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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):
March 9, 2000
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other Jurisdiction of Incorporation)
333-62449
(Commission File Number)
51-0337491
(I.R.S. Employer Identification No.)
Navistar Financial Retail Receivables Corporation
2850 W. Golf Road
Rolling Meadows, IL 60008
(Address of principal executive offices,including Zip Code)
Registrant's telephone number, including area code: (847) 734-4275
Former name or former address, if changed since last report: Not applicable
Exhibit Index appears on Page 4
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Item 5. Other Matters
On March 9, 2000, the Registrant, a wholly-owned subsidiary of
Navistar Financial Corporation ("NFC"), purchased a pool of and retail loans
evidenced by notes secured by medium- and heavy-duty trucks, buses and trailers
with an aggregate outstanding principal balance as of February 1, 2000 of
$380,843,908.73 (collectively, the "Initial Receivables") from NFC for a
purchase price equal to the principal balance of the Initial Receivables as of
February 1, 2000.
On March 13, 2000, the Registrant purchased a pool of retail loans
evidenced by notes secured by medium- and heavy-duty trucks, buses and trailers
with an aggregate outstanding principal balance as of March 1, 2000 of
$74,413,256.03 (collectively, the "First Subsequent Receivables") from NFC for a
purchase price equal to the principal balance of the Subsequent Receivables as
of March 1, 2000.
On March 20, 2000, the Registrant purchased a pool of retail loans
evidenced by medium- and heavy-duty trucks, buses and trailers with an aggregate
outstanding principal balance as of March 13, 2000 of $19,742,098.37
(collectively, the "Second Subsequent Receivables," together with the First
Subsequent Receivables, the "Subsequent Receivables" and, together with the
Initial Receivables and the First Subsequent Receivables, the "Receivables")
from NFC for a purchase price equal to the principal balance of the Second
Subsequent Receivables as of March 13, 2000.
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 Chase Manhattan Bank
Delaware, not in its individual capacity but solely as Owner Trustee of the
Navistar Financial 2000-A Owner Trust (the "Owner Trustee") in exchange for the
Notes described below. The Owner Trustee issued five classes of notes (the
"Notes") backed by the Receivables. The net cash proceeds of the issuance of the
Notes were $473,988,227.26. A portion of the net cash proceeds were used to pay
approximately $500,000 of transaction fees and expenses, to fund a
$18,090,085.66 deposit into a reserve account as credit support for the
Receivables and to fund a $94,156,091.27 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 to the Registrant, the
Registrant immediately transferred the Subsequent Receivables to the Owner
Trustee. In return for the Subsequent Receivables, the Owner Trustee transferred
an amount of cash to the Registrant from the pre-funding account equal to the
principal balance of the First Subsequent Receivables as of March 1, 2000 and of
the Second Subsequent Receivables as of March 13, 2000. 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
(Registrant)
Dated: March 21, 2000 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 Banc One
Capital Markets, Inc., as Representative of the several
Underwriters named on Schedule I thereto, dated February 24,
2000
4.1 Indenture between the Owner Trustee and the Indenture Trustee,
dated March 9, 2000
4.2 Trust Agreement between the Registrant and the Owner Trustee,
dated March 9, 2000
10.1 Purchase Agreement between NFC and the Registrant, dated March
9, 2000
10.2 Pooling and Servicing Agreement among the Registrant, NFC and
the Owner Trustee, dated March 9, 2000
10.3 Custodian Agreement between NFC and the Registrant, dated
March 9, 2000
10.4 Administration Agreement among NFC, the Owner Trustee and the
Indenture Trustee, dated March 9, 2000
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EXHIBIT 1.1
NAVISTAR FINANCIAL 2000-A OWNER TRUST
$475,000,000 Asset Backed Notes
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
(SELLER)
UNDERWRITING AGREEMENT
----------------------
February 24, 2000
BANC ONE CAPITAL MARKETS, INC.
As Representative of the
Several Underwriters named
on Schedule 1 hereto,
1 Bank One Plaza
Chicago, Illinois 60670
Dear Sirs:
Navistar Financial Retail Receivables Corporation, a Delaware
corporation (the "Seller"), proposes to form a Delaware common law trust,
Navistar Financial 2000-A 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) $84,000,000 principal
amount of its Class A-1 6.08% Asset Backed Notes (the "Class A-1 Notes"), (ii)
$142,000,000 principal amount of its Class A-2 6.82% Asset Backed Notes (the
"Class A-2 Notes"), (iii) $110,000,000 principal amount of its Class A-3 7.20%
Asset Backed Notes (the "Class A-3 Notes"), (iv) $121,187,500 principal amount
of its Class A-4 7.34% Asset Backed 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) $17,812,500 principal amount of its 7.47% 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 Owner
Trustee, acting on behalf of the Trust, and The Bank of New York, as trustee
(the "Indenture Trustee"). The Trust will also issue one or more certificates
(the "Certificates") to the Seller representing the equity of the Trust. The
assets of the Trust will include, among other things, a pool of commercial
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, February 1, 2000 and
(ii) for any Subsequent Receivables, the date designated by the Seller that
precedes the related Subsequent Transfer Date (in each case, the "Cutoff Date"),
security interests in the vehicles financed thereby, certain accounts, including
monies on deposit in the Pre-
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2
Funding Account and the Negative Carry Account and the proceeds thereof, the
proceeds, if any, of Dealer Liability, NITC Purchase Obligations and any
Guaranties, the proceeds from claims on certain insurance policies, the benefits
of any lease assignments and certain rights of the Seller under the related
Purchase Agreement and the related Custodian Agreement. The Initial Receivables
will be transferred to the Trust by the Seller in exchange for the Notes and the
Certificates 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 Owner
Trustee, acting on behalf of 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.333-62445) 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
February 24, 2000, 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 February 22, 2000 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
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3
Prospectus Supplement, complied in all material respects with the
applicable requirements of the Securities Act and the Rules and Regulations
and the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the rules and regulations of the Commission thereunder and did
not include any untrue statement of a material fact and, in the case of the
Registration Statement and any post-effective amendment thereto, did not
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading and, in the case of the
Prospectus, did not omit to state any material fact necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not 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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4
(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 Owner Trustee, in its
capacity as owner trustee of 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 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.
(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
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5
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, 99.890000% of the principal amount thereof, (ii) with
respect to the Class A-2 Notes, 99.843280% of the principal amount thereof,
(iii) with respect to the Class A-3 Notes, 99.756813% of the principal amount
thereof, (iv) with respect to the Class A-4 Notes, 99.701038% of the principal
amount thereof and (v) with respect to the Class B Notes, 99.623747% 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 Kirkland & Ellis, or at such other
place as shall be agreed upon by Banc One Capital Markets, Inc., as
representative of the Underwriters (the "Representative") and the Seller, at
10:00 A.M., New York City time, on March 9, 2000, 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
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6
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) 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 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
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7
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 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 commercial retail notes evidencing loans secured by, 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.
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8
(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 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:
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9
(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 opinions, as counsel to the Seller, addressed to the Underwriters
and dated the Closing Date, in form and substance reasonably satisfactory
to the Representative, regarding general corporate matters, enforceability
of the Notes, the Purchase Agreement, the Custodian Agreement and the
Further Transfer and Servicing Agreement, creation and perfection of
security interests, securities laws and other matters.
(d) Kirkland & Ellis shall have furnished to the Representative their
written opinion, as counsel to the Seller, addressed to the Underwriters
and dated the Closing Date, in form and substance reasonably satisfactory
to the Representative, with respect to the characterization of the transfer
of the Receivables by NFC to the Seller pursuant to the Purchase Agreement
as a sale and the non-consolidation of NFC and the Seller.
(e) The Representative shall have received from Simpson Thacher &
Bartlett, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to such matters as the Representative may
require, and the Seller shall have furnished to such counsel such documents
as they reasonably request for enabling them to pass upon such matters.
(f) Pryor, Cashman, Sherman & Flynn shall have furnished to the
Representative their written opinion, as counsel to the Owner Trustee,
addressed to the Underwriters and dated the Closing Date, in form and
substance reasonably satisfactory to the Representative.
<PAGE>
10
(g) Richards, Layton & Finger shall have furnished to the Representative
their written opinion, as counsel to the Trust, addressed to the Underwriters
and dated the Closing Date, in form and substance reasonably satisfactory to the
Representative.
(h) 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 form and substance reasonably
satisfactory to the Representative.
(i) 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.
(j) 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 October 31, 1999, 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.
(k) 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.
(l) 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
<PAGE>
11
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.
(m) The Certificates 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 6(l) shall have
occurred or any of the conditions described in Section 6(j) or 6(k) 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 non-defaulting 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 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
<PAGE>
12
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 non-defaulting
Underwriter or the Seller, except that the Seller will continue to be liable for
the payment of expenses to the extent set forth in Sections 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. If this Agreement is terminated pursuant
to Section 8 by reason of the default of one or more Underwriters, the Seller
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
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 15 of the Securities
Act (collectively referred to for the purposes of this Section 10 and Section 11
as the Underwriter) against any loss, claim, damage or liability, joint or
several, to which that Underwriter may become subject, under the Securities Act
or otherwise, insofar as such loss, claim, damage or liability (or any action in
respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus supplement, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they are made,
not misleading, and shall reimburse each Underwriter for any legal or other
expenses reasonably incurred by that Underwriter in connection with
investigating or preparing to defend or defending against or appearing as a
third party witness in connection with any such loss, claim, damage
<PAGE>
13
or liability (or any action in respect thereof) as such expenses are incurred;
provided, however, that neither NFC nor the Seller shall be liable in any such
case to the extent that any such loss, claim, damage or liability (or any action
in respect thereof) arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any preliminary
prospectus supplement, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with the
Underwriters' Information.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Seller, each of its directors, each officer of the Seller who
signed the Registration Statement and each person, if any, who controls the
Seller within the meaning of Section 15 of the Securities Act (collectively
referred to for the purposes of this Section 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 second paragraph of text and
the following table, the fifth paragraph of text and the last sentence of the
last paragraph of text, each under the caption "Underwriting" in the Prospectus
Supplement.
(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
<PAGE>
14
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 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.
<PAGE>
15
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 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to indemnify as
provided in Section 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 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, any other underwriting
and selling group documents and the Term Sheet 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
distributing the Prospectus to the Underwriters and the purchasers of the Notes
and advertising any offering of the Notes made by the Underwriters.
<PAGE>
16
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 Banc One Capital Markets, Inc., 1
Bank One Plaza, Chicago, Illinois 60670, Attention: Lisa N. Wilhelm, with
a copy to the Legal Department;
(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 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>
17
If the foregoing is in accordance with your understanding of the
agreement between the Seller and NFC and the several Underwriters, kindly
indicate your acceptance in the space provided for that purpose below.
Very truly yours,
NAVISTAR FINANCIAL RETAIL
RECEIVABLES CORPORATION
By____________________________
Name: R.W. Cain
Title: Vice President and Treasurer
NAVISTAR FINANCIAL CORPORATION
By____________________________
Name: R.W. Cain
Title: Vice President and Treasurer
Accepted:
BANC ONE CAPITAL MARKETS, INC.
For Itself and as Representative
of the Several Underwriters
By______________________________
Authorized Signatory
<PAGE>
SCHEDULE 1
UNDERWRITERS
<TABLE>
<CAPTION>
Credit Suisse
Banc One Capital First Boston J.P. Morgan
Principal Amount Markets, Inc. Corporation Securities Inc.
- ---------------- ------------- ----------- --------------
<S> <C> <C> <C>
Class A-1 Notes $28,000,000 $28,000,000 $28,000,000
Class A-2 Notes $47,333,334 $47,333,333 $47,333,333
Class A-3 Notes $36,666,668 $36,666,666 $36,666,666
Class A-4 Notes $40,395,834 $40,395,833 $40,395,833
Class B Notes $17,812,500 -- --
</TABLE>
<PAGE>
EXHIBIT 4.1
================================================================================
CHASE MANHATTAN BANK DELAWARE
AS OWNER TRUSTEE
Class A-1 6.08% Asset Backed Notes
Class A-2 6.82% Asset Backed Notes
Class A-3 7.20% Asset Backed Notes
Class A-4 7.34% Asset Backed Notes
Class B 7.47% Asset Backed Notes
-----------------------------
INDENTURE
Dated as of March 9, 2000
-----------------------------
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 OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
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..................................................... 5
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................................................ 11
SECTION 2.14 Tax Treatment....................................................... 11
ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest................................... 11
SECTION 3.2 Maintenance of Agency Office........................................ 11
SECTION 3.3 Money for Payments To Be Held in Trust.............................. 12
SECTION 3.4 Existence........................................................... 13
SECTION 3.5 Protection of Trust Estate; Acknowledgment of Pledge................ 13
SECTION 3.6 Opinions as to Trust Estate......................................... 14
SECTION 3.7 Performance of Obligations; Servicing of Receivables................ 15
SECTION 3.8 Negative Covenants.................................................. 16
SECTION 3.9 Annual Statement as to Compliance................................... 16
SECTION 3.10 Consolidation, Merger, etc., of Owner Trustee; Disposition of
Trust Assets........................................................ 17
SECTION 3.11 Successor or Transferee............................................. 17
SECTION 3.12 No Other Business................................................... 17
SECTION 3.13 No Borrowing........................................................ 17
SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities................... 18
SECTION 3.15 Servicer's Obligations.............................................. 18
SECTION 3.16 Capital Expenditures................................................ 18
SECTION 3.17 Removal of Administrator............................................ 18
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
SECTION 3.18 Restricted Payments................................................. 18
SECTION 3.19 Notice of Events of Default......................................... 19
SECTION 3.20 Further Instruments and Acts........................................ 19
SECTION 3.21 Indenture Trustee's Assignment of Administrative Receivables and
Warranty Receivables................................................ 19
SECTION 3.22 Representations and Warranties by the Owner Trustee to the
Indenture Trustee................................................... 19
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture............................. 20
SECTION 4.2 Application of Trust Money.......................................... 21
SECTION 4.3 Repayment of Monies Held by Paying Agent............................ 21
SECTION 4.4 Duration of Position of Indenture Trustee for Benefit of
Certificateholders.................................................. 21
ARTICLE V
DEFAULT AND REMEDIES
SECTION 5.1 Events of Default................................................... 22
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.................. 23
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee............................................................. 24
SECTION 5.4 Remedies; Priorities................................................ 26
SECTION 5.5 Optional Preservation of the Trust Estate........................... 27
SECTION 5.6 Limitation of Suits................................................. 27
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal and
Interest............................................................ 28
SECTION 5.8 Restoration of Rights and Remedies.................................. 28
SECTION 5.9 Rights and Remedies Cumulative...................................... 28
SECTION 5.10 Delay or Omission Not a Waiver...................................... 28
SECTION 5.11 Control by Noteholders.............................................. 29
SECTION 5.12 Waiver of Past Defaults............................................. 29
SECTION 5.13 Undertaking for Costs............................................... 30
SECTION 5.14 Waiver of Stay or Extension Laws.................................... 30
SECTION 5.15 Action on Notes..................................................... 30
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
</TABLE>
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<TABLE>
<S> <C>
SECTION 6.6 Reports by Indenture Trustee to Holders............................. 34
SECTION 6.7 Compensation; Indemnity............................................. 34
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............................................................. 36
SECTION 6.11 Eligibility; Disqualification....................................... 37
SECTION 6.12 Preferential Collection of Claims Against Owner Trustee............. 38
SECTION 6.13 Representations and Warranties of Indenture Trustee................. 39
SECTION 6.14 Indenture Trustee May Enforce Claims Without Possession of
Notes............................................................... 39
SECTION 6.15 Suit for Enforcement................................................ 39
SECTION 6.16 Rights of Noteholders to Direct Indenture Trustee................... 40
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 Owner Trustee To Furnish Indenture Trustee Names and Addresses
of Noteholders...................................................... 40
SECTION 7.2 Preservation of Information, Communications to Noteholders.......... 40
SECTION 7.3 Reports by Owner Trustee............................................ 41
SECTION 7.4 Reports by Indenture Trustee........................................ 41
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
</TABLE>
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<TABLE>
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc........................... 51
SECTION 11.2 Form of Documents Delivered to Indenture Trustee.................... 53
SECTION 11.3 Acts of Noteholders................................................. 54
SECTION 11.4 Notices, etc., to Indenture Trustee, Owner Trustee and Rating
Agencies............................................................ 54
SECTION 11.5 Notices to Noteholders; Waiver...................................... 54
SECTION 11.6 Alternate Payment and Notice Provisions............................. 55
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........................................................ 56
SECTION 11.11 Benefits of Indenture............................................... 56
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......................................................... 57
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 Asset Backed Note
Exhibit C - Form of Class A-2, Class A-3, Class A-4 and Class B Asset
Backed Note
Exhibit D - Form of Note Depository Agreement
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INDENTURE, dated as of March 9, 2000 between CHASE MANHATTAN BANK
DELAWARE, a Delaware banking corporation, not in its individual capacity but
solely as trustee under the Trust Agreement (the "Owner Trustee"), 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
Chase Manhattan Bank Delaware, not in its individual capacity, but
solely as Owner Trustee under the Trust Agreement, hereby grants to the
Indenture Trustee at the Closing Date, as trustee for the benefit of the
Noteholders and (only to the extent expressly provided herein) the
Certificateholders, all of the Owner Trustee'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 Owner Trustee 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 Initial PA Assignment and any
Subsequent Transfer PA Assignments assigned to the Owner Trustee 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,
book-entry securities, uncertificated securities, or otherwise); (i) the Reserve
Account Initial Deposit with respect to the Closing Date and each Subsequent
Transfer Date and all proceeds thereof (other than the Investment Earnings
thereon) ((h) and (i), collectively, the "Reserve Account Property"); (j) all
funds on deposit from time to time in the Pre-Funding Account and all proceeds
thereof, including all other amounts and investments held from time to time in
the Pre-Funding Account (whether in the form of deposit accounts, Physical
Property, book-entry securities, uncertificated Securities or otherwise)
(collectively, the "Pre-Funding Account Property"); (k) all funds on deposit
from time to time in the Negative Carry Account and all proceeds thereof (other
than the Investment Earnings thereon), including all other amounts, investments
and investment property held
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from time to time in the Negative Carry Account (whether in the form of deposit
accounts, Physical Property, book-entry securities, 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 Owner Trustee 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 Owner Trustee or on behalf of
the Owner Trust Estate or otherwise and generally to do and receive anything
that the Owner Trustee 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 Chase
- -
Manhattan Bank Delaware, acting as Owner Trustee of the Navistar Financial 2000-
A Owner Trust, 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
2
<PAGE>
herein which are defined in such Appendix A. All references herein to Articles,
----------
Sections, subsections and exhibits are to Articles, Sections, subsections and
exhibits contained in or attached to this Indenture unless otherwise specified.
All terms defined in this Indenture shall have the defined meanings when used in
any certificate, notice, Note or other document made or delivered pursuant
hereto unless otherwise defined therein. The rules of construction set forth in
Part II of such Appendix A shall be applicable to this Indenture.
----------
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 Owner Trustee 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) The Class A-1 Notes and each of the Class A-2 Notes, 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.
3
<PAGE>
(b) The Definitive Notes shall be typewritten, printed, lithographed
or engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the officers executing such Notes,
as evidenced by their execution of such Notes.
(c) Each Note shall be dated the date of its authentication. The
terms of each class of Notes as provided for in Exhibit B 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 (except, if applicable, for one Note representing
a residual portion of each class which may be issued in a different
denomination).
(b) The Notes shall be executed on behalf of the Owner Trustee 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 Owner Trustee shall bind the
Owner Trustee, 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 Owner Trustee, the Notes for original issue
in aggregate principal amount of $475,000,000.00, comprised of (i) Class A-1
Notes in the aggregate principal amount of $84,000,000.00, (ii) Class A-2 Notes
in the aggregate principal amount of $142,000,000.00, (iii) Class A-3 Notes in
the aggregate principal amount of $110,000,000.00 and (iv) Class A-4 Notes in
the aggregate principal amount of $121,187,500.00, and (v) Class B Notes in the
aggregate principal amount of $17,812,500.00. The aggregate principal amount of
all Notes outstanding at any time may not exceed $475,000,000.00 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, in Exhibit B, and in the case of the Class A-2 Notes,
---------
the Class A-3 Notes, the Class A-4 Notes and the 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.
4
<PAGE>
SECTION 2.3 Temporary Notes.
---------------
(a) Pending the preparation of Definitive Notes, if any, the Owner
Trustee may execute, and upon receipt of an Issuer Order the Indenture Trustee
shall authenticate and deliver, such Temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
as are consistent with the terms of this Indenture as the officers executing
such Notes may determine, as evidenced by their execution of such Notes.
(b) If Temporary Notes are issued, the Owner Trustee 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 Owner Trustee 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 Owner Trustee 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 Owner Trustee 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 Owner Trustee may prescribe, the Owner Trustee
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 Owner
Trustee 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
Owner Trustee as Note Registrar, the Owner Trustee 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
Owner Trustee (and following the delivery, in the former case, of such Notes to
the Owner Trustee by the Indenture Trustee), the Owner Trustee 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.
5
<PAGE>
(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 Owner Trustee
(and following the delivery, in the former case, of such Notes to the Owner
Trustee by the Indenture Trustee), the Owner Trustee shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, the Notes which the Noteholder making the exchange is
entitled to receive.
(e) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Owner Trustee, 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 Owner Trustee 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
Owner Trustee 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 Owner Trustee and the Indenture Trustee harmless, then, in the absence of
notice to the Owner Trustee, the Note Registrar or the Indenture Trustee that
such Note has been acquired by a bona fide purchaser, the Owner Trustee shall
execute and upon the Owner Trustee'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
6
<PAGE>
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 Owner
Trustee 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 Owner Trustee and the
Indenture Trustee shall be entitled to recover such replacement Note (or such
payment) from (i) any Person to whom it was delivered, (ii) the Person taking
such replacement Note from the Person to whom such replacement Note was
delivered or (iii) any assignee of such Person, except any bona fide purchaser,
and the Owner Trustee 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 Owner Trustee or the Indenture Trustee
in connection therewith.
(c) In connection with the issuance of any replacement Note under
this Section 2.5, the Owner Trustee 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 Owner Trustee, 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 Owner Trustee, the Indenture
Trustee and any of their agents 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 Owner
Trustee, the Indenture Trustee nor any agent of the Owner Trustee 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 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-2 Notes, the Class A-3 Notes, the
---------
Class
7
<PAGE>
A-4 Notes and the Class B Notes shall accrue in the manner set forth in
Exhibit C at the applicable Interest Rate for such class, and 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 Owner Trustee or the
Servicer into the Note Distribution Account before each Distribution Date for
payment to Noteholders on the related Distribution Date and shall be paid to the
Person in whose name such Note (or one or more Predecessor Notes) is registered
on the applicable Record Date, by check mailed first-class, postage prepaid to
such Person's address as it appears on the Note Register on such Record Date;
provided, however, that, unless and until Definitive Notes have been issued
- -------- -------
pursuant to Section 2.12, with respect to Notes registered on the applicable
Record Date in the name of the Note Depository (initially, Cede & Co.), payment
shall be made by wire transfer in immediately available funds to the account
designated by the Note Depository.
(b) Prior to the occurrence of an Event of Default and a declaration
in accordance with Section 5.2(a) that the Notes have become immediately due and
payable, the principal of each class of Notes shall be payable in full on the
Final Scheduled Distribution Date for such class and, to the extent of funds
available therefor, in instalments on the Distribution Dates (if any) preceding
the Final Scheduled Distribution Date for such class, in the amounts and in
accordance with the priorities set forth in Section 8.2(c)(ii) or (iii), as
applicable, and, if applicable, 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 Owner
Trustee 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) or (v), as applicable and, if applicable, Section 8.2(d).
(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
8
<PAGE>
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.
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 Owner
Trustee may at any time deliver to the Indenture Trustee for cancellation any
Notes previously authenticated and delivered hereunder which the Owner Trustee
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 Owner Trustee
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 Owner
Trustee 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 Owner Trustee. 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;
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(b) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the Notes
and the giving of instructions or directions hereunder) as the sole holder
of the Notes and shall have no obligation to the Note Owners;
(c) to the extent that the provisions of this Section 2.10
conflict with any other provisions of this Indenture, the provisions of
this Section 2.10 shall control;
(d) the rights of the Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Note Owners and the Clearing Agency and/or
the Clearing Agency Participants and unless and until Definitive Notes are
issued pursuant to Section 2.12, the initial Clearing Agency shall make
book-entry transfers between the Clearing Agency Participants and receive
and transmit payments of principal of and interest on the Notes to such
Clearing Agency Participants, pursuant to the Note Depository Agreement;
and
(e) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes evidencing
a specified percentage of the Outstanding Amount of the 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 Owner Trustee 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
Owner Trustee shall
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execute and the Indenture Trustee shall authenticate the Definitive Notes in
accordance with the instructions of the Clearing Agency. None of the Owner
Trustee, 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 Owner Trustee or its affiliates with the same rights it would have
if it were not the Seller.
SECTION 2.14 Tax Treatment. The Owner Trustee in entering into this
-------------
Indenture, and the Noteholders and the Note Owners, by acquiring any Note or
interest therein, (i) express their intention that the Notes qualify under
applicable tax law as indebtedness secured by the Collateral, and (ii) unless
otherwise required by appropriate taxing authorities, agree to treat the Notes
as indebtedness secured by the Collateral for the purpose of federal income
taxes, state and local income and franchise taxes, and any other taxes imposed
upon, measured by or based upon gross or net income.
ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest. The Owner Trustee
---------------------------------
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 Owner Trustee 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 Owner Trustee 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 Owner Trustee for
registration of transfer or exchange, and where notices and demands to or upon
the Owner Trustee in respect of the Notes and this Indenture may be served. The
Owner Trustee hereby initially appoints the Indenture Trustee to serve as its
agent for the foregoing purposes. The Owner Trustee 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 Owner Trustee 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
Owner Trustee hereby appoints the Indenture Trustee as its agent to receive all
such surrenders, notices and demands.
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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 Owner Trustee 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 Owner Trustee 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 Owner Trustee shall cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the
provisions of this Section 3.3, that such Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and pay such sums to
such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the Owner
Trustee (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 Owner Trustee 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
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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 Owner Trustee on Issuer Request; and
the Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Owner Trustee for payment thereof (but only to the extent of the
amounts so paid to the Owner Trustee), 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 Owner
Trustee 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 Owner Trustee. The Indenture Trustee may also adopt and
employ, at the expense of the Owner Trustee, any other reasonable means of
notification of such payment (including, but not limited to, mailing notice of
such payment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
SECTION 3.4 Existence. The Owner Trustee shall keep in full effect
---------
its existence, rights and franchises as a Delaware banking corporation (unless
it becomes, or any successor Owner Trustee hereunder is or becomes, organized
under the laws of any other State or of the United States of America, in which
case it 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 Owner Trustee 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
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following: (A) any change in the Owner Trustee's (or its successor's) name, (B)
any change in the location of the Owner Trustee's (or its successor's) principal
place of business and (C) any merger or consolidation or other change in the
Owner Trustee'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 Owner Trustee 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 Owner Trustee shall furnish to the
Indenture Trustee an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording and
filing of this Indenture, any indentures supplemental hereto and any other
requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements as are necessary to perfect and
make effective the lien and security interest of this Indenture and reciting the
details of such action, or stating that, in the opinion of such counsel, no such
action is necessary to make such lien and security interest effective.
(b) On or before April 15 in each calendar year, beginning April 15,
2001, the Owner Trustee 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 Owner Trustee 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
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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 Owner Trustee 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 Owner Trustee shall be deemed to be action taken by
the Owner Trustee. Initially, the Owner Trustee has contracted with the
Servicer and the Administrator to assist the Owner Trustee in performing its
duties under this Indenture.
(c) The Owner Trustee 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 Owner Trustee shall have knowledge of the occurrence of a
Servicer Default under the Pooling and Servicing Agreement, the Owner Trustee
shall promptly notify the Indenture Trustee and the Rating Agencies thereof, and
shall specify in such notice the response or action, if any, the Owner Trustee
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 Owner Trustee 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 Owner Trustee 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
Owner Trustee 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,
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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 Owner Trustee shall not:
(a) sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Owner Trust Estate, except the Owner Trustee
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
(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 Owner Trustee
---------------------------------
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, 2001, an
Officer's Certificate signed by an Authorized Officer, dated as of the
immediately preceding October 31, stating that:
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(a) a review of the activities of the Trust during such fiscal year
and of performance by the Owner Trustee 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 Owner Trustee 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 Owner Trustee addressed to the Corporate Trust
Office of the Indenture Trustee.
SECTION 3.10 Consolidation, Merger, etc., of Owner Trustee;
----------------------------------------------
Disposition of Trust Assets. (a) The Owner Trustee may be merged with or into
- ---------------------------
or consolidated with another Person provided that such merger or consolidation
complies with the requirements of Section 6.11 of the Trust Agreement and the
surviving entity is eligible as the Owner Trustee under Section 6.13 of the
Trust Agreement.
SECTION 3.11 Successor or Transferee.
-----------------------
(a) Upon any consolidation or merger of the Owner Trustee in
accordance with Section 3.10(a), the Person formed by or surviving such
consolidation or merger (if other than the Owner Trustee) shall succeed to, and
be substituted for, and may exercise every right and power of, the Owner Trustee
under this Indenture with the same effect as if such Person had been named as
the Owner Trustee herein.
(b) Upon the appointment of a successor trustee as Owner Trustee
under the Trust Agreement, such successor Owner Trustee shall succeed to, and be
substituted for, and may exercise every right and power of, the Owner Trustee
under this Indenture with the same effect as if such Person had been named as
the Owner Trustee herein.
SECTION 3.12 No Other Business. The Owner Trustee shall not engage
-----------------
in any business or activity other than acquiring, holding and managing the
Collateral and the proceeds therefrom in the manner contemplated by the Basic
Documents, issuing the Securities, making payments on the Securities and such
other activities that are necessary, suitable, desirable or convenient to
accomplish the foregoing or are incidental thereto, as set forth in Section 2.3
of the Trust Agreement. After the end of the Funding Period, the Owner Trustee
shall not fund the purchase of any new Retail Notes.
SECTION 3.13 No Borrowing. The Owner Trustee 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.
17
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SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities.
-------------------------------------------------
Except as contemplated by this Indenture or the other Basic Documents, the Owner
Trustee 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 Owner Trustee 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 Owner Trustee shall not make
--------------------
any expenditure of the funds of the Owner Trust Estate (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 Owner Trustee 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 Owner Trustee 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 any owner of a beneficial interest in the Trust or
otherwise, in each case with respect to any ownership or equity interest or
similar security in or of the Trust or to the Servicer;
(b) redeem, purchase, retire or otherwise acquire for value any such
ownership or equity interest or similar security; or
(c) set aside or otherwise segregate any amounts for any such
purpose;
provided, however, that the Owner Trustee 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 Owner Trustee shall not, directly
or indirectly, make payments to or distributions from the Collection Account
except in accordance with the Basic Documents.
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SECTION 3.19 Notice of Events of Default. The Owner Trustee 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 Owner Trustee 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 release 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, 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
Noteholders 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 Owner Trustee to
------------------------------------------------------
the Indenture Trustee. The Owner Trustee (not in its individual capacity, but
- ---------------------
solely as trustee under the Trust Agreement) hereby represents and warrants to
the Indenture Trustee as follows:
(a) Good Title. No Receivable has been sold, transferred, assigned
----------
or pledged by the Owner Trustee to any Person other than the Indenture Trustee;
immediately prior to the conveyance of the Receivables pursuant to this
Indenture, the Owner Trustee had good and marketable title thereto, free of any
Lien (except for any Lien which may exist in accessions to the Financed Vehicles
not financed by NFC); and, upon execution and delivery of this Indenture by the
Owner Trustee, the Indenture Trustee shall have all of the right, title and
interest of the Owner Trustee 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
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(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 Owner Trustee from the Owner
Trust Estate, 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 Owner Trustee and thereafter
repaid to the Owner Trustee or discharged from such trust, as provided
in Section 3.3) have been delivered to the Indenture Trustee for
cancellation; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation:
(A) have become due and payable,
(B) will be due and payable on their respective Final
Scheduled Distribution Dates within one year, or
(C) are to be called for redemption within one year
under arrangements satisfactory to the Indenture Trustee for the
giving of notice of redemption by the Indenture Trustee in the
name, and at the expense, of the Owner Trustee from the Owner
Trust Estate,
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and the Owner Trustee, in the case of (A), (B) or (C) of subsection
4.1(a)(2) above, has irrevocably deposited or caused to be irrevocably
deposited with the Indenture Trustee cash or direct obligations of or
obligations guaranteed by the United States of America (which will
mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire
unpaid principal and accrued interest on such Notes not theretofore
delivered to the Indenture Trustee for cancellation when due on the
Final Scheduled Distribution Date for such Notes or the Redemption
Date for such Notes (if such Notes are to be called for redemption
pursuant to Section 10.1(a)), as the case may be;
(b) the Owner Trustee has paid or caused to be paid all other
sums payable hereunder by the Owner Trustee; and
(c) the Owner Trustee has delivered to the Indenture Trustee an
Officer's Certificate of the Owner Trustee, 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 Owner Trustee, be paid to the
Indenture Trustee to be held and applied according to Section 3.3 and thereupon
such Paying Agent shall be released from all further liability with respect to
such monies.
SECTION 4.4 Duration of Position of Indenture Trustee for Benefit
-----------------------------------------------------
of Certificateholders. Notwithstanding (i) the earlier payment in full of all
- ---------------------
principal and interest due to the Noteholders under the terms of Notes of each
class, (ii) the cancellation of such Notes pursuant to Section 3.1 and (iii) the
discharge of the Indenture Trustee's duties hereunder with respect to such
Notes, the Indenture Trustee shall continue to act in the capacity as Indenture
Trustee hereunder for the benefit of the Certificateholders and the Indenture
Trustee, for the benefit of the Certificateholders, shall comply with its
obligations under Sections 5.01(a), 8.02 and 8.03 of the
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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 Owner Trustee and the Seller (or the Servicer, as
applicable) by the Indenture Trustee or to the Owner Trustee 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 Owner Trustee 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 Owner Trustee and the Seller (or the Servicer, as
applicable) by the Indenture Trustee or to the Owner Trustee 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 Trust or the Owner Trust
Estate or any substantial part of the Owner 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 Trust or the Owner Trust Estate (other than as Owner Trustee) or for
any substantial part of the Trust Estate, or
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ordering the winding-up or liquidation of the Trust's affairs, and such
decree or order shall remain unstayed and in effect for a period of sixty
(60) consecutive days; or
(f) the commencement by the Owner Trustee, on behalf of the Trust, 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 Owner Trustee, on behalf of the Trust, to the entry of an order for
relief in an involuntary case under any such law, or the consent by the
Owner Trustee, on behalf of the Trust, to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Trust or Owner Trust Estate or for
any substantial part of the Owner Trust Estate, or the making by the Owner
Trustee, on behalf of the Trust, of any general assignment of the Owner
Trust Estate for the benefit of creditors, or the failure by the Owner
Trustee generally to pay the debts of the Trust from the Owner Trust Estate
as such debts become due, or the taking of action by the Owner Trustee in
furtherance of any of the foregoing.
The Owner Trustee 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 Owner Trustee 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 Owner Trustee (and to the Indenture Trustee if given by the
Noteholders) setting forth the Event or Events of Default, and upon any such
declaration the unpaid principal amount of 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
Owner Trustee 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 Owner Trustee 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
Owner
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Trustee 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 Owner Trustee 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 Owner Trustee shall, upon demand of the Indenture Trustee, pay
to the Indenture Trustee, for the benefit of the Noteholders from the Owner
Trust Estate 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 Owner Trustee shall fail forthwith to pay such amounts from
the Owner Trust Estate 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 Owner Trustee and
the Owner Trust Estate or other obligor upon such Notes and collect in the
manner provided by law out of the property of the Owner Trust Estate, 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 Owner Trustee or the
Owner Trust Estate 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 Trust or the Owner Trust
Estate or such other Person, or in case of any other comparable judicial
Proceedings relative to the Owner Trustee or the Owner Trust Estate, or to the
creditors or property of the Owner Trust Estate, 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:
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(i) to file and prove a claim or claims for the entire amount
of the unpaid principal and interest owing in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances
made, by the Indenture Trustee and each predecessor trustee, except as a
result of negligence or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any monies or other property payable
or deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the Indenture Trustee
on their behalf; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Holders of Notes allowed in any judicial
proceedings relative to the Owner Trustee or the Owner Trust Estate, 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
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attorneys, shall be first for the ratable benefit of the Class A Noteholders and
the Class B Noteholders in the order of priority set forth in Section 8.2(c).
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
SECTION 5.4 Remedies; Priorities.
--------------------
(a) If an Event of Default shall have occurred and be continuing and
the Notes have been accelerated under Section 5.2(a), the Indenture Trustee may
do one or more of the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then due and payable on the
Notes or under this Indenture with respect thereto, whether by declaration
of acceleration or otherwise, enforce any judgment obtained, and collect
from the Owner Trustee or the Owner Trust Estate and any other obligor upon
such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and the Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law or elect to have the Owner Trustee
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, in each case
as of the date of such sale or liquidation or (C) (i) there has been an
Event of Default under Section 5.1(a), (b) or (c) or otherwise arising from
a failure to make a required payment of principal on any Notes, (ii) the
Indenture Trustee determines that the Trust Estate will not continue to
provide sufficient funds for the payment of principal of and interest on
the Notes as and when they would have become due if the Notes had not been
declared due and payable and (iii) the Indenture Trustee obtains the
consent of Holders of a majority of the aggregate Outstanding Amount of the
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
26
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Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant
to this Article V, it shall pay out or deposit such money or property in the
following order:
FIRST: to the Indenture Trustee for amounts due under Section
6.7; and
SECOND: to the Collection Account, for distribution pursuant to
Section 9.02 of the Pooling and Servicing Agreement and Section 8.2(c).
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;
27
<PAGE>
it being understood and intended that no Holder or Holders of Notes shall have
any right in any manner whatsoever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or preference
over any other Holders of Notes or to enforce any right under this Indenture,
except in the manner herein provided and for the equal, ratable (on the basis of
the respective aggregate amount of principal and interest, respectively, due and
unpaid on the Notes held by each Noteholder) and common benefit of all
Noteholders. For the protection and enforcement of the provisions of this
Section 5.6, each and every Noteholder shall be entitled to such relief as can
be given either at law or in equity.
If the Indenture Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority of the Outstanding Amount of the 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 Owner Trustee,
the Owner Trust Estate, 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
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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 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 Owner Trustee, the Owner Trust Estate, 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
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been cured and not to have occurred, for every purpose of this Indenture and for
purposes of Section 8.01(b) of the Pooling and Servicing Agreement; but no such
waiver shall extend to or affect any subsequent or other Default or impair any
right consequent thereto.
SECTION 5.13 Undertaking for Costs. All parties to this Indenture
---------------------
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
Proceeding for the enforcement of any right or remedy under this Indenture, or
in any Proceeding against the Indenture Trustee for any action taken, suffered
or omitted by it as Trustee, the filing by any party litigant in such Proceeding
of an undertaking to pay the costs of such Proceeding, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such Proceeding, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to:
(a) any Proceeding instituted by the Indenture Trustee;
(b) any Proceeding instituted by any Noteholder, or group of Noteholders,
in each case holding in the aggregate more than 10% of the Outstanding Amount of
the 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 Owner Trustee
--------------------------------
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 Owner Trustee (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 Owner Trustee or
the Owner Trust Estate 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 Owner Trust
Estate. Any money or property collected by the Indenture Trustee shall be
applied in accordance with Section 5.4(b).
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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 Owner Trustee 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 Owner Trustee 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 Owner Trustee under or in connection with the Pooling
and Servicing Agreement and the Purchase Agreement to the extent and in the
manner directed by the Indenture Trustee, including the transmission of notices
of default on the part of the Seller, the Servicer or NFC thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller, the Servicer or NFC of each of their
respective obligations under the Pooling and Servicing Agreement and the
Purchase Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and, at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of 66-2/3% of the Outstanding Amount of the Voting Notes shall, exercise
all rights, remedies, powers, privileges and claims of the Owner Trustee 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 Owner Trustee 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 Owner Trustee 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.
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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 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 Owner Trustee.
(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.
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(f) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayments
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(g) The Indenture Trustee shall reimburse the Seller and any director,
officer, employee or agent of the Seller for any contractual damages, liability
or expense incurred by reason of the Indenture Trustee's willful misfeasance,
bad faith or gross negligence (except errors in judgment) in the performance of
its duties under any of the Further Transfer and Servicing Agreements, or by
reason of reckless disregard of its obligations and duties under any of the
Further Transfer and Servicing Agreements.
(h) Every provision of this Indenture relating to the Indenture
Trustee shall be subject to the provisions of this Section 6.1 and to the
provisions of the TIA.
SECTION 6.2 Rights of Indenture Trustee.
---------------------------
(a) The Indenture Trustee may rely on any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Indenture Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate from the Owner Trustee 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.
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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 Owner Trustee, 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
Owner Trustee's use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Owner Trustee 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
30 days after such Responsible Officer obtained knowledge of such Default.
Except in the case of a Default in payment of principal of or interest on any
Note, the Indenture Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of Noteholders.
SECTION 6.6 Reports by Indenture Trustee to Holders. The Indenture
---------------------------------------
Trustee shall deliver to each Noteholder the information and documents set forth
in Article VII, and, in addition, all such information with respect to the Notes
as may be required, as specified by the Servicer, to enable such Holder to
prepare its federal and state income tax returns.
SECTION 6.7 Compensation; Indemnity.
-----------------------
(a) The Owner Trustee 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 Owner Trustee 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 Owner Trustee 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 Owner Trustee'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) the expenses are intended
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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 Owner Trustee; 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 Owner Trustee shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
(b) If the Indenture Trustee gives notice of its intent to resign or
is removed or if a vacancy exists in the office of the Indenture Trustee for any
reason (the Indenture Trustee in such event being referred to herein as the
retiring Indenture Trustee), the Owner Trustee 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
Owner Trustee. 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 Owner Trustee 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.
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(f) Notwithstanding the replacement of the Indenture Trustee pursuant
to this Section 6.8, the Owner Trustee's obligations under Section 6.7 and the
Servicer's corresponding obligations under the Pooling and Servicing Agreement
shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9 Merger or Consolidation of Indenture Trustee.
--------------------------------------------
(a) Any corporation into which the Indenture Trustee may be merged or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Indenture Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the Indenture Trustee,
shall be the successor of the Indenture Trustee under this Indenture; provided,
--------
however, that such corporation shall be eligible under the provisions of Section
- -------
6.11, without the execution or filing of any instrument or any further act on
the part of any of the parties to this Indenture, anything in this Indenture to
the contrary notwithstanding. Following such merger or consolidation, the
successor Indenture Trustee shall mail a notice of such merger or consolidation
to each of the Rating Agencies.
(b) If at the time such successor or successors by merger or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture, any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee. In all such cases such certificate of
authentication shall have the same full force as is provided anywhere in the
Notes or herein with respect to the certificate of authentication of the
Indenture Trustee.
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate
-----------------------------------------------
Indenture Trustee.
- -----------------
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate or any Financed Vehicle may at the time be
located, the Indenture Trustee shall have the power and may execute and deliver
all instruments to appoint one or more Persons to act as a co-trustee or co-
trustees, or separate trustee or separate trustees, of all or any part of the
Trust Estate, and to vest in such Person 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.
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(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Estate or any portion thereof
in any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or co-
trustee shall die, become incapable of acting, resign or be removed, 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
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excluded from the operation of TIA (S) 310(b)(1) any indenture or indentures
under which other securities of the Owner Trustee 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 Owner Trustee 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 Owner Trustee, 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 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 Owner
-----------------------------------------------
Trustee. 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.
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SECTION 6.13 Representations and Warranties of Indenture Trustee.
---------------------------------------------------
The Indenture Trustee represents and warrants as of the Closing Date that:
(a) the Indenture Trustee is a New York banking corporation duly
organized, validly existing and in good standing under the laws of the State of
New York and the eligibility requirements set forth in Section 6.11 are
satisfied with respect to the Indenture Trustee;
(b) the Indenture Trustee has full power, authority and legal right to
execute, deliver and perform this Indenture, and has taken all necessary action
to authorize the execution, delivery and performance by it of this Indenture;
(c) the execution, delivery and performance by the Indenture Trustee
of this Indenture (i) shall not violate any provision of any law or regulation
governing the banking and trust powers of the Indenture Trustee or any order,
writ, judgment or decree of any court, arbitrator, or governmental authority
applicable to the Indenture Trustee or any of its assets, (ii) shall not violate
any provision of the corporate charter or by-laws of the Indenture Trustee or
(iii) shall not violate any provision of, or constitute, with or without notice
or lapse of time, a default under, or result in the creation or imposition of
any lien on any properties included in the Trust Estate pursuant to the
provisions of any mortgage, indenture, contract, agreement or other undertaking
to which it is a party, which violation, default or lien could reasonably be
expected to have a materially adverse effect on the Indenture Trustee's
performance or ability to perform its duties under this Indenture or on the
transactions contemplated in this Indenture;
(d) the execution, delivery and performance by the Indenture Trustee
of this Indenture shall not require the authorization, consent or approval of,
the giving of notice to, the filing or registration with, or the taking of any
other action in respect of, any governmental 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,
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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.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 Owner Trustee To Furnish Indenture Trustee Names and
----------------------------------------------------
Addresses of Noteholders. The Owner Trustee 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
Owner Trustee 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.
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(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 Owner Trustee, the Indenture Trustee and the Note Registrar
shall have the protection of TIA (S) 312(c).
SECTION 7.3 Reports by Owner Trustee.
------------------------
(a) The Owner Trustee shall:
(i) file with the Indenture Trustee, within 15 days after the
Owner Trustee 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 Owner Trustee
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 Owner Trustee with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA (S) 313(c)) such
summaries of any information, documents and reports required to be filed by
the Owner Trustee 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 Owner Trustee otherwise determines, the fiscal year of
the Trust 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, 2001, 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 Owner Trustee shall notify the Indenture Trustee if and when
the Notes are listed on any stock exchange.
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(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 Owner Trustee shall cause
the Servicer to establish and maintain, in the name of the Indenture Trustee,
for the benefit of the Securityholders, the Designated Accounts as provided in
Articles IV and V of the Pooling and Servicing Agreement.
(b) Before each Distribution Date, the Indenture Trustee shall cause
all withdrawals, deposits, transfers and distributions provided for in Section
4.06(b) and Section 5.02(b) of the Pooling and Servicing Agreement to be made.
Before each Distribution Date, the Indenture Trustee shall make the
distributions from the Collection Account provided for in Section 4.06(c) of the
Pooling and Servicing Agreement. Notwithstanding the preceding sentence, to the
extent permitted and as provided by Section 4.08 of the Pooling and Servicing
Agreement, deposits may be netted against amounts owing to the depositor.
(c) On each Distribution Date, the Indenture Trustee shall distribute
all amounts on deposit in the Note Distribution Account, other than amounts
deposited in the Note Distribution Account pursuant to Section 5.02(b) of the
Pooling and Servicing Agreement and subject to the Certificateholder'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
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Note Distribution Account to
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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), (iv) or (v)
below, the Principal Payment Amount shall be applied on each Distribution
Date, as follows:
(A) first, 100% of the Principal Payment Amount shall be
applied to pay the principal of the Class A-1 Notes until the Class A-
1 Notes are paid in full;
(B) thereafter, 96.25% of the Principal Payment Amount (in
the case of the Distribution Date on which the Class A-1 Notes are
paid in full, 96.25% of the remaining Principal Payment Amount) shall
be applied to pay the principal of the other Class A Notes (all of
which shall be applied to pay the principal of the Class A-2 Notes
until paid in full, then shall be applied to pay the principal of the
Class A-3 Notes until paid in full, and then shall be applied to pay
the principal of the Class A-4 Notes until paid in full) and 3.75% of
the Principal Payment Amount (in the case of the Distribution Date on
which the Class A-1 Notes are paid full, 3.75% of the remaining
Principal Payment Amount) shall be applied to pay the principal of the
Class B Notes until the Class A Notes are paid in full; and
(C) thereafter, 100% of the Principal Payment Amount
(in the case of the Distribution Date on which the Class A Notes are
paid in full, the remaining Principal Payment Amount) to the Class B
Notes until the Class B Notes are paid in full;
(iii) if the amount on deposit in the Reserve Account on any
Distribution Date would be, after giving effect to the application of the
Principal Payment Amount in accordance with the foregoing priorities, less
than 1.0% of the Initial Aggregate 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
shall be applied on each Distribution Date to pay the principal of the
Class A Notes (all of which shall be applied to pay the principal of the
Class A-1 Notes until paid in full, then shall be applied to pay the
principal of the Class A-2 Notes until paid in full, then shall be applied
to pay the principal of Class A-3 Notes until paid in full, and then shall
be applied to pay the principal of the
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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 applied in accordance
with Section 8.2(c)(ii)(B) hereof until the Class A Notes have been paid in
full, and thereafter 100% of the Principal Payment Amount for such
Distribution Date shall be applied to pay the principal of 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 specified in Section 5.1(a), (b) or (c) 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) shall be applied in the following priority: (1) to the repayment of
principal of 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; and
(v) 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 specified in Section 5.1(d), (e) or (f) 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, 100% of the Principal Payment Amount
shall be applied on each Distribution Date to the payment of principal of
each class of the Class A Notes (on the basis of their respective unpaid
principal balances), and, thereafter, 100% of the Principal Payment Amount
shall be applied on each Distribution Date to the payment of principal of
the Class B Notes pro rata on the basis of the respective unpaid principal
amount of each such Class B Note.
(d) Subject to Sections 8.2(c)(iii), (iv) and (v), on the Distribution
Date on which the Funding Period ends (or, if the Funding Period does not end on
a Distribution Date, on the Distribution Date following the end of the Funding
Period, the Indenture Trustee shall apply any and all amounts deposited into the
Note Distribution Account pursuant to Section 5.02(b) of the Pooling and
Servicing Agreement (other than Noteholders' Prepayment Premium) to the
repayment of principal on the Notes in accordance with the priorities set forth
in Section 8.2(c)(ii); provided, however, that if the Pre-Funded Amount as of
the end of the Funding Period is greater than $100,000, the Indenture Trustee
shall apply such amounts to the repayment of principal of each Class of Notes
pro rata on the basis of the respective unpaid principal amount of each such
Class of Notes.
(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; provided, however, if less than the required
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Noteholders'
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Prepayment Premium for all classes of Notes has been deposited into the Note
Distribution Account, the amount distributable to the holders of each class of
Notes shall be limited to the Pre-Funded Percentage for that class of Notes for
funds that are so deposited. In either case, the Indenture Trustee shall
distribute the Noteholders' Prepayment Premium allocated to each class of Notes
to the Noteholders of such class of Notes pro rata on the basis of the unpaid
principal amount of such Noteholder's Notes of such class.
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 Owner Trustee 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 Owner
Trustee 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
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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 Owner Trustee to take
any action pursuant to Section 8.4(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require as a condition to such
action, an Opinion of Counsel, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such action
shall not materially and adversely impair the security for the Notes or the
rights of the Noteholders in contravention of the provisions of this Indenture;
provided, however, that such Opinion of Counsel shall not be required to express
- -------- -------
an opinion as to the fair value of the Trust Estate. Counsel rendering any such
opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.
------------------------------------------------------
(a) Without the consent of the Holders of any Notes but with prior
notice to the Rating Agencies, the Owner Trustee 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 Owner
Trustee, and the assumption by any such successor of the covenants of the
Owner Trustee contained herein and in the Notes;
(iii) to add to the covenants of the Owner Trustee for the
benefit of the Securityholders, or to surrender any right or power herein
conferred upon the Owner Trustee;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
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(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 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 Owner Trustee 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 Owner Trustee 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 Owner Trustee 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);
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(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;
(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 Owner Trustee, 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 Owner Trustee 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
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to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.3 Execution of Supplemental Indentures. In executing, or
------------------------------------
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and that all conditions precedent to
such execution have been satisfied. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indenture. Upon the execution
--------------------------------
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Owner Trustee 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 Owner Trustee or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Owner Trustee, to any such
supplemental indenture may be prepared and executed by the Owner Trustee 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
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Distribution Date after all Class A-1 Notes, Class A-2 Notes and 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 Owner Trustee has available funds in the Owner Trust Estate sufficient to
pay such amount. The Owner Trustee 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 Owner Trustee shall furnish notice thereof
to the Indenture Trustee not later than 25 days prior to the Redemption Date and
the Owner Trustee shall deposit into the Note Distribution Account, before the
Redemption Date, the 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
Owner Trustee out of the Owner Trust Estate. 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.]
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SECTION 10.3 Notes Payable on Redemption Date.
--------------------------------
The Class A-4 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 Owner
Trustee shall default in the payment of such Redemption Price) no interest shall
accrue on such Redemption Price for any period after the date to which accrued
interest is calculated for purposes of calculating such Redemption Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc.
------------------------------------------
(a) Upon any application or request by the Owner Trustee to the
Indenture Trustee to take any action under any provision of this Indenture, the
Owner Trustee 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.
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(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
Owner Trustee 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 Owner
Trustee of the Collateral or other property or securities to be so deposited.
(ii) Whenever the Owner Trustee 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 Owner Trustee shall also deliver to the Indenture Trustee an
Independent Certificate as to the same matters, if the fair value to the
Owner Trust Estate of the securities to be so deposited and of all other
such securities made on the basis of any such withdrawal or release since
the commencement of the then current fiscal year of the Trust, 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 Owner Trust Estate 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 Owner Trustee 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 Owner Trustee 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 Owner Trustee 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 Owner Trustee may (A) collect, liquidate, sell or
otherwise dispose of Receivables
52
<PAGE>
as and to the extent permitted or required by the Basic Documents, (B) make
cash payments out of the Designated Accounts and the Certificate
Distribution Account as and to the extent permitted or required by the
Basic Documents and (C) take any other action not inconsistent with the
TIA.
SECTION 11.2 Form of Documents Delivered to Indenture Trustee.
------------------------------------------------
(a) In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the Owner
Trustee 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 Owner Trustee or the Administrator, stating
that the information with respect to such factual matters is in the possession
of the Servicer, the Seller, the Owner Trustee 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 Owner
Trustee shall deliver any document as a condition of the granting of such
application, or as evidence of the Owner Trustee'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 Owner Trustee 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.
53
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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 Owner Trustee. 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 Owner Trustee,
if made in the manner provided in this Section 11.3.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes (or any one or more
predecessor Notes) shall bind the Holder of every Note issued upon the
registration thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Indenture Trustee or the
Owner Trustee in reliance thereon, whether or not notation of such action is
made upon such Note.
SECTION 11.4 Notices, etc., to Indenture Trustee, Owner Trustee 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 Owner Trustee 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.
54
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(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 Owner Trustee 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 Owner Trustee shall furnish
to the Indenture Trustee a copy of each such agreement and the Indenture Trustee
shall cause payments to be made and notices to be given in accordance with such
agreements.
SECTION 11.7 Conflict with Trust Indenture Act.
---------------------------------
(a) If any provision hereof limits, qualifies or conflicts with
another provision hereof that is required to be included in this Indenture by
any of the provisions of the TIA, such required provision shall control.
(b) The provisions of TIA (S)(S) 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns.
----------------------
(a) All covenants and agreements in this Indenture and the Notes by
the Owner Trustee 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.
55
<PAGE>
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.
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 Owner Trustee 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.
56
<PAGE>
SECTION 11.16 No Recourse. No recourse may be taken, directly or
-----------
indirectly, with respect to the obligations of 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 trust created by the
Trust Agreement; 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 Trust,
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 Owner Trustee hereunder,
the Owner Trustee shall be subject to, and entitled to the benefits of, the
terms and provisions of Articles VI, VII and VIII of the Trust Agreement.
SECTION 11.17 No Petition.
-----------
The Indenture Trustee, by entering into this Indenture, and each
Noteholder and Note Owner, by accepting a Note (or interest therein) issued
hereunder, hereby covenant and agree that they shall not, prior to the date
which is one year and one day after the termination of this Indenture with
respect to the Owner Trustee pursuant to Section 4.1, acquiesce, petition or
otherwise invoke or cause the Seller or the Owner Trustee to invoke the process
of any court or government authority for the purpose of commencing or sustaining
a case against the Seller or the Owner Trustee or the Owner Trust Estate 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, the Trust, the Owner Trust Estate or the Owner
Trustee or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Seller, the Trust, the Owner Trust Estate or
the Owner Trustee.
SECTION 11.18 Inspection.
----------
The Owner Trustee agrees that, on reasonable prior notice, it shall
permit any representative of the Indenture Trustee, during the Owner Trustee's
normal business hours, to examine all the books of account, records, reports and
other papers of the Owner Trustee (not in its individual capacity, but solely as
trustee under the Trust Agreement), to make copies and extracts therefrom,
57
<PAGE>
to cause such books to be audited by Independent certified public accountants,
and to discuss the Owner Trustee's (not in its individual capacity, but solely
as trustee under the Trust Agreement) affairs, finances and accounts with the
Owner Trustee's officers, employees and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall and shall cause its representatives to
hold in confidence all such information except to the extent disclosure may be
required by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
58
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee 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.
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: Erwin Soriano
Title: Assistant Treasurer
<PAGE>
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
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 Chase Manhattan Bank
Delaware, a Delaware banking corporation, not in its individual capacity, but
solely as trustee under the Trust Agreement and that he executed the same as the
act of said Delaware banking corporation for the purpose and consideration
therein expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 9th day of March,
2000.
___________________________________________________
Notary Public in and for the State of Illinois.
My commission expires:
____________________________
<PAGE>
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared Erwin Soriano, 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 he 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 9th day of March,
2000.
Notary Public in and for the State of Illinois.
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
FORM OF CLASS A-1 ASSET BACKED NOTE
REGISTERED $____________/1/
No. R- _______
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 63934VBA7
Unless this Note is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Owner Trustee 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.
CHASE MANHATTAN BANK DELAWARE
Not in its Individual Capacity but Solely as Owner
Trustee Under the Trust Agreement Dated as of
March 9, 2000
CLASS A-1 6.08% ASSET BACKED NOTES
CHASE MANHATTAN BANK DELAWARE, not in its individual capacity, but
solely as trustee (the "Owner Trustee") under that certain Trust Agreement,
dated as of March 9, 2000, between Chase Manhattan Bank Delaware (not in its
individual capacity, but solely as trustee) and Navistar Financial Retail
Receivables Corporation creating the Navistar Financial
____________________
/1/ Denominations of $1,000 and integral multiples thereof (except, if
applicable, for one Note representing a residual portion of such class which may
be issued in a different denomination).
1
<PAGE>
2000-A Owner Trust (the "Trust"), for value received, hereby promises to pay to
Cede & Co., or registered assigns, the principal sum of _______________ DOLLARS
($_________) 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 the 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 March 15, 2001 (the "Final
Scheduled Distribution Date"). The Owner Trustee shall pay interest on this Note
at the rate per annum shown above on each Distribution Date until the principal
of this Note is paid or made available for payment, on the principal amount of
this Note outstanding on the preceding Distribution Date (after giving effect to
all payments of principal made on the preceding Distribution Date). Interest on
this Note will accrue for each Distribution Date from and including the most
recent Distribution Date on which interest has been paid to but excluding the
then current Distribution Date or, if no interest has yet been paid, from March
9, 2000. Interest on this Note will be calculated on the basis of the actual
number of days elapsed since the Closing Date or the preceding 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 Owner
Trustee 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 Owner Trustee has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: CHASE MANHATTAN BANK
DELAWARE, not in its individual
capacity but solely as Owner Trustee
under the Trust Agreement
By: ______________________
Name: John J. Cashin
Title: Vice President
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: Erwin Soriano
Title: Assistant Treasurer
3
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of CHASE MANHATTAN BANK
DELAWARE, not in its individual capacity, but solely as trustee (the "Owner
Trustee") under that certain Trust Agreement, dated as of March 9, 2000, between
Chase Manhattan Bank Delaware, as Owner Trustee, and Navistar Financial Retail
Receivables Corporation creating the Navistar Financial 2000-A Owner Trust (the
"Trust") designated as its Class A-1 6.08% Asset Backed Notes (herein called the
"Class A-1 Notes"), all issued under an Indenture, dated as of March 9, 2000
(such Indenture, as supplemented or amended, is herein called the "Indenture"),
between the Owner Trustee 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 Owner Trustee, 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 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 Trust 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 Trust, 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
4
<PAGE>
termination of this Indenture with respect to the Owner Trustee, acquiesce,
petition or otherwise invoke or cause the Seller or the Owner Trustee to invoke
the process of any court or government authority for the purpose of commencing
or sustaining a case against the Seller, the Trust, the Owner Trust Estate or
the or the Owner Trustee 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 Owner Trustee or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Seller, the Trust, the Owner Trust Estate or the Owner
Trustee.
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 Owner Trustee, the Indenture Trustee and any agent of the Owner
Trustee 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 Owner Trustee, 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
Owner Trustee and the rights of the Noteholders under the Indenture at any time
by the Owner Trustee with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all 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 Owner Trustee 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 "Owner Trustee" as used in this Note includes any successor
to the Owner Trustee under the Indenture.
The Owner Trustee 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.
5
<PAGE>
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of Illinois, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws, except that the
obligations, rights and remedies of the Indenture Trustee hereunder shall be
determined in accordance with the internal laws of the State of New York.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Owner Trustee,
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 Trust, 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. 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 Owner Trust Estate for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
6
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________________________________________
_________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________________________, as attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.
Dated:__________________ __________________________________/2/
Signature Guaranteed:
________________________ __________________________________
_________________________
/2/ NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
7
<PAGE>
EXHIBIT C
FORM OF CLASS A-2, CLASS A-3, CLASS A-4 AND
CLASS B ASSET BACKED NOTE
REGISTERED $______________/1/
No. R-____ CUSIP No. ___________
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the
Corporate Trustee or its agent for registration of transfer, exchange or
payment, and any Note issued is registered in the name of Cede & Co. or in
such other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY
BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CHASE MANHATTAN BANK DELAWARE
Not in its Individual Capacity but Solely as
Owner Trustee Under the Trust Agreement
Dated as of March 9, 2000
CLASS ____ _____% ASSET BACKED NOTES
CHASE MANHATTAN BANK DELAWARE, not in its individual capacity, but
solely as trustee (the "Owner Trustee") under that certain Trust Agreement,
dated as of March 9, 2000 between Chase Manhattan Bank Delaware, (not in its
individual capacity, but solely as trustee) and Navistar Financial Retail
Receivables Corporation creating the Navistar Financial 2000-A Owner Trust (the
"Trust") for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of _______________ DOLLARS ($_________) payable in
___________________
/1/ Denominations of $1,000 and integral multiples thereof (except, if
applicable, for one Note representing a residual portion of such class) may be
issued in a different denomination.
8
<PAGE>
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 the 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 Corporate Trustee shall pay interest on this
Note at the rate per annum shown above on each Distribution Date until the
principal of this Note is paid or made available for payment, on the principal
amount of this Note outstanding on the preceding Distribution Date (after giving
effect to all payments of principal made on the preceding Distribution Date).
Interest on this Note will accrue for each Distribution Date from and including
the most recent Distribution Date on which interest has been paid to but
excluding the then current Distribution Date or, if no interest has yet been
paid, from March 9, 2000. Interest on this Note 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, 6/30ths 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 Owner
Trustee 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.
9
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: CHASE MANHATTAN BANK DELAWARE, not in
its individual capacity, but solely
as Owner Trustee under the Trust
Agreement
By: ____________________________
Name: John J. Cashin
Title: Vice President
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: Erwin Soriano
Title: Assistant Treasurer
10
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of CHASE MANHATTAN BANK
DELAWARE, not in its individual capacity, but solely as trustee (the "Owner
Trustee") under that certain Trust Agreement, dated as of March 9, 2000, between
Chase Manhattan Bank Delaware, as Owner Trustee, and Navistar Financial Retail
Receivables Corporation creating the Navistar Financial 2000-A Owner Trust (the
"Trust") designated as its Class ________ % Asset Backed Notes (herein
----
called the "Class______ Notes"), all issued under an Indenture, dated as of
March 9, 2000 (such Indenture, as supplemented or amended, is herein called the
"Indenture"), between the Owner Trustee 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 Owner Trustee, 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 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 Trust 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 Trust, 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.
11
<PAGE>
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Owner Trustee, acquiesce, petition or otherwise invoke or cause
the Seller or the Owner Trustee to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Seller,
the Trust, the Owner Trust Estate or the Owner Trustee 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 Owner Trustee or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Seller, the Trust,
the Owner Trust Estate or the Owner Trustee.
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 Owner Trustee, the Indenture Trustee and any agent of the Owner
Trustee 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 Owner Trustee, 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
Owner Trustee and the rights of the Noteholders under the Indenture at any time
by the Owner Trustee with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all 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 Owner Trustee 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 "Owner Trustee" as used in this Note includes any successor
to the Owner Trustee under the Indenture.
12
<PAGE>
The Owner Trustee is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of Illinois, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws, except that the
obligations, rights and remedies of the Indenture Trustee hereunder shall be
determined in accordance with the internal laws of the State of New York.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Owner Trustee,
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 Trust, 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 Owner Trustee. 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 Owner Trust Estate for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
13
<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.
14
<PAGE>
EXHIBIT D
FORM OF NOTE DEPOSITORY AGREEMENT
15
<PAGE>
EXHIBIT 4.2
================================================================================
TRUST AGREEMENT
BETWEEN
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
SELLER
AND
CHASE MANHATTAN BANK DELAWARE
OWNER TRUSTEE
DATED AS OF MARCH 9, 2000
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I
DEFINITIONS....................................................................... 1
1.1 Definitions................................................................. 1
ARTICLE II
ORGANIZATION...................................................................... 1
2.1 Name........................................................................ 1
2.2 Office...................................................................... 1
2.3 Purposes and Powers......................................................... 1
2.4 Appointment of Owner Trustee................................................ 2
2.5 Initial Capital Contribution of Owner Trust Estate.......................... 2
2.6 Declaration of Trust........................................................ 2
2.7 Liability of the 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......... 5
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>
-i-
<PAGE>
<TABLE>
<S> <C>
5.1 Establishment of Certificate Distribution Account................................. 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.............................................................. 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........................................ 20
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
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
9.11 Certificate Transfer Restrictions............................................. 25
9.12 Administrator................................................................. 26
9.13 Amended and Restated Trust Agreement.......................................... 26
</TABLE>
EXHIBITS
Exhibit A Form of Certificate
-iii-
<PAGE>
TRUST AGREEMENT, dated as of March 9, 2000 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 Chase Manhattan Bank Delaware, acting as Owner
Trustee of the Navistar Financial 2000-A Owner 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 2000-A Owner 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-
-1-
<PAGE>
Funding Account, the Negative Carry Account and other accounts established
pursuant to the Basic Documents and to pay the organizational, start-up and
transactional expenses of the Trust;
(iv) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the terms of the Indenture and to hold, manage and
distribute to the Certificateholders pursuant to the terms of this
Agreement and the Pooling and Servicing Agreement any portion of the Trust
Estate released from the lien of, and remitted to the Trust pursuant to,
the Indenture;
(v) to have the Owner Trustee enter into and perform obligations
and exercise rights on behalf of the Trust under the Basic Documents to
which it is to be a party;
(vi) to engage in those activities, including having the Owner
Trustee enter 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 Owner Trustee, on behalf of 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 Chase Manhattan Bank Delaware as trustee of the Trust (the "Owner
Trustee") 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, on behalf of the Trust, 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 Owner Trustee, on behalf of the Trust, under the Basic
Documents. It is the intention of the parties hereto that the Trust constitute a
common law trust duly organized under the laws of the State of Delaware, that
this Agreement constitute the governing instrument of such trust and that the
Certificates represent the equity interests therein. The rights of the
Certificateholders shall be determined as set forth herein and the relationship
between the parties
-2-
<PAGE>
hereto created by this Agreement shall not constitute indebtedness for any
purpose. It is the intention of the parties hereto that, solely for purposes of
federal income taxes, state and local income and franchise taxes, and any other
taxes imposed upon, measured by, or based upon gross or net income, the Trust
shall be treated as a division or branch of the Seller. The parties agree that,
unless otherwise required by appropriate tax authorities, the Owner Trustee
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 and the Pooling
and Servicing Agreement 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 Owner Trustee, on behalf of the
Trust, except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a co-trustee or a separate
trustee, in which case title shall be deemed to be vested in 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 Owner Trustee only in Delaware or
New York, and payments and distributions shall be made by the Owner Trustee only
from Delaware or New York. The only office of the Trust shall be the Corporate
Trust Office of the Owner Trustee 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.
-3-
<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 Owner Trustee on behalf of the Trust, and the Seller has duly
authorized such sale and assignment to the Owner Trustee, on behalf of the
Trust, 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.
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.
-4-
<PAGE>
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 Owner Trustee, 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 Owner Trustee, on behalf of the
Trust, pursuant to the Pooling and Servicing Agreement, the Owner Trustee shall
execute, authenticate and deliver the Certificates 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 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
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<PAGE>
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, 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, 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.
-------------------------------------------------
(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 such security
or indemnity as may be required by it to hold it harmless, then, in the absence
of notice to the
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<PAGE>
Certificate Registrar or the Owner Trustee that such Certificate has been
acquired by a protected purchaser, the Owner Trustee shall execute 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 under this Agreement ,
whether or not the mutilated, destroyed, lost or stolen Certificate shall be
found at any time or be enforced by anyone, and shall be entitled to all the
benefits of this Agreement equally and proportionately with any and all other
Certificates duly issued hereunder.
(e) The provisions of this Section 3.5 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 3.6 Persons Deemed Certificateholders. Prior to due
---------------------------------
presentation of a Certificate for registration of transfer, the Owner Trustee or
the Certificate Registrar may treat the Person in whose name any Certificate
shall be registered in the Certificate Register as the Certificateholder of such
Certificate for the purpose of receiving distributions pursuant to Article V and
for all other purposes whatsoever, and neither the Owner Trustee nor the
Certificate Registrar shall be bound by any notice to the contrary.
SECTION 3.7 Access to List of Certificateholders' Names and
-----------------------------------------------
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
- ---------
Servicer and the Seller, within 15 days
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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.
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.
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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 on behalf of 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 on behalf of or against the Trust or the Owner Trustee (other
than an action to collect on a Receivable or an action by the Indenture Trustee
pursuant to the Indenture);
(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(c) 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;
(d) 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;
(e) 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
(f) 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, 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.
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<PAGE>
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 not less than 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 2000-A Owner
Trust Certificate Distribution Account (the "Certificate Distribution Account"),
bearing an additional designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders.
(b) The Owner Trustee shall possess all right, title and interest in
and to all funds on deposit from time to time in the Certificate Distribution
Account and in all proceeds thereof. Except as otherwise provided herein or in
the Pooling and Servicing Agreement, the Certificate Distribution Account shall
be under the sole dominion and control of the Owner Trustee for the benefit of
the Certificateholders. If, at any time, the Certificate Distribution Account
ceases to be an Eligible Deposit Account, the Servicer shall within 10 Business
Days (or such longer period, not to exceed 30 calendar days, as to which each
Rating Agency may consent) establish a new Certificate Distribution Account as
an Eligible Deposit Account and shall cause the Owner Trustee to transfer any
cash and/or any investments in the old Certificate Distribution Account to such
new Certificate Distribution Account.
SECTION 5.2 Application of Trust Funds.
--------------------------
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<PAGE>
(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 distributions of the Owner
Trust Estate (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
required to be paid by the Owner Trustee, on behalf of 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 Owner Trustee 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 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 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)
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<PAGE>
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. 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 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:
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(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 it is to be a party, on behalf of the Trust, 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 it, on
behalf 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 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
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<PAGE>
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 exis tence
and enforceability of any insurance thereon; the existence and contents of
any Receiv able on any computer or other record thereof; the validity of
the assignment of any Receivable to the Owner Trustee 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;
(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
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<PAGE>
Documents or otherwise and the Owner Trustee shall not have any 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 not be under any 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.
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
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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 per formance 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 Owner 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 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 or other document or paper believed by it to
be genuine and believed by it to be signed by the proper
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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 from the Seller 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 it 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 not be deemed 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) 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 Agree ment, 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 Owner Trust Estate, 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 to do so, 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 Owner 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 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
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(iii) the Administrator and the Owner Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee or co-
trustee.
(c) Any notice, request or other writing given to the Owner Trustee
shall be deemed to have been given to each of the then separate trustees and co-
trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Administrator.
(d) Any separate trustee or co-trustee may at any time appoint the
Owner Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or co-
trustee shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Owner Trustee, to the extent permitted by law, without the appointment of
a new or successor trustee.
SECTION 6.13 Eligibility Requirements for Owner Trustee. The Owner
------------------------------------------
Trustee shall at all times: (a) be a corporation; (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; provided, however, that in no event shall the Trust created by
this Agreement continue beyond the
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expiration of 21 years from the date hereof. 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 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) This Agreement shall be irrevocable. Except as provided in
Section 7.1(a) and in this Section 7.1(b), neither the Seller nor any
Certificateholder shall be entitled to revoke or terminate the Trust or this
Agreement. Each of the Seller and the Owner Trustee acknowledges that the
Indenture Trustee, on behalf of the Noteholders, is a third-party beneficiary of
this Agreement. For so long as the Notes are outstanding, neither the Trust nor
this Agreement shall be revoked without the consent of the Indenture Trustee.
Each of the Seller and the Owner Trustee acknowledges that the Indenture
Trustee, as an agent of the Noteholders, maintains a legitimate interest in
ensuring that the Trust is not revoked prior to the fulfillment of the Trust
objectives. In no event may this Agreement be amended without the consent of
the Indenture Trustee if the effect of such amendment is the revocation or
termination of this Trust other than in accordance with this Section 7.1.
(c) Notice of any termination of the Trust specifying the Distribution
Date upon which the Certificateholders shall surrender their Certificates to the
Owner Trustee for payment of the final distribution and cancellation, shall be
given by the Owner Trustee by letter to Certificateholders mailed within five
Business Days of receipt of notice of such termination from the Servicer given
pursuant to subsection 9.02(b) of the Pooling and Servicing Agreement, stating:
(i) the Distribution Date upon or with respect to which the final distribution
on the Certificates shall be made upon presentation and surrender of the
Certificates at the office of the Owner Trustee; (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 Owner
Trustee therein specified. The Owner Trustee shall give such notice to the
Certificate Registrar (if other than the Owner Trustee) and the Owner Trustee at
the time such notice is given to Certificateholders. Upon presentation and
surrender of the Certificates, the Owner Trustee 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 Owner Trust Estate 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.
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(e) 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 Owner Trust Estate 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.
ARTICLE VII
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 Securityholders (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 Securityholders
(provided that if any such addition shall affect any class of Securityholders
- ---------
differently than any other class of Securityholders, 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 Securityholders), (iv) add to the
covenants, restrictions or obligations of the Seller or the Owner Trustee for
the benefit of the Securityholders, (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 Securityholders.
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 interests in
the Owner Trust Estate 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.
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SECTION 8.3 Form of Amendments.
------------------
(a) Promptly after the execution of any amendment, supplement or
consent pursuant to Section 8.1 or 8.2, the Owner Trustee shall furnish written
notification of the substance of such amendment or consent to each
Certificateholder and the Indenture Trustee.
(b) It shall not be necessary for the consent of Certificateholders,
the Noteholders or the Indenture Trustee pursuant to Section 8.2 to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof. The manner of obtaining
such consents (and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders and Noteholders shall be subject to
such reasonable requirements as the Owner Trustee may prescribe.
(c) Prior to the execution of any amendment to this Agreement, 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 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
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nonpayment of any amounts with respect to the Certificates, it shall have no
claim against any of the foregoing for any deficiency, loss or claim therefrom.
SECTION 9.9 Headings. The headings of the various Articles and
--------
Sections herein are for purposes of reference only and shall not affect the
meaning or interpretation of any provision hereof.
SECTION 9.10 Governing Law. This Agreement shall be construed in
-------------
accordance with the internal laws of the State of Delaware, without reference to
its conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 9.11 Certificate Transfer Restrictions. The Certificates
---------------------------------
may not be acquired by or for the account of (i) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii a plan described in Section 4975(e)(1) of the Code or (ii 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 Owner Trustee all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the Owner
Trustee 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 February 22, 2000 between the Seller and the Owner
Trustee.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
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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<PAGE>
EXHIBIT A
FORM OF CERTIFICATE
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 MARCH 9, 2000, 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 2000-A Owner Trust
CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined below,
the property of which includes a pool of retail loans evidenced by notes
secured by new and used medium and heavy duty trucks, buses and trailers.
(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 2000-A Owner Trust (the "Trust").
The Trust was created pursuant to a trust agreement, dated as of
February 22, 2000 (as amended and restated as of March 9, 2000 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
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Holder hereof to any benefit under the Trust Agreement or the Pooling and
Servicing Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
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IN WITNESS WHEREOF, the Owner Trustee, not in its individual capacity,
but solely as Owner Trustee, has caused this Certificate to be duly executed.
Dated: March 9, 2000
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:_________________________
Authorized Officer By:_________________________
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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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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EXHIBIT 10.1
PURCHASE AGREEMENT
BETWEEN
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
AND
NAVISTAR FINANCIAL CORPORATION
DATED AS OF MARCH 9, 2000
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TABLE OF CONTENTS
<TABLE>
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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................................................................ 10
SECTION 4.01. Conditions to Obligation of NFRRC......................... 10
SECTION 4.02. Conditions To Obligation of NFC........................... 11
ARTICLE V
ADDITIONAL AGREEMENTS..................................................... 11
SECTION 5.01. Conflicts With Further Transfer and Servicing Agreements.. 11
SECTION 5.02. Protection of Title....................................... 11
SECTION 5.03. Other Liens or Interests.................................. 12
SECTION 5.04. Repurchase Events......................................... 12
SECTION 5.05. Indemnification........................................... 12
SECTION 5.06. Further Assignments....................................... 12
SECTION 5.07. Pre-Closing Collections................................... 13
SECTION 5.08. Limitation on Transfer of NITC Purchase Obligations....... 13
SECTION 5.09. Sale Treatment............................................ 13
ARTICLE VI
MISCELLANEOUS PROVISIONS.................................................. 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........................................ 14
SECTION 6.07. Confidential Information.................................. 14
</TABLE>
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<TABLE>
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SECTION 6.08. Headings................................................. 14
SECTION 6.09. Counterparts............................................. 14
SECTION 6.10. Severability of Provisions............................... 14
SECTION 6.11. Further Assurances....................................... 14
SECTION 6.12. No Third-Party Beneficiaries............................. 14
SECTION 6.13. Merger and Integration................................... 14
</TABLE>
EXHIBITS
Exhibit A - Form of Initial PA Assignment
Exhibit B - Form of Subsequent Transfer PA Assignment
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PURCHASE AGREEMENT, dated as of March 9, 2000, between NAVISTAR FINANCIAL
RETAIL RECEIVABLES CORPORATION, a Delaware corporation ("NFRRC"), and NAVISTAR
FINANCIAL CORPORATION, a Delaware corporation ("NFC").
WHEREAS, NFRRC desires to purchase on the date hereof and from time to time
during the Funding Period a portfolio of commercial retail loans evidenced by
notes 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 transferee being the "Subsequent Transferee"); and
WHEREAS, the Subsequent Transferee 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
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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
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herewith by and among Chase Manhattan Bank Delaware, acting as Owner Trustee of
the Navistar Financial 2000-A Owner Trust, NFRRC and Navistar Financial
Corporation, as Servicer, 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
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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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ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
SECTION 2.01. Purchase and Sale of Receivables. Subject to the
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satisfaction of the conditions specified in Article IV, NFC agrees to sell,
transfer, assign and otherwise convey to NFRRC, without recourse, pursuant to a
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written assignment substantially in the form of Exhibit A (the "Initial PA
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Assignment"), and NFRRC agrees to purchase on the Closing Date and, pursuant to
an assignment substantially in the form of Exhibit B (each, a "Subsequent
Transfer PA assignment" and, together with the Initial PA Assignment, each a "PA
Assignment") up to the Available Purchase Amount, on each 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 PA 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
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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 a PA Assignment with respect to such Designated
Receivables. On the Closing Date, a portion of the Purchase Price payable on
such date equal to approximately $360,628,703.45 shall be paid to NFC in
immediately available funds, and the balance of the Purchase Price
($20,215,205.28) 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.
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SECTION 2.03. The Closings. Each sale and purchase of the Designated
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Receivables (each, a "Closing"), shall take place at such a place, on a date and
at a time mutually agreeable to 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
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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 $94,156,091.27. 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
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the sole remedy of NFRRC, 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
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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 date 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 NFC to finance a retail purchase by a retail
customer or a refinancing of a Financed Vehicle or Financed Vehicles by a
retail customer and was fully and properly executed by the parties thereto;
(ii) has created or shall create a valid, binding and enforceable
first priority security interest in favor of NFC in each Financed Vehicle
related thereto, which security interest will be validly assigned by NFC to
NFRRC and will be assignable by NFRRC to a subsequent purchaser;
(iii) contains customary and enforceable provisions such as to render
the rights and remedies of the holder thereof adequate for realization
against the collateral of the benefits of the security;
(iv) shall yield interest at the Annual Percentage Rate; and
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(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
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Receivables (as supplemented by the schedules to the related Subsequent Transfer
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PA 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
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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
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genuine, legal, valid and binding payment obligation in writing of the Obligor
thereon, enforceable against the Obligor by the holder thereof in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights in general and by equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
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(e) Security Interest in Financed Vehicle. Immediately prior to the sale,
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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
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Designated Receivable has been waived, altered or modified in any respect;
(h) No Amendments. Since the applicable Cutoff Date, no Designated
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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
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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
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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
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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
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maintain a physical damage insurance policy for each Financed Vehicle of the
type that NFC requires in accordance with its customary underwriting standards
for the purchase of medium and heavy duty truck, bus and trailer receivables,
unless NFC has in accordance with its customary procedures permitted an Obligor
to self-insure such Financed Vehicle;
(m) Good Title. No Designated Receivable has been sold, transferred,
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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
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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 PA 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
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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 6.75%;
(t) Scheduled Payments; Delinquency. As of the Initial Cutoff Date, each
-------------------------------
Designated Receivable being purchased on the Closing Date had a first scheduled
payment that was due on or before February 29, 2000; as of the applicable Cutoff
Date, each Designated Receivable being purchased during the Funding Period 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 May 31, 2006.
(u) Vehicles. Each Financed Vehicle to which a Designated Receivable
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relates was a new or used medium or heavy duty truck, bus or trailer at the time
the related Obligor executed the Retail Note;
(v) Origin. Each Designated Receivable was originated in the United
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States;
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(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
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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 9.07%, and (iii) the
weighted average remaining maturity of the Receivables in the Trust shall not be
greater than 57 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 each Purchase Date 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 PA 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
against creditors of and purchasers from NFC; and this Agreement, together with
the applicable PA
-7-
<PAGE>
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 PA Assignment, and the fulfillment of the terms of this
Agreement and any PA 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 PA Assignment or any Further Transfer and Servicing
Agreement), or violate any law or, to NFC's knowledge, any order, rule or
regulation applicable to NFC of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over NFC or any of its properties;
(f) No Proceedings. There are no proceedings or, to NFC's knowledge,
--------------
investigations pending or, to NFC's knowledge, threatened, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over NFC or its properties (i) asserting the
invalidity of this Agreement or any PA Assignment, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or any PA
Assignment, or (iii) seeking any determination or ruling that might materially
and adversely affect the performance by NFC of its obligations under, or the
validity or enforceability of, this Agreement or any PA 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 PA 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 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;
-8-
<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 PA 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 PA 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 PA 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
-9-
<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 PA 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 PA Assignment).
(d) Documents to be Delivered By NFC.
--------------------------------
(i) The Assignment. On such Purchase Date, NFC shall execute and
--------------
deliver to NFRRC the PA 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
the related Closing (and all conditions precedent thereto shall be satisfied) to
the extent that such transactions are intended to be substantially
contemporaneous with the transactions hereunder.
SECTION 4.02. Conditions To Obligation of NFC. The obligation of NFC to
-------------------------------
sell the 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.
-10-
<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
Designated 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 Designated
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 Designated 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 Designated 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 Designated
Receivables and Related Security against all claims of third parties claiming
through or under NFC.
-11-
<PAGE>
SECTION 5.04. Repurchase Events. By its execution of the Further
-----------------
Transfer and Servicing Agreements to which it is a party, NFC shall be deemed to
acknowledge the assignment by NFRRC of such of its right, title and interest in,
to and under this Agreement to the Subsequent Transferee 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 Subsequent Transferee (if the
Subsequent Transferee 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 Subsequent Transferee if the
Subsequent Transferee 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 Subsequent Transferee 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 Designated 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 Subsequent Transferee and assign its rights hereunder to the
Subsequent Transferee, subject to the terms and conditions of the Further
Transfer and Servicing Agreements, and that the Subsequent Transferee 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 Subsequent Transferee.
SECTION 5.07. Pre-Closing Collections. Within two Business Days after
-----------------------
each Purchase Date, NFC shall transfer to the account or accounts designated by
NFRRC (or by the Subsequent Transferee 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 on such
Purchase Date 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.
-12-
<PAGE>
SECTION 5.09. Sale Treatment. NFC intends to treat each transfer and
--------------
assignment described herein as a sale for accounting and tax purposes.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.01. Amendment. This Agreement may be amended from time to time
---------
(subject to any expressly applicable amendment provision of the Further Transfer
and Servicing Agreements) by a written amendment duly executed and delivered by
NFC and NFRRC. Prior to the execution of any such amendment, NFC shall furnish
written notification of the substance of such amendment to each of the Rating
Agencies.
SECTION 6.02. Survival. The representations, warranties and covenants of
--------
NFC set forth in Article III and Article V of this Agreement shall remain in
full force and effect and shall survive each Purchase Date 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 PA 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 PA 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
Designated 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.
-13-
<PAGE>
SECTION 6.09. Counterparts. This Agreement may be executed in two or
------------
more counterparts, and by different parties on separate counterparts, each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
SECTION 6.10. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed enforceable to the fullest extent permitted, and if not
so permitted, shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Agreement or of any
Securities or rights of any Owner.
SECTION 6.11. Further Assurances. NFC and NFRRC agree to do and perform,
------------------
from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the other more fully to effect
the purposes of this Agreement, including the execution of any financing
statements or continuation statements relating to the Designated 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.
-14-
<PAGE>
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
and year first above written.
NAVISTAR FINANCIAL CORPORATION
By: ___________________________________________
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 INITIAL PA ASSIGNMENT
-----------------------------
For value received, in accordance with the Purchase Agreement, dated as of
March 9, 2000 (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
- ----------
$380,843,908.73) (the "Designated Receivables") and all monies paid thereon
(including Liquidation Proceeds) and due thereunder on and after February 1,
2000; (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 PA 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 PA Assignment to be
duly executed as of March 9, 2000.
NAVISTAR FINANCIAL CORPORATION
By:__________________________________
Name:
Title:
<PAGE>
EXHIBIT B
FORM OF SUBSEQUENT TRANSFER PA ASSIGNMENT
-----------------------------------------
For value received, in accordance with the Purchase Agreement, dated as of
March 9, 2000 (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 _________, 2000
(the "Subsequent 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 Subsequent Transfer PA 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.
* * * * *
-3-
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Subsequent Transfer PA
Assignment to be duly executedas of _____________, 2000.
NAVISTAR FINANCIAL CORPORATION
By:__________________________________
Name:
Title:
<PAGE>
EXHIBIT 10.2
POOLING AND SERVICING AGREEMENT
AMONG
NAVISTAR FINANCIAL CORPORATION
SERVICER
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
SELLER
AND
CHASE MANHATTAN BANK DELAWARE
NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS OWNER TRUSTEE
DATED AS OF MARCH 9, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I
DEFINITIONS.......................................................................................... 1
SECTION 1.01. Definitions............................................................... 1
ARTICLE II
CONVEYANCE OF RECEIVABLES; ORIGINAL ISSUANCE OF CERTIFICATES......................................... 2
SECTION 2.01. Conveyance of Initial Receivables......................................... 2
SECTION 2.02. Conveyance of Subsequent Receivables...................................... 3
SECTION 2.03. Custody of Receivable Files............................................... 6
SECTION 2.04. Acceptance by Owner Trustee; Limitation on Transfer of
NITC Purchase Obligations................................................. 7
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......................................... 10
SECTION 3.06. Maintenance of Security Interests in Vehicles............................. 10
SECTION 3.07. Covenants of the Servicer................................................. 10
SECTION 3.08. Purchase of Receivables Upon Breach of Covenant........................... 11
SECTION 3.09. Total and Supplemental Servicing Fees; Payment of Certain
Expenses by Servicer...................................................... 11
SECTION 3.10. Servicer's Certificate.................................................... 11
SECTION 3.11. Application of Collections................................................ 11
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
ARTICLE IV
SERVICER'S COVENANTS; DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS..................................................... 12
SECTION 4.01. Annual Statement as to Compliance: Notice of Servicer Default............. 12
SECTION 4.02. Annual Independent Accountants' Report.................................... 13
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......... 14
SECTION 4.06. Distributions............................................................. 14
SECTION 4.07. Reserve Account........................................................... 16
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............................................ 19
SECTION 5.01. Establishment of Accounts................................................. 19
SECTION 5.02. Pre-Funding Account....................................................... 22
SECTION 5.03. Negative Carry Account.................................................... 23
SECTION 5.04. Collections............................................................... 24
SECTION 5.05. Investment Earnings and Supplemental Servicing Fees....................... 24
SECTION 5.06. Monthly Advances.......................................................... 24
SECTION 5.07. Additional Deposits....................................................... 25
ARTICLE VI
THE SELLER; REPRESENTATIONS AND WARRANTIES
OF THE SELLER AND THE SERVICER....................................................................... 25
SECTION 6.01. Representations and Warranties of the Seller and the Servicer............. 25
SECTION 6.02. Liability of Seller....................................................... 28
SECTION 6.03. Merger or Consolidation of, or Assumption of the Obligations
of, Seller; Amendment of Certificate of Incorporation..................... 28
SECTION 6.04. Limitation on Liability of Seller and Others.............................. 28
SECTION 6.05. Seller May Own Securities................................................. 28
</TABLE>
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<TABLE>
<S> <C>
ARTICLE VII
LIABILITIES OF SERVICER AND OTHERS................................................................... 29
SECTION 7.01. Liability of Servicer; Indemnities........................................ 29
SECTION 7.02. Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer.......................................................... 30
SECTION 7.03. Limitation on Liability of Servicer and Others............................ 30
SECTION 7.04. Delegation of Duties...................................................... 31
SECTION 7.05. Servicer Not to Resign.................................................... 31
ARTICLE VIII
DEFAULT.............................................................................................. 32
SECTION 8.01. Servicer Defaults......................................................... 32
SECTION 8.02. Consequences of a Servicer Default........................................ 32
SECTION 8.03. Indenture Trustee to Act; Appointment of Successor........................ 33
SECTION 8.04. Notification to Securityholders........................................... 34
SECTION 8.05. Waiver of Past Defaults................................................... 34
SECTION 8.06. Repayment of Advances..................................................... 34
ARTICLE IX
TERMINATION.......................................................................................... 34
SECTION 9.01. Optional Purchase of All Receivables...................................... 34
SECTION 9.02. Sale of Assets; Termination............................................... 35
ARTICLE X
MISCELLANEOUS PROVISIONS............................................................................. 37
SECTION 10.01. Amendment................................................................. 37
SECTION 10.02. Protection of Title to Owner Trust Estate................................. 38
SECTION 10.03. Notices................................................................... 40
SECTION 10.04. Governing Law............................................................. 40
SECTION 10.05. Severability of Provisions................................................ 40
SECTION 10.06. Assignment................................................................ 40
SECTION 10.07. Third-Party Beneficiaries................................................. 40
SECTION 10.08. Separate Counterparts..................................................... 40
SECTION 10.09. Headings and Cross-References............................................. 41
SECTION 10.10. Assignment to Indenture Trustee........................................... 41
SECTION 10.11. No Petition Covenants..................................................... 41
SECTION 10.12. Limitation of Liability of the Trustees................................... 41
SECTION 10.13. Business Day Certificate.................................................. 42
</TABLE>
iii
<PAGE>
EXHIBIT A Form of Initial Assignment
EXHIBIT B Form of Subsequent Transfer 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 March 9, 2000 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 Chase Manhattan Bank Delaware, a
Delaware banking corporation, not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement (the "Owner Trustee").
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 Owner Trustee 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 Owner Trustee wish to set forth the terms
pursuant to which the Receivables are to be sold by the Seller to the Owner
Trustee on behalf of the Trust 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
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.
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ARTICLE II
CONVEYANCE OF RECEIVABLES; ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Initial Receivables. In consideration of the
---------------------------------
Owner Trustee'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 and otherwise
convey to Chase Manhattan Bank Delaware, not in its individual capacity, but
solely as Owner Trustee, under the Trust Agreement, without recourse, pursuant
------- --------
to an assignment in the form attached hereto as Exhibit A (the "Initial
---------
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 Initial PA 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 Owner Trustee, on behalf of the Trust, 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
2
<PAGE>
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 Owner Trustee, on behalf of the Trust, 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 pursuant to this Section
2.01, to give and receive notices and other communications, to make waivers or
other agreements, to exercise all rights, powers 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 Owner Trustee'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 Owner Trustee, 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 identified on the Schedule of Receivables 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
3
<PAGE>
Receivables (subject to the limitations set forth in Section 2.04) and
proceeds from any Guaranties of Subsequent Receivables;
(vi) the Purchase Agreement, the Subsequent Transfer PA Assignments
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 Owner Trustee and the beneficial interest in
and title to the assets conveyed pursuant to the Subsequent Transfer Assignment
shall not be part of the Seller's estate in the event of the filing of a
bankruptcy petition by or against the Seller under any bankruptcy law. Within
two Business Days after 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 Owner Trustee 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,
powers 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 Owner Trustee 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:
4
<PAGE>
(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
-----------------------
in effect at such time);
(iv) the applicable Reserve Account Initial Deposit for such
Subsequent Transfer Date shall have been deposited in the Reserve Account
pursuant to Section 5.02(a)(ii);
(v) the Seller shall, at its own expense, on or prior to each
Subsequent Transfer Date indicate in its computer files that the Subsequent
Receivables conveyed on such date have been sold to the Owner Trustee
pursuant to this Agreement and the related Subsequent Transfer Assignment;
(vi) the Seller shall have taken any action required to maintain the
first priority perfected ownership interest of the Owner Trustee in the
Owner Trust Estate and the first priority 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 9.07%, (B) the weighted average remaining maturity of the Receivables
in the Trust shall not be greater than 57 months and (C) the aggregate
Receivables Balance of all Receivables owing 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
5
<PAGE>
applicable Subsequent 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 Owner Trustee pursuant
to Section 2.02(a) before the termination of the Funding Period, Subsequent
Receivables with an aggregate Starting Receivable Balance equal to
$94,156,091.27. 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 Owner Trustee 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 the foregoing shall be the sole remedy of 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 to the Seller from NFC pursuant to the
Purchase Agreement, the Seller, simultaneously with the execution and delivery
of this Agreement, shall enter into the Custodian Agreement with the Custodian,
pursuant to which the Seller shall revocably appoint the Custodian, and the
Custodian shall accept such appointment, to act as the agent of the Seller as
Custodian of the following documents or instruments which shall be
constructively delivered to the Owner Trustee, as of the Closing Date with
respect to each Initial Receivable, and as of the related Subsequent Transfer
Date with respect to each Subsequent Receivable:
(a) the fully executed original of the Retail Note for such Receivable;
(b) documents evidencing or related to any Insurance Policy;
(c) the original credit application of each Obligor, fully executed by
each such Obligor on NFC's customary form, or on a form approved by NFC, for
such application;
(d) where permitted by law, the original certificate of title (when
received) and otherwise such documents, if any, that NFC keeps on file in
accordance with its customary procedures indicating that the Financed Vehicle is
owned by the Obligor and subject to the interest of NFC as first lienholder or
secured party; and
6
<PAGE>
(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 Owner Trustee.
SECTION 2.04. Acceptance by Owner Trustee; Limitation on Transfer of NITC
-----------------------------------------------------------
Purchase Obligations. The Owner Trustee does hereby accept all consideration
- --------------------
conveyed by the Seller pursuant to Sections 2.01 and 2.02, and declares that
the Owner Trustee 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, the Indenture and this Agreement; provided,
--------
however, that the Owner Trustee 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 Owner Trustee pursuant to the
terms hereof, (b) the Owner Trustee 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 Owner Trustee. The Owner Trustee 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.
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 Owner
Trustee 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 Owner
Trustee 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 Owner Trustee is relying 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 Owner Trustee 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
7
<PAGE>
(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 Owner Trustee 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 Owner Trustee
pursuant to Section 3.08 hereof and to repurchase Warranty Receivables pursuant
to Section 5.04 of the Purchase Agreement.
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01. Duties of the Servicer. The Servicer is hereby appointed
----------------------
and authorized to act as agent for the Owner of the Receivables and in such
capacity shall manage, service, administer and make collections on the
Receivables with reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to comparable medium and heavy duty truck,
bus and trailer receivables that it services for itself or others. The Servicer
hereby accepts such appointment and authorization and agrees to perform the
duties of Servicer with respect to the Receivables set forth herein. The
Servicer's duties shall include collection and posting of all payments,
responding to inquiries of Obligors on the Receivables, investigating
delinquencies, sending payment coupons to Obligors, reporting tax information to
Obligors, policing the collateral, accounting for collections and furnishing
monthly and annual statements to the Owner of any Receivables with respect to
distributions, generating federal income tax information and performing the
other duties specified herein. Subject to the provisions of Section 3.02, the
Servicer shall follow its customary standards, policies and procedures and shall
have full power and authority, acting alone, to do any and all things in
connection with such managing, servicing, administration and collection that it
may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer is
hereby authorized and empowered by the Owner of the Receivables, pursuant to
this Section 3.01, to execute and deliver, on behalf of all Interested Parties,
or any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments, with
respect to the Receivables and the Financed Vehicles. The Servicer is hereby
authorized to commence in the name of the Owner of such Receivable or, to the
extent necessary, in its own name, a legal proceeding to enforce a Liquidating
Receivable as contemplated by Section 3.04, to enforce all obligations of NFC
and NFRRC, in its capacity as the Seller or otherwise, under each of the
Purchase Agreement and the Further Transfer and Servicing Agreements or to
commence or
8
<PAGE>
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.
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
9
<PAGE>
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 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 Owner Trustee, on behalf of the Trust, 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
December 31, 2006.
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
10
<PAGE>
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. Neither the Owner
Trustee nor the Indenture Trustee shall have any 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 Owner Trustee, any trustees and independent accountants,
taxes imposed on the Servicer, expenses incurred in connection with
distributions and reports to Securityholders and all other fees and expenses not
expressly stated under this Agreement to be for the account of the
Securityholders, but excluding federal, state and local income and franchise
taxes, if any, of the Owner Trustee 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
------
11
<PAGE>
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, 2001, an Officer's Certificate signed by the
President or any Vice President of the Servicer, dated as of the immediately
preceding October 31, stating that (i) a review of the activities of the
Servicer during the preceding 12-month period (or, with respect to the first
such certificate, such period as shall have elapsed from the Closing Date to the
date of such certificate) and of its performance under this Agreement has been
made under such officer's supervision and (ii) to such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such period, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. A copy of such certificate may be
obtained by any Noteholder or any Certificateholder by a request in writing to
the Indenture Trustee or the Owner Trustee, respectively, 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.
--------------------------------------
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(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, 2001 with respect to the twelve months ended on the immediately
preceding October 31 (or, with respect to the first such report, such period as
shall have elapsed from the Closing Date to the date of such certificate), a
report (the "Accountants' Report") addressed to the board of directors of the
Servicer and to each Trustee, to the effect that such firm has audited the
financial statements of the Servicer and issued its report thereon and that such
audit (i) was made in accordance with generally accepted auditing standards,
(ii) included tests relating to Retail Notes serviced for others in accordance
with the requirements of the Uniform Single Audit Program for Mortgage Bankers
(the "Program"), to the extent the procedures in the Program are applicable to
the servicing obligations set forth in this Agreement and (iii) except as
described in the report, disclosed no exceptions or errors in the records
relating to Retail Notes serviced for others that, in the firm's opinion,
paragraph four of the Program requires such firm to report.
(b) The Accountants' Report shall also indicate that the firm is
independent of the Seller and the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
(c) A copy of the Accountants' Report may be obtained by any Noteholder or
any Certificateholder by a request in writing to the Indenture Trustee or the
Owner Trustee, respectively, 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 Owner Trustee (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
13
<PAGE>
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 Trustee'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 Trustee in certain
rebates of premiums and other amounts relating to the Insurance Policies and any
document relating thereto and (g) the rights of such Trustee under the Purchase
Agreement and the Custodian Agreement with respect to such Receivable, such
assignment being an assignment outright and not for security. Upon the
assignment of such Receivable described in the preceding sentence, the Servicer
or the Warranty Purchaser, as applicable, shall own such Receivable, and all
such security and documents, free of any further obligations to either Trustee
or the Securityholders with respect thereto. If in any Proceeding it is held
that the Servicer may not enforce a Receivable on the ground that it is not a
real party in interest or a holder entitled to enforce the Receivable, the
applicable Trustee shall, at the Servicer's expense, take such steps as the
Servicer deems necessary to enforce the Receivable, including bringing suit in
the name of such Person or the names of the Securityholders.
SECTION 4.06. Distributions.
-------------
(a) On or before 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
14
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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 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.
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<PAGE>
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 2000-A 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 Owner Trustee, on behalf of the
Trust, subject to the rights of the Indenture Trustee in the Reserve Account
Property.
(b) If the amount on deposit in the Reserve Account on any Distribution
Date (after giving effect to all deposits therein or withdrawals therefrom on
such Distribution Date) exceeds the Specified Reserve Account Balance for such
Distribution Date, the Servicer shall instruct the Indenture Trustee to 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 Notes with respect to such
Distribution Date or the preceding Monthly Period, as applicable:
16
<PAGE>
(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;
(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 plus amounts in
respect thereof to be distributed to each class of Noteholders as a
prepayment of principal (expressed as a dollar amount per $1,000 of Initial
Principal Balance);
(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 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 Owner
Trustee since the preceding
17
<PAGE>
Distribution Date, the remaining Pre-Funded Amount and the Investment
Earnings on amounts on deposit in the Pre-Funding Account (if any) for the
related Monthly Period;
(xv) for the first Distribution Date occurring on or after the last
day of the Funding Period, the amount of any remaining Pre-Funded Amount
that has not been used to fund the purchase of Subsequent Receivables.
Each amount set forth pursuant to clauses (i), (iv), (viii), (x) and (xi) above
shall be expressed as a dollar amount per $1,000 of initial Note Principal
Balance. In lieu of preparing and delivering a separate statement to
Securityholders pursuant to this Section, a Trustee may deliver a copy of the
Servicer's Certificate furnished pursuant to Section 3.10.
(b) Within the prescribed period of time for tax reporting purposes after
the end of each calendar year during the term of this Agreement, the Servicer
shall prepare and execute and the Indenture Trustee and the Owner Trustee shall
mail to each Person who at any time during such calendar year shall have been a
holder of Notes or Certificates, respectively, and received any payments
thereon, a statement prepared and supplied by the Servicer containing the
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, the Seller or the Trust, the
Servicer shall deliver to each of the Ratings Agencies notice of such Insolvency
Event. Failure by the Servicer to comply with the terms of this Section 4.10
shall not constitute a "Servicer Default," an "Event of Default" or a default
under any Basic Document.
ARTICLE V
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 2000-A 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.
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<PAGE>
(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 2000-A 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 2000-A Owner
Trust Certificate Distribution Account (the "Certificate Distribution Account"),
bearing an additional designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders.
(iv) The Servicer, for the benefit of the Noteholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account known as the Navistar Financial 2000-A 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 2000-A 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 S&P 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
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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. The Indenture Trustee or the other Person holding the Designated
Accounts as provided in this Section 5.01(b)(i) shall be the "Securities
Intermediary." If the Securities Intermediary shall be a Person other than the
Indenture Trustee, the Servicer shall obtain the express agreement of such
Person to the obligations of the Securities Intermediary set forth in Section
5.01.
(ii) With respect to the Designated Account Property, the Indenture
Trustee agrees, by its acceptance hereof, that:
(A) The Designated Accounts are accounts to which Financial
Assets will be credited.
(B) All securities or other property underlying any Financial
Assets credited to the Designated Accounts shall be registered in the
name of the Securities Intermediary, indorsed to the Securities
Intermediary or in blank or credited to another securities account
maintained in the name of the Securities Intermediary and in no case
will any Financial Asset credited to any of the Designated Accounts be
registered in the name of the Owner Trustee, the Servicer or the
Seller, payable to the order of the Owner Trustee, the Servicer or the
Seller or specially indorsed to the Owner Trustee, the Servicer or the
Seller except to the extent the foregoing have been specially indorsed
to the Securities Intermediary or in blank.
(C) All property delivered to the Securities Intermediary
pursuant to the Pooling and Servicing Agreement will be promptly
credited to the appropriate Designated Account.
(D) Each item of property (whether investment property,
Financial Asset, security, instrument or cash) credited to a
Designated Account shall be treated as a "financial asset" within the
meaning of Section 8-102(a)(9) of the New York UCC.
(E) If at any time the Securities Intermediary shall receive any
order from the Indenture Trustee directing transfer or redemption of
any Financial Asset relating to the Securities Accounts, the
Securities Intermediary shall comply with such entitlement order
without further consent by the Owner Trustee, the Servicer, the Seller
or any other Person.
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(F) The Designated Accounts shall be governed by the laws of
the State of New York, regardless of any provision in any other
agreement. For purposes of the UCC, New York shall be deemed to be the
Securities Intermediary's jurisdiction and the Designated Accounts (as
well as the Securities Entitlements related thereto) shall be governed
by the laws of the State of New York.
(G) The Securities Intermediary has not entered into, and
until the termination of this Agreement will not enter into, any
agreement with any other person relating to the Designated Accounts
and/or any Financial Assets credited thereto pursuant to which it has
agreed to comply with entitlement orders (as defined in Section 8-
102(a)(8) of the New York UCC) of such other person and the Securities
Intermediary has not entered into, and until the termination of this
Agreement will not enter into, any agreement with the Owner Trustee,
the Seller, the Servicer or the Indenture Trustee purporting to limit
or condition the obligation of the Securities Intermediary to comply
with entitlement orders as set forth in Section 5.01(b)(ii)(E) hereof.
(H) Except for the claims and interest of the Indenture
Trustee and of the Owner Trustee in the Designated Accounts, the
Securities Intermediary knows of no claim to, or interest in, the
Designated Accounts or in any Financial Asset credited thereto. If any
other person asserts any lien, encumbrance or adverse claim (including
any writ, garnishment, judgment, warrant of attachment, execution or
similar process) against the Designated Accounts or in any Financial
Asset carried therein, the Securities Intermediary will promptly
notify the Indenture Trustee, the Servicer and the Owner Trustee
thereof.
(I) The Securities Intermediary will promptly send copies of
all statements, confirmations and other correspondence concerning the
Designated Accounts and/or any Designated Account Property
simultaneously to each of the Servicer and the Indenture Trustee at
the addresses set forth in Appendix B to this Agreement.
(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.
21
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(v) The Servicer shall not direct the Indenture Trustee to make any
investment of any funds or to sell any investment held in any of the Designated
Accounts unless the security interest granted and perfected in such account
shall continue to be perfected in such investment or the proceeds of such sale,
in either case without any further action by any Person, and, in connection with
any direction to the Indenture Trustee to make any such investment or sale, if
requested by the Indenture Trustee, the Servicer shall deliver to the Indenture
Trustee an Opinion of Counsel, acceptable to the Indenture Trustee, to such
effect.
(c) Pursuant to the Trust Agreement, the Owner Trustee shall possess all
right, title and interest in and to all funds on deposit from time to time in
the Certificate Distribution Account and in all proceeds thereof. Except as
otherwise provided herein or in the Trust Agreement, the Certificate
Distribution Account shall be under the sole dominion and control of the Owner
Trustee for the benefit of the Certificateholders. If, at any time, the
Certificate Distribution Account ceases to be an Eligible Deposit Account, the
Servicer shall within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency may consent) establish a new
Certificate Distribution Account as an Eligible Deposit Account and shall cause
the Owner Trustee to transfer any cash and/or any investments in the old
Certificate Distribution Account to such new Certificate Distribution Account.
(d) The Indenture Trustee, the Owner Trustee, the Securities Intermediary
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 $94,156,091.27 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 Owner Trustee 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 Owner Trustee, will deposit into the Note Distribution Account for
each class of Notes an amount equal to the Noteholders'
22
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Prepayment Premiums for such class of Notes; provided, however, that
-------- -------
the Owner Trustee's obligation to pay the Noteholders' Prepayment
Premiums shall be limited to funds which are received by the Owner
Trustee 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 Owner Trustee will be
available for making such payments. If the amount of funds available
for payment of the Noteholders' Prepayment Premiums is less than 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 the Pre-Funded Percentage for such class of Notes.
SECTION 5.03. Negative Carry Account. (a) On the Closing Date, the Seller
----------------------
shall deposit in the Negative Carry Account $1,113,346.88 (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
to or upon the order of the Seller in an account designated by the Seller to the
Servicer, 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 to or upon the order of the Seller in an
account designated by the Seller to the Servicer.
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 S&P 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
23
<PAGE>
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.
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 from amounts
on deposit in 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 then owned by the Owner Trustee.
24
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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.
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 Owner Trustee 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 Owner Trustee 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
25
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with the Owner Trustee as part of the Owner Trust Estate and has duly authorized
such sale and assignment to the Owner Trustee by all necessary corporate action;
and the execution, delivery and performance by such Party of the applicable
Further Transfer and Servicing Agreements have been duly authorized by such
Party by all necessary corporate action;
(iv) Binding Obligations. The applicable Further Transfer and
-------------------
Servicing Agreements, when duly executed and delivered, shall constitute a
legal, valid and binding obligation of such Party enforceable against such Party
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law;
(v) No Violation. The consummation by such Party of the
-------------
transactions contemplated by the applicable Further Transfer and Servicing
Agreements and the fulfillment of the terms of such agreements by such Party
shall not conflict with, result in any breach of any of the terms and provisions
of or constitute (with or without notice or lapse of time) a default under, the
certificate of incorporation or by-laws of such Party, or any indenture,
agreement or other instrument to which such Party is a party or by which it is
bound, or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument, other than the applicable Further Transfer and Servicing Agreements,
or violate any law or, to such Party's knowledge, any order, rule or regulation
applicable to such Party of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over such Party or any of its properties; and
(vi) No Proceedings. There are no proceedings or, to such Party's
--------------
knowledge, investigations pending or, to such Party's knowledge, threatened
before any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over such Party or its
properties (i) asserting the invalidity of the applicable Further Transfer and
Servicing Agreements, any Securities issued pursuant thereto and, in the case of
the Seller, the Custodian Agreement or the Administration Agreement, (ii)
seeking to prevent the issuance of such Securities or the consummation of any of
the transactions 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.
-------------------------------------------------
26
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(i) Good Title. No Receivable has been sold, transferred, assigned
----------
or pledged by the Seller to any Person other than the Owner Trustee;
immediately prior to the conveyance of the Receivables pursuant to this
Agreement the Seller had good and marketable title thereto, free of any
Lien (except for any Lien which may have existed in accessions to the
Financed Vehicles not financed by NFC); and, upon execution and delivery of
this Agreement and execution and delivery of, with respect to the Initial
Receivables, the Initial Assignment, and, with respect to any Subsequent
Receivables, the related Subsequent Transfer Assignment by the Seller, the
Owner Trustee 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);
(ii) All Filings Made. All filings (including UCC filings)
----------------
necessary in any jurisdiction to give the Owner Trustee 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 the Initial Assignment
----------
constitute, 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
27
<PAGE>
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.
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 the
Indenture Trustee, the Owner Trustee, the Owner Trust Estate and the
Securityholders from and against any and
28
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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 the Owner
Trustee and the Indenture Trustee 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
Owner Trustee 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, the
Owner Trustee, the Indenture Trustee and the Securityholders from and
against any and all costs, expenses, losses, claims, damages, and
liabilities to the extent that such cost, expense, loss, claim, damage, or
liability arose out of, or was imposed upon such Trustee 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.
29
<PAGE>
(b) Indemnification under this Section 7.01 shall survive the resignation
or removal of the Owner Trustee or the Indenture Trustee or the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Servicer has made any indemnity payments
pursuant to this Section 7.01 and the recipient thereafter collects any of such
amounts from others, the recipient shall promptly repay such amounts collected
to the Servicer, without interest.
SECTION 7.02. Merger or Consolidation of, or Assumption of the Obligations
------------------------------------------------------------
of, the Servicer. Any corporation (a) into which the Servicer may be merged or
- ----------------
consolidated, (b) resulting from any merger, conversion or consolidation to
which the Servicer shall be a party, (c) succeeding to the business of the
Servicer, or (d) more than 50% of the voting stock of which is owned directly or
indirectly by NIC and which is otherwise servicing the Seller's receivables,
which corporation in any of the foregoing cases executes an agreement of
assumption to perform every obligation of the Servicer under this Agreement
shall be the successor to the Servicer under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties to this Agreement, notwithstanding anything in this Agreement to the
contrary. The Servicer shall provide notice of any merger, consolidation or
succession pursuant to this Section 7.02 to the Rating Agencies.
SECTION 7.03. Limitation on Liability of Servicer and Others.
----------------------------------------------
(a) Neither the Servicer nor any of the directors or officers or employees
or agents of the Servicer shall be under any liability to the Owner Trustee 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
30
<PAGE>
costs for such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Owner Trustee payable from the Owner Trust Estate
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)(v) 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.
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;
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(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 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
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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 (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.
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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.
ARTICLE IX
TERMINATION
SECTION 9.01. Optional Purchase of All Receivables. On the last day of
------------------------------------
any Monthly Period as of which (i) the Aggregate Receivables Balance is 10% or
less of the Aggregate Starting Receivables Balance and (ii) 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 Owner Trust Estate 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 contained in the Owner Trust Estate
(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 contained in the Owner Trust Estate (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
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succeed to all interests in and to the Owner Trust Estate (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 Owner Trust
Estate 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 Applicable
Trustee to make the following deposits (after the application on the day
preceding such Distribution Date of the Available Amount and funds on deposit in
the Reserve Account pursuant to Sections 4.06 and 4.07) from the 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:
(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) if such Event of Default Sale results from the occurrence of an
Event of Default specified in Section 5.1(a), (b) or (c) of the Indenture,
to the Note Distribution Account, an amount equal to the Note Principal
Balance of the Class A Notes (after giving effect to the reduction in the
Aggregate Note Principal Balance to result from the deposits made in the
Note Distribution Account on the day preceding such Distribution Date and
on the day preceding each prior Distribution Date);
(iii) to the 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;
(iv) if such Event of Default Sale does not result from the
circumstances specified in Section 9.02(a)(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 in the Aggregate Note Principal
Balance to result from the deposits made in the Note Distribution Account
on the day preceding such Distribution Date and on the day preceding each
prior Distribution Date); and
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(v) 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).
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 distribution to the
Certificateholders and any other assets remaining in the Owner Trust Estate
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,
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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.
(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.
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(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 Owner Trustee under this Agreement in the Receivables and the Indenture
Trustee's interest in the Receivables under the Indenture. The Seller or the
Servicer or both shall deliver (or cause to be delivered) to the Owner Trustee
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change its name, identity or
corporate structure in any manner that would, could or might make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of Section 9-402(7) of the UCC, unless
it shall have given each Trustee at least 60 days prior written notice thereof.
(c) Each of the Seller and the Servicer shall give each Trustee at least 60
days prior written notice of any relocation of its principal executive office
if, as a result of such relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement. The Servicer shall at
all times maintain each office from which it services Receivables and its
principal executive office within the United States of America.
(d) The Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Receivable, including payments and recoveries made
and payments owing (and the nature of each) and extensions of any scheduled
payments made not less than 45 days prior thereto, and (ii) reconciliation
between payments or recoveries on (or with respect to) each Receivable and the
amounts from time to time deposited in the Collection Account, the Note
Distribution Account and the Certificate Distribution Account.
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(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 Owner
Trustee, 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 Owner Trustee. Indication of the Owner Trustee'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 Owner Trustee 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 Owner Trust Estate, 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 Owner Trust Estate. Upon request, the Servicer shall
furnish a copy of any such list to the Seller. Each Trustee and the Seller
shall hold any such list and the Schedule of Receivables for examination by
-----------------------
interested parties during normal business hours at their respective offices
located at the addresses set forth in Section 10.03.
(i) The Servicer shall deliver to each Trustee promptly after the execution
and delivery of this Agreement and of each amendment thereto, an Opinion of
Counsel either (a) stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of each Trustee in the
Receivables, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (b) stating that, in the
opinion of such counsel, no such action is necessary to preserve and protect
such interest.
(j) To the extent required by law, the Seller shall cause the 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.
----------
39
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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.
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 Owner Trustee on behalf of the Trust, to the Indenture
Trustee pursuant to the Indenture for the benefit of the Noteholders and (only
to the extent expressly provided therein) the Certificateholders of all right,
title and interest of the Owner Trustee in, to and under the Purchased Property
and/or the assignment of any or all of the Owner Trustee's rights and
obligations hereunder to the Indenture Trustee.
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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 Owner Trustee to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Trust,
the Owner Trust Estate or the Owner Trustee on behalf of the Trust, 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 Owner Trustee, on behalf of the Trust, or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the Trust,
the Owner Trust Estate or the Owner Trustee, on behalf of the Trust.
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 Owner Trustee 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 Owner Trust
Estate.
(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 Trust
under the Trust Agreement 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 Trust have any liability for the representations,
warranties, covenants, agreements or other obligations of the Owner Trustee
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 Owner Trust Estate. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of Article
VI of the Trust Agreement.
SECTION 10.13. Business Day Certificate.
------------------------
On the Closing Date (with respect to the remainder of calendar year
2000) 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.
* * * * *
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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.
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: Erwin Soriano
Title: Assistant Treasurer
<PAGE>
EXHIBIT A
Form of Initial Assignment
For value received, in accordance with the Pooling and Servicing Agreement,
dated as of March 9, 2000 (the "Pooling and Servicing Agreement"), among
Navistar Financial Corporation, a Delaware corporation ("NFC"), Navistar
Financial Retail Receivables Corporation, a Delaware corporation (the "Seller")
and Chase Manhattan Bank Delaware, not in its individual capacity but solely as
Owner Trustee under the Trust Agreement (the "Owner Trustee"), the Seller does
hereby sell, assign, transfer and otherwise convey unto the Owner Trustee,
without recourse, all right, title and interest of the Seller in, to and under
- ----------------
(i) the Initial Receivables (having an aggregate Starting Receivables Balance of
$____________________ ) 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 Owner Trustee 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 Initial Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Pooling and Servicing Agreement and is to be governed by the Pooling and
Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Pooling and Servicing Agreement.
* * * * *
1
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Initial Assignment to
be duly executed as of March 9, 2000.
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION
By: _________________________________
Name: R. Wayne Cain
Title: Vice President and Treasurer
<PAGE>
EXHIBIT B
Form of Subsequent Transfer Assignment
For value received, in accordance with the Pooling and Servicing Agreement,
dated as of March 9, 2000 (the "Pooling and Servicing Agreement"), among
Navistar Financial Corporation, a Delaware corporation ("NFC"), Navistar
Financial Retail Receivables Corporation, a Delaware corporation (the "Seller"),
and Chase Manhattan Bank Delaware, not in its individual capacity but solely as
Owner Trustee under the Trust Agreement (the "Owner Trustee"), the Seller does
hereby sell, assign, transfer and otherwise convey unto the Owner Trustee,
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 Subsequent 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 Owner Trustee 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 Subsequent Transfer 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 Subsequent Transfer
Assignment to be duly executed as of __________________, 2000.
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
<PAGE>
EXHIBIT C
Locations of Schedule of Receivables
The Schedule of Receivables is
-----------------------
on file at the offices of:
1. The Indenture Trustee
2. The Owner Trustee
3. Navistar Financial Corporation
4. Navistar Financial Retail Receivables Corporation
3
<PAGE>
APPENDIX A
PART I - DEFINITIONS
All terms defined in this Appendix shall have the defined meanings when
used in the Basic Documents, unless otherwise defined therein.
Accountants' Report: The report described in Section 4.02 of the Pooling
-------------------
and Servicing Agreement.
Accounting Date: With respect to a Distribution Date, the last day of the
---------------
related Monthly Period, 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 Owner
Trustee, 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 March 9, 2000 among NFC, as Administrator, Chase Manhattan Bank Delaware, as
Owner Trustee, 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,
<PAGE>
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
Agency Office: The office of the Owner Trustee 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)
owned by the Owner Trustee 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 $380,843,908.73, plus the aggregate Starting
----
Receivable Balances (as of the related Subsequent Cutoff Date) for all
Subsequent Receivables sold to the Owner Trustee 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 Initial Assignment or any Subsequent Transfer Assignment.
----------
Authorized Officer: With respect to the Owner Trustee, acting not in its
------------------
individual capacity but solely in its capacity as Owner Trustee under the Trust
Agreement, any officer of the Owner Trustee who is authorized to act for the
Owner Trustee in matters relating to the Owner Trust Estate 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
2
<PAGE>
more senior officer of the Administrator who is authorized to act for the
Administrator in matters relating to the Owner Trust Estate and to be acted upon
by the Administrator pursuant to the Administration Agreement and who is
identified on the list of Authorized Officers delivered by the Administrator to
the Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
Available Amount: With respect to a Distribution Date, the sum of the
----------------
Collected Interest and the Collected Principal for such Distribution Date.
Available Purchase Amount: As of any Subsequent Transfer Date, the amount
-------------------------
by which $475,000,000.00 exceeds the Aggregate Starting Receivables Balance on
(and before giving effect to any transfers of Receivables on) such Subsequent
Transfer Date.
Basic Documents: The Trust Agreement, the Purchase Agreement, each PA
---------------
Assignment, the Pooling and Servicing Agreement, each 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.
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.
---------
Certificate Distribution Account: The account designated as such,
--------------------------------
established and maintained pursuant to Section 5.1(a) of the Trust Agreement.
Certificate Register: The register of Certificates specified in Section
--------------------
3.4 of the Trust Agreement.
Certificate Registrar: The registrar at any time of the Certificate
---------------------
Register, appointed pursuant to Section 3.4(a) of the Trust Agreement.
Certificated Security: As of any date, has the meaning given to such term
---------------------
under the applicable UCC in effect on such date.
3
<PAGE>
Certificateholder: A Person in whose name a Certificate is registered
-----------------
pursuant to the terms of the Trust Agreement.
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: (a) With respect to the
--------------------------------------------------
Class A-1 Notes and any Distribution Date, the product of (1) the outstanding
principal balance of the Class A-1 Notes on the preceding Distribution Date
after giving effect to all payments of principal in respect of the Class A-1
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 the Class A-1 Notes 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) to but excluding the current Distribution Date, and
the denominator of which is 360, and (b) with respect to the Class A-2 Notes,
the Class A-3 Notes and the Class A-4 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 of Class A Notes and a fraction, the numerator of
which is 30 (or, in the case of the first Distribution Date, the number of days
elapsed 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 6.08% Asset Backed Notes in the aggregate
---------------
principal amount of $84,000,000.00 issued pursuant to the Indenture.
Class A-2 Notes: The Class A-2 6.82% Asset Backed Notes in the aggregate
---------------
principal amount of $142,000,000.00 issued pursuant to the Indenture.
Class A-3 Notes: The Class A-3 7.20% Asset Backed Notes in the aggregate
---------------
principal amount of $110,000,000.00 issued pursuant to the Indenture.
Class A-4 Notes: The Class A-4 7.34% Asset Backed Notes in the aggregate
---------------
principal amount of $121,187,500.00 issued pursuant to the Indenture.
Class B Notes: The Class B 7.47% Asset Backed Notes in the aggregate
-------------
principal amount of $17,812,500.00 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
4
<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 elapsed 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: "Closing" as defined in Section 2.03 of the Purchase Agreement.
-------
Closing Date: March 9, 2000.
------------
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
5
<PAGE>
Advances of interest with respect to such Receivable and (y) Liquidation
Proceeds with respect to a particular Receivable to the extent of the
Outstanding Monthly Advances of interest thereon.
Collected Principal: With respect to any Distribution Date, the sum of the
-------------------
following amounts with respect to the related Monthly Period in each case
computed in accordance with the actuarial method: (i) that portion of all
collections on Receivables (other than Liquidating Receivables) allocable to
principal, (ii) that portion of Liquidation Proceeds allocable to principal in
accordance with the Servicer's customary servicing procedures, (iii) that
portion of all Monthly Advances allocable to principal, (iv) that portion of all
Warranty Payments, Administrative Purchase Payments or the Optional Purchase
Proceeds allocable to principal, and (v) that portion of all Prepayments
allocable to principal; less an amount equal to the sum of (x) amounts received
on any Receivable (other than a Liquidating Receivable) to the extent of the
aggregate Outstanding Monthly Advances of principal with respect to such
Receivable and (y) Liquidation Proceeds with respect to a particular Receivable
to the extent of the Outstanding Monthly Advances of principal and amounts
representing reimbursement for Liquidation Expenses with respect to such
Receivables pursuant to subsection 4.06(b)(i) of the Pooling and Servicing
Agreement.
Collection Account: The account designated as such, established and
------------------
maintained pursuant to Section 5.01(a)(i) of the Pooling and Servicing
Agreement.
Corporate Trust Office: With respect to the Indenture Trustee or the Owner
----------------------
Trustee, the principal office at which at any particular time the corporate
trust business of the Indenture Trustee or Owner Trustee, respectively, shall be
administered, which offices at the Closing Date are located, in the case of the
Indenture Trustee, at The Bank of New York, 101 Barclay Street Floor 12 East,
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 March 9, 2000
-------------------
between the Custodian and the Seller, as amended or supplemented from time to
time.
Cutoff Date: With respect to an Initial Receivable, the Initial Cutoff
-----------
Date, and with respect to a Subsequent Receivable, the related Subsequent Cutoff
Date.
Dealer: (i) A Person with whom NITC has a valid dealer sales/maintenance
------
agreement to sell NITC vehicles, (ii) a Person with whom NFC has an agreement to
extend new or used truck floor plan financing terms or (iii) a truck, bus, or
trailer equipment manufacturer with whom NITC has a valid agreement to sell NITC
vehicles.
Dealer Liability: With respect to a Receivable, all rights, claims and
----------------
actions of NFC against the Dealer which 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.
6
<PAGE>
Default: Any occurrence that is, or with notice or the lapse of time or
-------
both would become, an Event of Default.
Definitive Certificates: The Certificates specified in Section 3.13 of the
-----------------------
Trust Agreement.
Definitive Notes: The Notes specified in Section 2.12 of the Indenture.
----------------
Delinquency Percentage: With respect to a Distribution Date, the aggregate
----------------------
Remaining Gross Balances of all outstanding Receivables which are 61 days or
more past due as of the last day of the related Monthly Period, as determined in
accordance with the Servicer's normal practices, expressed as a percentage of
the aggregate Remaining Gross Balances of all outstanding Receivables on the
last day of such Monthly Period.
Designated Account Property: The Designated Accounts, all amounts and
---------------------------
investments held from time to time in any Designated Account (whether in the
form of deposit accounts, Physical Property, book-entry securities,
uncertificated securities or otherwise), including the Reserve Account Initial
Deposit, and all proceeds of the foregoing.
Designated Accounts: The Collection Account, the Note Distribution
-------------------
Account, the Reserve Account, the Negative Carry Account and the Pre-Funding
Account, collectively.
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 March 15, 2000.
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 S&P 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 S&P and "P-1" from Moody's Investors
Service, Inc.,
7
<PAGE>
(B) whose deposits are insured by the FDIC and (C) having a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition.
Eligible Investments: Book-entry securities, negotiable instruments or
--------------------
securities represented by instruments in bearer or registered form which
evidence:
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America;
(ii) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws of
the United States of America or any state thereof (or any domestic branch
of a foreign bank) and subject to supervision and examination by Federal or
State banking or depository institution authorities; provided, however,
-------- -------
that at the time of the investment or contractual commitment to invest
therein, the commercial paper or other short-term unsecured debt
obligations (other than such obligations the rating of which is based on
the credit of a Person other than such depository institution or trust
company) thereof shall have a credit rating from each of the Rating
Agencies in the highest investment category for short-term unsecured debt
obligations or certificates of deposit granted thereby;
(iii) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the Rating
Agencies in the highest investment category for short-term unsecured debt
obligations or certificates of deposit granted thereby;
(iv) investments in money market or common trust funds having a
rating from each of the Rating Agencies in the highest investment category
for short-term unsecured debt obligations or certificates of deposit
granted thereby (including funds for which the Indenture Trustee or the
Owner Trustee or any of their respective affiliates is investment manager
or advisor, so long as such fund shall have such rating);
(v) bankers' acceptances issued by any depository institution or
trust company referred to in clause (ii) above;
(vi) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America
or any agency or instrumentality thereof the obligations of which are
backed by the full faith and credit of the United States of America, in
either case entered into with (A) a depository institution or trust company
(acting as principal) described in clause (ii) or (B) a depository
institution or trust company the deposits of which are insured by FDIC or
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
Owner Trustee 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
8
<PAGE>
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.
------------
Executive Officer: With respect to any corporation, the Chief Executive
-----------------
Officer, Chief Operating Officer, Chief Financial Officer, President, Executive
Vice President, any Vice President, the Secretary or the Treasurer of such
corporation; and with respect to any partnership, any general partner thereof.
Expenses: The expenses described in Section 6.9 of the Trust Agreement.
--------
FDIC: Federal Deposit Insurance Corporation or any successor agency.
----
Final Scheduled Distribution Date: With respect to a class of Securities,
---------------------------------
the date set forth below opposite such Securities:
Class A-1 Notes: March 15, 2001
Class A-2 Notes: March 17, 2003
Class A-3 Notes: May 17, 2004
Class A-4 Notes: January 15, 2007
Class B Notes: February 15, 2007
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.
9
<PAGE>
Full Prepayment: With respect to a Distribution Date, that portion of an
---------------
Actual Payment (other than the Scheduled Payment), which with respect to (i) any
Receivable, is sufficient to prepay such Receivable in full (after application
of the Scheduled Payment), or (ii) a Receivable secured by multiple Financed
Vehicles, equals the unpaid principal amount of the Receivable relating to any
Financed Vehicle, as determined by the Servicer in accordance with its customary
servicing procedures.
Funding Percentage: With respect to any Distribution Date, the percentage
------------------
derived from the fraction the numerator of which is the Pre-Funded Amount and
the denominator of which is the sum of the Aggregate Receivables Balance and the
Pre-Funded Amount, in each case, as of the last day of the related Monthly
Period.
Funding Period: The period beginning on and including the Closing Date and
--------------
ending on the first to occur of (a) the Distribution Date on which the amount on
deposit in the Pre-Funding Account (after giving effect to any transfers
therefrom in connection with the transfer of Subsequent Receivables to the Owner
Trustee 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 June 2000 Distribution Date.
Further Transfer and Servicing Agreements: The Pooling and Servicing
-----------------------------------------
Agreement, including any Assignment, 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 March 9, 2000 between the Owner
---------
Trustee and the Indenture Trustee, as amended and supplemented from time to
time.
10
<PAGE>
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 Trust, the Owner Trustee, 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 Trust, the Owner Trust Estate or the Owner
Trustee, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons and (iii) is not connected with the Trust, the Owner Trust
Estate or the Owner Trustee, any such other obligor, the Seller or any Affiliate
of any of the foregoing Persons as an officer, employee, promoter, under
writer, trustee, partner, director or person performing similar functions.
Independent Certificate: A certificate or opinion to be delivered to the
-----------------------
Indenture Trustee under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 11.1 of the Indenture, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in the Indenture and that the signer is Independent within the meaning thereof.
Indirect Participant: A securities broker, dealer, bank, trust company or
--------------------
other Person that clears through or maintains a custodial relationship with a
Clearing Agency Participant, either directly or indirectly.
Initial Assignment: As defined in Section 2.01 of the Pooling and Servicing
-------------------
Agreement.
Initial Cutoff Date: February 1, 2000.
-------------------
Initial PA Assignment: As defined in Section 2.01 of the Pooling and
----------------------
Servicing Agreement.
Initial Receivables: Receivables transferred to the Owner Trustee on the
-------------------
Closing Date as set forth on the Schedule of Receivables as of 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.
11
<PAGE>
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, 6.08% per annum, with
-------------
respect to the Class A-2 Notes, 6.82% per annum, with respect to the Class A-3
Notes, 7.20% per annum, with respect to the Class A-4 Notes, 7.34% per annum and
with respect to the Class B Notes, 7.47% per annum.
Interested Parties: The Owner Trustee 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 Order and Issuer Request: A written order or request signed in the
------------ --------------
name of the Owner Trustee 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.
12
<PAGE>
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.
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.
New York UCC: The UCC as in effect in the State of New York.
------------
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.
13
<PAGE>
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 June 15, 2000, 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 June 15, 2000 (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 March 15, 2001, 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 5.625% United States
Treasury Note due February 28, 2001 (such excess to be discounted on a monthly
basis to present value to such Distribution Date at the yield described in
clause (ii)(b) above), (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 March 15, 2002, 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 6.25% United States
Treasury Note due February 28, 2002 (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 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 May 15, 2003, 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 5.75% United States
Treasury Note due April 30, 2003 (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)
14
<PAGE>
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 Note Prepayment Amount") at
the Interest Rate of such class during the period commencing on and including
the Distribution Date on which such Class B Note Prepayment Amount is required
to be paid to but excluding July 15, 2002, over (b) the amount of interest that
would have accrued on such Class B Note Prepayment Amount over the same period
at a per annum rate of interest equal to the bond equivalent yield to maturity
on the Determination Date preceding such Distribution Date on the 6.50% United
States Treasury Note due May 31, 2002 (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 Noteholders' Principal Distributable
Amount for such Distribution Date over the amount that was actually deposited in
the Note Distribution Account on the day preceding such Distribution Date in
respect of principal.
Noteholders' Principal Distributable Amount: For any Distribution Date,
-------------------------------------------
the lesser of (x) the sum of (i) the Principal Distributable Amount, (ii) the
Noteholders' Principal Carryover Shortfall for the immediately preceding
Distribution Date and (iii) on the Final Scheduled Distribution Date for a class
of Notes, the amount necessary to reduce the Note Principal Balance with respect
to such class of Notes to zero and (y) the sum of the Note Principal Balances
with respect to each outstanding class of Notes.
Note Depository: The depositary from time to time selected by the
---------------
Indenture Trustee on behalf of the Trust in whose name the Notes are registered
prior to the issue of Definitive Notes. The first Note Depository shall be Cede
& Co., the nominee of the initial Clearing Agency.
Note Depository Agreement: The agreement, dated as of the Closing Date,
-------------------------
among the Owner Trustee, 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
15
<PAGE>
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 Owner Trustee, 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 Owner Trustee.
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 Indenture 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
16
<PAGE>
(iii) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a protected 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 constituting part of the Owner Trust Estate, 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 Owner Trust Estate, 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.
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 Owner Trustee, on behalf of the Trust;
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 Owner Trustee, on
------------------
behalf of the Trust in and to the property and rights assigned to the Owner
Trustee, on behalf of 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
Owner Trustee, on behalf 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.
17
<PAGE>
Owner Trustee: Chase Manhattan Bank Delaware, a Delaware banking
-------------
corporation, not in its individual capacity but solely as owner trustee under
the Trust Agreement, or any successor trustee under the Trust Agreement.
PA Assignment: As defined in Section 2.01 of the Purchase 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 Owner
Trustee 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 Owner Trustee. 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.
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 March 9, 2000, among NFC, the Seller, Chase Manhattan Bank Delaware,
as Owner Trustee, 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.
18
<PAGE>
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 owned by the Owner Trustee (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, an amount
------------------------
equal to the lesser of (a) the Principal Distributable Amount for such
Distribution Date and (b) the Total Available Amount over the sum of the Total
Servicing Fee and accrued and unpaid interest on the Notes due and payable on
such Distribution Date.
Proceeding: Any suit in equity, action at law or other judicial or
----------
administrative proceeding.
Program: As defined in subsection 4.02(a) of the Pooling and Servicing
-------
Agreement.
Purchase Agreement: The Purchase Agreement, dated as of March 9, 2000,
------------------
between NFC and the Seller, as amended and supplemented from time to time.
Purchase Date: "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.
19
<PAGE>
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
Owner Trustee 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 Owner Trustee 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.
Redemption Date: The Distribution Date specified by the Servicer or the
---------------
Owner Trustee 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 Security: The "Related Security" as defined in Section 2.01 of the
----------------
Purchase Agreement.
20
<PAGE>
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 S&P. 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 $18,090,085.66, and (b)
with respect to each Subsequent Transfer Date, cash or Eligible Investments
having a value of at least equal to 5.50% of the aggregate Starting Receivable
Balance of the Subsequent Receivables transferred to the Owner Trustee on such
Subsequent Transfer Date, which shall be deposited into the Reserve Account on
the Closing Date or such Subsequent Transfer Date, as applicable, pursuant to
Section 4.07(a) of the Pooling and Servicing Agreement.
Reserve Account Property: As defined in the Granting Clause of the
------------------------
Indenture.
Responsible Officer: With respect to the Indenture Trustee or the Owner
-------------------
Trustee, any officer within the Corporate Trust Office of such trustee,
including any Vice President, Assistant Vice President, Assistant Secretary,
Assistant Treasurer, Trust Officer or any other officer of such Trustee who
customarily performs functions similar to those performed by the persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of the Indenture or the Trust, as applicable, and, with respect
21
<PAGE>
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 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.
S&P : As defined in subsection 2.02(b)(xi) of the Pooling and Servicing
---
Agreement.
Schedule of Receivables: The schedule of all Receivables transferred to
-----------------------
the Owner Trustee, 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 Section 8-
--------------------
102(a)(16) of the New York UCC.
Security Entitlement: Has the meaning given such term in Section 8-
--------------------
102(a)(17) of the New York UCC.
Securityholder: Any of the Noteholders or Certificateholders.
--------------
Seller: The Person executing the Pooling and Servicing Agreement as the
------
Seller, or its successor in interest pursuant to Section 6.03 of the Pooling and
Servicing Agreement.
22
<PAGE>
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 5.50% of the Aggregate Receivables Balance as of the
close of business on the last day of the related Monthly Period plus 5.50%
of the aggregate Starting Receivables Balance of all Subsequent Receivables
acquired after the related Accounting Date and on or before such
Distribution Date, except that if on any Distribution Date (i) the product
------
(expressed as a percentage) of (A) twelve and (B) a fraction, the numerator
of which 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.
State: Any one of the 50 States of the United States of America or the
-----
District of Columbia.
23
<PAGE>
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
----------------------
Owner Trustee 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 Owner Trustee 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 Owner Trustee 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.
Subsequent Transfer PA Assignment: As defined in Section 2.01 of the
----------------------------------
Purchase 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
owned by the Owner Trustee 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 PA
---------------------------------
Assignments, the Pooling and Servicing Agreement, the 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.
24
<PAGE>
Trust: Navistar Financial 2000-A Owner Trust, a Delaware common law trust
-----
created by the Trust Agreement.
Trust Agreement: The Trust Agreement, dated as of March 9, 2000, 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 February 22, 2000 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 February 24,
----------------------
2000, among Banc One Capital Markets, Inc., 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 Owner Trustee 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
25
<PAGE>
Receivable Balance of such Warranty Receivable) previously received with respect
to such Warranty Receivable.
Warranty Purchaser: Either (i) the Seller pursuant to Section 2.06 of the
------------------
Pooling and Servicing Agreement or (ii) NFC pursuant to Section 5.04 of the
Purchase Agreement.
Warranty Receivable: A Receivable which the Warranty Purchaser has become
-------------------
obligated to repurchase pursuant to Section 2.06 of the Pooling and Servicing
Agreement or Section 5.04 of the Purchase Agreement.
26
<PAGE>
PART II - RULES OF CONSTRUCTION
(a) Accounting Terms. As used in this Appendix or the Basic Documents,
----------------
accounting terms which are not defined, and accounting terms partly defined,
herein or therein shall have the respective meanings given to them under
generally accepted accounting principles. To the extent that the definitions of
accounting terms in this Appendix or the Basic Documents are inconsistent with
the meanings of such terms under generally accepted accounting principles, the
definitions contained in this Appendix or the Basic Documents will control.
(b) "Hereof," etc. The words "hereof," "herein" and "hereunder" and words
-------------
of similar import when used in this Appendix or any Basic Document will refer to
this Appendix or such Basic Document as a whole and not to any particular
provision of this Appendix or such Basic Document; and Section, Schedule and
Exhibit references contained in this Appendix or any Basic Document are
references to Sections, Schedules and Exhibits in or to this Appendix or such
Basic Document unless otherwise specified. The word "or" is not exclusive.
(c) Reference to Distribution Dates. With respect to any Distribution
-------------------------------
Date, the "related Monthly Period," and the "related Record Date," will mean the
Monthly Period and Record Date, respectively, immediately preceding such
Distribution Date, and the relationships among Monthly Periods and Record Dates
will be correlative to the foregoing relationships.
(d) Number and Gender. Each defined term used in this Appendix or the
-----------------
Basic Documents has a comparable meaning when used in its plural or singular
form. Each gender-specific term used in this Appendix or the Basic Documents
has a comparable meaning whether used in a masculine, feminine or gender-neutral
form.
(e) Including. Whenever the term "including" (whether or not that term is
---------
followed by the phrase "but not limited to" or "without limitation" or words of
similar effect) is used in this Appendix or the Basic Documents in connection
with a listing of items within a particular classification, that listing will be
interpreted to be illustrative only and will not be interpreted as a limitation
on, or exclusive listing of, the items within that classification.
27
<PAGE>
APPENDIX B
----------
Notice Addresses and Procedures
All requests, demands, directions, consents, waivers, notices,
authorizations and communications provided or permitted under any Basic Document
to be made upon, given or furnished to or filed with the Seller, the Servicer,
the Administrator, the Indenture Trustee, the 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 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 Owner Trustee 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 Owner Trustee.
(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
55 Water Street
New York, New York 10041
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
2
<PAGE>
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.
3
<PAGE>
EXHIBIT 10.3
================================================================================
CUSTODIAN AGREEMENT
BETWEEN
NAVISTAR FINANCIAL CORPORATION
CUSTODIAN
AND
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
SELLER
DATED AS OF MARCH 9, 2000
================================================================================
<PAGE>
THIS CUSTODIAN AGREEMENT, dated as of March 9, 2000 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 Owner Trustee,
pursuant to which the Seller shall sell, transfer and assign to the Owner
Trustee 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 Owner Trustee and the Indenture Trustee.
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
- ----------
Chase Manhattan Bank Delaware, acting as Owner Trustee of the Navistar Financial
2000-A Owner Trust, 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 Owner Trustee and
the Indenture Trustee 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 Owner Trustee and the
Indenture
-1-
<PAGE>
Trustee with respect to those Receivables of which from time to time the Owner
Trustee and the Indenture Trustee are Holders. In performing its duties
hereunder, the Custodian agrees to act with reasonable care, using that degree
of skill and attention that the Custodian exercises with respect to receivable
files relating to comparable medium and heavy duty truck, bus and trailer
receivables that the Custodian services and holds for itself or others. The
Custodian hereby acknowledges receipt of the Receivable File for each Receivable
listed on the Schedule of Receivables.
3. Maintenance at Office. The Custodian agrees to maintain each
---------------------
Receivable File at its principal office at Navistar Financial Corporation, 2850
West Golf Road, Rolling Meadows, Illinois 60008, or at such other office of the
Custodian as shall from time to time be identified to the Holder of the related
Receivable upon 30 days' prior written notice.
4. Duties of Custodian.
-------------------
(a) Safekeeping. The Custodian shall hold each Receivable File
-----------
described herein on behalf of the Holder of the related Receivable for the use
and benefit of such Holder and, if applicable, Interested Parties and shall
maintain such accurate and complete accounts, records and computer systems
pertaining to each Receivable File described herein as shall enable the Seller
and the Owner Trustee and the Indenture Trustee 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 Owner Trustee
and the Indenture Trustee 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 Owner Trustee and the Indenture Trustee, 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
Owner Trustee generally in the preparation of
-2-
<PAGE>
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 Owner Trustee with respect to the
Receivable Files described herein upon its receipt of written instructions
signed by an Authorized Officer. A certified copy of a by-law or of a
resolution of the appropriate governing body of the Owner Trustee may be
received and accepted by the Custodian as conclusive evidence of the authority
of any such Authorized 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 Owner Trust Estate 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 Owner Trust Estate 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 Owner Trust Estate or any such Trustee, respectively,
for any portion of any such amount resulting from the willful misfeasance, bad
faith or gross negligence of any such Trustee.
7. Advice of Counsel. The Custodian, the Seller and, upon execution
-----------------
of the Further Transfer and Servicing Agreements, the Owner Trustee further
agrees 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 Owner
Trustee or by any Persons to whom the Owner Trustee 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 Owner
Trustee or the Owner Trustee's agent at such place or places as the Owner
Trustee 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.
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<PAGE>
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 Owner Trustee, the Indenture Trustee,
the Custodian and their respective successors and assigns.
12. Severability of Provisions. If any one or more of the covenants,
--------------------------
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
13. Assignment. Notwithstanding anything to the contrary contained
----------
in this Agreement, this Agreement may not be assigned by the Custodian without
the prior written consent of the Seller or any Persons to whom the Seller has
assigned its rights hereunder, as applicable.
14. Headings. The headings of the various Sections herein are for
--------
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
15. Counterparts. This Agreement may be executed by the parties in
------------
separate counterparts, each of which when so executed and delivered shall be an
original but all such counterparts shall together constitute but one and the
same instrument.
16. No Third-Party Beneficiaries. This Agreement shall inure to the
----------------------------
benefit of and be binding upon the parties hereto, the Owners and their
respective successors and permitted assigns. Except as otherwise expressly
provided in this Agreement, no other Person shall have any right or obligation
hereunder.
17. Merger and Integration. Except as specifically stated otherwise
----------------------
herein, this Agreement sets forth the entire understanding of the parties
relating to the subject matter hereof, and all prior understandings, written or
oral, are superseded by this Agreement. This Agreement may not be modified,
amended, waived, or supplemented except as provided herein.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be 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
CHASE MANHATTAN BANK DELAWARE
NOT IN ITS INDIVIDUAL CAPACITY
BUT SOLELY AS OWNER TRUSTEE
AND
NAVISTAR FINANCIAL CORPORATION
ADMINISTRATOR
AND
THE BANK OF NEW YORK
INDENTURE TRUSTEE
DATED AS OF MARCH 9, 2000
<PAGE>
ADMINISTRATION AGREEMENT, dated as of March 9, 2000 among CHASE
MANHATTAN BANK DELAWARE, not in its individual capacity, but solely as Owner
Trustee (the "Owner Trustee"), 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 Owner Trustee, not in its individual capacity, but acting
solely as Owner Trustee under the Trust Agreement, is issuing Notes pursuant to
an Indenture, dated as of March 9, 2000 (as amended and supplemented from time
to time, the "Indenture"), between Chase Manhattan Bank Delaware (not in its
individual capacity, but solely as Owner Trustee under the Trust Agreement) and
the Indenture Trustee;
WHEREAS, the Owner Trustee 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 Owner Trustee is
required to perform certain duties in connection with (a) the Notes and the
Collateral and (b) the Certificates;
WHEREAS, the Owner Trustee desires to have the Administrator perform
certain of the duties of 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 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 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
- ----------
Chase Manhattan Bank Delaware, acting as Owner Trustee of the Navistar Financial
2000-A Owner Trust, 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.
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<PAGE>
2. Duties of the Administrator.
---------------------------
(a) Duties with Respect to the Note Depository Agreements and the
-------------------------------------------------------------
Indenture.
---------
(i) The Administrator agrees to perform all its duties as Administrator
and the duties of the 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 Owner Trustee under the Indenture or
the Note Depository Agreement. The Administrator shall monitor the performance
of the Owner Trustee and shall advise the Owner Trustee when action is
necessary to comply with the duties of the Owner Trustee under the Indenture
or the Note Depository Agreement. The Administrator shall prepare for
execution by 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 Owner
Trustee 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 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) [RESERVED];
-2-
<PAGE>
(J) the preparation of all supplements, amendments, financing statements,
continuation statements, instruments of further assurance and other instruments,
in accordance with Section 3.5 of the Indenture, necessary to protect the Trust
Estate (Section 3.5);
(K) the delivery of the Opinion of Counsel on the Closing Date, in
accordance with Section 3.6(a) of the Indenture, as to the Trust Estate, and the
annual delivery of the Opinion of Counsel, the Officers' Certificate and certain
other statements, in accordance with Sections 3.6(b) and 3.9 of the Indenture,
as to compliance with the Indenture (Sections 3.6 and 3.9);
(L) the identification to the Indenture Trustee in an Officers' Certificate
of a Person with whom the Owner Trustee 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 Owner Trustee 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 Owner Trustee's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an Officers'
Certificate and the obtaining of the Opinion of Counsel and the Independent
Certificate relating thereto (Section 4.1);
(Q) the compliance with any written directive of the Indenture Trustee with
respect to the sale of the Trust Estate in a commercially reasonable manner if
an Event of Default shall have occurred and be continuing (Section 5.4);
(R) the preparation and delivery of notice to Noteholders of the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee
(Section 6.8);
(S) the preparation of any written instruments required to confirm more
fully the authority of any co-trustee or separate trustee and any written
instruments necessary in connection with the resignation or removal of any co-
trustee or separate trustee (Sections 6.8 and 6.10);
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<PAGE>
(T) the furnishing of the Indenture Trustee with the names and addresses
of Noteholders during any period when the Indenture Trustee is not the Note
Registrar (Section 7.1);
(U) the preparation and, after execution by the Owner Trustee, 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 Owner Trustee 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 gross negligence, willful misconduct or bad faith on their
part, arising out of or in connection with the acceptance or administration of
the transactions contemplated by the Trust
-4-
<PAGE>
Agreement, including the reasonable costs and expenses of defending themselves
against any claim or liability in connection with the exercise or performance of
any of their powers or duties under the Trust Agreement.
(b) Additional Duties.
-----------------
(i) In addition to the duties of the Administrator set forth above, the
Administrator shall perform such calculations and shall prepare for execution by
the 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 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 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 payments from the Owner
Trust Estate 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
Owner Trust Estate 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 March 15, 2000 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
-5-
<PAGE>
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 Owner Trustee and shall be, in the Administrator's opinion, no
less favorable to the Owner Trust Estate than would be available from Persons
that are not Affiliates of the Administrator.
(vii) The Administrator hereby agrees to execute on behalf of the Owner
Trustee all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of 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 for the benefit of the Owner
Trust Estate and the compromise of any action, claim or lawsuit brought for the
benefit of or against the Owner Trust Estate;
(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 Owner Trustee
directs the Administrator not to take on its behalf.
-6-
<PAGE>
3. Successor Servicer and Administrator. The Owner Trustee 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 Owner Trustee and
the Seller at any time during normal business hours.
5. Compensation. As compensation for the performance of the
------------
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Servicer shall pay the Administrator a monthly fee
in the amount of $1,500.
6. Additional Information To Be Furnished to the Owner Trustee. The
-----------------------------------------------------------
Administrator shall furnish to the Owner Trustee from time to time such
additional information regarding the Collateral as the Owner Trustee 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 Owner Trustee with respect to the manner in
which it accomplishes the performance of its obligations hereunder. Unless
expressly authorized by the Owner Trustee, the Administrator shall have no
authority to act for or represent the Owner Trust Estate or the Owner Trustee in
any way and shall not otherwise be deemed an agent of the Owner Trustee.
8. No Joint Venture. Nothing contained in this Agreement (i) shall
----------------
constitute the Administrator and the Owner Trustee as members of any
partnership, joint venture, association, syndicate, unincorporated business or
other separate entity, (ii) shall be construed to impose any liability as such
on any of them or (iii) shall be deemed to confer on any of them any express,
implied or apparent authority to incur any obligation or liability on behalf of
the others.
9. Other Activities of Administrator. Nothing herein shall prevent
---------------------------------
the Administrator or its Affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other person or entity even though such person or entity may engage in business
activities similar to those of the Owner Trust Estate, the Owner Trustee or the
Indenture Trustee.
10. Term of Agreement; Resignation and Removal of Administrator.
--------------------------------------------- -------------
(a) This Agreement shall continue in force until termination of the
Trust Agreement, upon which event this Agreement shall automatically terminate.
(b) Subject to Section 10(e), the Administrator may resign its duties
hereunder by providing the Owner Trustee with at least 60 days' prior written
notice.
-7-
<PAGE>
(c) Subject to Section 10(e), the Owner Trustee 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 Owner
Trustee, the Administrator may be removed immediately upon written notice of
termination from the Owner Trustee 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 Owner Trustee 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 Owner
Trustee);
(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 Owner Trustee 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 Owner Trustee, (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 Owner Trustee 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
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<PAGE>
with the Owner Trustee and take all reasonable steps requested to assist the
Owner Trustee in making an orderly transfer of the duties of the Administrator.
12. Notices. All demands, notices and communications upon or to the
-------
Owner Trustee, the Indenture 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 Owner Trustee, the Administrator and the Indenture Trustee, without the
consent of the Securityholders, for any of the following purposes:
(i) to add provisions hereof for the benefit of the Securityholders
or to surrender any right or power herein conferred upon the Administrator;
(ii) to cure any ambiguity or to correct or supplement any provision
herein which may be inconsistent with any other provision herein or in any
other Basic Document;
(iii) to evidence and provide for the appointment of a successor
Administrator hereunder and to add to or change any of the provisions of
this Agreement as shall be necessary to facilitate such succession; and
(iv) to add any provisions to, or change in any manner or eliminate
any of the provisions of, this Agreement, or modify in any manner the
rights of the Securityholders; provided, however, that such amendment under
-------- -------
this Section 13(a)(iv) shall not, as evidenced by an Opinion of Counsel,
materially and adversely affect in any material respect the interest of any
Securityholder.
Prior to the execution of any amendment pursuant to this Section 13(a), the
Administrator shall furnish written notification of the substance of such
amendment to each of the Rating Agencies.
(b) This Agreement may also be amended by the Owner Trustee, the
Administrator and the Indenture Trustee with prior notice to the Rating Agencies
and with the written consent of the holders of Notes evidencing at least a
majority in the Outstanding Amount as of the close of the immediately preceding
Distribution Date of (i) the Class A Notes and the Class B Notes voting together
as a single class, and of (ii) the Class A Notes voting as a single class, 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
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<PAGE>
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 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
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 Owner Trustee and the
Indenture Trustee an agreement in which such corporation or other organization
agrees to be bound hereunder by the terms of such assignment in the same manner
as the Administrator is bound hereunder. Subject to the foregoing, this
Agreement shall bind any successors or assigns of the parties hereto.
15. GOVERNING LAW. All questions concerning the construction,
-------------
validity and interpretation of this Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Illinois,
without giving effect to any choice of law or conflict provision or rule
(whether of the State of Illinois or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Illinois.
16. Headings. The section headings hereof have been inserted for
--------
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
17. Separate Counterparts. This Agreement may be executed by the
---------------------
parties in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
18. Severability of Provisions. If any one or more of the covenants,
--------------------------
agreements, provisions or terms of this Agreement shall for any reason
whatsoever be held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
19. Not Applicable to Navistar Financial Corporation in Other
---------------------------------------------------------
Capacities. Nothing in this Agreement shall affect any obligation Navistar
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Financial Corporation may have in any other capacity.
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<PAGE>
20. Limitation of Liability of Owner Trustee and Indenture Trustee.
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(a) Notwithstanding anything contained herein to the contrary, this instrument
has been executed 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 in its individual capacity have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Owner Trustee (other than representations, warranties,
covenants, agreements or other obligations made in its individual capacity)
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 Owner Trust Estate. For all purposes of this Agreement, in the
performance of any duties or obligations of the Owner Trustee 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 Owner Trustee 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 Owner Trust
Estate.
21. Third-Party Beneficiary. Each of the Seller, only to the
-----------------------
extent provided in Section 13(c), and the Owner Trustee is a third-party
beneficiary to this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto.
22. Merger and Integration. Except as specifically stated otherwise
----------------------
herein, this Agreement sets forth the entire understanding of the parties
relating to the subject matter hereof, and all prior understandings, written or
oral, are superseded by this Agreement. This Agreement may not be modified,
amended, waived, or supplemented except as provided herein.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers as of the day and year first above
written.
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: Erwin Soriano
Title: Assistant Treasurer
NAVISTAR FINANCIAL CORPORATION, as
Administrator
By:___________________________________________
Name: R. Wayne Cain
Title: Vice President and Treasurer
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