Exhibit 4.1
POOLING AND SERVICING AGREEMENT
AMONG
NAVISTAR FINANCIAL CORPORATION
SERVICER
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
SELLER
AND
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS OWNER TRUSTEE
DATED AS OF APRIL 30, 2002
TABLE OF CONTENTS
Page
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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
International 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 ............................. 10
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
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 ...................................... 12
SECTION 4.03. Access to Certain Documentation and
Information Regarding Receivables ........................................... 13
SECTION 4.04. Amendments to Schedule of Receivables ....................................... 13
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SECTION 4.05. Assignment of Administrative Receivables and Warranty Receivables ..... 13
SECTION 4.06. Distributions ......................................................... 14
SECTION 4.07. Reserve Account ....................................................... 15
SECTION 4.08. Net Deposits .......................................................... 16
SECTION 4.09. Statements to Financial Parties ....................................... 16
SECTION 4.10. Information Provided to Rating Agencies ............................... 18
ARTICLE V
ACCOUNTS; COLLECTIONS, DEPOSITS AND INVESTMENTS; ADVANCES ............................. 18
SECTION 5.01. Establishment of Accounts ............................................. 18
SECTION 5.02. Pre-Funding Account. .................................................. 22
SECTION 5.03. Negative Carry Account ................................................ 22
SECTION 5.04. Collections ........................................................... 23
SECTION 5.05. Investment Earnings and Supplemental Servicing Fees ................... 24
SECTION 5.06. Monthly Advances ...................................................... 24
SECTION 5.07. Additional Deposits ................................................... 24
ARTICLE VI
THE SELLER; REPRESENTATIONS AND WARRANTIESOF 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 ................................................... 27
SECTION 6.03. Merger or Consolidation of, or Assumption of the Obligations of, Seller;
Amendment of Certificate of Incorporation ............................. 27
SECTION 6.04. Limitation on Liability of Seller and Others .......................... 28
SECTION 6.05. Seller May Own Securities ............................................. 28
ARTICLE VII
LIABILITIES OF SERVICER AND OTHERS .................................................... 28
SECTION 7.01. Liability of Servicer; Indemnities .................................... 28
SECTION 7.02. Merger or Consolidation of, or Assumption of the Obligations of,
the Servicer .......................................................... 29
SECTION 7.03. Limitation on Liability of Servicer and Others ........................ 30
SECTION 7.04. Delegation of Duties .................................................. 30
SECTION 7.05. Servicer Not to Resign ................................................ 31
ARTICLE VIII
DEFAULT ............................................................................... 31
SECTION 8.01. Servicer Defaults ................................................... 31
SECTION 8.02. Consequences of a Servicer Default .................................. 32
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SECTION 8.03. Indenture Trustee to Act; Appointment of Successor ............. 32
SECTION 8.04. Notification to Financial Parties .............................. 33
SECTION 8.05. Waiver of Past Defaults ........................................ 33
SECTION 8.06. Repayment of Advances .......................................... 33
ARTICLE IX
TERMINATION .................................................................... 34
SECTION 9.01. Optional Purchase of All Receivables ........................... 34
SECTION 9.02. Sale of Assets; Termination .................................... 34
ARTICLE X
MISCELLANEOUS PROVISIONS ....................................................... 36
SECTION 10.01. Amendment ...................................................... 36
SECTION 10.02. Protection of Title to Owner Trust Estate ...................... 37
SECTION 10.03. Notices ........................................................ 39
SECTION 10.04. Governing Law .................................................. 39
SECTION 10.05. Severability of Provisions ..................................... 39
SECTION 10.06. Assignment ..................................................... 39
SECTION 10.07. Third-Party Beneficiaries ...................................... 40
SECTION 10.08. Separate Counterparts .......................................... 40
SECTION 10.09. Headings and Cross-References .................................. 40
SECTION 10.10. Assignment to Indenture Trustee ................................ 40
SECTION 10.11. No Petition Covenants .......................................... 40
SECTION 10.12. Limitation of Liability of the Trustees ........................ 40
SECTION 10.13. Business Day Certificate ....................................... 41
EXHIBIT A Locations of Schedule of Receivables
EXHIBIT B Form of Initial PSA Assignment
EXHIBIT C Form of Subsequent Transfer PSA Assignment
APPENDIX A Defined Terms and Rules of Construction
APPENDIX B Notice Addresses and Procedures
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THIS POOLING AND SERVICING AGREEMENT is made as of April 30, 2002 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 USA, National
Association, a national banking association, 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
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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
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herein to "the Agreement" or "this Agreement" are to this Pooling and Servicing
Agreement as it may be amended, supplemented (whether by Subsequent Transfer PSA
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
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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
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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
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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 USA, National Association, 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
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Exhibit B (the "Initial PSA Assignment"), all right, title and interest of the
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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 International 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
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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
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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
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recourse, pursuant to an assignment in substantially the form of Exhibit C (a
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"Subsequent Transfer PSA Assignment"), all right, title and interest of the
Seller in, to and under:
(i) the Subsequent Receivables described in such Subsequent
Transfer PSA 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 International Purchase
Obligations with respect to such
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Subsequent Receivables (subject to the limitations set forth in Section
2.04) and proceeds from any Guaranties of Subsequent Receivables;
(vi) the Purchase Agreement, the 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 PSA
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 PSA 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 PSA
Assignment, and the Seller hereby grants such security interest and (ii) the
assets conveyed pursuant to such Subsequent Transfer PSA 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 PSA 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 PSA
Assignment and all other monies payable under the Subsequent Receivables
conveyed pursuant to such Subsequent Transfer PSA 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 PSA Assignment. For purposes of
such grant, each such Subsequent Transfer PSA 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
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satisfaction of each of the following conditions precedent on or prior to the
related Subsequent Transfer Date:
(i) the Funding Period shall not have terminated;
(ii) each of the representations and warranties made by the
Seller pursuant to Section 2.05 with respect to such Subsequent
Receivables shall be true and correct as of the related Subsequent
Transfer Date with the same effect as if then made, and the Seller
shall have performed all obligations to be performed by it hereunder on
or prior to such Subsequent Transfer Date;
(iii) the Seller shall have delivered to the Owner Trustee, the
Indenture Trustee and the Rating Agencies a duly executed Subsequent
Transfer PSA Assignment, including a schedule of such Subsequent
Receivables (which schedule shall be deemed to supplement the Schedule
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of Receivables in effect at such time);
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(iv) the applicable Reserve Account Subsequent Transfer 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 PSA 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 Effective Annual Percentage Rate of the Receivables in
the Trust shall not be less than 7.25% (B) the weighted average
remaining maturity of the Receivables in the Trust shall not be greater
than 53 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);
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(ix) the Seller shall have delivered to the Rating Agencies an Opinion
of Counsel with respect to the transfer of such Subsequent Receivables
substantially in the form of the Opinion of Counsel delivered to the Rating
Agencies on the Closing Date;
(x) The Seller shall have delivered to the Owner Trustee and the
Indenture Trustee written confirmation from an independent public
accounting firm that, as of the applicable 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) 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
$182,045,113.47. 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
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Trustee, the Indenture Trustee and 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,
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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;
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(d) where permitted by law, the original certificate of title (when
received) and otherwise such documents, if any, that NFC keeps on file in
accordance with its customary procedures indicating that the Financed Vehicle is
owned by the Obligor and subject to the interest of NFC as first lienholder or
secured party; and
(e) any and all other documents that NFC keeps on file in accordance with
its customary procedures relating to the individual Receivable, Obligor or
Financed Vehicle.
Pursuant to Sections 2.01(f) and 2.02(a)(vi), the rights of the Seller under the
Custodian Agreement are being assigned to the Owner Trustee.
SECTION 2.04. Acceptance by Owner Trustee; Limitation on Transfer of
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International Purchase Obligations. The Owner Trustee does hereby accept all
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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
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that (a) the rights pursuant to the International 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
PSA 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.
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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
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discovery by the Seller, the Servicer or either Trustee of a breach of any of
the representations and warranties
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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 Financial Parties in any
Receivable, the party discovering such breach shall give prompt written notice
thereof to the others. As of the second Accounting Date following its discovery
or its receipt of notice of breach (or, at the Seller's election, the first
Accounting Date following such discovery), unless such breach shall have been
cured in all material respects, in the event of a breach of the representations
and warranties made by the Seller in Section 2.05 or Section 6.01, the Seller
shall repurchase such Receivable from the 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
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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, truck chassis,
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
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respect to the Receivables and the Financed Vehicles. The Servicer is hereby
authorized to commence in the name of the Owner of such Receivable or, to the
extent necessary, in its own name, a legal proceeding to enforce a Liquidating
Receivable as contemplated by Section 3.04, to enforce all obligations of NFC
and NFRRC, in its capacity as the Seller or otherwise, under each of the
Purchase Agreement and the Further Transfer and Servicing Agreements or to
commence or participate in a legal proceeding (including a bankruptcy
proceeding) relating to or involving a Receivable or a Liquidating Receivable.
If the Servicer commences or participates in such a legal proceeding in its own
name, the Owner of such Receivable shall thereupon be deemed to have
automatically assigned such Receivable to the Servicer for purposes of
commencing or participating in any such proceeding as a party or claimant, the
Servicer is hereby authorized and empowered by the Owner of a Receivable to
execute and deliver in the Servicer's name any notices, demands, claims,
complaints, responses, affidavits or other documents or instruments in
connection with any such proceeding. Any Owner of Receivables, upon the written
request of the Servicer, shall furnish the Servicer with any powers of attorney
and other documents and take any other steps which the Servicer may deem
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties under this Agreement and the other Further Transfer and
Servicing Agreements. Except to the extent required by the preceding two
sentences, the authority and rights granted to the Servicer in this Section 3.01
shall be nonexclusive and shall not be construed to be in derogation of the
retention by the Owner of a Receivable of equivalent authority and rights.
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, truck chassis, 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, truck chassis, 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
9
any International Purchase Obligations, proceeds from any Insurance Policies and
proceeds from any Guaranties, in each case with respect to the Receivables,
selling the related Financed Vehicle or Financed Vehicles at public or private
sale or sales and other actions by the Servicer in order to realize upon such a
Receivable. The foregoing is subject to the provision that, in any case in which
the Financed Vehicle shall have suffered damage, the Servicer shall not expend
funds in connection with any repair or towards the repossession of such Financed
Vehicle unless it shall determine in its discretion that such repair and/or
repossession shall increase the proceeds of liquidation of the related
Receivable by an amount greater than the amount of such expenses. The Servicer
shall be entitled to receive Liquidation Expenses with respect to each
Liquidating Receivable at such time as the Receivable becomes a Liquidating
Receivable in accordance with subsection 4.06(b)(i).
SECTION 3.05. Maintenance of Insurance Policies. The Servicer shall, in
---------------------------------
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering each Financed Vehicle as
of the execution of the related Receivable, unless the Servicer has in
accordance with its customary procedures permitted an Obligor to self-insure the
Financed Vehicle or Financed Vehicles securing such Receivable. The Servicer
shall, in accordance with its customary servicing procedures, monitor such
physical damage insurance with respect to each Financed Vehicle that secures
each Receivable.
SECTION 3.06. Maintenance of Security Interests in Vehicles. The Servicer
---------------------------------------------
shall, in accordance with its customary servicing procedures and at its own
expense, take such steps as are 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:
(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 Contractual
Annual Percentage Rate or the total number of Scheduled Payments is altered or
such that the final scheduled payment on such Receivable will be due later than
March 31, 2009.
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SECTION 3.08. Purchase of Receivables Upon Breach of Covenant. Upon
-----------------------------------------------
discovery by any of the Seller, the Servicer or any party under the Further
Transfer and Servicing Agreements of a breach of any of the covenants set forth
in Sections 3.06 and 3.07, the party discovering such breach shall give prompt
written notice thereof to the others. As of the second Accounting Date following
its discovery or receipt of notice of any such breach (or, at the Servicer's
election, the first Accounting Date so following) that materially and adversely
affects any Receivable as determined by such Owner, 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 any 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 Financial Parties and all other fees and expenses
not expressly stated under this Agreement to be for the account of the Financial
Parties, 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 the Financial Parties 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:
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(a) All payments by or on behalf of the Obligor (excluding Supplemental
Servicing Fees and Investment Earnings) shall be applied (i) first to reduce
Outstanding Monthly Advances, if any, with respect to such Receivable, as
described in Section 5.06, (ii) second, to the Scheduled Payment for such
Monthly Period with respect to such Receivable, and (iii) third, the remainder
shall constitute, with respect to such Receivable, a Full Prepayment or Partial
Prepayment; and
(b) A Partial Prepayment made on a Receivable is applied to reduce the
final Scheduled Payment and will thereafter, to the extent the Partial
Prepayment exceeds the final Scheduled Payment, reduce Scheduled Payments in
reverse chronological order beginning with the penultimate Scheduled Payment.
The Rebate related to such Partial Prepayment will reduce the final Scheduled
Payment and will thereafter, to the extent the Rebate exceeds the final
Scheduled Payment, reduce Scheduled Payments in reverse chronological order
beginning with the penultimate Scheduled Payment.
ARTICLE IV
SERVICER'S COVENANTS; DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 4.01. Annual Statement as to Compliance: Notice of Servicer
-----------------------------------------------------
Default.
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(a) The Servicer shall deliver to each Trustee, on or before February 1
of each year, beginning February 1, 2003, 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.
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SECTION 4.02. Annual Independent Accountants' Report.
--------------------------------------
(a) The Servicer shall cause a firm of independent accountants, who may
also render other services to the Servicer or the Seller, to deliver to each
Trustee and the Rating Agencies, on or before February 1 of each year, beginning
February 1, 2003 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 and Noteholders
-----------
reasonable access to the documentation regarding the Receivables. The Servicer
also shall provide reasonable access to the documentation regarding the
Receivables to a Noteholder in cases where such Noteholder 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
13
amendment to the Schedule of Receivables to report the newly assigned account
-----------------------
number. Each such amendment shall list all new account numbers assigned to
Receivables during such Monthly Period and shall show by cross reference the
prior account numbers identifying such Receivables on the Schedule of
-----------
Receivables.
-----------
SECTION 4.05. Assignment of Administrative Receivables and Warranty
-----------------------------------------------------
Receivables. Upon receipt of the Administrative Purchase Payment or the Warranty
-----------
Payment with respect to an Administrative Receivable or a Warranty Receivable,
respectively, each Trustee shall assign, without recourse, representation or
warranty, to the Servicer or the Warranty Purchaser, as applicable, all of such
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 International
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 Financial Parties 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 Financial Parties.
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 Amount, 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, the amount of Outstanding Monthly
Advances to be reimbursed, the amount of Liquidation Expenses to be reimbursed
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 the Business 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:
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(i) from the Collection Account to the Servicer, in immediately
available funds, reimbursement of Outstanding Monthly Advances
pursuant to Section 5.06, payments of Liquidation Expenses with
respect to Receivables which became Liquidating Receivables during the
related Monthly Period pursuant to Section 3.04 and any unpaid
Liquidation Expenses from prior periods;
(ii) from the Pre-Funding Account to the Collection Account, the
Investment Earnings on the Pre-Funding Account for the related Monthly
Period;
(iii) from the Negative Carry Account to the Collection Account,
the Negative Carry Amount for such Distribution Date; and
(iv) from the Reserve Account to the Collection Account, the
lesser of (A) the amount of cash or other immediately available funds
therein on the Business 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 Collected 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) Before 12:00 noon, New York City time, on the Business 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
distribution 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
15
(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.
SECTION 4.07. Reserve Account.
---------------
(a) The Servicer, for the benefit of the Financial Parties, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account known as the Navistar Financial 2002-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 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 or upon the order of the
Certificateholders in an account designated in writing by the Certificateholders
to the Servicer.
(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 Financial Parties.
-------------------------------
(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
16
(subject to the last sentence of this paragraph (a)) 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:
(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, the
Specified Reserve Account Balance, and the Specified Yield Supplement
Amount 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;
17
(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 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; and
(xv) for the first Distribution Date occurring on or after the last
day of the Funding Period, the amount of any remaining Pre-Funded Amount
that has not been used to fund the purchase of Subsequent Receivables.
Each amount set forth pursuant to clauses (i), (iv), (viii), (x) and (xi) above
shall be expressed as a dollar amount per $1,000 of initial Note Principal
Balance. In lieu of preparing and delivering a separate statement to Financial
Parties 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) and (xi), for such
calendar year or, if such Person shall have been a Financial Party during a
portion of such calendar year and received any payments thereon, for the
applicable portion of such year, for the purposes of such Financial Party'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.
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ARTICLE V
ACCOUNTS; COLLECTIONS, DEPOSITS AND INVESTMENTS; ADVANCES
SECTION 5.01. Establishment of Accounts.
-------------------------
(a) (i) The Servicer, for the benefit of the Financial Parties, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account known as the Navistar Financial 2002-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 Financial
Parties.
(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 2002-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 2002-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 2002-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 Financial Parties, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account known as the Navistar 2002-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 Noteholders.
(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
19
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; provided, that
--------
such investments may mature on a later date if the Rating Agency Condition is
satisfied with respect thereto. Investments in Eligible Investments shall be
made in the name of the Indenture Trustee or its nominee, and such investments
shall not be sold or disposed of prior to their maturity. Should the short-term
unsecured debt obligations of the Indenture Trustee (or any other bank or trust
company with which the Designated Accounts are maintained) no longer have the
Required Deposit Rating, then the Servicer shall within 10 Business Days (or
such longer period, not to exceed 30 calendar days, upon satisfaction of the
Rating Agency Condition with respect thereto), 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 amounts on deposit in 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 this Section 5.01.
(ii) With respect to the Designated Account Property, the
Securities Intermediary 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.
20
(C) All property delivered to the Securities Intermediary pursuant to this
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.
(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, 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
21
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 Financial Parties.
(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 $182,045,113.47 (the "Initial
Pre-Funded Amount") 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
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aggregate Starting Receivable Balance of the Subsequent Receivables transferred
to the Owner Trustee on such Subsequent Transfer Date less the Reserve Account
Subsequent Transfer 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 Subsequent Transfer 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
an amount equal to the aggregate of Noteholders' Prepayment Premiums for all
classes 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 $1,964,348.69 (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
(i) in the Certificate Distribution Account for distribution to the
Certificateholders or (ii) upon the order of the Certificateholders in an
account designated in writing by the Certificateholders 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 in the Certificate Distribution Account for distribution
to the Certificateholders or upon the order of the Certificateholders in an
account designated in writing by the Certificateholders to the Servicer.
23
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 International Purchase Obligations and proceeds
from any Guaranties within two Business Days after receipt thereof.
Notwithstanding the foregoing, the Servicer shall not be required to remit such
collections within such two Business Days but may remit collections received
during a Monthly Period to the Collection Account in immediately available funds
on the Business Day immediately preceding the related Distribution Date but only
for so long as (i) NFC is the Servicer, (ii) (x) the Servicer satisfies the
requirements for monthly remittances established by the Rating Agencies
initially rating the Securities, and upon the satisfaction of such requirements,
the Rating Agencies which initially rated the Securities reaffirm the rating of
the Securities at the level at which they would be rated if collections were
remitted within two Business Days, (y) the short-term unsecured debt obligations
of NFC are rated at least A-1 by S&P and P-1 by Xxxxx'x Investors Service or (z)
a standby letter of credit has been issued by an Eligible Institution which, as
of each date during the period that the Servicer is making monthly remittances
of Collections, has an undrawn amount at least equal to 150% of all Scheduled
Payments due for the latest Monthly Period ended prior to the next succeeding
Distribution Date (and the aggregate amount of unremitted collections does not
at any time exceed 90% of the undrawn amount of such letter of credit) and (iii)
a Servicer Default shall not have occurred and be continuing. The Indenture
Trustee shall not be deemed to have knowledge of any event or circumstance under
clause (iii) of the immediately preceding sentence that would require remittance
within two Business Days by the Servicer to the Collection Account unless the
Indenture Trustee has received notice of such event or circumstance from the
Seller or the Servicer in an Officer's Certificate or from Noteholders whose
Notes evidence not less than 25% of the Outstanding Amount of the Controlling
Class 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)(i) hereof, the
Certificateholders (via the Certificate Distribution Account or such other
account as shall be designated in writing by the Certificateholders to the
Servicer) 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
24
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)(i) 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.
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 Business 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 in each case 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.
25
(a) Representations and Warranties as to each Party.
-----------------------------------------------
(i) Organization and Good Standing. Such Party has been duly
------------------------------
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with power and authority to
own its properties and to conduct its business as such properties are
presently owned and such business is presently conducted, and had at
all relevant times, and now has, power, authority and legal right (A)
in the case of the Seller, to acquire and own the Receivables and (B)
in the case of the Servicer, to service the Receivables as provided in
this Agreement;
(ii) Due Qualification. Such Party is duly qualified to do
-----------------
business as a foreign corporation in good standing, and has obtained
all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business
(including, in the case of the Servicer, the servicing of the
Receivables as required by this Agreement) requires or shall require
such qualification;
(iii) Power and Authority. Such Party (A) has the power and
-------------------
authority to execute and deliver the Further Transfer and Servicing
Agreements to which it is a party (as used in this Section 6.01(a), the
"applicable Further Transfer and Servicing Agreements") and to carry
out the respective terms of such agreements and, (B) in the case of the
Seller, has the power and authority to sell and assign the property to
be sold and assigned to and deposited with the 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,
26
any order, rule or regulation applicable to such Party of any court or
of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over such Party or any
of its properties; and
(vi) No Proceedings. There are no proceedings or, to such
--------------
Party's knowledge, investigations pending or, to such Party's
knowledge, threatened before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality having
jurisdiction over such Party or its properties (i) asserting the
invalidity of the applicable Further Transfer and Servicing Agreements,
any Securities issued pursuant thereto and, in the case of the Seller,
the Custodian Agreement or the Administration Agreement, (ii) seeking
to prevent the issuance of such Securities or the consummation of any
of the transactions contemplated by the applicable Further Transfer and
Servicing Agreements and, in the case of the Seller, the Custodian
Agreement or the Administration Agreement, or (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by such Party of its obligations under, or the validity or
enforceability of, such Securities, the applicable Further Transfer and
Servicing Agreements or, in the case of the Seller, the Custodian
Agreement or the Administration Agreement.
(b) Representations and Warranties of the Seller Only.
-------------------------------------------------
(i) Good Title. No Receivable has been sold, transferred,
----------
assigned or pledged by the Seller to any Person other than the 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 PSA Assignment,
and, with respect to any Subsequent Receivables, the related Subsequent
Transfer PSA 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 PSA
----------
Assignment constitute, and each Subsequent Transfer PSA 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.
---------------------------------------------------
27
(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, truck chassis, bus and trailer receivables.
(ii) Purchase Agreement Representations. The representations and
----------------------------------
warranties in Sections 3.01 and 3.02 of the Purchase Agreement are true as
of the Closing Date and each Subsequent Transfer Date.
SECTION 6.02. Liability of Seller. The Seller shall be liable in
-------------------
accordance with this Agreement only to the extent of the obligations in this
Agreement specifically undertaken by the Seller.
SECTION 6.03. Merger or Consolidation of, or Assumption of the
------------------------------------------------
Obligations of, Seller; Amendment of Certificate of Incorporation.
-----------------------------------------------------------------
(a) Any corporation (i) into which the Seller may be merged or
consolidated, (ii) resulting from any merger or consolidation to which the
Seller shall be a party, (iii) succeeding to the business of the Seller, or (iv)
more than 50% of the voting stock of which is owned directly or indirectly by
NIC, which corporation in any of the foregoing cases executes an agreement of
assumption to perform every obligation of the Seller under this Agreement, shall
be the successor to the Seller under this Agreement without the execution or
filing of any document or any further act on the part of any of the parties to
this Agreement. The Seller shall provide 10 days' prior notice of any merger,
consolidation or succession pursuant to this Section 6.03 to the Rating
Agencies.
(b) The Seller hereby agrees that during the term of this Agreement it
shall not amend Articles Third, Fourth, Fifth, Twelfth or Fourteenth of its
Restated Certificate of Incorporation without obtaining the prior written
consent of the Rating Agencies or without obtaining the prior written consent of
Noteholders whose Notes evidence not less than a majority of the Outstanding
Amount of the Controlling Class 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
28
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
Financial Parties from and against any and all costs, expenses, losses,
damages, claims and liabilities arising out of or resulting from the
use, ownership or operation by the Servicer or any Affiliate thereof of
any Financed Vehicle;
(ii) The Servicer shall indemnify, defend and hold harmless 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 Financial Parties 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
Financial Parties 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
29
(iv) The Servicer (other than the Indenture Trustee in its
capacity as successor Servicer pursuant to Section 8.02 hereof) shall
indemnify, defend and hold harmless each Trustee and their respective
agents, officers, directors and servants, from and against all costs,
expenses, losses, claims, damages and liabilities arising out of or
incurred in connection with (x) in the case of the Owner Trustee, the
Indenture Trustee's performance of its duties under the Basic
Documents, (y) in the case of the Indenture Trustee, the Owner
Trustee's performance of its duties under the Basic Documents or (z)
the acceptance, administration or performance by, or action or inaction
of, the applicable Trustee of the trusts and duties contained in this
Agreement, the Basic Documents, the Indenture (in the case of the
Indenture Trustee), including the administration of the Trust Estate,
and the Trust Agreement (in the case of the Owner Trustee), including
the administration of the Owner Trust Estate, except in each case to
the extent that such cost, expense, loss, claim, damage or liability:
(A) is due to the willful misfeasance, bad faith or negligence (except
for errors in judgment) of the Person seeking to be indemnified, (B) to
the extent otherwise payable to the Indenture Trustee, arises from the
Indenture Trustee's breach of any of its representations or warranties
in Section 6.13 of the Indenture or (C) to the extent otherwise payable
to the Owner Trustee, arises from the Owner Trustee's breach of any of
its representations or warranties set forth in Section 6.6 of the Trust
Agreement.
(b) Indemnification under this Section 7.01 shall survive the
resignation or removal of the Owner Trustee or the Indenture Trustee or the
termination of this Agreement and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Servicer has made any indemnity
payments pursuant to this Section 7.01 and the recipient thereafter collects any
of such amounts from others, the recipient shall promptly repay such amounts
collected to the Servicer, without interest.
SECTION 7.02. Merger or Consolidation of, or Assumption of the
------------------------------------------------
Obligations of, the Servicer. Any corporation (a) into which the Servicer may be
----------------------------
merged or consolidated, (b) resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, (c) succeeding to the
business of the Servicer, or (d) more than 50% of the voting stock of which is
owned directly or indirectly by NIC and which is otherwise servicing the
Seller's receivables, which corporation in any of the foregoing cases executes
an agreement of assumption to perform every obligation of the Servicer under
this Agreement shall be the successor to the Servicer under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties to this Agreement, notwithstanding anything in this Agreement
to the contrary. The Servicer shall provide notice of any merger, consolidation
or succession pursuant to this Section 7.02 to the Rating Agencies.
SECTION 7.03. Limitation on Liability of Servicer and Others.
----------------------------------------------
(a) Neither the Servicer nor any of the directors or officers or
employees or agents of the Servicer shall be under any liability to the Owner
Trustee or the Financial Parties, except as specifically provided in this
Agreement, for any action taken or for refraining from the taking of any
30
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 Financial
Parties under this Agreement and the Noteholders and (to the extent expressly
provided therein) the Certificateholders under the Indenture and the interests
of the Certificateholders under the Trust Agreement. In such event, the legal
expenses and costs for such action and any liability resulting therefrom shall
be expenses, costs and liabilities of the 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, truck chassis, 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
31
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to each Trustee. No such resignation shall become effective
until the Indenture Trustee or a successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
8.02.
ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Defaults. Each of the following shall
-----------------
constitute a "Servicer Default:"
(a) any failure by the Servicer to deliver to the Indenture Trustee for
deposit in any of the Designated Accounts or to the Owner Trustee for deposit in
the Certificate Distribution Account any required payment or to direct the
Indenture Trustee to make any required distributions therefrom, which failure
continues unremedied for a period of five Business Days after written notice is
received by the Servicer from the Applicable Trustee or after discovery of such
failure by an officer of the Servicer;
(b) failure on the part of the Seller or the Servicer to duly observe
or perform in any material respect any other covenants or agreements of the
Seller or the Servicer set forth in the Purchase Agreement, this Agreement or
any of the other Further Transfer and Servicing Agreements which failure (i)
materially and adversely affects the rights of Financial Parties, 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 25% or more of
the Controlling Class as of the close of the preceding Distribution Date;
(c) any representation, warranty or certification made by the Servicer
pursuant to this Agreement, the Purchase Agreement, Indenture or any other
Further Transfer and Servicing Agreement shall prove to have been incorrect in
any material respect when made, and if the consequences of such representation,
warranty or certification being incorrect shall be susceptible of remedy in all
material respects, such consequences shall not be remedied in all material
respects within 30 days after the Servicer first becomes aware or is advised
that such representation, warranty or certification was incorrect in a material
respect;
(d) 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
32
(e) 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 not less
than a majority of the Controlling Class 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 Financial Parties) 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, including the termination
of all sub-servicing agreements, without cost. On or after the receipt by the
Servicer of such written notice, all authority and power of the Servicer under
this Agreement, whether with respect to the Securities or the Receivables or
otherwise, shall pass to and be vested in the Indenture Trustee pursuant to and
under this Section 8.02. The Indenture Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The Servicer
agrees to cooperate with either Trustee in effecting the termination of the
responsibilities and rights of the Servicer under this Agreement, including the
transfer to either Trustee for administration by it of all cash amounts that
shall at the time be held by the Servicer for deposit, or that shall have been
deposited by the Servicer in the Collection Account, the Negative Carry Account,
the Pre-Funding Account, the Reserve Account, the Note Distribution Account or
the Certificate Distribution Account or thereafter received with respect to the
Receivables that shall at that time be held by the Servicer. In addition to any
other amounts that are then payable to the Servicer under this Agreement, the
Servicer shall be entitled to receive from the successor Servicer reimbursements
for any Outstanding Monthly Advances made during the period prior to the notice
pursuant to this Section 8.02 which terminates the obligation and rights of the
Servicer under this Agreement.
SECTION 8.03. Indenture Trustee to Act; Appointment of Successor. On
----------------------------------------------------
and after the time the Servicer receives a notice of termination pursuant to
Section 8.02, the Indenture Trustee shall be the successor in all respects to
the Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for in this Agreement, and shall be subject
to all the responsibilities, restrictions, duties and liabilities relating
thereto placed on the Servicer by the terms and provisions of this Agreement;
provided, however, that the predecessor Servicer shall remain liable for, and
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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
-------- -------
33
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
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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 Financial Parties. Upon any termination
---------------------------------
of, or appointment of a successor to, the Servicer pursuant to this Article
VIII, the Indenture Trustee shall give prompt written notice thereof to the
Noteholders and the Rating Agencies and the Owner Trustee shall give prompt
written notice thereof to the Certificateholders.
SECTION 8.05. Waiver of Past Defaults. A majority of the Controlling
-----------------------
Class as of the close of the preceding Distribution Date may, on behalf of all
Financial Parties, 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.
34
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 Xxxxx'x 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 Xxxxx'x 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 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
Business 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 Business Day preceding a Distribution Date, on the Business
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 Business Day preceding such Distribution Date of
the Collected 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:
35
(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
(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).
36
(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 Financial Parties, (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 the Certificateholders differently than any
other class of Noteholders or the Certificateholders, respectively, then such
addition shall not, as evidenced by an Opinion of Counsel, adversely affect in
any material respect the interests of any class of Noteholders or the
Certificateholders, (iv) add to the covenants, restrictions or obligations of
the Seller, the Servicer, or either Trustee or (v) add, change or eliminate any
other provision of this Agreement in any manner that shall not, as evidenced by
an Opinion of Counsel, adversely affect in any material respect the interests of
the Financial Parties.
(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 Controlling Class 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 Financial Parties; 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
37
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 Controlling Class 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 Financial
Parties described in such Section.
(c) Prior to the execution of any such amendment or consent, the Indenture
Trustee shall furnish written notification to the Rating Agencies of the
substance of such amendment or consent as provided to the Indenture Trustee.
(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 of the substance of such
amendment or consent as provided to the Indenture Trustee.
(e) It shall not be necessary for the consent of Financial Parties 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 Financial Parties provided for in this Agreement) and of evidencing the
authorization of the execution thereof by Financial Parties shall be subject to
such reasonable requirements as either Trustee may prescribe, including the
establishment of record dates pursuant to paragraph number 3 of the Note
Depository Agreement.
(f) Prior to the execution of any amendment to this Agreement, each Trustee
shall be entitled to receive and rely upon the Opinion of Counsel referred to in
subsection 10.02(i) and an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent to the execution and delivery of such amendment have been satisfied.
Each Trustee may, but shall not be obligated to, enter into any such amendment
which affects such Trustee's own rights, duties or immunities under this
Agreement or otherwise.
(g) Each of NFC and the Seller agrees that such Person shall not amend or
agree to any amendment of the Purchase Agreement unless such amendment would be
permissible under the terms of this Section 10.01 as if this Section 10.01 were
contained in the Purchase Agreement.
SECTION 10.02. Protection of Title to Owner Trust Estate.
-----------------------------------------
(a) The Seller or the Servicer or both shall execute and file such
financing statements and cause to be executed and filed such continuation and
other statements, and the Seller and the Servicer hereby consent to the filing
of such financing statements and 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 Financial Parties and the Owner Trustee
under this Agreement in the
38
Receivables and the Indenture Trustee's interest in the Receivables under the
Indenture. For the purposes of the UCC, the Owner Trustee is hereby authorized,
but is not obligated to file such financing statements or continuation
statements. 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 9-506 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 change in its jurisdiction of formation and
shall file such financing statements or amendments as may be necessary to
continue the perfection of each Trustee's security interest in the Receivables.
The Servicer shall at all times maintain each office from which it services
Receivables and its jurisdiction of formation 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 in respect of such
Receivable.
(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, repurchased by the Seller,
purchased by the Servicer or become a Liquidating Receivable.
(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 and has been pledged to the Indenture Trustee unless such
Receivable has been paid in full, purchased by the Seller, purchased by the
Servicer or become a Liquidating Receivable.
39
(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.
----------
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 (i) the duties and immunities of the Owner
Trustee hereunder shall be governed by the laws of the State of Delaware and
(ii) the rights and remedies of the Indenture Trustee, and the provisions
contained in Section 5.01(b)(ii) shall be governed by the laws of the State of
New York.
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
40
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 Controlling Class 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 Financial Parties 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 Owner Trust Estate
and/or the assignment of any or all of the Owner Trustee's rights and
obligations hereunder to the Indenture Trustee.
SECTION 10.11. No Petition Covenants. Notwithstanding any prior termination
---------------------
of this Agreement, the Servicer and the Seller shall not, prior to the date
which is one year and one day after the final distribution with respect to the
Securities to the Note Distribution Account or the Certificate Distribution
Account, as applicable, acquiesce, petition or otherwise invoke or cause the
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.
41
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 USA, National Association
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
USA, National Association 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
2002) 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.
* * * * *
42
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 USA, NATIONAL
ASSOCIATION, not in its individual capacity
but solely as Owner Trustee on behalf of
the Trust
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION, as Seller
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and Treasurer
NAVISTAR FINANCIAL CORPORATION, as Servicer
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and Treasurer
Acknowledged and Accepted:
THE BANK OF NEW YORK, not in
its individual capacity but solely as
Indenture Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: Assistant Treasurer
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
EXHIBIT B
Form of Initial PSA Assignment
For value received, in accordance with the Pooling and Servicing Agreement,
dated as of April 30, 2002 (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 USA, National Association, 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 $317,954,886.53) 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 International 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 PSA Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the undersigned
contained in the Pooling and Servicing Agreement and is to be governed by the
Pooling and Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Pooling and Servicing Agreement.
* * * * *
IN WITNESS WHEREOF, the undersigned has caused this Initial PSA Assignment
to be duly executed as of April 30, 2002.
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION
By:___________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and Treasurer
2
EXHIBIT C
Form of Subsequent Transfer PSA Assignment
For value received, in accordance with the Pooling and Servicing Agreement,
dated as of April 30, 2002 (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 USA, National Association, 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
__________, 2002 (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
International 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 PSA Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the undersigned
contained in the Pooling and Servicing Agreement and is to be governed by the
Pooling and Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Pooling and Servicing Agreement.
* * * * *
IN WITNESS WHEREOF, the undersigned has caused this Subsequent Transfer PSA
Assignment to be duly executed as of __________________, 2002.
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
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 April 30, 2002 among NFC, as Administrator, Chase Manhattan Bank USA,
National Association, 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 purchase as of an
Accounting Date pursuant to Section 9.01 of the Pooling and Servicing Agreement.
Administrator: NFC or any successor Administrator under the Administration
-------------
Agreement.
Affiliate: With respect to any specified Person, any other Person
---------
controlling, controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
Agency Office: The office of the 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).
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 $317,954,886.53, 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.
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 PSA Assignment or any Subsequent Transfer PSA
----------
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 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
2
Administrator to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).
Available Purchase Amount: As of any Subsequent Transfer Date, the excess,
-------------------------
if any, of $500,000,000.00 over 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.
Certificateholder: A Person in whose name a Certificate is registered
-----------------
pursuant to the terms of the Trust Agreement.
3
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 1.96% Asset Backed Notes in the aggregate
---------------
principal amount of $73,000,000 issued pursuant to the Indenture.
Class A-2 Notes: The Class A-2 3.07% Asset Backed Notes in the aggregate
---------------
principal amount of $182,000,000 issued pursuant to the Indenture.
Class A-3 Notes: The Class A-3 4.09% Asset Backed Notes in the aggregate
---------------
principal amount of $104,000,000 issued pursuant to the Indenture.
Class A-4 Notes: The Class A-4 4.76% Asset Backed Notes in the aggregate
---------------
principal amount of $121,000,000 issued pursuant to the Indenture.
Class B Notes: The Class B 4.95% Asset Backed Notes in the aggregate
-------------
principal amount of $20,000,000 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 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.
4
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: April 30, 2002
------------
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 Amount: With respect to any Distribution Date, for the related
----------------
Monthly Period, the sum of (a) all Collections received by the Servicer, (b) all
Monthly Advances made by the Servicer, and (c) all Warranty Payments and
Administrative Purchase Payments, minus (d) an amount equal to the aggregate of
the amounts representing reimbursement for outstanding Monthly Advances and
Liquidation Expenses for the related Monthly Period.
Collections: All amounts received from Obligors or otherwise in respect of
-----------
Receivables during the related Monthly Period, whether constituting principal,
interest, proceeds of sales of Financed Vehicles, Insurance Proceeds,
Liquidation Proceeds or otherwise, except for Supplemental Servicing Fees
received on the Receivables and the Related Security.
Collection Account: The account designated as such, established and
------------------
maintained pursuant to Section 5.01(a)(i) of the Pooling and Servicing
Agreement.
5
Contractual Annual Percentage Rate: With respect to a Receivable, for any
----------------------------------
day or period, the annual rate of finance charges stated in such Receivable
applicable to that day or period.
Controlling Class: (a) So long as any Class A Notes are outstanding, the
-----------------
Class A Notes, (b) if the Class A Notes are no longer outstanding but the Class
B Notes are outstanding, the Class B Notes, and (c) if the Notes are no longer
outstanding, the Certificates.
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, 0 Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, Attn: Corporate Trust ABS Unit, and in the case of the Owner
Trustee, at Chase Manhattan Bank USA, National Association, c/o JPMorgan Chase
Bank, 000 Xxxxxxx Xxxxxxxxxx Xxxx, XXX0/0xx Xxx., Xxxxxx, Xxxxxxxx 00000, Attn:
Institutional Trust Services.
Custodian: NFC, as Servicer, or another custodian named from time to time
---------
in the Custodian Agreement.
Custodian Agreement: The Custodian Agreement, dated as of April 30, 2002
-------------------
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 International has a valid dealer
------
sales/maintenance agreement to sell International 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 International
has a valid agreement to sell International 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.
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
6
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 May 15, 2002.
Distributor: A distributor of vehicles and equipment not manufactured by
-----------
International.
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, acting in its fiduciary capacity, 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.
Effective Annual Percentage Rate: (1) for any Temporary Interest Free
--------------------------------
Receivable, the implicit interest rate for that Temporary Interest Free
Receivable calculated on a constant yield to maturity basis assuming such
Temporary Interest Free Receivable is paid in accordance with its terms and
accrues no interest during its interest free period and accrues interest at its
contractual rate during the remainder of its term and (2) for any other
Receivable, the Contractual Annual Percentage Rate with respect to such
Receivable.
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 Xxxxx'x
Investors Service or (2) a short-term unsecured debt or certificate of deposit
rating of at least "A-1+" from S&P and "P-1" from Xxxxx'x Investors Service, (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.
7
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
repurchase obligation (unless the counterparty immediately satisfies the
repurchase obligation upon being notified of such shortfall);
8
(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.
Equal Payment Fully Amortizing Receivable: A Retail Note that provides for
-----------------------------------------
equal monthly payments that fully amortize the amount financed over its original
term to maturity.
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: May 15, 2003
Class A-2 Notes: April 15, 2005
Class A-3 Notes: July 17, 2006
Class A-4 Notes: April 15, 2009
Class B Notes: April 15, 2009
Financed Vehicle: A new or used medium or heavy duty truck, truck chassis,
----------------
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.
Financial Parties: The Noteholders and the Certificateholders.
-----------------
9
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 October 2002 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 xxxxx x xxxx 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 April 30, 2002 between the Owner
---------
Trustee and the Indenture Trustee, as amended and supplemented from time to
time.
10
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, underwriter,
trustee, partner, director or person performing similar functions.
Independent Certificate: A certificate or opinion to be delivered to the
-----------------------
Indenture Trustee under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 11.1 of the Indenture, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in the Indenture and that the signer is Independent within the meaning thereof.
Indirect Participant: A securities broker, dealer, bank, trust company or
--------------------
other Person that clears through or maintains a custodial relationship with a
Clearing Agency Participant, either directly or indirectly.
Initial Aggregate Starting Receivables Balance: $317,954,886.53
----------------------------------------------
Initial Cutoff Date: April 1, 2002.
-------------------
Initial PA Assignment: As defined in Section 2.01 of the Purchase
----------------------
Agreement.
Initial PSA 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
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, 1.96% per annum, with
-------------
respect to the Class A-2 Notes, 3.07% per annum, with respect to the Class A-3
Notes, 4.09% per annum, with respect to the Class A-4 Notes, 4.76% per annum and
with respect to the Class B Notes, 4.95% 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 Financial
Party with respect to the Purchased Property.
International: International Truck and Engine Corporation, a Delaware
-------------
corporation, and its successors.
International Purchase Obligations: Certain obligations of International,
----------------------------------
subject to limitations, to purchase Financed Vehicles securing Liquidating
Receivables pursuant to Article VI, "NFC/International Retail Repossession
Purchase and Remarketing Agreement" and other provisions of the Master
Intercompany Agreement by and between NFC and International dated as of April
26, 1993, as such Master Intercompany Agreement may be amended, supplemented,
restated or otherwise modified.
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
12
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 International Purchase Obligations and proceeds from any Guaranties,
net of amounts that are required to be refunded to the Obligor on such
Receivable.
Low APR Receivable: A Receivable that has a Contractual Annual Percentage
------------------
Rate that is less than the Required Rate, other than a Temporary Interest Free
Receivable.
Maximum Negative Carry Amount: With respect to the Closing Date and any
-----------------------------
Distribution Date, the product of (i) the excess of (a) the weighted average of
the Interest Rates on the Notes as of such date over (b) 1.25%, multiplied by
(ii) the amount on deposit in the Pre-Funding Account on such date multiplied by
(iii) the fraction of a year represented by the number of days from such date
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) of (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
amounts in 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.
13
NFC: Navistar Financial Corporation, a Delaware corporation, and its
---
successors.
NFRRC: Navistar Financial Retail Receivables Corporation, a Delaware
-----
corporation, and its successors.
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 July 15, 2002, 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 Xxxx due July 18, 2002 (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 April 15, 2003, 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 4% 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 (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 April 15, 2004, 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 3_% United States
Treasury Note due March 31, 2004 (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 April 15, 2005, over (b) the amount of interest that would have
accrued on such Class A-4
14
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 1/2% United States Treasury Note due
May 15, 2005 (such excess to be discounted on a monthly basis to present value
to such Distribution Date at the yield described in clause (iv)(b) above) and
(v) the Class B Notes, an amount equal to the excess, if any, discounted as
described below, of (a) the amount of interest that would have accrued on the
portion of the remaining Pre-Funded Amount to be paid to the Noteholders of the
Class B Notes pursuant to Section 8.2(c)(ii) of the Indenture (the "Class B 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 May 15, 2004 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 5 1/4 % United States Treasury Note due May 15, 2004
(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 D 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).
15
Note Pool Factor: With respect to any class of Notes and any Distribution
----------------
Date, a seven-digit decimal figure computed by the Servicer which is equal to
the Note Principal Balance for such class as of the close of such Distribution
Date divided by the initial Note Principal Balance for such class.
Note Principal Balance: With respect to any class of Notes and any
----------------------
Distribution Date, the initial aggregate principal balance of such class of
Notes, reduced by all previous payments to the Noteholders of such class in
respect of principal of such Notes, other than the Noteholders' Prepayment
Premium.
Note Register: With respect to any class of Notes, the register of such
-------------
Notes specified in Section 2.4 of the Indenture.
Note Registrar: The registrar at any time of the Note Register, appointed
--------------
pursuant to Section 2.4 of the Indenture.
Notes: Collectively, the Class A-1 Notes, the Class A-2 Notes, the Class
-----
A-3 Notes, the Class A-4 Notes and the Class B Notes.
Obligor: With respect to any Receivable, the purchaser or any co-purchaser
-------
of the related Financed Vehicle or Financed Vehicles or any other Person, other
than the maker of any Guaranty, who owes payments under a Receivable.
Officer's Certificate: A certificate signed by any Authorized Officer of
---------------------
the 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 Proceeds: The amount specified in the second or third
--------------------------
sentence, as applicable, of Section 9.01 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
16
Agent in trust for the Holders of such Notes; provided, however, that if
-------- -------
such Notes are to be redeemed, notice of such redemption has been duly
given pursuant to the Indenture or provision therefor, satisfactory to the
Indenture Trustee, has been made; and
(iii) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a protected purchaser;
provided, however, that in determining whether the Holders of the requisite
-------- -------
Outstanding Amount of the Controlling Class 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
17
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.
Owner Trustee: Chase Manhattan Bank USA, National Association, a national
-------------
bank, 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 XX
Xxxxxx Xxxxx 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 9-102(a)(47) of the UCC and are susceptible of
physical delivery.
Pooling and Servicing Agreement: The Pooling and Servicing Agreement, dated
-------------------------------
as of April 30, 2002, among NFC, the Seller and Chase Manhattan Bank USA,
National Association, 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-Funded Amount: With respect to any Distribution Date, the amount on
-----------------
deposit in the Pre-Funding Account.
18
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.
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.
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 (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 April 30, 2002,
-------------------
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 Section 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.
19
Rating Agencies: As of any date, the nationally recognized statistical
---------------
rating organizations requested by the Seller to provide ratings on the Notes
which are rating the Notes on such date.
Rating Agency Condition: With respect to any action, the condition that
-----------------------
each Rating Agency shall have been given at least 10 days (or such shorter
period as is acceptable to each Rating Agency) prior notice thereof and that
each of the Rating Agencies shall have notified the Seller, the Servicer and the
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
International Purchase Obligations and proceeds from any Guaranties.
Receivable File: The documents listed in Section 2.03 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.
20
Related Security: The "Related Security" as defined in Section 2.01 of the
----------------
Purchase Agreement.
Remaining Gross Balance: With respect to any Receivable (other than a
-----------------------
Liquidating Receivable) and as of an Accounting Date, the Starting Gross
Receivable Balance thereof minus the sum of (i) the portion of all Actual
Payments with respect to such Receivable, (ii) any Warranty Payment or
Administrative Purchase Payment with respect to any such Receivable, (iii) any
Prepayments applied to reduce the Starting Gross Receivable Balance of any such
Receivable and (iv) proceeds from any Insurance Policies with respect to such
Receivable, plus for any Receivable not classified by the Servicer as a "finance
charge - included contract," the portion of the payments specified in the
preceding clauses (i), (ii), (iii) or (iv) above allocable in accordance with
the actuarial method to finance charges; provided, however, that the Remaining
Gross Balance of any Receivable that has been designated a Liquidating
Receivable during the related Monthly Period shall equal zero.
Repurchase Event: A Repurchase Event described in Section 5.04 of the
----------------
Purchase Agreement.
Required Deposit Rating: A rating on short-term unsecured debt obligations
-----------------------
of P-1 by Xxxxx'x Investors Service 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.
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 Certificateholders pursuant to
Section 5.05 of the Pooling and Servicing Agreement) and (b) the Maximum
Negative Carry Amount as of such date.
Required Rate: 5.16%.
-------------
Reserve Account: The account designated as such, established and maintained
---------------
pursuant to Section 4.07(a) of the Pooling and Servicing Agreement.
Reserve Account Initial Deposit: Cash or Eligible Investments having a
-------------------------------
value of at least $15,734,758.86, which shall be deposited into the Reserve
Account on the Closing Date pursuant to Section 4.07(a) of the Pooling and
Servicing Agreement.
Reserve Account Subsequent Transfer Deposit: With respect to any Subsequent
-------------------------------------------
Transfer Date, cash or Eligible Investments in an amount equal to the sum of (1)
4.75% of the aggregate Starting Receivables Balance of the transferred
Subsequent Receivables and (2) the aggregate Yield Supplement Required Deposit
Amounts for the transferred Subsequent Receivables, which shall be deposited
into the Reserve Account on such Subsequent Transfer Date pursuant to Section
4.07(a) of the Pooling and Servicing Agreement.
Reserve Account Property: As defined in the Granting Clause of the
------------------------
Indenture.
21
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
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, truck chassis, 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: Standard & Poor's Ratings Services and any successor thereto.
---
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 A to the Pooling and Servicing Agreement, as it may
---------
be amended from time to time in accordance with any Subsequent Transfer PSA
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 Contractual Annual
Percentage Rate in effect during the period to which that payment relates unless
otherwise specified by its terms. When Scheduled Payment is used with reference
to a Distribution Date after the date such Receivable is transferred to the
Trust, it means the payment which is due in the related Monthly Period;
provided, however, that in the case of the first Distribution Date, 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.
22
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.
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:
(1) the sum of
(a) 5.50% of the sum of the Aggregate Receivables Balance as of the
close of business on the last day of the related Monthly Period and the
aggregate Starting Receivables Balance of all Subsequent Receivables
acquired by the Trust after such date and on or prior to such Distribution
Date,
(b) the Specified Yield Supplement Amount for such Distribution Date
and
(2) 2.0% of the Aggregate Starting Receivables Balance;
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 Subsequent Receivables referred to in clause (a) above, shall be
equal to 10.0%.
Specified Yield Supplement Amount: for any Distribution Date, an amount
---------------------------------
equal to the sum of
23
(a) for each Temporary Interest Free Receivable transferred to the Trust
prior to the opening of business on the first day of the Monthly Period in which
such Distribution Date occurs, the aggregate, for each Monthly Period or part of
a Monthly Period beginning with the Monthly Period in which such Distribution
Date occurs during which such Temporary Interest Free Receivable is not accruing
interest, of the product of (1) the scheduled balance of such Temporary Interest
Free Receivable as of the opening of business on the first day of such Monthly
Period assuming all payments are made as scheduled and no prepayments are made
and (2) the result of (A) the Required Rate divided by (B) twelve,
(b) the greater of (1) for each Low APR Receivable transferred to the
Trust prior to the opening of business on the first day of the Monthly Period in
which such Distribution Date occurs, the aggregate, for each Monthly Period
beginning with the Monthly Period in which such Distribution Date occurs through
and including the Monthly Period during which the stated maturity date for such
Low APR Receivable occurs, of the product of (A) the scheduled balance of such
Low APR Receivable as of the opening of business on the first day of such
Monthly Period assuming all payments are made as scheduled and no prepayments
are made and (B) the result of (i) the Required Rate minus the APR of such Low
APR Receivable divided by (ii) twelve, and (2) the lesser of (i) the aggregate
of the portions of the Yield Supplement Required Deposit Amounts attributable to
Low APR Receivables deposited into the Reserve Account on or prior to the last
day of the related Monthly Period, and (ii) $50,000, and
(c) the aggregate Yield Supplement Required Deposit Amounts for any
Subsequent Receivable transferred to the Trust after the last day of the related
Monthly Period but on or prior to such Distribution Date.
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 00 Xxxxxx xx xxx Xxxxxx Xxxxxx xx Xxxxxxx or the
-----
District of Columbia.
Subsequent Cutoff Date: Any date designated by the Seller within the period
----------------------
beginning on the first day of the Monthly Period preceding the Monthly Period in
which the related Subsequent Transfer Date occurs and ending on the Subsequent
Transfer Date.
Subsequent Receivables: The Receivables transferred from the Seller to the
----------------------
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 PSA
Assignment.
24
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 PSA 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.
Subsequent Transfer PSA 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.
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
during the applicable Monthly Period.
Temporary Interest Free Receivable: A Receivable that has an initial period
----------------------------------
during which no interest accrues on such Receivable and all Scheduled Payments
are applied to the reduction of the principal amount thereof.
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
----------------------
Collected 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.
Trust: Navistar Financial 2002-A Owner Trust, a Delaware common law trust
-----
created by the Trust Agreement.
25
Trust Agreement: The Trust Agreement, dated as of April 30, 2002, 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 April 8, 2002 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 April 16, 2002,
-----------------------
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.
Warranty Payment: With respect to a Distribution Date and to a Warranty
----------------
Receivable repurchased as of the related Accounting Date, the sum of (i) the sum
of all remaining Scheduled Payments on such Warranty Receivable due after the
Accounting Date, (ii) all past due Scheduled Payments with respect to which a
Monthly Advance has not been made, (iii) any reimbursement made pursuant to the
last sentence of Section 5.06 of the Pooling and Servicing Agreement with
respect to such Warranty Receivable, and (iv) all Outstanding Monthly Advances
made on such Warranty Receivable, minus (x) the rebate, calculated in accordance
with the actuarial method, that would be payable to the Obligor on such Warranty
Receivable were the Obligor to prepay such Receivable in full on such day and
(y) any Liquidation Proceeds (to the extent applied to reduce the Receivable
Balance of such Warranty Receivable) previously received with respect to such
Warranty Receivable.
Warranty Purchaser: Either (i) the Seller pursuant to Section 2.06 of the
------------------
Pooling and Servicing Agreement or (ii) NFC pursuant to Section 5.04 of the
Purchase Agreement.
Warranty Receivable: A Receivable which the Warranty Purchaser has become
-------------------
obligated to repurchase pursuant to Section 2.06 of the Pooling and Servicing
Agreement or Section 5.04 of the Purchase Agreement.
Yield Supplement Required Deposit Amount: means,
----------------------------------------
26
(a) for any Temporary Interest Free Receivable, an amount equal to the
aggregate, for each Monthly Period or part of a Monthly Period after
the Cutoff Date for that Temporary Interest Free Receivable in which
that Temporary Temporary Interest Free Receivable is not accruing
interest, of the product of
(1) the scheduled balance of that Temporary Interest Free Receivable
as of the opening of business on the first day of that Monthly
Period assuming all Scheduled Payments are made as scheduled and
no prepayments are made and
(2) the result of (A) the Required Rate divided by (B) twelve and
(b) for any Low APR Receivable, an amount equal to the aggregate, for each
Monthly Period after the Cutoff Date for that Low APR Receivable
through and including the Monthly Period during which the stated
maturity date for that Low APR Receivable occurs, of the product of
(1) the scheduled balance of that Low APR Receivable as of the
opening of business on the first day of that Monthly Period
assuming all Scheduled Payments are made as scheduled and no
prepayments are made and
(2) the result of (A) the Required Rate minus the APR of that Low APR
Receivable divided by (B) twelve.
27
PART II - RULES OF CONSTRUCTION
(a) Accounting Terms. As used in this Appendix or the Basic Documents,
----------------
accounting terms which are not defined, and accounting terms partly defined,
herein or therein shall have the respective meanings given to them under
generally accepted accounting principles. To the extent that the definitions of
accounting terms in this Appendix or the Basic Documents are inconsistent with
the meanings of such terms under generally accepted accounting principles, the
definitions contained in this Appendix or the Basic Documents will control.
(b) "Hereof," etc. The words "hereof," "herein" and "hereunder" and words
------------
of similar import when used in this Appendix or any Basic Document will refer to
this Appendix or such Basic Document as a whole and not to any particular
provision of this Appendix or such Basic Document; and Section, Schedule and
Exhibit references contained in this Appendix or any Basic Document are
references to Sections, Schedules and Exhibits in or to this Appendix or such
Basic Document unless otherwise specified. The word "or" is not exclusive.
(c) Reference to Distribution Dates. With respect to any Distribution
-------------------------------
Date, the "related Monthly Period," and the "related Record Date," will mean the
Monthly Period and Record Date, respectively, immediately preceding such
Distribution Date, and the relationships among Monthly Periods and Record Dates
will be correlative to the foregoing relationships.
(d) Number and Gender. Each defined term used in this Appendix or the
-----------------
Basic Documents has a comparable meaning when used in its plural or singular
form. Each gender-specific term used in this Appendix or the Basic Documents has
a comparable meaning whether used in a masculine, feminine or gender-neutral
form.
(e) Including. Whenever the term "including" (whether or not that term is
---------
followed by the phrase "but not limited to" or "without limitation" or words of
similar effect) is used in this Appendix or the Basic Documents in connection
with a listing of items within a particular classification, that listing will be
interpreted to be illustrative only and will not be interpreted as a limitation
on, or exclusive listing of, the items within that classification.
28
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
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
with a copy to:
Navistar Financial Retail Receivables Corporation
0000 Xxxx Xxxx Xxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
(b) in the case of the Servicer, the Custodian or the Administrator,
at the following address:
Navistar Financial Corporation
0000 Xxxx Xxxx Xxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
with a copy to:
Navistar Financial Corporation
0000 Xxxx Xxxx Xxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
(c) in the case of the Indenture Trustee, at its Corporate Trust
Office
1
(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
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
and:
Navistar Financial Retail Receivables Corporation
0000 Xxxx Xxxx Xxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
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 Xxxxx'x Investors Service, Inc., to
Xxxxx'x Investors Service, Inc.
ABS Monitoring Department
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 and
(f) in the case of Standard & Poor's Ratings Services, to
Standard & Poor's Ratings Services
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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 Financial Parties 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 Financial Parties is given by mail, neither the
failure to mail such notice nor any defect in any notice so mailed to any
particular Financial Party shall affect the sufficiency of such notice with
respect to other Financial Parties, and any notice that
2
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
