indenture, necessary to protect the
Trust Estate (Section 3.5);
(K) the delivery of the Opinion of Counsel on the Closing Date, in
accordance with Section 3.6(a) of the Indenture, as to the Trust Estate,
and the annual delivery of the Opinion of Counsel, the Officers'
Certificate and certain other statements, in accordance with Sections
3.6(b) and 3.9 of the Indenture, as to compliance with the Indenture
(Sections 3.6 and 3.9);
(L) the identification to the Indenture Trustee in an Officers'
Certificate of a Person with whom the Issuer has contracted to perform its
duties under the Indenture (Section 3.7(b));
(M) the notification of the Indenture Trustee and the Rating Agencies
of a Servicer Default pursuant to the Pooling and Servicing Agreement and,
if such Servicer Default arises from the failure of the Servicer to perform
any of its duties under the Pooling and Servicing Agreement, the taking of
all reasonable steps available to remedy such failure (Section 3.7(d));
(N) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under the
Indenture (Section 3.11(b));
(O) the delivery of notice to the Indenture Trustee of each Event of
Default under the Indenture, each Servicer Default, 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);
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(U) the preparation and, after execution by the Issuer, the filing
with the Commission, any applicable state agencies and the Indenture
Trustee of documents required to be filed on a periodic basis with, and
summaries thereof as may be required by rules and regulations prescribed
by, the Commission and any applicable state agencies and the transmission
of such summaries, as necessary, to the Noteholders (Section 7.3);
(V) the preparation of an Issuer Request and Officer's Certificate
and the obtaining of an Opinion of Counsel and Independent Certificates, if
necessary, for the release of the Trust Estate (Sections 8.4 and 8.5);
(W) the preparation of Issuer Orders and the obtaining of Opinions of
Counsel with respect to the execution of supplemental indentures and the
mailing to the Noteholders of notices with respect to such supplemental
indentures (Sections 9.1, 9.2 and 9.3);
(X) the execution and delivery of new Notes conforming to any
supplemental indenture (Section 9.6);
(Y) the notification of Noteholders and the Rating Agencies of
redemption of the Notes or the duty to cause the Indenture Trustee to
provide such notification (Sections 10.1 and 10.2);
(Z) the preparation of all Officer's Certificates, Opinions of
Counsel and Independent Certificates with respect to any requests by the
Issuer to the Indenture Trustee to take any action under the Indenture
(Section 11.1(a));
(AA) the preparation and delivery of Officers' Certificates and the
obtaining of Independent Certificates, if necessary, for the release of
property from the lien of the Indenture (Section 11.1(b));
(BB) the notice or other communication to the Rating Agencies, upon
the failure of the Indenture Trustee to give such notice or other
communication pursuant to Section 11.4 (Section 11.4);
(CC) the preparation and delivery to Noteholders and the Indenture
Trustee of any agreements with respect to alternate payment and notice
provisions (Section 11.6); and
(DD) the recording of the Indenture, if applicable (Section 11.15).
(ii) In addition, the Administrator will indemnify the Owner Trustee
and its agents for, and hold them harmless against, any losses, liability or
expense incurred without negligence or bad faith on their part, arising out of
or in connection with the acceptance or administration of the transactions
contemplated by the Trust Agreement, including the reasonable 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.
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(i) In addition to the duties of the Administrator set forth above,
the Administrator shall perform such calculations and shall prepare for
execution by the Issuer or the Owner Trustee or shall cause the preparation by
other appropriate persons of all such documents, reports, filings, instruments,
certificates, notices and opinions as it shall be the duty of the Issuer or the
Owner Trustee to prepare, file or deliver pursuant to the Basic Documents, and
at the request of the Owner Trustee shall take all appropriate action that it is
the duty of the Issuer or the Owner Trustee to take pursuant to the Basic
Documents. Subject to Section 7 of this Agreement, and in accordance with the
directions of the Owner Trustee, the Administrator shall administer, perform or
supervise the performance of such other activities in connection with the
Collateral (including the Basic Documents) as are not covered by any of the
foregoing provisions and as are expressly requested by the Owner Trustee and are
reasonably within the capability of the Administrator.
(ii) Notwithstanding anything in this Agreement or the Basic
Documents to the contrary, the Administrator shall be responsible for promptly
notifying the Owner Trustee if any withholding tax is imposed on the Trust's
payments to a Certificateholder as contemplated in Section 5.2(c) of the Trust
Agreement. Any such notice shall specify the amount of any withholding tax
required to be withheld by the Owner Trustee pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the Basic
Documents to the contrary, the Administrator shall be responsible for
performance of the duties of the Owner Trustee set forth in Sections 5.2(d),
5.4(a), (b), (c) and (d) and the last two sentences of Section 5.4, and Section
5.5 of the Trust Agreement with respect to, among other things, accounting and
reports to Certificateholders.
(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. If a withholding tax specified in the previous clause
(ii) is due, such accountants or the Administrator shall provide the Owner
Trustee with a letter specifying which withholding tax specified in the
preceding clause (ii) is then required and specifying the procedures to be
followed to comply with the Code (a) on or before November 17, 1997 if such
withholding tax is due in connection with a payment made on the first
Distribution Date or (b) in all other instances, thirty days before such tax is
to be withheld. 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.
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(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.
(viii) Notwithstanding anything in this Agreement or the Basic
Documents to the contrary, the Administrator shall be responsible for
performance of the duties of NFRRC set forth in Section 2.6(iii) of the Trust
Agreement.
(c) Non-Ministerial Matters.
(i) With respect to matters that in the reasonable judgment of the
Administrator are non-ministerial, the Administrator shall not take any action
unless, within a reasonable time before the taking of such action, the
Administrator shall have notified the Owner Trustee of the proposed action and
the Owner Trustee shall not have withheld consent or provided an alternative
direction. For the purpose of the preceding sentence, "non-ministerial matters"
shall include:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the
Issuer;
(C) the amendment, change or modification of any of the Basic
Documents;
(D) the appointment of successor Note Registrars, successor Paying
Agents and successor Indenture Trustees pursuant to the Indenture or the
appointment of successor Administrators or successor Servicers, or the
consent to the assignment by the Note Registrar, Paying Agent or Indenture
Trustee of its obligations under the Indenture; and
(E) the removal of the Indenture Trustee.
(ii) Notwithstanding anything to the contrary in this Agreement, the
Administrator shall not be obligated to, and shall not, (x) make any payments to
the Noteholders under the Basic Documents, (y) sell the Trust Estate pursuant to
Section 5.4 of the Indenture or (z) take any other action that the Issuer
directs the Administrator not to take on its behalf.
3. Successor Servicer and Administrator. The Issuer shall undertake,
as promptly as possible after the giving of notice of termination to the
Servicer of the Servicer's rights and powers pursuant to Section 8.02 of the
Pooling and Servicing Agreement, to enforce the provisions of Sections 8.02,
8.03 and 8.04 of the Pooling and Servicing Agreement with respect to the
appointment of a successor Servicer. Such successor Servicer shall, upon
compliance with Sections 10(e)(ii) and (iii), become the successor Administrator
hereunder.
4. Records. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer, the Owner
Trustee and the Seller at any time during normal business hours.
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5. Compensation. As compensation for the performance of the
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Servicer shall pay the Administrator a monthly fee
in the amount of $1,500.
6. Additional Information To Be Furnished to the Issuer. The
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
7. Independence of the Administrator. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer, the Administrator shall
have no authority to act for or represent the Issuer or the Owner Trustee in any
way and shall not otherwise be deemed an agent of the Issuer or the Owner
Trustee.
8. No Joint Venture. Nothing contained in this Agreement (i) shall
constitute the Administrator and either of the Issuer or the Owner Trustee as
members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be con strued to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
9. Other Activities of Administrator. Nothing herein shall prevent
the Administrator or its Affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other person or entity even though such person or entity may engage in business
activities similar to those of the Issuer, the Owner Trustee or the Indenture
Trustee.
10. Term of Agreement; Resignation and Removal of Administrator.
(a) This Agreement shall continue in force until the dissolution of
the Issuer, upon which event this Agreement shall automatically terminate.
(b) Subject to Section 10(e), the Administrator may resign its duties
hereunder by providing the Issuer with at least 60 days' prior written notice.
(c) Subject to Section 10(e), the Issuer may remove the Administrator
without cause by providing the Administrator with at least 60 days' prior
written notice.
(d) Subject to Section 10(e), at the sole option of the Issuer, the
Administrator may be removed immediately upon written notice of termination from
the Issuer to the Administrator if any of the following events shall occur:
(i) the Administrator shall default in the performance of any of its
duties under this Agreement and, after notice from the Issuer of such
default, shall not cure such default within ten days (or, if such default
cannot be cured in such time, shall not give within ten days such assurance
of cure as shall be reasonably satisfactory to the Issuer);
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(ii) a court having jurisdiction in the premises shall enter a
decree or order for relief, and such decree or order shall not have been
vacated within 60 days, in respect of the Administrator in any involuntary
case under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect or appoint a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for the Administrator
or any substantial part of its property or order the winding-up or
liquidation of its affairs; or
(iii) the Administrator shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary
case under any such law, or shall consent to the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator or similar official
for the Administrator or any substantial part of its property, shall
consent to the taking of possession by any such official of any substantial
part of its property, shall make any general assignment for the benefit of
creditors or shall fail generally to pay its debts as they become due.
The Administrator agrees that if any of the events specified in
clauses (ii) or (iii) of this Section 10(d) shall occur, it shall give written
notice thereof to the Issuer and the Indenture Trustee within seven days after
the happening of such event.
(e) No resignation or removal of the Administrator pursuant to this
Section 10 shall be effective until (i) a successor Administrator shall have
been appointed by the Issuer, (ii) such successor Administrator shall have
agreed in writing to be bound by the terms of this Agreement in the same manner
as the Administrator is bound hereunder, and (iii) the Rating Agency Condition
has been satisfied with respect to such proposed appointment.
11. Action upon Termination, Resignation or Removal. Promptly upon
the effective date of termination of this Agreement pursuant to Section 10(a) or
the resignation or removal of the Administrator pursuant to Section 10(b) or
(c), respectively, the Administrator shall be entitled to be paid all fees and
reimbursable expenses accruing to it to the effective date of such termination,
resignation or removal. The Administrator shall forthwith upon such termination
pursuant to Section 10(a) deliver to the Issuer all property and documents of or
relating to the Collateral then in the custody of the Administrator. In the
event of the resignation or removal of the Administrator pursuant to Section
10(b) or (c), respectively, the Administrator shall cooperate with the Issuer
and take all reasonable steps requested to assist the Issuer in making an
orderly transfer of the duties of the Administrator.
12. Notices. All demands, notices and communications upon or to the
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:
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(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 a majority of the ownership interest in the Trust as of
the close of the preceding Distribution Date for the purpose of adding any
provisions to, changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of Securityholders;
provided, however, that no such amendment may (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that are required to be made for the
benefit of the Securityholders, (ii) reduce the percentage of the holders of
Securities which are required to consent to any amendment of this Agreement or
(iii) modify or alter any provision of this Section 13, except to provide that
certain additional provisions of this Agreement and the Basic Documents cannot
be modified or waived without the consent of each Securityholder affected
thereby, without, in any such case, the consent of the holders of all the
outstanding Securities.
(c) Notwithstanding Sections 13(a) and (b), the Administrator may not
amend this Agreement without the permission of the Seller, which permission
shall not be unreasonably withheld.
14. Successors and Assigns. This Agreement may not be assigned by
the Administrator unless such assignment is previously consented to in writing
by the Issuer and the Owner Trustee and subject to the satisfaction of the
Rating Agency Condition in respect thereof. An assignment with such consent and
satisfaction, if accepted by the assignee, shall bind the assignee hereunder in
the same manner as the Administrator is bound hereunder. Notwithstanding the
foregoing, this Agreement may be assigned by the Administrator without the
consent of the Issuer or the Owner Trustee to a corporation or other
organization that is a successor (by merger, consolidation or purchase of
assets) to the Administrator, provided that such successor organization executes
and delivers to the Issuer, the Owner Trustee and the Indenture Trustee an
agreement in
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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 Chase Manhattan Bank Delaware, not
in its individual capacity but solely as Owner Trustee on behalf of the Trust
and in no event shall Chase Manhattan Bank Delaware have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer. For all purposes of this Agreement, in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of Article
VI of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been executed by The Bank of New York, not in its individual
capacity but solely in its capacity as Indenture Trustee and in no event shall
The Bank of New York have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
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21. Third-Party Beneficiary. Each of the Seller, only to the extent
provided in Section 13(c), and the Owner Trustee is a third-party beneficiary to
this Agreement and is entitled to the rights and benefits hereunder and may
enforce the provisions hereof as if it were a party hereto.
22. Merger and Integration. Except as specifically stated otherwise
herein, this Agreement sets forth the entire understanding of the parties
relating to the subject matter hereof, and all prior understandings, written or
oral, are superseded by this Agreement. This Agreement may not be modified,
amended, waived, or supplemented except as provided herein.
* * * * *
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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 1997-B OWNER TRUST
By: CHASE MANHATTAN BANK DELAWARE, not in its
individual capacity, but solely as Owner
Trustee on behalf of the Trust
By:
----------------------------------------------
Name: John J. Cashin
Title: Vice President
THE BANK OF NEW YORK, as Indenture Trustee
By:
----------------------------------------------
Name: Reyne Macadaeg
Title: Assistant Vice President
NAVISTAR FINANCIAL CORPORATION, as Administrator
By:
----------------------------------------------
Name: R. Wayne Cain
Title: Vice President and Treasurer
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