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SECURITY, PLEDGE AND TRUST AGREEMENT
between
NAVISTAR FINANCIAL CORPORATION
and
BANKERS TRUST COMPANY,
Trustee
Dated as of June 8, 2001
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.............................................2
SECTION 1.01. Definitions...................................2
ARTICLE II THE SECURITY INTEREST.................................13
SECTION 2.01. Grant of Security Interest...................13
SECTION 2.02. Release of Security Interest in Receivables
and in Capital Stock of Harco Insurance......15
SECTION 2.03. Continuing Liability of Navistar Financial
and its Subsidiaries.........................15
SECTION 2.04. Rights of Secured Parties Under Secured
Instruments................................. 15
SECTION 2.05. Release of Collateral........................16
SECTION 2.06. Senior Liens.................................16
SECTION 2.07. Additional Secured Obligations...............19
ARTICLE III REPRESENTATIONS AND WARRANTIES.......................20
SECTION 3.01. Title to Collateral; Validity of
Security Interest............................20
SECTION 3.02. No Tax or ERISA Liens; Enforceability of
Navistar Financial Receivables...............22
SECTION 3.03. Location of Collateral.......................22
SECTION 3.04. Subsidiaries.................................22
ARTICLE IV COVENANTS.............................................23
SECTION 4.01. Filings and Further Assurances...............23
SECTION 4.02. Marketable Securities........................26
SECTION 4.03. Subsidiary Shares and Subsidiary Notes.......29
SECTION 4.04. Liens on the Collateral......................30
SECTION 4.05. Place of Business and Collateral.............31
SECTION 4.06. Insurance....................................31
SECTION 4.07. Collection Procedures........................31
SECTION 4.08. Delivery of Secured Instruments..............35
SECTION 4.09. Information as to Secured Parties............35
SECTION 4.10. Stamp and Other Similar Taxes................36
SECTION 4.11. Filing Fees; Excise Taxes....................36
SECTION 4.12. Collateral Reports...........................36
SECTION 4.13. Government Receivables.......................36
ARTICLE V ACCELERATION OF SECURED OBLIGATIONS; REMEDIES..........38
SECTION 5.01. Notice of Acceleration.......................38
SECTION 5.02. General Authority of the Trustee over
the Collateral...............................38
SECTION 5.03. Remedies; Rights Upon Acceleration of
Secured Obligations..........................39
SECTION 5.04. Right to Initiate Judicial Proceedings.......41
SECTION 5.05. Right to Appoint a Receiver..................41
SECTION 5.06. Instructions of Required Secured Parties.....42
SECTION 5.07. Remedies Not Exclusive.......................42
SECTION 5.08. Waiver and Estoppel..........................43
SECTION 5.09. Limitation by Law............................43
ARTICLE VI COLLATERAL ACCOUNT; DISTRIBUTIONS.....................43
SECTION 6.01. The Collateral Account.......................43
SECTION 6.02. Control of Collateral Account................44
SECTION 6.03. Investment of Funds Deposited in
Collateral Account.......................... 44
SECTION 6.04. Application of Moneys........................45
SECTION 6.05. Application of Moneys Distributable to
Indenture Trustees...........................46
SECTION 6.06. Trustee's Calculations.......................47
SECTION 6.07. Pro Rata Sharing.............................47
ARTICLE VII THE TRUSTEE..........................................48
SECTION 7.01. Acceptance of Trust..........................48
SECTION 7.02. Exculpatory Provisions.......................48
SECTION 7.03. Delegation of Duties.........................49
SECTION 7.04. Reliance by Trustee..........................49
SECTION 7.05. Limitations on Duties of Trustee.............50
SECTION 7.06. Moneys to be Held in Trust...................50
SECTION 7.07. Resignation and Removal of the Trustee.......50
SECTION 7.08. Status of Successor Trustees.................51
SECTION 7.09. Merger of the Trustee........................52
SECTION 7.10. Co-Trustee; Separate Trustees................52
SECTION 7.11. Treatment of Payee or Indorsee by Trustee;
Representatives of Secured Parties...........53
SECTION 7.12. Compensation and Expenses....................54
SECTION 7.13. Indemnification..............................54
ARTICLE VIII RELEASE OF COLLATERAL...............................55
SECTION 8.01. Permitted Releases...........................55
SECTION 8.02. Conditions to Termination of Security Interest
and Release of All Collateral................55
SECTION 8.03. Procedure for Termination and Release........55
ARTICLE IX MISCELLANEOUS.........................................56
SECTION 9.01. Notices......................................56
SECTION 9.02. No Waivers...................................56
SECTION 9.03. Amendments, Supplements and Waivers..........56
SECTION 9.04. Headings.....................................57
SECTION 9.05. Severability.................................57
SECTION 9.06. Successors and Assigns.......................57
SECTION 9.07. Currency Conversions.........................58
SECTION 9.08. Governing Law................................58
SECTION 9.09. Counterparts.................................58
SECTION 9.10. Termination..................................58
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Schedule A - Existing Debt Indentures
Schedule B - Permitted Receivables Sale Agreements
Schedule C - List of Collection Banks, Lock-boxes, Suspense
Accounts and Collection Accounts
Schedule D - List of Proceeds Account Banks and Proceeds Deposit
Accounts
Schedule E - Subsidiaries and Capitalization
Schedule F - Instruments
Exhibit A - Perfection Certificate
Exhibit B - Confirmation
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SECURITY, PLEDGE AND TRUST AGREEMENT dated as of June 8, 2001,
between NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (with its
successors, "Navistar Financial"), and BANKERS TRUST COMPANY, a corporation
duly organized and existing under the laws of the State of New York, acting
individually and as trustee for the holders of the Secured Obligations.
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Credit Agreement and the
364-Day Credit Agreement (such capitalized terms and other capitalized terms
used herein being used with the meanings given to such terms in Section
1.01), Navistar Financial desires to secure, equally and ratably, the payment
of (i) the principal of and interest on the Loans and all other amounts from
time to time owing by Navistar Financial under the Credit Agreement and the
364-Day Credit Agreement and (ii) all amounts from time to time owing by
Navistar Financial in respect of Financial Services Obligations;
WHEREAS, in order to comply with the Existing Debt Indentures,
Navistar Financial also desires to secure the payment of the principal of,
premium, if any, and interest on the Existing Indenture Obligations equally
and ratably with the Loans and Financial Services Obligations; and
WHEREAS, from time to time after the date hereof Navistar Financial
may desire to secure additional Indebtedness equally and ratably with the
Existing Indenture Obligations, the Loans and Financial Services Obligations;
DECLARATION OF TRUST:
NOW, THEREFORE, in order to secure the payment of the Secured
Obligations and in consideration of the premises and the mutual agreements
set forth herein, Navistar Financial hereby grants the Trust Estate to the
Trustee and the Trustee declares that it holds the Trust Estate as trustee in
trust under this Agreement.
TO HAVE AND TO HOLD the Trust Estate unto the Trustee in trust
under this Agreement and its assigns and their assigns forever.
IN TRUST NEVERTHELESS under and subject to the conditions set forth
herein and for the benefit of the Secured Obligations and the holders
thereof, and for the enforcement of the payment of the Secured Obligations,
and as security for the performance of and compliance with the covenants and
conditions of this Agreement.
PROVIDED, HOWEVER, that if Navistar Financial or its assigns shall
satisfy the conditions set forth in Section 8.02 and 8.03, then this
Agreement, and the estates and rights hereby granted, shall cease, terminate
and be void and of no further force and effect.
IT IS HEREBY FURTHER COVENANTED AND DECLARED that the Trust Estate
is to be held and applied by the Trustee, subject to the further covenants,
conditions and trusts hereinafter set forth.
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have the
following meanings:
"Account Debtor" means, with respect to any Receivable, any Person
obligated to make payment thereunder, including, without limitation, any
"account debtor" (as defined in the UCC) on such Receivable.
"Additional Secured Obligation" means any obligation which Navistar
Financial designates as an Additional Secured Obligation pursuant to Section
2.07 after the date hereof.
"Additional Short-Term Debt" means (i) commercial paper issued by
Navistar Financial and (ii) other Indebtedness for Borrowed Money (as defined
in the Credit Agreement) of Navistar Financial owing to a bank, in each case
(x) having a maturity not greater than 270 days from the date of the issuance
or incurrence thereof and (y) not subject to any provision for extension or
renewal or automatic "roll-over" at the option of either party.
"Administrative Agent" means The Chase Manhattan Bank, in its
capacity as Administrative Agent under each of the Credit Agreement and the
364-Day Credit Agreement, or any successor Administrative Agent appointed in
accordance with the respective terms of each such agreement.
"Affiliate" has the meaning specified in the Credit Agreement.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
amended, or any successor statute.
"Books and Records" means all computer programs, tapes, discs,
punch cards, data processing software, transaction files, master files and
related property and rights (except computer and peripheral equipment) of
Navistar Financial pertaining to any of the Collateral, or regularly used by
Navistar Financial in enforcing or identifying any of the Collateral or
establishing the amount of any Navistar Financial Receivable, or identifying
the Account Debtor with respect to any Navistar Financial Receivable, or
identifying or establishing the amount of any Proceeds of any of the
Collateral.
"Chattel Paper" means Navistar Financial Receivables which
constitute "chattel paper" (as defined in the UCC).
"Collateral" means all property in which a security interest is
granted to the Trustee pursuant to Section 2.01 and not released pursuant to
the terms hereof.
"Collateral Account" has the meaning set forth in Section 6.01.
"Collateral Release Notice" has the meaning set forth in Section
8.03.
"Collection Account" has the meaning set forth in Section 4.07(a).
"Collection Bank" means each of the banks listed in Schedule C
hereto, as amended from time to time in accordance with Section 4.07(c), at
which one or more Lock-boxes and/or Suspense Accounts and/or Collection
Accounts are maintained.
"Commitment" has the meanings specified in the Credit Agreement and
the 364-Day Credit Agreement.
"Concentration Bank" means The Chase Manhattan Bank, in its
capacity as the agent of the Trustee (or of a co-trustee or separate
trustee), or any successor Concentration Bank appointed pursuant to Section
4.07(g) at which the Proceeds Allocation Account is maintained. If the
Concentration Bank is an agent of a co-trustee or separate trustee appointed
pursuant to Section 7.10, references to the "Trustee" in connection with the
Concentration Bank shall refer to such co-trustee or separate trustee, as the
case may be.
"co-trustee" has the meaning set forth in Section 7.10.
"Credit Agreement" means the Credit Agreement, dated as of December
8, 2000, among Navistar Financial, Arrendadora Financiera Navistar, S.A. de
C.V., Servicios Financieros Navistar, S.A. de C.V., Navistar Comercial, S.A.
de C.V., the Lenders party thereto, The Chase Manhattan Bank, as
administrative agent, Bank of America, N.A., as syndication agent and The
Bank of Nova Scotia, as documentation agent, as amended, supplemented or
otherwise modified from time to time.
"Dealer" means (i) a Person with whom International or an affiliate
of International has a valid dealer sales/maintenance agreement to sell
Navistar Vehicles (it being understood that any such Person may also have an
agreement with an OEM Supplier to sell OEM Vehicles), (ii) a truck equipment
manufacturer with whom International has a valid agreement to sell
International vehicles, (iii) a Person with whom Navistar Financial has a
valid agreement to extend used truck floor plan terms or (iv) a Person for
whom Navistar Financial provides financing for OEM Vehicles.
"Debt Indentures" means (i) each Existing Debt Indenture and (ii)
any other indenture entered into after the date hereof pursuant to which
Additional Secured Obligations are issued, in each case as such indenture is
amended from time to time.
"Documents" means all "documents" (as defined in the UCC) or other
receipts covering, evidencing or representing goods, now owned or hereafter
acquired by Navistar Financial.
"Dollars" and "$" mean lawful money of the United States of America.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or
required by law to close.
"Engine Accounts Sale Agreement" means the agreement by and between
International and Navistar Financial, dated as of November 21, 2000.
"Equipment" means all "equipment" (as defined in the UCC) now or
hereafter owned by Navistar Financial, including, without limitation, all
motor vehicles, trucks, trailers, office equipment and computer hardware;
provided that any of the foregoing which constitute Inventory shall be
included in the meaning of the term "Inventory" and excluded from the meaning
of the term "Equipment".
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, including (unless the context otherwise
requires) all rules and regulations promulgated thereunder.
"ERISA Affiliate" has the meaning specified in the Credit Agreement.
"Event of Default" has the meaning specified in the Credit
Agreement.
"Existing Debt Indentures" means the indentures listed on Schedule
A hereto, as such indentures are amended from time to time.
"Existing Indenture Obligations" means the notes and debentures of
Navistar Financial outstanding from time to time under the Existing Debt
Indentures; provided that the term Existing Indenture Obligations shall not
include any such securities that are not issued and outstanding on the date
hereof unless such securities have been issued in exchange or substitution
for any securities constituting Existing Indenture Obligations which were
outstanding on the date hereof.
"Existing Senior Lien" has the meaning specified in Section 2.06(d).
"Financial Services Obligations" means all obligations of Navistar
Financial to any Lender, or any affiliate of any Lender, under any Secured
Interest Rate Agreement.
"General Intangibles" means all "general intangibles" (as defined
in the UCC) now owned or hereafter acquired by Navistar Financial (other than
any Navistar Financial Receivable or Related Receivable Right), including,
without limitation, to the extent the same constitute "general intangibles"
(as defined in the UCC), (i) all rights and privileges of Navistar Financial
in, to and under the Material Agreements, (ii) all patents, patent licenses,
trademarks, trademark licenses, rights in intellectual property, goodwill,
trade names, service marks, trade secrets, copyrights, permits and licenses,
(iii) all rights or claims in respect of refunds for taxes paid and (iv) all
rights in respect of any pension plan or similar arrangement maintained for
employees of Navistar Financial or any ERISA Affiliate.
"Government Account" has the meaning set forth in Section 4.13(c).
"Government Receivables" has the meaning set forth in Section
4.13(a).
"Harco Leasing" means Harco Leasing Company, Inc., a Delaware
corporation.
"hereunder", "hereby", "herein", "hereof" and like words refer to
this Agreement as a whole (including any schedules and supplements hereto)
and not merely to the specific section, paragraph or clause in which the
respective word appears.
"Indebtedness" has the meaning specified in the Credit Agreement.
"Indenture Obligations" means the securities evidencing
Indebtedness of Navistar Financial outstanding from time to time under the
Debt Indentures; provided that such securities are Existing Indenture
Obligations or Additional Secured Obligations.
"Indenture Trustee" means a trustee under any Debt Indenture.
"Instruments" means all "instruments" (as defined in Article 9 of
the UCC) or "letters of credit" (as defined in the UCC), whether or not
evidencing, representing, arising from or existing in respect of, relating
to, securing or otherwise supporting the payment of, any of the Navistar
Financial Receivables, including (but not limited to) the Subsidiary Notes
and any other promissory notes, drafts, bills of exchange and trade
acceptances, in each case now owned by Navistar Financial or hereafter
acquired by Navistar Financial or arising, other than any of the foregoing
which (i) constitute or are part of a group of writings that constitute
Chattel Paper or (ii) are marketable securities or Subsidiary Shares.
"Insurance Policies" means all rights of Navistar Financial in, to
and under insurance policies of every kind, presently existing or hereafter
acquired, under which any collateral securing any Navistar Financial
Receivable is insured; provided that any such rights which constitute
Proceeds shall be included in the meaning of the term "Proceeds" and excluded
from the meaning of the term "Insurance Policies".
"Intercompany Debt" means any Indebtedness owing from time to time
by a Navistar Financial Subsidiary to Navistar Financial, whether or not such
Indebtedness is evidenced by a promissory note or other "instrument" (as
defined in Article 9 of the UCC).
"Intercompany Loan Agreement" means each agreement creating or
evidencing Intercompany Debt, in each case as such agreement may be amended
or supplemented from time to time.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate
collar agreement, interest rate hedge agreement or other similar agreement or
arrangement designed to protect Navistar Financial against fluctuations in
interest rates.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any successor statute.
"International" means International Truck and Engine Corporation,
formerly Navistar International Transportation Corp., a Delaware corporation
and its successors.
"Inventory" means all "inventory" (as defined in the UCC), now
owned or hereafter acquired by Navistar Financial, wherever located.
"Lenders" means the lenders that are parties to either or both of
the Credit Agreement and the 364-Day Credit Agreement, and their respective
successors and assigns; and "Lender" means each of the foregoing.
"Letter of Credit" has the meaning specified in the Credit
Agreement.
"Lien" has the meaning specified in the Credit Agreement.
"Loans" means the loans made by the Lenders pursuant to the Credit
Agreement and the 364-Day Credit Agreement.
"Local UCC" has the meaning set forth in Section 4.01(f).
"Lock-box" has the meaning set forth in Section 4.07(a).
"Master Intercompany Agreement" has the meaning specified in the
Credit Agreement.
"Material Agreements" means, collectively, (i) the Intercompany
Loan Agreements, (ii) the Master Intercompany Agreement, (iii) the Tax
Allocation Agreement, and (iv) each Receivables Sale Agreement, and each
other agreement entered into by Navistar Financial in connection with any
Receivables Sale Agreement or pursuant thereto, to which Navistar Financial
is or becomes a party, in each case as such agreement is amended from time to
time.
"Navistar Financial Receivables" means all right, title and
interest, whether now owned or existing or hereafter arising or acquired, of
Navistar Financial in Receivables, including, without limitation:
(a) all rights of Navistar Financial to receive payments of money or other
consideration from International under the Master Intercompany
Agreement, the Engine Accounts Sale Agreement, the Parents' Side
Agreement, the Tax Allocation Agreement, or otherwise, or from any
Person (other than any Navistar Financial Subsidiary) under secured or
unsecured borrowing or other credit arrangements,
(b) all rights of Navistar Financial to receive payment in respect of the
purchase price of any asset (other than any Receivable) sold by it,
(c) all rights of Navistar Financial to receive payments of money or other
consideration from a Purchaser or any trust or other similar entity
created in connection with the sale of Receivables by Navistar Financial
under any Receivables Sale Agreement or any other agreement executed in
connection with such Receivables Sale Agreement (including, without
limitation, all rights of Navistar Financial (i) to receive the purchase
price of any Sold Receivables, including any portion thereof which
becomes payable at any time following such sale, (ii) to be reimbursed
for advances made or expenses incurred on behalf of any such Purchaser,
trust or similar entity, and for expenses incurred by Navistar Financial
in connection with its servicing of Receivables on behalf of any such
Purchaser, trust or similar entity and (iii) to receive servicing fees
in connection with the collection and administration of Sold Receivables
on behalf of any such Purchaser, trust or similar entity),
(d) all rights of Navistar Financial to receive payments of money or other
consideration from Account Debtors in respect of Retail Receivables and
Wholesale Receivables (excluding any Sold Receivables) and
(e) all rights of Navistar Financial to receive payments of money or other
consideration from any Navistar Financial Subsidiary in respect of any
Intercompany Debt, any amounts payable from time to time to Navistar
Financial under the Tax Allocation Agreement, or otherwise;
provided that the term "Navistar Financial Receivables" shall include
Navistar Financial's right, title and interest in Receivables with respect to
which the United States of America or an agency or department thereof is the
obligor only to the extent provided in Section 4.13; and provided, further,
that the term "Navistar Financial Receivables" shall not include any Sold
Receivables.
"Navistar Financial Subsidiary" means each Subsidiary of Navistar
Financial, except for Harco National Insurance Company, an Illinois
corporation.
"Navistar Vehicle" means any medium or heavy-duty truck produced
by, or for, International or an affiliate of International and sold by
International to Dealers.
"NFRRC" means Navistar Financial Retail Receivables Corporation, a
Delaware corporation, and its successors.
"NFSC" means Navistar Financial Securities Corporation, a Delaware
corporation, and its successors.
"1999 Annual Report" has the meaning specified in the Credit
Agreement.
"Notice of Acceleration" means a written notice delivered to the
Trustee.
(i) by the Administrative Agent with respect to the Loans or other
indebtedness outstanding under the Credit Agreement or the 364-Day
Credit Agreement, or
(ii) by the relevant Indenture Trustee with respect to indebtedness
constituting Secured Obligations hereunder and outstanding under a Debt
Indenture,
stating that (a) such indebtedness has not been paid in full at the stated
final maturity thereof and any applicable grace period has expired or (b) an
event of default has occurred under the provisions of the relevant Secured
Instrument, and, as a result thereof, such indebtedness has become due and
payable prior to the stated maturity thereof.
"OEM Supplier" means any Person who sells OEM Vehicles to a Dealer
and who has entered into an agreement for the benefit of Navistar Financial
to repurchase new vehicle inventory from Navistar Financial upon Navistar
Financial's foreclosure upon such inventory owned by such Dealer (subject to
such customary conditions and limitations as are acceptable to Navistar
Financial).
"OEM Vehicle" means a new medium or heavy-duty truck manufactured
by, or for, a manufacturer other than International.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel to Navistar Financial (other than an employee of Navistar Financial
or any Affiliate of Navistar Financial) satisfactory to the Trustee.
"Parent" means Navistar International Corporation, a Delaware
corporation, and its successors.
"Parents' Side Agreement" has the meaning specified in the Credit
Agreement.
"Perfection Certificate" means a certificate substantially in the
form of Exhibit A hereto, completed and supplemented with the schedules and
attachments contemplated thereby to the satisfaction of the Trustee and duly
executed by a Responsible Officer of Navistar Financial.
"Permitted Financial Intermediary" means at any time the Trustee,
in its individual capacity, or any Affiliate of the Trustee, provided that
(i) such Person in the ordinary course of its business maintains securities
accounts for its customers and (ii) such Person is at such time acting in the
capacity of a "securities intermediary" as defined in Section 8-102(a)(14) of
the UCC.
"Permitted Liens" means the Liens on the Collateral permitted to be
created, assumed or to exist pursuant to Section 8.02 of the Credit Agreement
and Section 7.02 of the 364-Day Credit Agreement.
"Permitted Receivables Sale Agreement" means any Receivables Sale
Agreement (i) which is listed in Schedule B hereto or (ii) with respect to
which the Trustee shall have received a certificate of a Responsible Officer
(x) stating that such agreement was entered into after the date hereof and
all sales thereunder are either expressly permitted or are not prohibited by
any Secured Instrument and (y) setting forth the name and address of each
Purchaser under such agreement, as such agreement may be amended from time to
time.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Pledged Securities" means the Instruments and the Subsidiary
Shares.
"Proceeds" means all "proceeds" (as defined in the UCC) of any of
the Collateral described in clauses (i) through (ix) of Section 2.01.
"Proceeds Account Bank" means any of the banks listed in Schedule D
hereto, as amended from time to time in accordance with Section 4.07(c), at
which a Proceeds Deposit Account is maintained.
"Proceeds Allocation Account" has the meaning set forth in Section
4.07(a).
"Proceeds Deposit Account" has the meaning set forth in Section
4.07(a).
"Purchaser" means, as applicable, NFSC, NFRRC, TRIP or any other
purchaser of Receivables from Navistar Financial under any Receivables Sale
Agreement.
"Qualified Securitization Transaction" has the meaning specified in
the Credit Agreement.
"Receivable" means, as the context may require, either (a) all
assets of the type classified under the heading "Finance Receivables" on the
statement of consolidated financial condition of Navistar Financial and its
consolidated Subsidiaries as of October 31, 1999 and the related statements
of consolidated income and retained earnings and consolidated cash flow for
the fiscal year then ended, together with the notes thereto, included in the
1999 Annual Report and reported on by Deloitte & Touche or (b) the aggregate
Unpaid Balances thereof or (c) equipment on operating leases.
"Receivables Sale Agreement" means any agreement providing for the
sale by Navistar Financial of any Receivables or interests in Receivables.
"Related Receivable Rights" means the rights with respect to
Navistar Financial Receivables which are described in Section 2.01(i) to the
extent such rights are "accounts", "contract rights" or "general intangibles"
(as such terms are defined in the UCC) and are not excluded from the coverage
of the UCC by reason of Section 9-104 thereof.
"Releasing Secured Parties" means all Lenders under the Credit
Agreement.
"Relevant UCC" means, with respect to any UCC Deposit Account
Jurisdiction at any time, the Uniform Commercial Code as then in effect in
such UCC Deposit Account Jurisdiction.
"Required Lenders" has the meaning specified, as the context
requires, in the Credit Agreement or the 364-Day Credit Agreement.
"Required Secured Parties" means the Required Lenders under the
Credit Agreement and the 364-Day Credit Agreement; provided that, if at any
time all principal of and interest on the Loans and all other amounts due
under the Credit Agreement shall have been paid in full and the Commitments
thereunder shall have terminated in their entirety, "Required Secured
Parties" shall mean Indenture Trustees under Debt Indentures under which more
than 50% of then aggregate outstanding principal amount of the Indenture
Obligations were issued.
"Responsible Officer" means the President, the Treasurer, the
Controller, any Vice President or any other officer of Navistar Financial
designated as a Responsible Officer for purposes of this Agreement by a then
current Responsible Officer of Navistar Financial.
"Retail Receivables" means all Receivables of the types classified
in the statement of consolidated financial condition of Navistar Financial
and its consolidated Subsidiaries as of October 31, 1999 and the related
statements of consolidated income and retained earnings and consolidated cash
flow for the fiscal year then ended, together with the notes thereto,
included in the 1999 Annual Report and reported on by Deloitte & Touche LLP
(a) under the heading "Retail notes and lease financing" or (b) under the
heading "Accounts", except Wholesale Receivables.
"Retained Collections" means all amounts (except Sold Collections)
which from time to time are received by Navistar Financial, a Collection
Bank, the Concentration Bank, a Proceeds Account Bank or the Trustee as
Proceeds of Navistar Financial Receivables which are Wholesale Receivables or
Retail Receivables, including, without limitation, to the extent constituting
Proceeds, (i) all payments of purchase prices, principal, finance charges,
interest, late payment charges and other charges, (ii) all collection fees,
extension fees and other fees, (iii) all insurance proceeds, payments by
guarantors and other amounts to be applied to the payment of the foregoing,
(iv) all net proceeds of the sale or other disposition of repossessed
equipment, vehicle repair and replacement parts inventory or other collateral
and (v) all proceeds of any repurchase or purchase of any Navistar Financial
Receivables by the original seller or a third party.
"Secured Instruments" means at any time (i) the Credit Agreement
and any promissory note issued thereunder, (ii) the 364-Day Credit Agreement
and any promissory note issued thereunder, (iii) each Secured Interest Rate
Agreement, (iv) the Existing Debt Indentures and (v) each other agreement,
Debt Indenture, promissory note or "instrument" (as defined in Article 9 of
the UCC), evidencing Additional Secured Obligations.
"Secured Interest Rate Agreement" means an Interest Rate Agreement
between Navistar Financial and any Lender or any affiliate of any Lender that
is in effect on the date hereof or with respect to which Navistar Financial's
obligations are hereafter designated as Additional Secured Obligations
pursuant to Section 2.07.
"Secured Obligations" means:
(i) all principal of and interest on the Loans and all other sums payable by
Navistar Financial under the Credit Agreement and the 364-Day Credit
Agreement,
(ii) all sums payable by Navistar Financial under this Agreement including,
without limitation, Trustee's Fees,
(iii) all principal of, premium, if any, and interest on the Existing
Indenture Obligations and all other sums payable under the Existing Debt
Indentures,
(iv) all sums, if any, payable by Navistar Financial to any Lender or any
affiliate of any Lender under any Secured Interest Rate Agreement, and
(v) all Additional Secured Obligations;
provided that the terms "interest", "sums" and "Additional Secured
Obligations" as used above shall each include, without limitation, any
interest which accrues on the relevant Secured Obligation after, or would so
accrue but for the commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency or reorganization of Navistar
Financial.
"Secured Parties" means:
(i) so long as any Lender has any Commitment under the Credit Agreement or
the 364-Day Credit Agreement or any Loan is outstanding or any amount
due and payable by Navistar Financial under the Credit Agreement or the
364-Day Credit Agreement remains unpaid, the Lenders and the
Administrative Agent,
(ii) the Trustee,
(iii) so long as any Secured Obligation (whether or not due and payable) is
unpaid under any Debt Indenture, the Indenture Trustee under such Debt
Indenture,
(iv) each Lender or affiliate thereof that is a party to a Secured Interest
Rate Agreement, and
(v) each other holder of an Additional Secured Obligation.
"Securities Account" has the meaning set forth in Section 4.02.
"security interest" means a "security interest" (as defined in the
UCC).
"Senior Lien" has the meaning specified in Section 2.06(a).
"Sold Collections" means all amounts which from time to time (i)
are received by Navistar Financial, International, a Collection Bank, the
Concentration Bank, a Proceeds Account Bank or the Trustee with respect to
Sold Receivables and (ii) are owed to a Purchaser or its assignee, or are
required to be deposited in a special purpose trust or similar account, in
connection with any Permitted Receivables Sale Agreement.
"Sold Receivables" means any Receivables transferred by Navistar
Financial pursuant to any Permitted Receivables Sale Agreement and not
repurchased by Navistar Financial, except to the extent that Navistar
Financial retains an ownership or other interest therein.
"Subsidiary" of any Person means any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such Person.
"Subsidiary Notes" means (i) the notes listed in Schedule F hereto
evidencing Intercompany Debt and (ii) any other promissory notes or
"instruments" (as defined in Article 9 of the UCC) required to be pledged to
the Trustee pursuant to Section 4.03(c).
"Subsidiary Shares" means (i) the shares of capital stock of the
Navistar Financial Subsidiaries listed in Schedule E hereto and (ii) any
other shares of capital stock required to be pledged to the Trustee pursuant
to Section 4.03(c).
"Suspense Account" has the meaning set forth in Section 4.07(a).
"Tax Allocation Agreement" has the meaning specified in the Credit
Agreement.
"364-Day Credit Agreement" means the 364-Day Credit Agreement,
dated as of December 8, 2000, among Navistar Financial, the Lenders party
thereto, The Chase Manhattan Bank, as administrative agent, Bank of America,
N.A., as syndication agent and The Bank of Nova Scotia, as documentation
agent, as amended, supplemented or otherwise modified from time to time.
"TRIP" means Truck Retail Instalment Paper Corp., a Delaware
corporation, and its successors.
"TRIP Receivables Purchase Agreement" means the Receivables
Purchase Agreement by and between TRIP and Navistar Financial, dated as of
October 16, 2000.
"Trust Estate" means all right, title and interest of the Trustee
in, to and under the Collateral.
"Trustee" means Bankers Trust Company, a New York banking
corporation, in its capacity as Trustee hereunder, and any successor thereto
in such capacity appointed pursuant to Section 7.07, which successor shall be
(a) a bank or trust company in good standing and having power to act as
Trustee hereunder, incorporated under the laws of the United States of
America or any State thereof or the District of Columbia, having its
principal corporate trust office within the 48 contiguous States and having
capital, surplus and undivided profits of not less than $100,000,000.00, and
(b) selected by Navistar Financial, subject to the consent of the
Administrative Agent (such consent not to be unreasonably withheld).
"Trustee's Fees" means all fees, costs, indemnities and expenses of
the Trustee of the types described in Sections 4.10, 4.11, 7.12 and 7.13.
"Trustee's Security Interest" means the security interest granted
to the Trustee in Section 2.01.
"2000 Annual Report" means Navistar Financial's 2000 Annual Report
on Form 10-K for the fiscal year ended October 31, 2000, in the form
delivered to the Lenders prior to the date hereof.
"UCC" means at any time the Uniform Commercial Code as in effect in
the State of New York; provided that if, by reason of mandatory provisions of
law, the validity or perfection of the Trustee's Security Interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New York, "UCC" means the Uniform Commercial Code as
in effect in such other jurisdiction for purposes of the provisions hereof
relating to such validity or perfection (and for purposes of definitions
related to such provisions).
"UCC Deposit Account" means a "deposit account" (as defined in the
Relevant UCC) now or hereafter maintained by Navistar Financial in a UCC
Deposit Account Jurisdiction.
"UCC Deposit Account Jurisdiction" means, at any time, any
jurisdiction in which the Relevant UCC then governs the creation, attachment
and perfection of security interests in "deposit accounts" (as defined in the
Relevant UCC).
"Unpaid Balances" has the meaning set forth in the Credit Agreement.
"Used Truck Center" means any facility (including, without
limitation, any Dealer or any facility of International) which regularly
holds for sale any Inventory and/or Equipment.
"Wholesale Receivables" means all Receivables of the types
classified in the statement of consolidated financial condition of Navistar
Financial and its consolidated Subsidiaries as of October 31, 1999 and the
related statements of consolidated income and retained earnings and
consolidated cash flow for the fiscal year then ended, together with the
notes thereto, included in the 1999 Annual Report and reported on by Deloitte
& Touche LLP under the heading "Wholesale notes" or under the heading
"Accounts", but only such "Accounts" with respect to which the obligor is a
Dealer.
SECTION 1.02. Interpretation. References in this Agreement to the
term "sale" with respect to any transfer of Receivables, rights to receive
income therefrom or undivided interests therein are deemed to include any
transfer which purports to be a sale on the face of the agreement governing
such transfer, without regard to whether such transfer would constitute a
"true sale" under applicable legal principles. The terms "sell" and "sold",
as used as described in the foregoing sentence, shall have correlative
meanings.
ARTICLE II
THE SECURITY INTEREST
SECTION 2.01. Grant of Security Interest. To secure the due and punctual
payment of all Secured Obligations, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing
or due or to become due, in accordance with the terms thereof and to secure
the due and punctual performance of all of the obligations of Navistar
Financial contained herein, Navistar Financial hereby grants to the Trustee a
continuing security interest in and to all of the following property of
Navistar Financial (all being collectively referred to as the "Collateral"):
(i) all Navistar Financial Receivables and all rights of Navistar Financial
(A) with respect to any collateral security for any Navistar Financial
Receivable, (B) under any "security agreement" (as defined in the UCC)
securing any Navistar Financial Receivable or (C) assertable against any
Person other than the related obligor, under a guaranty, warranty or
otherwise, in connection with any Navistar Financial Receivable or any
collateral securing any Navistar Financial Receivable,
(ii) all of Navistar Financial's right, title and interest in marketable
securities, and all of Navistar Financial's rights and privileges with
respect thereto, and all income and profits thereon, and all interest
and other payments with respect thereto,
(iii) all Pledged Securities and all of Navistar Financial's rights and
privileges with respect to the Pledged Securities, and all income and
profits thereon, and all interest, dividends and other payments and
distributions with respect thereto, and all rights of Navistar Financial
(A) with respect to any collateral security for any Instrument or (B)
under any "security agreement" (as defined in the UCC) securing any
Instrument,
(iv) all Chattel Paper,
(v) all General Intangibles and all of Navistar Financial's rights and
privileges with respect to the General Intangibles, and all income and
profits thereon, and all interest and other payments with respect
thereto (excluding any General Intangibles, which by their terms,
prohibit any security interest from being taken thereon, but not
excluding any Receivables arising out of any such General Intangibles or
any money due or to become due under any such General Intangibles),
(vi) all Documents,
(vii) all Inventory,
(viii) all Equipment,
(ix) all right, title and interest of Navistar Financial in the Collateral
Account, all funds deposited therein from time to time, the investments
made pursuant to Section 6.03 and other monies and property of any kind
of Navistar Financial in the possession or under the control of the
Trustee,
(x) all right, title and interest of Navistar Financial in Books and Records,
(xi) all Proceeds,
(xii) all Insurance Policies, and
(xiii) all UCC Deposit Accounts, all funds deposited therein from time to
time, all interest earned thereon and all "proceeds" (as defined in the
Relevant UCC) thereof,
in each case, whether now owned or existing or hereafter acquired or arising
and regardless of where located; provided that the Trustee's Security
Interest may be released from time to time after the date hereof with respect
to certain Collateral as provided in Sections 2.02, 2.05, 4.02(f), 4.07(d)
and 8.01. The foregoing grant of a security interest shall not be effective
at any time prior to the date hereof.
SECTION 2.02. Release of Security Interest in Receivables. Navistar
Financial expects to sell or assign Receivables, or interests in Receivables,
from time to time pursuant to Permitted Receivables Sale Agreements. The
Trustee's Security Interest in any Sold Receivables, in all Sold Collections
related thereto, in all related rights of the types described in Section
2.01(i) and related Insurance Policies and Books and Records which are
expressly sold or assigned by Navistar Financial pursuant to any Permitted
Receivables Sale Agreement and in all Proceeds of the foregoing (but not in
Proceeds arising from the sale or assignment of such Receivables and related
rights by Navistar Financial) shall, immediately upon the sale or assignment
of such Receivables pursuant to a Permitted Receivables Sale Agreement and
without any further action on the part of the Trustee, be released unless a
Notice of Acceleration is in effect at the time of such sale and the
Purchaser under such Permitted Receivables Sale Agreement shall have received
notice from the Trustee pursuant to Section 5.01, before Navistar Financial
shall have become legally obligated to sell such Receivables, stating that a
Notice of Acceleration is in effect.
SECTION 2.03. Continuing Liability of Navistar Financial and its
Subsidiaries. Anything herein to the contrary notwithstanding, Navistar
Financial shall remain liable under each contract, agreement, interest and
obligation included in the Collateral, to observe and perform all the
conditions and obligations to be observed and performed by it thereunder
(including, without limitation, any undertaking to maintain insurance), all
in accordance with and pursuant to the terms and provisions thereof, and
shall do nothing to impair the Trustee's Security Interest in any
Collateral. Neither the Trustee nor any other Secured Party shall have any
obligation or liability under any such contract, agreement, interest or
obligation by reason of or arising out of this Agreement or the receipt by
the Trustee or any other Secured Party of any payment relating to any such
contract, agreement, interest or obligation pursuant hereto, nor shall the
Trustee or any Secured Party be required or obligated in any manner to
perform or fulfill any of the obligations of Navistar Financial thereunder or
pursuant thereto, or to make any payment, or to make any inquiry as to the
nature or the sufficiency of any payment received by it or the sufficiency of
any performance by any party under any such contract, agreement, interest or
obligation, or to present or file any claim, or to take any action to collect
or enforce any performance or the payment of any amount thereunder to which
it may be entitled at any time.
SECTION 2.04. Rights of Secured Parties Under Secured Instruments.
Notwithstanding any other provision of this Agreement, the right of each
Secured Party to receive payment of each Secured Obligation held by such
Secured Party when due (whether at the stated maturity thereof, by
acceleration or otherwise) as expressed in the relevant Secured Instrument
or, subject to any limitations in such Secured Instrument or in any other
agreement to which such Secured Party is a party or by which such Secured
Party is bound, to institute suit for the enforcement of such payment on or
after such due date, and the obligation of Navistar Financial to pay such
Secured Obligation when due, shall not be impaired or affected without the
consent of such Secured Party.
SECTION 2.05. Release of Collateral. Unless a Notice of Acceleration is in
effect, Navistar Financial may (in addition to its rights under Sections
2.02, 4.02 and 4.07(d)) (x) sell or otherwise dispose of any item of
Collateral in the ordinary course of business if such sale or disposition is
not prohibited by any Secured Instrument, (y) sell any collateral subject to
any Senior Lien in a sale as to which the Trustee shall have waived its
rights in accordance with Section 2.06 and (z) sell or otherwise dispose of
any item of Collateral pursuant to a Qualified Securitization Transaction.
In connection with any such sale or disposition,
(i) the Trustee's Security Interest in such item (but not in the Proceeds
arising from such sale or disposition) shall cease immediately upon such
sale or disposition, without any further action on the part of the
Trustee;
(ii) if such item is in the possession of the Trustee, any co-trustee or any
of their respective agents, the Trustee, such co-trustee or such agent
shall deliver such item to Navistar Financial promptly following receipt
of a certificate of a Responsible Officer (1) requesting such delivery
and certifying that such sale or other disposition is permitted in
accordance with this Section 2.05, (2) certifying that such delivery is
for a purpose that will cause the Trustee's Security Interest in such
item to remain perfected for a specified period following the date of
delivery pursuant to Section 9-304(5) of the UCC and (3) certifying that
the relevant sale or disposition shall occur no later than five days
prior to the expiration of such specified period; and
(iii) the Trustee, any co-trustee and any of their respective agents are each
hereby authorized and instructed to deliver to the purchaser of such
item a certificate prepared by Navistar Financial stating that the
Trustee no longer has any security interest therein, and such purchaser
shall be entitled to rely conclusively on such certificate for any and
all purposes; provided that the Trustee, such co-trustee or such agent
shall have received a certificate of a Responsible Officer requesting
such delivery and certifying that such sale or other disposition is
permitted in accordance with this Section 2.05.
Unless notified to the contrary by any Secured Party, the Trustee may assume
that any sale or disposition of an item of Collateral is not prohibited by
any Secured Instrument and may so inform any of its agents and any co-trustee.
SECTION 2.06. Senior Liens. (a) If at any time Navistar Financial desires
to subordinate the Trustee's Security Interest in any cash, marketable
securities or Equipment and any Proceeds thereof to a Lien (a "Senior Lien")
on such Collateral that is not prohibited by any Secured Instrument, Navistar
Financial shall deliver to the Trustee (and concurrently deliver to the
Administrative Agent for distribution to each of the Lenders) a certificate
of a Responsible Officer:
(i) describing the proposed Senior Lien and the cash, marketable securities
and/or Equipment subject thereto and certifying that the creation and
senior status thereof is not prohibited by any Secured Instrument,
(ii) requesting the subordination of the Trustee's Security Interest in such
Collateral to such Senior Lien,
(iii) if any marketable securities are to be delivered (or, in the case of
marketable securities as to which ownership or the existence of a
security interest is evidenced by book entries, transferred) by the
Trustee to the holder of such Senior Lien or its agent pursuant to
subsection (c) below, requesting such delivery (or transfer) thereof,
(iv) attaching a copy of any documents to be prepared by Navistar Financial
and executed by the Trustee and delivered by the Trustee to the holder
of such Senior Lien or its agent pursuant to subsection (b) of this
Section, and
(v) specifying the date on which Navistar Financial desires the Trustee to
deliver said documents and deliver or transfer, as the case may be, any
marketable securities referred to in clause (iii) above to the holder of
such Senior Lien or its agent.
(b) If the requirements set forth in subsection (a) above have been met with
respect to any Senior Lien, the Trustee will, at Navistar Financial's
expense, execute and deliver to the holder of such Senior Lien or its agent
as set forth in subsection (a) above such documents as Navistar Financial
shall reasonably request (copies of which documents shall have been attached
to the certificate delivered pursuant to subsection (a) above in accordance
with clause (iv) thereof):
(i) evidencing the subordination of the Trustee's Security Interest in the
relevant cash, marketable securities and/or Equipment and any Proceeds
thereof to such Senior Lien,
(ii) waiving any objection the Trustee may otherwise be entitled to make
under this Agreement or under applicable law to the sale or other
disposition of the Collateral subject to such Senior Lien or any
exercise by the holder of such Senior Lien of remedies permitted by
applicable law or contract, provided that the Trustee's Security
Interest shall continue in any Proceeds of such Collateral so sold or
disposed of, subject in all respects to the rights of the holder of such
Senior Lien; and
(iii) waiving any right of the Trustee under this Agreement or under
applicable law to sell, or require the holder of such Senior Lien to
sell, such Collateral prior to the satisfaction in full of the
obligations secured by such Senior Lien.
If the holder of any such Senior Lien shall at any time sell or dispose of
any marketable securities subject to such Senior Lien for materially less
than fair market value, Navistar Financial agrees to use reasonable efforts
to recover, as promptly as is practicable, damages from such holder if
Navistar Financial determines in its reasonable discretion that such holder
failed to act in a commercially reasonable manner in connection with such
sale or disposal.
(c) If the requirements set forth in subsection (a) above have been met with
respect to any Senior Lien and the certificate delivered pursuant to such
subsection requests the delivery and/or transfer of any marketable
securities, then the Trustee (either directly, through one or more of its
agents referred to in Section 4.02 or, in the case of any marketable
securities as to which ownership or the existence of a security interest is
evidenced by book entries, through the relevant Permitted Financial
Intermediary) will make appropriate arrangements for such delivery and/or
transfer.
(d) Notwithstanding anything contained in this Agreement to the
contrary, the Trustee's Security Interest in any cash, marketable securities
or Equipment and any Proceeds thereof shall be junior and subordinate in all
respects to any Lien (an "Existing Senior Lien") on such Collateral existing
on the date hereof and not prohibited by any Secured Instrument, and the
holder of such Existing Senior Lien may continue to hold (either directly,
through a duly authorized agent or, in the case of any marketable securities
as to which ownership or the existence of a security interest is evidenced by
book entries, through a "securities intermediary" (as defined in the UCC))
any such cash or marketable securities held by it on the date hereof and any
Proceeds thereof, provided that, on or before the date hereof, with respect
to such cash or marketable securities, the Trustee shall have received, in
each case in form and substance reasonably satisfactory to the Trustee:
(i) a certificate of a Responsible Officer
(x) describing such Existing Senior Lien and the cash and/ or
marketable securities subject thereto and certifying that the
creation and senior status of such Existing Senior Lien is not
prohibited by any Secured Instrument,
(y) specifying any cash or marketable securities subject to
the Trustee's Security Interest that are to be held on or after the
date hereof by the holder of such Existing Senior Lien, its agent
or, in the case of marketable securities as to which ownership or
the existence of a security interest is evidenced by book entries,
a "securities intermediary" (as defined in the UCC), and
(z) if any Collateral is to be held by or on behalf of the
holder of such Existing Senior Lien, certifying that Navistar
Financial has provided the holder of such Existing Senior Lien and
any other Person who will hold such Collateral (and, in the case of
an Existing Senior Lien on marketable securities as to which
ownership or the existence of a security interest is evidenced by
book entries, the relevant "securities intermediary" (as defined in
the UCC)), with (x) written notice of the existence of the
Trustee's Security Interest in such Collateral and (y) irrevocable
written instructions to transfer to or as directed by the Trustee
any such Collateral and Proceeds thereof remaining after the
obligations secured by such Existing Senior Lien have been
satisfied, unless such Person shall have previously received notice
from the Trustee of the release of the Trustee's Security Interest
therein; and
(ii) to the extent obtainable by Navistar Financial using commercially
reasonable efforts, a writing signed by the holder of such Existing Senior
Lien
(x) acknowledging and consenting to the creation of the
Trustee's Security Interest in such Collateral, and
(y) irrevocably agreeing to hold any such Collateral for the
benefit of the Trustee and the other Secured Parties, as holders of
a junior Lien with respect to such Collateral, and to transfer to
or as directed by the Trustee any such Collateral held or received
by such holder immediately upon the satisfaction of the obligations
secured by such Existing Senior Lien, unless such holder has
previously received written notice from the Trustee of the release
of the Trustee's Security Interest therein.
As of the date hereof, the Trustee hereby irrevocably waives, for the benefit
of the holders of Existing Senior Liens
(i) any objection the Trustee may otherwise be entitled to make under this
Agreement or under applicable law to the sale or other disposition of
the Collateral subject to such Existing Senior Lien or any exercise by
the holder of such Existing Senior Lien of remedies permitted by
applicable law or contract, provided that (1) the Trustee's Security
Interest shall continue in any Proceeds of such Collateral so sold or
disposed of, subject in all respects to the rights of the holder of such
Existing Senior Lien, and (2) if any marketable securities are to be so
sold or disposed of in connection with any sale or disposition as to
which the Trustee shall not have consented, the Trustee shall have
received a certificate of a Responsible Officer certifying that the
consideration received for such marketable securities is at least equal
to the fair market value thereof, and
(ii) any right of the Trustee under this Agreement or under applicable law to
sell, or require the holder of such Existing Senior Lien to sell, such
Collateral prior to the satisfaction in full of the obligations secured
by such Existing Senior Lien.
SECTION 2.07. Additional Secured Obligations. (a) If at any time Navistar
Financial desires to designate any of its proposed or existing Indebtedness
or other obligations as an Additional Secured Obligation for purposes hereof
(other than any Additional Short-Term Debt), Navistar Financial shall deliver
to the Trustee (and concurrently deliver to the Administrative Agent for
distribution to each of the Lenders) a certificate signed by a Responsible
Officer which shall (x) identify such proposed or existing Indebtedness or
other obligation, (y) certify that the designation thereof as an Additional
Secured Obligation is not prohibited by any provision of any Secured
Instrument and (z) specify the name and address of the proposed or existing
holder or holders of each Additional Secured Obligation so designated or of
an Indenture Trustee, agent or other duly authorized representative of such
holder or holders designated in accordance with Section 7.11(b). Unless the
Trustee (at the written direction of the Administrative Agent) or the
Administrative Agent, by no later than the ninth Domestic Business Day
following the receipt of such certificate by the Trustee or the
Administrative Agent, notifies Navistar Financial that the Required Lenders
have determined that such designation is prohibited by the Credit Agreement
or the 364-Day Credit Agreement, such Indebtedness or other obligation shall
be, from and after the later of (i) the tenth Domestic Business Day after the
receipt of such certificate by the Trustee and (ii) the incurrence of such
Indebtedness or other obligation, an Additional Secured Obligation for
purposes of this Agreement; provided that in the case of any such
Indebtedness in a principal amount of $25,000,000 or less, such Indebtedness
shall be, from and after the later of (i) the date of the receipt of such
certificate by the Trustee and (ii) the incurrence of such Indebtedness, an
Additional Secured Obligation for purposes of this Agreement. The proviso to
the immediately preceding sentence shall be applicable during each fiscal
year of Navistar Financial only to the extent that the aggregate principal
amount of Indebtedness designated as Additional Secured Obligations during
such fiscal year does not exceed $100,000,000.
(b) If at any time Navistar Financial desires to designate any Additional
Short-Term Debt as an Additional Secured Obligation for purposes hereof,
Navistar Financial shall deliver to the Trustee (and concurrently deliver to
the Administrative Agent for distribution to each of the Lenders) a
certificate signed by a Responsible Officer which shall (w) state that
Navistar Financial proposes to issue commercial paper and/or to incur other
Additional Short-Term Debt owing to one or more banks, (x) specify the name
and address of each Person acting as a dealer with respect to any such
commercial paper, (y) certify that the designation of such Additional
Short-Term Debt as an Additional Secured Obligation is not prohibited by any
provision of any Secured Instrument and that, after giving effect to the
issuance or incurrence thereof, the aggregate amount of the unused
commitments under (or, if less, the amount actually available to be borrowed
or received in connection with a purchase under) the Credit Agreement, the
364-Day Credit Agreement, the TRIP Receivables Purchase Agreement and all
Permitted Receivables Sales Agreements shall be sufficient (taking into
account any scheduled terminations of any such commitments) to provide funds
to repay in full at maturity the aggregate outstanding principal or face
amount of all Additional Secured Obligations constituting Additional
Short-Term Debt and (z) specify the name and address of each bank (other than
a Lender) to which any such other Additional Short-Term Debt is owing or
proposed to be owing. Such commercial paper (if issued through a dealer so
specified) and such other Additional Short-Term Debt (if owing to a Lender or
another bank so specified) shall be, from and after the later of (i) the date
of the receipt of such certificate by the Trustee and (ii) the issuance or
incurrence thereof, Additional Secured Obligations for purposes of this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Title to Collateral; Validity of Security Interest. In
respect of all Collateral, Navistar Financial represents and warrants that:
(a) Navistar Financial owns or has rights in the Collateral free and clear
of any Lien of any creditor of Navistar Financial or, to the knowledge of
Navistar Financial, of any other Person, except for Permitted Liens.
(b) Except for errors and omissions, the aggregate effect of which is
immaterial, Navistar Financial has taken all actions necessary under the UCC
to perfect, as against its assignors and their creditors, its interest in
Receivables purchased or otherwise acquired by it from such assignors and,
upon compliance with the applicable provisions of Article IV, the Trustee
will have a valid, perfected security interest in each such Receivable under
the UCC which is prior, subject only to Permitted Liens, to the extent
priority is governed by the UCC, to claims of creditors, or a trustee in
bankruptcy, of the assignor of such Receivable.
(c) The Subsidiary Shares include all of the issued and outstanding stock of
each Navistar Financial Subsidiary which is directly owned by Navistar
Financial.
(d) To the extent the UCC is applicable thereto, the Trustee's Security
Interest constitutes a valid security interest under the UCC securing the
Secured Obligations. When UCC financing statements in the form specified in
the Perfection Certificate shall have been filed in the offices specified by
Navistar Financial in the Perfection Certificate the Trustee's Security
Interest shall constitute a perfected security interest in the Collateral
(except Inventory in transit) to the extent that a security interest therein
may be perfected by filing financing statements pursuant to the UCC. Upon,
and assuming the continuation of, compliance with Sections 4.01(a)(ii),
4.01(a)(viii), 4.02, 4.03 and, if applicable, 2.06, the Trustee will have a
valid and perfected security interest in the Instruments, marketable
securities, Subsidiary Shares and Subsidiary Notes, to the extent the UCC
and, in the case of marketable securities issued by the United States,
Treasury regulations are applicable thereto.
(e) So long as (i) the relevant Instrument remains in the possession of the
Trustee, a co-trustee or any of their respective agents or (ii) the relevant
marketable security, Subsidiary Note or certificate representing any
Subsidiary Shares continues to be held as described below, the security
interest of the Trustee in, as the case may be, (x) any Instrument that is
delivered to the Trustee, a co-trustee or any of their respective agents in
accordance with Section 4.01(a)(ii), (y) any marketable security that is an
"instrument" (as defined in Article 9 of the UCC) and is delivered to the
Trustee or any agent thereof and held in any Securities Account, or is
otherwise held in accordance with Section 2.06(c), and (z) any Subsidiary
Note and any certificate representing any Subsidiary Shares, will be prior to
all Liens thereon of any creditor of Navistar Financial arising under the UCC
and existing at the time of such delivery and prior to all Liens created or
arising under the UCC after such delivery, subject only to Permitted Liens.
The security interest of the Trustee in all other Collateral will be prior,
to the extent that applicable law permits such priority to be determined by
the absence of previously filed conflicting UCC financing statements, to all
other Liens thereon of any creditor of Navistar Financial now existing or
arising or created hereafter, subject only to Permitted Liens.
No financing statement or other similar document covering all or
any part of the Collateral and naming Navistar Financial as debtor or seller
is on file in any recording office in any jurisdiction in which such filing
would be effective to perfect a security interest in such Collateral, except
for financing statements with respect to Permitted Liens. No Collateral is
in the possession of any Person (other than Navistar Financial) asserting any
claim thereto or security interest therein, except (A) such Collateral as may
be in the possession of the Trustee, a co-trustee or any of their respective
agents and (B) Collateral securing Permitted Liens or Senior Liens.
(f) Upon compliance by Navistar Financial with Section 4.01(a)(viii), a
valid and perfected security interest (as to the creation of which any
consent required from any third party has been obtained), subject only to
Permitted Liens, will have been created under the Relevant UCC in favor of
the Trustee for the benefit of the Secured Parties in all existing Collateral
referred to in Section 2.01(xiii).
(g) Other than the filing of financing statements with respect to the
Trustee's Security Interest in the jurisdictions specified in the Perfection
Certificate, no registration, recordation or filing with any governmental
body, agency or official is required in connection with the execution or
delivery of this Agreement or necessary for the validity or enforcement
hereof or for the perfection or enforcement of the Trustee's Security
Interest (except as may be required pursuant to Section 4.13). Neither
Navistar Financial nor any of the Navistar Financial Subsidiaries has
performed or will perform any acts which might prevent the Trustee from
enforcing any of the terms and conditions of this Agreement or which would
limit the Trustee in any such enforcement.
(h) As of the date hereof, except as specified in Schedule F hereto, (i)
none of the Collateral is evidenced by any Instrument and (ii) no collateral
security for any Collateral is evidenced by any promissory note or other
"instrument" (as defined in Article 9 of the UCC) or any "letter of credit"
(as defined in the UCC).
(i) As of the date hereof, the aggregate fair market value of all Equipment
and Inventory located in (i) the State of Tennessee does not exceed
$2,343,000 and (ii) the State of Maryland does not exceed $741,000.
SECTION 3.02. Enforceability of Navistar Financial Receivables. Navistar
Financial represents and warrants that to the best knowledge of Navistar
Financial, each Navistar Financial Receivable (i) constitutes a legal, valid
and binding obligation of the related Account Debtor, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law and (ii) complies in all
material respects with all applicable legal requirements, including, without
limitation, all state and federal usury laws.
SECTION 3.03. Location of Collateral. As of the date hereof, the Perfection
Certificate is correct and complete in all material respects and correctly
sets forth the location of all of the Collateral (other than (i) Collateral
to be delivered to the Trustee under this Agreement and (ii) repossessed
and/or seized Inventory and Equipment held by any Dealer that is not a Used
Truck Center) and the chief executive office of Navistar Financial.
SECTION 3.04. Subsidiaries. As of the Effective Date, Schedule E sets forth
the name, jurisdiction of incorporation and capital stock ownership of each
Subsidiary owned by Navistar Financial. The amount listed directly opposite
the name of each Subsidiary of Navistar Financial under the column heading
"Subsidiary Shares" in such Schedule correctly states the number of shares of
such Subsidiary's capital stock outstanding as of the date hereof.
ARTICLE IV
COVENANTS
SECTION 4.01. Filings and Further Assurances. (a) In respect of all
Collateral, Navistar Financial will, at its expense, take the following steps:
(i) as to all (a) Navistar Financial Receivables (except those covered by
clause (ii) below), (b) Related Receivable Rights, (c) marketable
securities which are not "instruments" (as defined in Article 9 of the
UCC), (d) General Intangibles and related rights and privileges
described in Section 2.01(iv) (except any such rights and privileges
covered by clause (iv) below), (e) Documents, (f) Inventory, (g)
Equipment and (h) Books and Records, Navistar Financial will at all
times on and after the date hereof cause UCC financing statements and
continuation statements to be filed in all applicable jurisdictions as
required to perfect the Trustee's Security Interest, to the extent that
applicable law permits perfection thereof by filing against Navistar
Financial under the UCC;
(ii) as to any Instrument (other than any Subsidiary Note, as to which the
provisions of Section 4.03 will apply) (including, without limitation,
any Instrument received by Navistar Financial as a result of Navistar
Financial's realization upon the collateral security for any
Collateral), other than any check or draft constituting a payment in
respect of any Navistar Financial Receivable, as to which the provisions
of Section 4.07 shall apply, Navistar Financial will, immediately upon
receiving such Instrument, deliver it or cause it to be delivered to the
Trustee, a co-trustee or any of their respective agents;
(iii) as to all marketable securities that are "instruments" (as defined in
Article 9 of the UCC) (including, without limitation, any such
instrument received by Navistar Financial as a result of Navistar
Financial's realization upon the collateral security for any
Collateral), Navistar Financial will comply with the provisions of
Section 4.02;
(iv) as to all Subsidiary Shares and Subsidiary Notes, Navistar Financial
will comply with Section 4.03;
(v) as to all Proceeds, Navistar Financial will cause all UCC financing
statements and continuation statements filed in accordance with clause
(i) above to include a statement or a checked box indicating that
proceeds of all items of collateral described therein are covered, and
Navistar Financial will also comply with the provisions of Section 4.07;
(vi) as to Insurance Policies, Navistar Financial will comply with the
provisions of Section 4.06; and
(vii) as to all UCC Deposit Accounts, all funds deposited therein and any
interest earned thereon, by the later of the date hereof and the date
each such UCC Deposit Account is established, Navistar Financial will
notify the organization with which such UCC Deposit Account is
maintained of the Trustee's Security Interest therein and obtain from
such organization and furnish to the Trustee a written acknowledgment of
and consent to such notice and written confirmation that such
organization (x) has not received notice of any other Lien or claim on
such UCC Deposit Account, (y) does not itself have any Lien or other
claim on such UCC Deposit Account other than any Permitted Lien and (z)
to the extent obtainable by Navistar Financial using commercially
reasonable efforts, irrevocably waives its right of set-off with respect
to such UCC Deposit Account except its right to set-off against such UCC
Deposit Account the face amount of any check deposited in and credited
to such UCC Deposit Account which is subsequently returned for any
reason, and will take such other action as may be necessary or
appropriate from time to time under the Relevant UCC to perfect the
Trustee's Security Interest in any UCC Deposit Account.
(b) Navistar Financial will and will cause each Navistar Financial
Subsidiary to, from time to time, at its expense, execute, deliver, file and
record any other statement, assignment, instrument, document, agreement or
other paper and take any other action that from time to time may be
necessary, or that the Trustee may reasonably request, in order to create,
preserve, perfect, confirm or validate the Trustee's Security Interest or any
security interest granted as collateral security for any Collateral, or to
enable the Trustee to obtain the full benefits of this Agreement or any
security agreement securing any Collateral, or to exercise and enforce any of
its rights, powers and remedies hereunder or thereunder with respect to any
of the Collateral. If Navistar Financial or the servicer of any mortgage or
deed of trust securing any Collateral acquires title to any real property on
foreclosure of any such mortgage or deed of trust then pledged hereunder (or
pursuant to any deed in lieu of foreclosure) or repossesses any other real
property collateral securing any Collateral, Navistar Financial will promptly
notify the Trustee thereof and, at the request of the Required Secured
Parties and at its own expense, execute and record, or cause such servicer to
execute and record, a mortgage or deed of trust with respect to any such real
property in favor of the Trustee for the benefit of the Secured Parties and
take all further action as may be necessary, or that the Trustee may
reasonably request, so that the Trustee shall have a valid and perfected Lien
on such real property prior to all Liens other than Permitted Liens.
(c) Navistar Financial will not, and will not permit any Navistar Financial
Subsidiary to, change its name, identity or corporate structure in any manner
which might make any financing or continuation statement filed hereunder
seriously misleading within the meaning of Section 9-402(7) of the UCC (or
any other then applicable provision of the UCC) unless Navistar Financial
shall have given the Trustee at least 30 days' prior written notice thereof
and shall have taken all action (or made arrangements to take such action
substantially simultaneously with such change if it is impossible to take
such action in advance) necessary or reasonably requested by the Trustee to
amend such financing statement or continuation statement so that it is not
seriously misleading.
(d) To the fullest extent permitted by law, Navistar Financial authorizes
the Trustee to sign and file financing and continuation statements and
amendments thereto with respect to the Collateral without the signature of
Navistar Financial thereon. Navistar Financial agrees that a carbon,
photographic, photostatic or other reproduction of this Agreement or of a
financing statement is sufficient as a financing statement.
(e) If any Collateral is at any time in the possession or control of any
warehouseman or bailee or any of Navistar Financial's agents or processors
(including, without limitation, any Dealer or any Used Truck Center),
Navistar Financial shall, at its expense, notify such warehouseman, bailee,
agent or processor of Navistar Financial's ownership interest in such
Collateral and the Trustee's Security Interest therein and to hold all such
Collateral for the Trustee's account; provided that, in the case of any such
Person that is a Dealer, such notification may be made by inserting in
Navistar Financial's next regularly scheduled general mailing to Dealers a
statement to the effect that (i) Navistar Financial has entered into this
Agreement and (ii) any property of Navistar Financial (including, without
limitation, any repossessed trucks) that may be held from time to time by
such Dealer is owned by Navistar Financial in accordance with the terms of
certain agreements between Navistar Financial and International and is
subject to the Trustee's Security Interest therein. If any collateral
security for any Collateral is at any time in the possession or control of
any warehouseman or bailee or any of Navistar Financial's or any Navistar
Financial Subsidiary's agents or processors, Navistar Financial shall, at its
expense, notify such warehouseman, bailee, agent or processor of the security
interest to hold all such collateral security for the account of Navistar
Financial. The foregoing shall apply to single items of Collateral described
herein with a fair market value greater than $100,000; provided that if the
aggregate amount of Collateral with a fair market value not exceeding
$100,000 exceeds $7,000,000 (the "Maximum Level"), the foregoing shall apply
to all Collateral acquired after such Maximum Level has been exceeded.
(f) If any Collateral constituting "goods" (as defined in the UCC) is
regularly held for sale by any third party (including, without limitation,
any Used Truck Center), Navistar Financial shall, at its expense, promptly
following the later of the date hereof and the date on which such third party
begins regularly to receive any such goods, (i) file in the applicable filing
offices appropriately completed UCC financing statements in accordance with
Section 2-326(3)(c) of the Uniform Commercial Code as in effect in the
jurisdiction in which such goods are located (the "Local UCC"), (ii) if
appropriate, give notices complying with the requirements of subsections (b),
(c) and (d) of Section 9-114(l) of the Local UCC, and (iii) execute, deliver,
file and record any other statement, assignment, instrument, document,
agreement or other paper and take any other action that from time to time may
be necessary, or that the Trustee may reasonably request, to ensure that such
goods shall not be subject to the claims of such third party's creditors.
The foregoing provision shall apply to single items of Collateral described
herein with a fair market value greater than $100,000; provided that if the
aggregate amount of Collateral with a fair market value not exceeding 100,000
exceeds the Maximum Level, the foregoing provision shall apply to all
Collateral acquired after such Maximum Level has been exceeded.
(g) Within 60 days after the date hereof, Navistar Financial shall furnish
to the Trustee file search reports from each UCC filing office set forth in
Schedule 6 to the Perfection Certificate confirming the filing information
set forth in such Schedule; provided that if Navistar Financial's reasonable
efforts to provide such a search report within such 60-day period from any
such filing office (other than the office of the Secretary of State of
Illinois) are unsuccessful, Navistar Financial shall furnish to the Trustee
such a file search report from such filing office as promptly as is
reasonably practicable.
(h) If a Notice of Acceleration is in effect, Navistar Financial shall,
subject to Section 2.06, immediately upon its receipt thereof, deliver or
cause to be delivered to the Trustee for deposit in the Collateral Account
all Proceeds of Equipment, General Intangibles or Inventory that is sold or
otherwise disposed of pursuant to Section 2.05.
(i) Navistar Financial will not, without the prior consent of the Releasing
Secured Parties, sell, lease, exchange, assign or otherwise dispose of or
grant any option with respect to any Collateral, except as permitted by the
Credit Agreement, the 364-Day Credit Agreement, Section 2.02, Section 2.05,
Section 4.02 or Section 4.07(d).
SECTION 4.02. Marketable Securities. (a) On or before the date hereof,
Navistar Financial shall, subject to Section 2.06(d), transfer or cause to be
transferred to one or more of the Securities Accounts referred to below (i)
all marketable securities (other than (x) repurchase agreements, (y)
marketable securities that are UCC Deposit Accounts and (z) marketable
securities as to which ownership or the existence of a security interest is
evidenced by entries on the books of a "securities intermediary" (as defined
in the UCC), custodian or other entity) owned by Navistar Financial on the
date hereof, and (ii) all securities subject to, and all confirmations
relating to, repurchase agreements constituting marketable securities owned
by Navistar Financial on the date hereof. The marketable securities so
transferred (other than repurchase agreements and confirmations) shall be in
suitable form for transfer by delivery or shall be accompanied by duly
executed and undated instruments of transfer or assignment in blank, in form
and substance reasonably satisfactory to the Trustee.
(b) On and after the date hereof, all investments in marketable securities
by Navistar Financial (except investments in marketable securities that are
UCC Deposit Accounts or are covered by subsection (c) below) shall be made by
and in the name of the Trustee at the written direction of Navistar through
one or more accounts (each a "Securities Account") established in the name of
the Trustee and maintained with the Trustee or any agent thereof appointed
for the purpose as provided in subsections (c) and (d) below. Unless a
Notice of Acceleration is in effect, the purchase, sale or presentation for
payment of any such marketable securities and the receipt by Navistar
Financial of the proceeds of the sale or collection thereof and any interest
paid thereon shall all occur as provided below in this subsection. To
initiate the purchase of such marketable securities, Navistar Financial will
in writing (i) inform the Trustee as to the particulars of such purchase and
(ii) cause to be transferred to a bank account designated by, and in the name
of, the Trustee (either as Trustee or in its individual capacity) funds,
and/or instruct the Trustee to apply funds received by the Trustee in respect
of other marketable securities, in an amount equal to the sum of (x) the
purchase price plus (y) any brokers' fees and other out-of-pocket expenses
reasonably expected to be incurred in connection with such purchase,
whereupon the Trustee will make arrangements (either directly or through one
or more agents) for the purchase of such marketable securities, including the
payment of the purchase price thereof. All marketable securities (other than
repurchase agreements) purchased by the Trustee as aforesaid (and all
securities subject to, together with all confirmations relating to,
repurchase agreements) will be delivered to and, subject to the following
sentence, held in the Securities Accounts. To initiate a sale or
presentation for payment of such marketable securities, Navistar Financial
will inform the Trustee in writing as to the particulars of such sale or
presentation, whereupon the Trustee will make arrangements (either directly
or through the appropriate agents) for the sale or presentation of such
marketable securities, and the transfer of funds received by the Trustee or
such agents on the sale or collection of such marketable securities to such
bank account of Navistar Financial (other than a Proceeds Deposit Account
that is not a UCC Deposit Account) as shall have been designated by Navistar
Financial for the purpose, or for the application of such funds to another
investment in marketable securities, as Navistar Financial shall elect;
provided that the Trustee shall revoke any such arrangements previously made
for the transfer of such funds to a bank account of Navistar Financial
promptly after receiving a Notice of Acceleration. Any interest received by
the Trustee or any agent thereof in respect of marketable securities held in
a Securities Account will be similarly transferred or applied.
(c) Notwithstanding anything contained in this Agreement to the contrary, on
and after the date hereof Navistar Financial may make investments through a
Securities Account in marketable securities as to which ownership or the
existence of a security interest is evidenced by entries on the books of a
"securities intermediary" (as defined in the UCC), custodian or other entity;
provided that,
(i) (A) such investment is made through a Securities Account maintained by
the Trustee with a Permitted Financial Intermediary,
(B) concurrently with the making of such investment, such Permitted
Financial Intermediary sends to the Trustee confirmation, substantially
in the form of Exhibit B hereto, of the purchase of such marketable
securities, and also by book entry to the relevant Securities Account
identifies such marketable securities as subject to the Trustee's
Security Interest,
(C) such Permitted Financial Intermediary shall have previously received a
copy of this Agreement signed by Navistar Financial, and
(D) Navistar Financial promptly takes any other action that may be necessary
under the UCC, or that the Trustee may reasonably request, to perfect
the Trustee's Security Interest in such marketable securities;
or
(ii) (A) before Navistar Financial makes such investment, the Trustee (1)
has received an Opinion of Counsel setting forth the procedures to be
followed so that, after making such investment, the Trustee will have a
valid security interest in the relevant marketable securities which is
perfected to the same extent as if physical delivery were made to the
Trustee of marketable securities in bearer definitive form or in other
suitable form for such delivery, and (2) has not received notice of any
change in the law upon which such Opinion of Counsel is based, and
(B) the procedures set forth in such Opinion of Counsel are followed.
Navistar Financial shall promptly notify the Trustee as to any change in the
law upon which any Opinion of Counsel referred to in clause (ii)(A) above is
based and shall not make any investment in marketable securities of the type
covered in such Opinion of Counsel (other than any such investment made in
compliance with clause (i) above) until it furnishes the Trustee with a new
Opinion of Counsel to the effect set forth in clause (ii)(A)(1) above.
To initiate the purchase of any marketable securities in accordance
with clause (i) above, Navistar Financial will (x) inform the Trustee in
writing as to the particulars of such purchase and (y) cause to be
transferred to a bank account designated by, and in the name of, the Trustee
(either as Trustee or in its individual capacity) funds, and/or instruct the
Trustee to apply funds received by the Trustee in respect of other marketable
securities, in an amount equal to the sum of (x) the purchase price plus (y)
any brokers' fees and other out-of-pocket expenses reasonably expected to be
incurred in connection with such purchase, whereupon the Trustee will make
arrangements through a Permitted Financial Intermediary for the purchase of
such marketable securities, including the payment of the purchase price
thereof.
Unless a Notice of Acceleration is in effect, the Trustee shall,
upon the written instructions and for the account of Navistar Financial, sell
or otherwise dispose of marketable securities in which Navistar Financial has
invested pursuant to this subsection (c). To initiate a sale or other
disposition of such marketable securities, Navistar Financial will inform the
Trustee in writing as to the particulars of such sale or presentation,
whereupon the Trustee will make arrangements through, and in accordance with
the usual procedures of, the relevant Permitted Financial Intermediary for
the sale or disposition of such marketable securities, and the transfer of
funds received by the Trustee on the sale or collection of such marketable
securities to such bank account of Navistar Financial (other than a Proceeds
Deposit Account that is not a UCC Deposit Account) as shall have been
designated by Navistar Financial for the purpose, or for the application of
such funds to another investment in marketable securities, as Navistar
Financial shall elect; provided that the Trustee shall revoke any such
arrangements previously made for the transfer of such funds to a bank account
of Navistar Financial promptly after receiving a Notice of Acceleration. Any
interest received by the Trustee or any agent thereof in respect of
marketable securities held in accordance with this subsection (c) will be
similarly transferred or applied.
(d) The Trustee shall from time to time appoint, as its agent or agents, one
or more Persons (which in no case shall be Navistar Financial or an
Affiliate, employee or agent of Navistar Financial) designated by Navistar
Financial and reasonably acceptable to the Trustee, located in New York, with
whom a Securities Account shall be established and maintained. Prior to
establishing such a Securities Account, the Person so appointed shall deliver
to the Trustee a writing acknowledging that (i) in opening such Securities
Account and holding securities therein, such Person is acting as agent of the
Trustee, and will conduct transactions in securities in such account in the
name and upon the instruction of the Trustee (with any confirmations of such
transactions sent by such Person to reflect that fact), and (ii) such Person
shall in no event (except upon the termination of this Agreement as provided
in Section 9.10) deliver any securities held in such Securities Account to
Navistar Financial or any Affiliate, employee or agent of Navistar
Financial. The provisions of clause (ii) of the preceding sentence shall
also apply to any Securities Account maintained with the Trustee.
(e) Upon receipt of a Notice of Acceleration and thereafter so long as such
Notice of Acceleration is in effect, the Trustee shall transfer or cause to
be transferred for deposit in the Collateral Account any funds in the
Securities Accounts.
(f) Upon the sale or disposition of any marketable securities pursuant to
this Section, the Trustee's Security Interest therein (but not in the
Proceeds arising from such sale or disposition) shall, without any further
action on the part of the Trustee, be released.
SECTION 4.03. Subsidiary Shares and Subsidiary Notes. (a) On or before the
date hereof, Navistar Financial shall deliver or cause to be delivered to the
Trustee, a co-trustee or any of their respective agents, all Subsidiary Notes
and certificates representing Subsidiary Shares endorsed or accompanied by
duly executed and undated instruments of transfer and assignment in blank so
as to be in suitable form for transfer by endorsement and delivery by the
Trustee, all in form and substance reasonably satisfactory to the Trustee.
(b) If a Notice of Acceleration is in effect, the Trustee may, in its sole
discretion, cause any or all of the Subsidiary Shares to be transferred of
record into the name of the Trustee or its nominee. If a Notice of
Acceleration is in effect, Navistar Financial will promptly give or cause to
be given to the Trustee copies of any notices or other communications
received by it with respect to Subsidiary Shares registered in the name of
Navistar Financial or any Navistar Financial Subsidiary and required to be
delivered to the Trustee hereunder and the Trustee will promptly give to
Navistar Financial copies of any notices and communications received by the
Trustee with respect to Subsidiary Shares registered in the name of the
Trustee or its nominee.
(c) If any Navistar Financial Subsidiary at any time issues any shares of
capital stock of any class (including, without limitation, substitute shares
of capital stock) to Navistar Financial or owes any Intercompany Debt which
is evidenced by a promissory note or "instrument" (as defined in Article 9 of
the UCC), including any substitute note or instrument, which has not
previously been delivered hereunder, Navistar Financial will immediately
pledge and deposit with the Trustee, a co-trustee or any of their respective
agents certificates representing all such shares and such notes or
instruments evidencing such Intercompany Debt as additional security for the
Secured Obligations. All such shares, notes or instruments shall be endorsed
or accompanied by duly executed and undated instruments of transfer and
assignment in blank so as to be in suitable form for transfer by endorsement
and delivery by the Trustee, all in form and substance reasonably
satisfactory to the Trustee. All such shares, notes and instruments
constitute Pledged Securities and are subject to all relevant provisions of
this Agreement.
(d) If any Navistar Financial Subsidiary at any time holds any certificate
or "instrument" (as defined in Article 9 of the UCC) representing such
Navistar Financial Subsidiary's right to receive any payment from the
purchasers of any Receivables sold by such Navistar Financial Subsidiary or
from any trust to which any Receivables shall have been transferred
(including, without limitation, any substitute certificate or instrument)
which has not been previously delivered hereunder, Navistar Financial will
immediately cause such Navistar Financial Subsidiary to pledge and deposit
such certificate or instrument with Navistar Financial, and Navistar
Financial will immediately deliver such certificate or instrument to the
Trustee hereunder as additional security (to the extent of Navistar
Financial's interest therein) for the Secured Obligations.
(e) If a Notice of Acceleration is in effect, Navistar Financial shall
promptly upon the request of the Required Secured Parties, (i) deliver to the
Trustee hereunder as additional security (to the extent of Navistar
Financial's interest therein) for the Secured Obligations any "instruments"
(as defined in Article 9 of the UCC) or "letters of credit" (as defined in
the UCC) which are pledged to and held by or on behalf of Navistar Financial
and (ii) make appropriate arrangements for any marketable securities as to
which ownership or the existence of a security interest is evidenced by book
entries which are pledged to Navistar Financial to be held by a Permitted
Financial Intermediary in the name and for the account of the Trustee as
additional security (to the extent of Navistar Financial's interest therein)
for the Secured Obligations. All such instruments and letters of credit
shall be endorsed or accompanied by duly executed and undated instruments of
transfer and assignment in blank so as to be in suitable form for transfer by
endorsement and delivery by the Trustee, all in form and substance reasonably
satisfactory to the Trustee.
(f) The Trustee shall have the right to receive and, while any Notice of
Acceleration is in effect, to retain as Collateral hereunder in the
Collateral Account all dividends and other payments and distributions made
upon or with respect to (A) the Subsidiary Shares and (B) any Instruments
delivered hereunder pursuant to Section 4.01(a)(ii). Navistar Financial
shall take all such action as the Trustee may deem necessary or appropriate
to give effect to such right. All such dividends and other payments and
distributions which are received by Navistar Financial shall be received in
trust for the benefit of the Trustee and the other Secured Parties and, if
the Trustee so directs so long as a Notice of Acceleration is in effect,
shall be segregated from other funds of Navistar Financial and shall
forthwith upon demand by the Trustee so long as a Notice of Acceleration is
in effect be paid over to the Trustee as Collateral for deposit in the
Collateral Account in the same form as received (with any necessary
endorsement). After a Notice of Acceleration has been cancelled, the
Trustee's right to retain dividends, interest and other payments and
distributions under this Section 4.03(g) shall cease and the Trustee shall
pay over to Navistar Financial any such Collateral retained by it while such
Notice of Acceleration was in effect.
(g) (i) Unless a Notice of Acceleration shall be in effect, Navistar
Financial shall have the right, from time to time, to vote and to give
consents, ratifications and waivers with respect to the Subsidiary Shares and
the Trustee shall, upon receiving a written request from Navistar Financial,
deliver to Navistar Financial or as specified in such request such proxies,
powers of attorney, consents, ratifications and waivers in respect of any of
the Subsidiary Shares which are registered in the name of the Trustee or its
nominee as shall be specified in such request and be in form and substance
satisfactory to the Trustee.
(ii) If a Notice of Acceleration has been received by the Trustee and so long
as such Notice of Acceleration is in effect, the Trustee shall have the right
(to the extent permitted by law), and Navistar Financial shall take all such
action as may be necessary, or as the Trustee may reasonably request, to give
effect to such right, to vote and to give consents, ratifications and
waivers, and take any other action with respect to any or all of the
Subsidiary Shares with the same force and effect as if the Trustee were the
absolute and sole owner thereof.
SECTION 4.04. Liens on the Collateral. Navistar Financial shall not create
or suffer to exist any Lien on any Collateral other than Permitted Liens.
Without limiting the generality of the foregoing, if any Lien on all or any
part of the Collateral shall be filed pursuant to Section 4068 or 302(f) of
ERISA or Section 6323 of the Internal Revenue Code, Navistar Financial shall
cause such Lien to be released within 30 days after such filing.
SECTION 4.05. Place of Business and Collateral. Navistar Financial will not
change the location of any of (i) its places of business, (ii) its chief
executive office, (iii) its jurisdiction of incorporation or (iv) the offices
or other locations where it keeps or holds any Collateral or any records
relating thereto from the location listed in the Perfection Certificate
(except to the extent temporary location elsewhere is needed in connection
with litigation, repossession or other collection activities) unless Navistar
Financial, promptly, and in any event within 30 days after making such
change, notifies the Trustee of such change, makes, or causes such Subsidiary
Pledgor to make, all UCC filings required by Section 4.01(a) and takes all
other action necessary, or that the Trustee may reasonably request, to
preserve, perfect, confirm and protect (to the extent contemplated hereby)
the Trustee's Security Interest. Navistar Financial will not in any event
change the location of any Collateral, if such change would cause the
Trustee's Security Interest in such Collateral to lapse or cease to be
perfected. Navistar Financial will at all times maintain its chief executive
office within one of the 48 contiguous states (other than Maryland or
Tennessee) in which Article 9 of the Uniform Commercial Code (Secured
Transactions) is in effect. Navistar Financial will permit the Trustee, or
any agent designated by it, at any time and from time to time during normal
business hours, to inspect, audit, check and make abstracts from Navistar
Financial's Books and Records.
SECTION 4.06. Insurance. Navistar Financial will cause any group, property
or casualty insurance policy maintained by it on the Collateral to name the
Trustee, for the benefit of the Secured Parties, as an additional named
insured, loss payee, beneficiary or otherwise, as appropriate, to the extent
its interest may appear.
SECTION 4.07. Collection Procedures. (a) On or before the date hereof,
Navistar Financial will establish a system of operations, accounts and
instructions to the Concentration Bank, Collection Banks, Proceeds Account
Banks, International, Dealers and Account Debtors, as provided in this
Section.
Navistar Financial shall, subject to the provisions of Section
4.13, (i) instruct any Account Debtor obligated to make payments under any
Navistar Financial Receivable (other than any Navistar Financial Receivable
referred to in clause (ii) below) to make such payments directly to a
separate special purpose account of Navistar Financial maintained at a
Proceeds Account Bank and containing only Proceeds (a "Proceeds Deposit
Account") and (ii) subject to the provisions of Section 4.13, instruct any
Account Debtor obligated to make payments under any Navistar Financial
Receivable referred to in clause (d) of the definition of Navistar Financial
Receivables to make such payments (except to the extent that any Permitted
Receivables Sale Agreement may require otherwise with respect to Receivables
sold thereunder) to lock-boxes (the "Lock-boxes") (in the case of any
payments in the form of cash, checks, drafts and other instruments or items
for the payment of money) and accounts (the "Collection Accounts") (in the
case of any payments made by wire transfer or similar electronic means)
maintained by Navistar Financial with the Collection Banks. Payments on
account of Wholesale Receivables shall be paid to Lock-boxes and Collection
Accounts which are separate from those to which payments on account of Retail
Receivables are made. Navistar Financial shall, and shall request
International and each Dealer to, pay forthwith into Lock-boxes and
Collection Accounts, as appropriate, in the form received (or, in the case of
any such payment received by wire transfer or similar electronic means, by
such means), all payments on account of Wholesale Receivables and Retail
Receivables received directly by Navistar Financial, International or any
such Dealer; provided that payments received by International as contemplated
by the proviso to the second preceding sentence shall be deposited forthwith
by International into the applicable retail suspense account of International
(each such suspense account and each suspense account referred to in the next
succeeding sentence, a "Suspense Account") maintained by a Collection Bank.
Navistar Financial shall instruct each Collection Bank to transfer by wire
transfer or similar electronic means, on the same business day as received,
all amounts deposited by wire transfer or similar electronic means into the
wholesale or retail Collection Account maintained by such Collection Bank
pursuant to this Section into a special purpose account of Navistar Financial
maintained at the Concentration Bank (the "Proceeds Allocation Account");
provided that, if such Collection Bank receives any such amounts on a day
that is not a business day, or too late on a business day to make such a
transfer in accordance with such Collection Bank's normal procedures, then
such Collection Bank may make such transfer on the next succeeding business
day. Navistar Financial shall instruct each Collection Bank (x) to deposit
all cash, checks, drafts and other instruments or items for the payment of
money paid into the wholesale or retail Lock-box (if any) maintained by such
Collection Bank pursuant to this Section forthwith in the wholesale or retail
Suspense Account of Navistar Financial, as appropriate, maintained by such
Collection Bank (except that such Collection Bank may deal with items which
are postdated, improperly endorsed or otherwise irregular in accordance with
such Collection Bank's usual procedures) and (y) to transfer by wire transfer
or similar electronic means all cash, checks, drafts and other instruments or
items deposited into any Suspense Account maintained by such Collection Bank
to the Proceeds Allocation Account on the same business day as such items
clear in accordance with such Collection Bank's customary clearing schedule;
provided that, if any such items so clear too late on a business day to make
such a transfer in accordance with such Collection Bank's normal procedures,
then such Collection Bank may make such transfer on the next succeeding
business day. Navistar Financial shall not deposit or, except as set forth
above in this subsection (a), cause to be deposited any amount in any
Proceeds Deposit Account.
The Trustee is hereby directed to instruct the Concentration Bank
to follow the instructions of Navistar Financial given pursuant to this
subsection (a). Navistar Financial shall instruct the Concentration Bank to
retain all amounts transferred into the Proceeds Allocation Account in such
account until they have been identified by Navistar Financial, either by
actual identification or, so long as no Notice of Acceleration is in effect,
by reasonable estimation in accordance with Navistar Financial's usual
procedures, as (i) Sold Collections, (ii) Retained Collections or (iii) other
amounts. Upon such identification, (w) Navistar Financial shall provide
prompt notice thereof to the Concentration Bank and the Trustee, (x) Retained
Collections shall be transferred forthwith to a Proceeds Deposit Account, (y)
Sold Collections shall be transferred in accordance with the terms under
which the underlying Receivables were sold and (z) other amounts shall be
transferred in accordance with Navistar Financial's usual procedures. Such
identification by Navistar Financial shall be effected as soon as reasonably
practicable.
Navistar Financial shall not permit any Proceeds to remain in any
account described in this subsection (a) (other than any such account that is
a UCC Deposit Account) more than 10 days after receipt of such Proceeds by a
Collection Bank.
If, notwithstanding the foregoing, the Trustee or any Purchaser
shall in good faith challenge Navistar Financial's identification of any item
of payment or shall in good faith challenge any of Navistar Financial's
formulas for allocating items of payment, Deloitte & Touche LLP (or such
other accounting firm as shall be acceptable to Navistar Financial, such
Purchaser and the Trustee), at Navistar Financial's expense, shall determine
the proper identification of such item of payment or the propriety of such
allocation formula. If any such determination shall result in additional
amounts being transferable to a Proceeds Deposit Account with respect to any
such item of payment, Navistar Financial shall promptly so transfer such
additional amounts and, if it has been determined that Navistar Financial's
formula for allocation was in error, the proper allocation formula shall
thereafter be applied to allocate items of payment, subject to any subsequent
revision as provided herein. No such determination shall prevent Navistar
Financial, the Trustee or any Purchaser from litigating a claim to a greater
portion of such funds.
Navistar Financial will use all reasonable efforts to cause
International and each Account Debtor, Dealer, Proceeds Account Bank and
Collection Bank to comply with the foregoing procedures and instructions;
provided that the failure of any of them so to comply shall not constitute a
breach of this subsection.
(b) The name in which such Lock-boxes, Collection Accounts,
Suspense Accounts and Proceeds Allocation Account are carried shall clearly
indicate that (i) certain of the items and funds deposited therein are the
property of Navistar Financial subject to the Trustee's Security Interest and
(ii) certain other items and funds deposited therein are the property of one
or more other Persons. The name in which each Proceeds Deposit Account is
carried shall reflect the fact that all items and funds deposited therein are
the property of Navistar Financial subject to the Trustee's Security Interest
hereunder. The instructions governing such Lock-boxes and accounts shall not
be altered in any material manner which is inconsistent with any Secured
Instrument or which could reasonably be expected to adversely affect the
Trustee, any Secured Party or any other holder of a Secured Obligation
without the prior consent of the Required Secured Parties.
(c) Not later than the date hereof, as to (i) any Lock-box,
Suspense Account or Collection Account with a Collection Bank established on
or before the date hereof and (ii) any Proceeds Deposit Account with a
Proceeds Account Bank established on or before the date hereof, and prior to
establishing any such lock-boxes and accounts with any bank after the date
hereof, Navistar Financial will cause such bank to deliver a writing to the
Trustee confirming that the bank in question has received the instructions
and established the relevant accounts and procedures referred to in this
Section. Navistar Financial may, from time to time after the date hereof,
designate a bank to act as a Collection Bank or a Proceeds Account Bank and
such bank shall become a Collection Bank or a Proceeds Account Bank for
purposes of this Agreement, provided that (i) such bank is located in one of
the 48 contiguous states (other than Maryland or Tennessee) in which Article
9 of the Uniform Commercial Code (Secured Transactions) is in effect, (ii)
such bank has delivered a writing to the Trustee confirming the matters set
forth in the first sentence of this subsection (c), and (iii) Navistar
Financial has delivered to the Trustee an amended Schedule C or D, setting
forth the then current list of Collection Banks or Proceeds Account Banks, as
the case may be.
(d) Unless a Proceeds Account Bank has received notice from the
Trustee that a Notice of Acceleration is in effect, Navistar Financial shall
be entitled to instruct such Proceeds Account Bank to transfer amounts held
in a Proceeds Deposit Account maintained with such bank to or upon the order
of Navistar Financial, whereupon, unless such amounts are deposited in a UCC
Deposit Account, the Trustee's Security Interest in such amounts (but not in
any property or rights concurrently or subsequently acquired by Navistar
Financial in consideration of Navistar Financial's payment of any such
amounts) shall cease immediately without any further action on the part of
the Trustee; provided that Navistar Financial shall not instruct any Proceeds
Account Bank to transfer funds from a Proceeds Deposit Account to any other
bank account maintained by Navistar Financial which is not a Proceeds Deposit
Account except to facilitate the prompt application thereof in Navistar
Financial's business. After receiving notice from the Trustee that a Notice
of Acceleration is in effect, each Proceeds Account Bank shall immediately
and from time to time thereafter (unless it receives notice from the Trustee
stating that such Notice of Acceleration is no longer in effect) transfer all
funds held in its Proceeds Deposit Account to the Trustee for deposit in the
Collateral Account and shall notify the Trustee by facsimile transmission as
to the details of each such transfer.
(e) Unless a Notice of Acceleration is in effect, Navistar
Financial will, at its expense and in accordance with its normal commercial
practices, for the benefit of the Trustee:
(i) ask for, demand, xxx for, collect or cause to be collected from the
Account Debtor or Account Debtors on each Navistar Financial Receivable,
as and when due, any and all amounts, including interest, owing under or
on account of such Navistar Financial Receivable;
(ii) compromise and settle any dispute related to any Navistar Financial
Receivable; and
(iii) take or cause to be taken such action to repossess goods securing any
Navistar Financial Receivable, or to enforce any rights or liens arising
thereunder and to dispose of such repossessed goods as Navistar
Financial may deem proper;
provided that Navistar Financial will not be required to take any action
under this subsection which would be contrary to any applicable law or court
order.
(f) The Proceeds Allocation Account and each Lock-box, Suspense
Account, Collection Account and Proceeds Deposit Account established for
purposes of this Section shall be located in one of the 48 contiguous states
(other than Maryland or Tennessee) in which Article 9 of the Uniform
Commercial Code (Secured Transactions) is in effect, and each Proceeds
Deposit Account shall be located in a state in which Section 9-306 of the
Uniform Commercial Code provides for continuous perfection of a security
interest in separate deposit accounts containing only proceeds. Navistar
Financial shall keep the Trustee informed at all times as to the location of
such accounts.
(g) Not later than the date hereof, the Trustee will cause the
Concentration Bank to deliver a writing to the Trustee and Navistar
Financial, confirming that the Concentration Bank has received the
instructions of the Trustee and Navistar Financial referred to in subsection
(a) of this Section. The Concentration Bank may at any time, by giving
written notice to the Trustee and Navistar Financial, resign its position as
the Trustee's agent and be discharged of its responsibilities hereunder, such
resignation to be effective upon the appointment by the Trustee of a
successor Concentration Bank (which Navistar Financial shall have the right
to designate) and the acceptance of such appointment by such successor
Concentration Bank. If no successor Concentration Bank shall be appointed
and shall have accepted such appointment within 30 days after the
Concentration Bank gives the aforesaid notice of resignation, the Trustee may
appoint a successor Concentration Bank or apply to any court of competent
jurisdiction to appoint a successor Concentration Bank. Upon the instruction
of Navistar Financial, the Trustee shall, upon ten days' prior notice, remove
the Concentration Bank and appoint as its agent a successor Concentration
Bank designated by Navistar Financial, provided that such successor
Concentration Bank shall have accepted such appointment and delivered a
writing to the Trustee and Navistar Financial confirming the matters set
forth in the first sentence of this subsection (g). Any successor
Concentration Bank shall be a bank (i) located in one of the 48 contiguous
states (other than Maryland or Tennessee) in which Article 9 of the Uniform
Commercial Code (Secured Transactions) is in effect and in a state in which
Section 9-306 of the Uniform Commercial Code provides for continuous
perfection of a security interest in separate deposit accounts containing
only proceeds and (ii) having capital, surplus and undivided profits of at
least $500,000,000 if there be such a bank with such capital, surplus and
undivided profits willing, qualified and able to act as Concentration Bank
upon reasonable or customary terms.
SECTION 4.08. Delivery of Secured Instruments. Within 30 days after the
date hereof, Navistar Financial shall deliver to the Trustee true and
complete copies of all Secured Instruments as in effect on the date hereof.
Navistar Financial will deliver to the Trustee, promptly upon the execution
thereof, a true and complete copy of (i) each Secured Instrument entered into
after the date hereof and (ii) each amendment, modification or supplement to
any Secured Instrument.
SECTION 4.09. Information as to Secured Parties. Navistar Financial shall
deliver to the Trustee between November 1 and November 15 in each year, and
from time to time upon reasonable request of the Trustee, a list setting
forth as of a date not more than 30 days prior to the date of such delivery,
(i) for each Secured Instrument (other than any Secured Instrument referred
to in clause (iii), (iv), (v) or (vi) below), the aggregate unpaid principal
or face amount outstanding thereunder, (ii) for each Secured Instrument
(other than any Debt Indenture, the Credit Agreement and the 364-Day Credit
Agreement), to the extent known, the names of the holders of Secured
Obligations outstanding thereunder and the unpaid principal or face amount
thereof owing to each such holder, (iii) the aggregate unpaid principal
amount of Indenture Obligations outstanding under each Debt Indenture and the
name and address of the Indenture Trustee thereunder, (iv) the aggregate
unpaid principal amount of loans outstanding under the Credit Agreement and
the name and address of the Administrative Agent thereunder, (v) the
aggregate unpaid principal amount of loans outstanding under the 364-Day
Credit Agreement and the name and address of the Administrative Agent
thereunder, and (vi) in the case of Secured Obligations other than Indenture
Obligations, the Credit Agreement and the 364-Day Credit Agreement, the name
and address of any duly authorized representative of the Secured Parties
holding such Secured Obligations designated in accordance with Section
7.11(b). Navistar Financial shall furnish to the Trustee within 30 days
after the date hereof a list setting forth the name and address of each party
to whom notices must be sent under each Secured Instrument in effect on the
date hereof and Navistar Financial shall furnish promptly to the Trustee any
changes or additions to such list of which it receives notice. The Trustee
shall provide a copy of such list to any Secured Party requesting it.
SECTION 4.10. Stamp and Other Similar Taxes. Navistar Financial shall
indemnify and hold harmless the Trustee and each Secured Party from any
present or future claim or liability for any stamp or any other similar tax
and any penalties or interest with respect thereto which may be assessed,
levied or collected by any jurisdiction in connection with this Agreement,
the Trust Estate or any Collateral.
SECTION 4.11. Filing Fees; Excise Taxes. Navistar Financial shall pay any
and all payments in respect of all search, filing, recording and registration
fees, taxes, excise taxes and other similar imposts which may be payable or
determined to be payable in respect of the execution, delivery and
performance of this Agreement.
SECTION 4.12. Collateral Reports. Navistar Financial shall furnish or cause
to be furnished to the Trustee from time to time, as promptly as feasible
upon the Trustee's request, schedules or other reports generated by Navistar
Financial in the ordinary course of business identifying and describing the
Collateral (including, without limitation, the locations of Books and Records
and other Collateral), all as the Trustee may reasonably request.
SECTION 4.13. Government Receivables. (a) Navistar Financial's right,
title and interest in any Receivables as to which the United States of
America or any agency or a department thereof is the obligor ("Government
Receivables") shall constitute "Navistar Financial Receivables" except for
purposes of Sections 3.01(e) and (f) and Section 3.02(b); provided that
nothing in this Agreement shall obligate Navistar Financial to comply with
the federal Assignment of Claims Act as set forth in 31 U.S.C.A.ss.3727
(1983) and 41 U.S.C.A.ss.15 (1987) (the "FACA") until it is required to do so
pursuant to subsection (b) below or to instruct any Account Debtor under any
Government Receivable to make any payment into a Lock-box or Collection
Account referred to in Section 4.07.
(b) If at any time:
(i) Navistar Financial notifies the Trustee that it desires to comply with
the FACA with respect to the assignment to the Trustee of any Government
Receivable, or
(ii) the Required Secured Parties notify the Trustee and Navistar Financial
that (A) they have determined that Government Receivables constituted at
the end of any month more than 5% of the total (net) receivables of
Navistar Financial, determined on a basis consistent with the statement
of consolidated financial condition of Navistar Financial and its
consolidated Subsidiaries as of October 31, 2000 and the related
statements of consolidated income and retained earnings and consolidated
cash flow for the fiscal year then ended, together with the notes
thereto, included in the 2000 Annual Report and reported on by Deloitte
& Touche LLP, and (B) they have decided to require Navistar Financial to
comply with the FACA with respect to the assignment to the Trustee of
Government Receivables to the extent necessary so that Government
Receivables as to which Navistar Financial has not so complied will
constitute less than 5% of such total (net) receivables,
then Navistar Financial will file with the appropriate contracting officer,
head of department or agency or disbursing officer appropriate written
notices of assignment which comply with the FACA
(x) within 30 days after the Trustee's receipt of a notice
described in clause (i) or (ii) above as to Government Receivables
arising before the receipt of such notice, and
(y) promptly after the execution of the relevant contract as
to Government Receivables arising after receipt of such notice
to the extent required to comply with clause (i) or (ii) above and permitted
by the terms of such Government Receivables.
(c) Notwithstanding any other provision of this Agreement, unless a Notice
of Acceleration is in effect, any amounts received by the Trustee with
respect to any Government Receivables assigned pursuant to the FACA shall be
deposited in one or more special demand accounts of the Trustee or any of its
agents (each a "Government Account"), the balance of which shall be subject
to withdrawal or transfer upon the order of Navistar Financial in accordance
with the Trustee's or such agent's normal rules and regulations governing
commercial demand deposit accounts. If a Notice of Acceleration is delivered
and so long as it remains in effect, any amounts in Government Accounts shall
be held and applied by the Trustee or such agent in accordance with the
provisions of Article VI. The Trustee agrees that such reports as may be
requested by Navistar Financial as to the source of funds deposited in the
Government Accounts will be rendered at reasonable intervals.
ARTICLE V
ACCELERATION OF SECURED OBLIGATIONS; REMEDIES
SECTION 5.01. Notice of Acceleration. (a) Upon receipt of a Notice of
Acceleration, the Trustee shall (i) immediately notify Navistar Financial,
any co-trustee, each Purchaser, the Concentration Bank, each Proceeds Account
Bank, each insurance company that has issued an insurance policy naming the
Trustee as an additional named insured, loss payee, beneficiary or otherwise
in accordance with Section 4.06(a) (provided that Navistar Financial shall
have notified, and hereby agrees to notify, the Trustee of the proper
address, or facsimile number for such each such notice) and each Lender
holding any Secured Bank Account Obligation of the receipt and contents
thereof and (ii) within ten days thereafter, notify each Secured Party
thereof. So long as such Notice of Acceleration is in effect, the Trustee
shall exercise the rights and remedies provided in this Article. The Trustee
is not empowered to exercise any remedy hereunder unless a Notice of
Acceleration is in effect.
(b) A Notice of Acceleration shall become effective upon receipt thereof by
the Trustee. A Notice of Acceleration, once effective, shall remain in
effect unless and until it is cancelled as provided in Section 5.01(c).
(c) The party or parties giving a Notice of Acceleration shall be entitled
to cancel it by delivering a written notice of cancellation to the Trustee
(i) before the Trustee takes any action to exercise any remedy with respect
to the Collateral or (ii) thereafter, if the Trustee believes that all
actions it has taken to exercise any remedy or remedies with respect to the
Collateral can be reversed without undue difficulty; provided that no Notice
of Acceleration shall be cancelled more than 30 days after it is received by
the Trustee. The Trustee shall immediately notify Navistar Financial as to
the receipt and contents of any such notice of cancellation and shall
promptly notify Navistar Financial, any co-trustee, the Concentration Bank,
each Proceeds Account Bank, each insurance company that has received notice
of the relevant Notice of Acceleration in accordance with Section 5.01(a),
each Purchaser and each other Secured Party as to the cancellation of any
Notice of Acceleration.
SECTION 5.02. General Authority of the Trustee over the Collateral.
Navistar Financial hereby irrevocably constitutes and appoints the Trustee
and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full power and authority in the name of
Navistar Financial or in its own name, from time to time in the Trustee's
discretion, so long as any Notice of Acceleration is in effect, to take any
and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to carry out the terms of
this Agreement and accomplish the purposes hereof and, without limiting the
generality of the foregoing, Navistar Financial hereby gives the Trustee the
power and right on behalf of Navistar Financial, without notice to or further
assent by Navistar Financial, except as provided in Section 5.03(b), to do
the following:
(i) to ask for, demand, xxx for, collect, receive and give acquittance for
any and all moneys due or to become due upon, or in connection with, the
Collateral;
(ii) to receive, take, endorse, assign and deliver any and all checks, notes,
drafts, acceptances, documents and other negotiable and non-negotiable
instruments and Chattel Paper taken or received by the Trustee as, or in
connection with, the Collateral;
(iii) to commence, prosecute, defend, settle, compromise or adjust any claim,
suit, action or proceeding with respect to, or in connection with, the
Collateral;
(iv) to sell, transfer, assign or otherwise deal in or with the Collateral or
any part thereof or the proceeds or avails thereof as fully and
effectively as if the Trustee were the absolute owner thereof;
(v) to extend the time of payment of any or all thereof and to make any
allowance and other adjustments with reference thereto; and
(vi) to do, at its option and at the expense and for the account of Navistar
Financial, at any time or from time to time, all acts and things which
the Trustee deems necessary to protect or preserve the Collateral and to
realize upon the Collateral.
SECTION 5.03. Remedies; Rights Upon Acceleration of Secured Obligations.
(a) If a Notice of Acceleration is in effect and the related 30-day
cancellation period referred to in the proviso to the first sentence of
Section 5.01(c) shall have expired:
(i) The Trustee may at any time, without further notice to Navistar
Financial, notify Account Debtors that a security interest in their
obligations has been granted to the Trustee and that payments thereunder
or in respect thereof should be made directly to the Trustee. If
requested by the Trustee, Navistar Financial will so notify Account
Debtors. The Trustee may in its own name or in the name of others
communicate with Account Debtors.
(ii) All payments received by Navistar Financial under or in connection with
the Collateral shall be held by Navistar Financial in trust for the
Trustee, shall be segregated from other funds of Navistar Financial and
shall, forthwith upon receipt by Navistar Financial, be turned over to
the Trustee, in the same form as received by Navistar Financial (duly
endorsed to the Trustee, if required) for deposit in the Collateral
Account.
(iii) Any and all such payments so received by the Trustee (whether from
Navistar Financial or otherwise) shall be deposited by the Trustee in
the Collateral Account. Any Proceeds, whether consisting of cash,
checks, notes, drafts, bills of exchange, money orders or commercial
paper of any kind whatsoever, shall be deposited or held in the
Collateral Account when received.
(b) If a Notice of Acceleration is in effect, the Trustee may exercise, in
addition to all other rights and remedies granted to it in this Agreement,
all rights and remedies of a secured party under the UCC (whether or not in
effect in the jurisdiction where such rights are exercised) and, for the
purpose of enforcing any and all rights and remedies of the Trustee under
this Agreement, may (i) enter, with or without process of law and without
breach of the peace, any premises where any of the Collateral is or may be
located, and without charge or liability to the Trustee seize and remove such
Collateral from such premises and (ii) have access to and use Navistar
Financial's Books and Records relating to the Collateral. Without limiting
the generality of the foregoing, Navistar Financial agrees that in any such
event the Trustee, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of the
time and place of any public or private sale) to or upon Navistar Financial
or any other Person (all of which demands, advertisements and/or notices are
hereby waived by Navistar Financial), may forthwith withdraw all cash and
investments in the Collateral Account and apply such cash and investments and
other cash, if any, then held by it as Collateral as specified in Section
6.04, withdraw all or any portion of the funds on deposit in any UCC Deposit
Account or Government Account and otherwise collect, receive, appropriate and
realize upon the Collateral or any part thereof, and/or forthwith sell,
lease, assign, give an option or options to purchase or otherwise dispose of
and deliver the Collateral (or contract to do so) or any part thereof in one
or more parcels at public or private sale, at any exchange, broker's board or
at any office of the Trustee or elsewhere in such commercially reasonable
manner as it may deem best, for cash or on credit or for future delivery and
at such price or prices as the Trustee may deem satisfactory. Upon any such
sale the Trustee shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold. Each purchaser at any such sale
shall hold the Collateral so sold to it absolutely and free from any claim or
right of whatsoever kind, including any equity or right of redemption of
Navistar Financial which may be waived, and Navistar Financial, to the extent
permitted by law, hereby specifically waives all rights of redemption, stay
or appraisal which it has or may have under any law now existing or hereafter
adopted. The Trustee or any Secured Party shall have the right upon any such
public sale, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral so sold. Any
such public sale shall be held at such time or times within ordinary business
hours and at such place or places as the Trustee may fix in the notice of
such sale. The Trustee shall not be obligated to make any such sale pursuant
to any such notice. The Trustee may, without notice or publication, adjourn
any public or private sale or cause the same to be adjourned from time to
time by announcement at the time and place fixed for sale, and such sale may
be made at any time or place to which the same may be so adjourned. In the
case of any sale of all or any part of the Collateral on credit or for future
delivery, the Collateral sold may be retained by the Trustee until the
selling price is paid by the purchaser thereof, but the Trustee shall not
incur any liability in case of the failure of such purchaser to take up and
pay for the Collateral so sold and, in case of any such failure, such
Collateral may again be sold upon like notice. The Trustee is authorized, in
connection with any such sale, if it deems it advisable so to do, (i) to
restrict the prospective bidders on or purchasers of any of the Pledged
Securities to a limited number of sophisticated investors who will represent
and agree that they are purchasing for their own account for investment and
not with a view to the distribution or sale of any of such Pledged
Securities, (ii) to cause to be placed on certificates for any or all of the
Pledged Securities or on any other securities pledged hereunder a legend to
the effect that such security has not been registered under the Securities
Act of 1933, as amended, and may not be disposed of in violation of the
provision of said Act, and (iii) to impose such other limitations or
conditions in connection with any such sale as the Trustee deems necessary or
advisable in order to comply with said Act or any other law. Navistar
Financial covenants and agrees that it will and will cause each Navistar
Financial Subsidiary to execute and deliver such documents and take such
other action as the Trustee deems necessary or advisable in order that any
such sale may be made in compliance with the law. Navistar Financial further
agrees, at the Trustee's request, to assemble the Collateral, and to make it
available to the Trustee at places which the Trustee shall reasonably select,
whether at Navistar Financial's premises or elsewhere. The Trustee shall
deposit the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale in the Collateral Account. To the extent
permitted by applicable law, Navistar Financial waives all claims, damages
and demands against the Trustee or any other Secured Party arising out of the
foreclosure, repossession, retention or sale of the Collateral. The Trustee
shall give Navistar Financial not less than 10 business days' notice (which
notification shall be deemed given when mailed, postage prepaid, addressed to
Navistar Financial at its address determined pursuant to Section 9.01) of the
time and place of any public sale or other intended disposition or of the
time after which a private sale or other intended disposition may take place
and Navistar Financial agrees that such notice is "reasonable notification"
within the meaning of Section 9-504(3) of the UCC; provided that no such
notice shall be required in the case of the public or private sale or other
intended disposition of any Collateral which is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market. The Trustee may also render any or all of the Collateral unusable at
Navistar Financial's premises and may dispose of such Collateral on such
premises without liability for rent or costs. Notwithstanding any provision
hereof to the contrary, the rights and remedies of the Trustee with respect
to any Collateral subject to a Senior Lien or an Existing Senior Lien shall
be subject to the terms of any subordination agreement with respect thereto
executed and delivered in accordance with Section 2.06. The Trustee shall be
entitled to consult with financial advisors, accountants and counsel in
connection with the sale of any Collateral and the Trustee shall not be
liable for any actions it takes in reliance upon the advice of those
financial advisors, accountants and counsel selected by it without gross
negligence or willful misconduct.
SECTION 5.04. Right to Initiate Judicial Proceedings. If a Notice of
Acceleration is in effect, the Trustee (i) shall have the right and power to
institute and maintain such suits and proceedings as it may deem appropriate
to protect and enforce the rights vested in it by this Agreement and (ii) may
proceed by suit or suits at law or in equity to enforce such rights and to
foreclose upon the Collateral and to sell all or, from time to time, any of
the Collateral under the judgment or decree of a court of competent
jurisdiction.
SECTION 5.05. Right to Appoint a Receiver. If a Notice of Acceleration is
in effect, upon the filing of a xxxx in equity or other commencement of
judicial proceedings to enforce the rights of the Trustee or of the other
Secured Parties under this Agreement, the Trustee shall, to the extent
permitted by law, be entitled as a matter of right to the appointment of a
receiver or receivers (who may be the Trustee) of the Trust Estate, or any
part thereof, and of the profits, revenues and other income thereof, pending
such proceedings, with such powers as the court making such appointment shall
confer, and to the entry of an order directing that the profits, revenues and
other income of the property constituting the whole or any part of the Trust
Estate be segregated, sequestered and impounded for the benefit of the
Trustee and the Secured Parties, and Navistar Financial irrevocably consents
to the appointment of such receiver or receivers and to the entry of such
order; provided that, notwithstanding the appointment of any receiver, the
Trustee shall be entitled to retain possession and control of all cash held
by or deposited with it pursuant to this Agreement.
SECTION 5.06. Instructions of Required Secured Parties. (a) The Required
Secured Parties shall have the right, by one or more instruments in writing
executed and delivered to the Trustee, to direct the time, method and place
of conducting any proceeding for any right or remedy available to the
Trustee, or of exercising any trust or power conferred on the Trustee, or for
the appointment of a receiver, or for the taking of any action authorized by
this Article; provided that (i) such direction shall not conflict with the
provisions of law or of this Agreement and (ii) the Trustee shall be
indemnified as provided in Section 7.04(d). Nothing in this Section shall
impair the right of the Trustee in its discretion to take any action which it
deems proper and which is not inconsistent with such direction by the
Required Secured Parties. In the absence of such direction, the Trustee
shall have no duty to take or refrain from taking any action unless
explicitly required herein.
(b) If, within 45 days after the Trustee receives a Notice of Acceleration
which has not been cancelled, the Trustee shall not have received written
directions from the Required Secured Parties pursuant to subsection (a) above
for the exercise of rights or remedies by the Trustee, the Trustee shall,
until it receives written directions from the Required Secured Parties,
follow written directions from Secured Parties holding more than 50% of the
Secured Obligations then outstanding under the Secured Instruments in respect
of which Notices of Acceleration have been given; provided that (i) such
direction shall not conflict with the provisions of applicable law or of this
Agreement, (ii) the Trustee shall be indemnified as provided in Section
7.04(d) and (iii) if any Secured Instrument is a Debt Indenture the relevant
Indenture Trustee shall be deemed to be the holder of all Secured Obligations
outstanding thereunder.
SECTION 5.07. Remedies Not Exclusive. (a) No remedy conferred upon or
reserved to the Trustee herein is intended to be exclusive of any other
remedy or remedies, but every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing
at law or in equity or by statute.
(b) No delay or omission by the Trustee to exercise any right, remedy or
power hereunder shall impair any such right, remedy or power or shall be
construed to be a waiver thereof, and every right, power and remedy given
under this Agreement to the Trustee may be exercised from time to time and as
often as may be deemed expedient by the Trustee.
(c) If the Trustee shall have proceeded to enforce any right, remedy or
power under this Agreement and the proceeding for the enforcement thereof
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Trustee, then Navistar Financial, the Trustee and
the Secured Parties shall, subject to any determination in such proceeding,
severally and respectively be restored to their former positions and rights
hereunder with respect to the Trust Estate and in all other respects, and
thereafter all rights, remedies and powers of the Trustee shall continue as
though no such proceeding had been taken.
(d) All rights of action and of asserting claims upon or under this
Agreement may be enforced by the Trustee without the possession of any
Secured Instrument or Indenture Obligation or the production thereof in any
trial or other proceeding relative thereto, and any suit or proceeding
instituted by the Trustee shall be brought in its name as Trustee and any
recovery of judgment shall be held as part of the Trust Estate.
SECTION 5.08. Waiver and Estoppel. (a) Navistar Financial agrees, to the
extent it may lawfully do so, that it will not at any time in any manner
whatsoever claim or take the benefit or advantage of any appraisement,
valuation, stay, extension, moratorium, turnover or redemption law, or any
law permitting it to direct the order in which the Collateral shall be sold,
now or at any time hereafter in force, which may delay, prevent or otherwise
affect the performance or enforcement of this Agreement and hereby waives all
benefit or advantage of all such laws and covenants that it will not hinder,
delay or impede the execution of any power granted to the Trustee in this
Agreement but will suffer and permit the execution of every such power as
though no such law were in force; provided that this subsection (a) shall not
be construed as a waiver of any rights of Navistar Financial under any
applicable federal bankruptcy law.
(b) Navistar Financial, to the extent it may lawfully do so, on behalf of
itself and all who may claim through or under it, including, without
limitation, any and all subsequent creditors, vendees, assignees and lienors,
waives and releases all rights to demand or to have any marshalling of the
Collateral upon any sale, whether made under any power of sale herein granted
or pursuant to judicial proceedings or upon any foreclosure or any
enforcement of this Agreement and consents and agrees that all the Collateral
may at any such sale be offered and sold as an entirety.
(c) Navistar Financial waives presentment, demand, protest and any notice of
any kind (except notices explicitly required hereunder) in connection with
this Agreement and any action taken by the Trustee with respect to the
Collateral.
SECTION 5.09. Limitation by Law. All rights, remedies and powers provided
by this Article and by Article VI may be exercised only to the extent that
the exercise thereof does not violate any applicable provision of law, and
all the provisions of this Article are intended to be subject to all
applicable mandatory provisions of law which may be controlling and to be
limited to the extent necessary so that they will not render this Agreement
invalid or unenforceable in whole or in part.
ARTICLE VI
COLLATERAL ACCOUNT; DISTRIBUTIONS
SECTION 6.01. The Collateral Account. On the date hereof there shall be
established and, at all times thereafter until the trusts created by this
Agreement shall have terminated in accordance with the terms hereof, there
shall be maintained with the Trustee at the office of the Trustee's corporate
trust division an account which shall be entitled the "Navistar Financial
Collateral Account" (the "Collateral Account"). All moneys which are
required by this Agreement to be delivered to the Trustee while a Notice of
Acceleration is in effect or which are received by the Trustee or any agent
to the Trustee in respect of the Collateral, whether in connection with the
exercise of the remedies provided in this Agreement or otherwise, while a
Notice of Acceleration is in effect shall be deposited in the Collateral
Account and held by the Trustee as part of the Trust Estate and applied in
accordance with the terms of this Agreement. Upon the cancellation of any
Notice of Acceleration pursuant to Section 5.01(c), the Trustee shall cause
all funds on deposit in the Collateral Account to be applied as follows:
(i) all amounts transferred to the Collateral Account from a Proceeds
Deposit Account pursuant to Section 4.07(d) shall be returned to such
Proceeds Deposit Account or, at the request of Navistar Financial, to
any other Proceeds Deposit Account, and
(ii) all other amounts remaining in the Collateral Account (including any
amounts transferred to the Collateral Account from a Securities Account
pursuant to Section 4.02(e), all dividends and other payments and
distributions made upon or with respect to the Subsidiary Shares
transferred into the Collateral Account pursuant to Section 4.03(e) and
all insurance proceeds transferred into the Collateral Account pursuant
to Section 4.06(b)) shall be paid over by the Trustee to Navistar
Financial or as it may direct.
SECTION 6.02. Control of Collateral Account. All right, title and interest
in and to the Collateral Account shall vest in the Trustee, and funds on
deposit in the Collateral Account shall constitute part of the Trust Estate.
The Collateral Account shall be subject to the exclusive dominion and control
of the Trustee.
SECTION 6.03. Investment of Funds Deposited in Collateral Account. The
Trustee shall invest and reinvest moneys on deposit in the Collateral Account
at any time at the written direction of Navistar in:
(i) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America, in
each case maturing within one year from the date of acquisition thereof;
(ii) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of acquisition,
the credit rating of A-2 or higher from S&P or P-2 or higher from
Xxxxx'x;
(iii)investments in certificates of deposit, banker's acceptances
and time deposits maturing within one year from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any
State thereof or Canada which has a combined capital and surplus and
undivided profits of not less than $250,000,000;
(iv) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above; and
(v) investments in money market funds substantially all of the
assets of which are comprised of securities of the type described in
clauses (a) through (d) above;
provided that the aggregate amount invested in obligations of the types
described in clauses (iii), (iv) and (v) above of any one issuer shall not
exceed $10,000,000 at any time. All such investments and the interest and
income received thereon and the net proceeds realized on the sale or
redemption thereof shall be held in the Collateral Account as part of the
Trust Estate.
SECTION 6.04. Application of Moneys. (a) The Trustee shall have the right
at any time to apply moneys of Navistar Financial held by it in the
Collateral Account to the payment of due and unpaid Trustee's Fees. Subject
to Section 6.05, all remaining moneys held by the Trustee in the Collateral
Account while a Notice of Acceleration is in effect shall, to the extent
available for distribution (it being understood that the Trustee may
liquidate investments prior to maturity in order to make a distribution
pursuant to this Section), be distributed by the Trustee on dates fixed by
the Trustee (the first of which shall be within 90 days after the Trustee
receives a Notice of Acceleration and the remainder of which shall be monthly
thereafter on the day of the month corresponding to the first Distribution
Date (or, if there is no such corresponding day, the last day of such month)
for such distribution (individually a "Distribution Date" and collectively
"Distribution Dates") in the following order of priority:
First: to any Secured Party which has theretofore advanced or paid any
unpaid Trustee's Fees constituting administrative expenses allowable
under Section 503(b) of the Bankruptcy Code, an amount equal to the
amount thereof so advanced or paid by such Secured Party prior to such
Distribution Date;
Second: to any Secured Party which has theretofore advanced or paid any
unpaid Trustee's Fees other than such administrative expenses, an amount
equal to the amount thereof so advanced or paid by such Secured Party
prior to such Distribution Date;
Third: to the Secured Parties entitled thereto, an amount equal to their
respective Catch-up Amounts (as defined in subsection (c) below), if
any, and, if such moneys shall be insufficient to pay such Catch-up
Amounts in full, then to such Secured Parties ratably in proportion to
their respective Catch-up Amounts;
Fourth: to the Secured Parties entitled thereto in an amount equal to the
unpaid principal of, premium, if any, and interest on the Secured
Obligations (other than Financial Services Obligations) then outstanding
whether or not then due and payable, and all unpaid amounts then due and
payable by Navistar Financial in respect of the Financial Services
Obligations, and all unpaid fees and expenses of any Indenture Trustee
under any Debt Indenture, and, if such moneys shall be insufficient to
pay such principal, premium, interest and other amounts in full, then
ratably (without priority of any one over any other, except in
accordance with applicable subordination provisions) to the Secured
Parties in proportion to the unpaid amounts thereof on such Distribution
Date;
Fifth: to the Secured Parties, amounts equal to all other sums then due
and payable in respect of the Secured Obligations, including, without
limitation, the costs and expenses of the Secured Parties and their
representatives which are due and payable under the relevant Secured
Instruments as of such Distribution Date and, if such moneys shall be
insufficient to pay such sums in full, then ratably to the Secured
Parties in proportion to such sums; and
Sixth: any surplus then remaining shall be paid to Navistar Financial or
to whomsoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct.
(b) The term "unpaid" as used in clause Fourth of subsection (a) above and
in subsection (c) below, with respect to any Secured Obligations, refers:
(i) in the absence of a bankruptcy proceeding with respect to Navistar
Financial, to all amounts of such Secured Obligations outstanding as of
a Distribution Date, and
(ii) during the pendency of a bankruptcy proceeding with respect to Navistar
Financial, to all amounts which have not been disallowed by the
bankruptcy court in respect of such Secured Obligations as a basis for
distribution (including estimated amounts, if any, allowed in respect of
contingent claims),
to the extent that prior distributions (whether actually distributed or set
aside pursuant to Section 6.05) have not been made in respect thereof.
(c) Catch-up Amounts shall be calculated on any Distribution Date before
giving effect to any distribution on such Distribution Date pursuant to
clauses Fourth, Fifth and Sixth of subsection (a) above. The term "Catch-up
Amount" means, with respect to any Secured Instrument, the amount, if any,
required to be distributed to the Secured Party or Parties in respect of
Secured Obligations thereunder, so that, immediately after such distribution,
the ratio of (i) all amounts theretofore distributed hereunder to such
Secured Party or Parties in respect of such Secured Instrument to (ii) the
unpaid amount then due and payable to such Secured Party or Parties
thereunder plus the amount of all distributions theretofore made hereunder in
respect thereof, is equal to the highest ratio of (x) all amounts theretofore
distributed hereunder in respect of any other Secured Instrument to (y) the
unpaid amount then due and payable to the Secured Party or Parties with
respect thereto plus the amount of all distributions theretofore made
hereunder in respect thereof.
(d) Nothing in this Agreement shall affect the subordinated status of any
subordinated Secured Obligation or affect the rights or obligations of any
Secured Party under any applicable subordination provisions, and payments
made to or by a Secured Party by reason of any subordination provisions shall
be disregarded for purposes of computing the amounts of distributions made
pursuant to this Section.
SECTION 6.05. Application of Moneys Distributable to Indenture Trustees. If
at any time any moneys collected or received by the Trustee pursuant to this
Agreement are distributable pursuant to Section 6.04 to an Indenture Trustee
and if such Indenture Trustee shall notify the Trustee, which shall then
notify Navistar Financial, that no provision is made under the relevant Debt
Indenture for the application by such Indenture Trustee of moneys (whether
because the Secured Obligations issued under such Debt Indenture have not
become due and payable or otherwise) and that such Debt Indenture does not
effectively provide for the receipt and the holding by such Indenture Trustee
of such moneys pending the application thereof, then the Trustee shall invest
such amounts at the written direction of Navistar Financial in obligations of
the kinds referred to in clauses (i) and (ii) of Section 6.03 maturing within
90 days after they are acquired by the Trustee and shall hold all such
amounts so distributable and all such investments and the net proceeds
thereof in trust solely for such Indenture Trustee (in its capacity as
trustee) and for no other purpose until such time as such Indenture Trustee
shall request the delivery thereof by the Trustee for application pursuant to
such Debt Indenture.
SECTION 6.06. Trustee's Calculations. In making the determinations and
allocations required by Sections 6.04 and 6.05, the Trustee may rely upon
information supplied by each Secured Party as to the amounts payable with
respect to Secured Obligations held by such Secured Party or as to the
amounts of unpaid principal outstanding under the Debt Indentures, premium,
if any, with respect thereto, and interest accrued thereon, as the case may
be, and the Trustee shall have no liability to any of the other Secured
Parties for actions taken in reliance on such information. All distributions
made by the Trustee pursuant to such Sections shall be (subject to any decree
of any court of competent jurisdiction) final and the Trustee shall have no
duty to inquire as to the application by the Secured Parties of any amounts
distributed to them.
SECTION 6.07. Pro Rata Sharing. If, through the operation of any
bankruptcy, reorganization, insolvency or other laws or otherwise, the
Trustee's Security Interest is avoided with respect to some, but not all, of
the Secured Obligations then outstanding, the Trustee shall nonetheless apply
the proceeds of the Collateral net of any unpaid Trustee's Fees collected by
it for the benefit of the holders of all Secured Obligations (except any
holder as to which such security interest would have been enforced but for
the gross negligence or willful misconduct of such holder or any predecessor
in interest of such holder) in the proportions and subject to the priorities
specified above; provided that, if the Trustee's Security Interest is avoided
with respect to any Additional Secured Obligation, no proceeds of the
Collateral collected with respect to other Secured Obligations shall be
distributed under this Section with respect to such Additional Secured
Obligation. To the extent that the Trustee distributes proceeds collected
with respect to Secured Obligations held by one holder to or on behalf of
Secured Obligations held by a second holder, the first holder shall be deemed
to have purchased a participation in the Secured Obligations held by the
second holder, or shall be subrogated to the rights of the second holder to
receive any subsequent payments and distributions made with respect to the
portion thereof paid or to be paid by the application of such proceeds.
ARTICLE VII
THE TRUSTEE
SECTION 7.01. Acceptance of Trust. The Trustee, for itself and its
successors, hereby accepts the trusts created by this Agreement upon the
terms and conditions hereof.
SECTION 7.02. Exculpatory Provisions. (a) The Trustee shall not be
responsible in any manner whatsoever for the correctness of any recitals,
statements, representations or warranties herein, all of which are made
solely by Navistar Financial. The Trustee makes no representations as to the
value or condition of the Collateral or the Trust Estate or any part thereof,
or as to the title of Navistar Financial thereto or as to the security
afforded by this Agreement, or as to the validity, execution (except its own
execution), enforceability, legality or sufficiency of this Agreement or of
the Secured Obligations, and the Trustee shall incur no liability or
responsibility in respect of any such matters. The Trustee shall not be
responsible for insuring the Collateral or for the payment of taxes, charges
or assessments or discharging of Liens upon the Collateral or otherwise as to
the maintenance of the Collateral, except that if the Trustee takes
possession of any Collateral, the Trustee shall preserve the Collateral in
its possession.
(b) The Trustee shall not be required to ascertain or inquire as to the
performance by Navistar Financial of any of the covenants or agreements
contained herein or in any Secured Instrument or Indenture Obligation.
Whenever it is necessary, or in the opinion of the Trustee advisable, for the
Trustee to ascertain the amount of Secured Obligations then held by a Secured
Party, the Trustee may rely on a certificate of such Secured Party as to such
amount and, if any such Secured Party shall not give such information to the
Trustee, it shall not be entitled to receive distributions hereunder until it
does so, in which case distributions shall be calculated by the Trustee
based, with respect to such Secured Party, on the list then most recently
delivered by Navistar Financial pursuant to Section 4.09 and the amount so
calculated to be distributable to such Secured Party shall be held in trust
for such Secured Party until such Secured Party has given such information to
the Trustee, whereupon the amount distributable to such Secured Party shall
be recalculated on the basis of such information and distributed to it.
(c) Notwithstanding any other provision of this Agreement, the Trustee, in
its individual capacity, shall not be personally liable for any action taken
or omitted to be taken by it in accordance with this Agreement except for its
own gross negligence or willful misconduct. Other than as expressly set
forth in this Agreement, nothing in this Agreement shall be construed to
require the Trustee to take any action which would cause it to become liable,
in its individual capacity, to any Person.
(d) The Trustee shall have the same rights under any Secured Instrument
under which it is a party in its own right as any other Secured Party
thereunder and may exercise such rights as though it were not the Trustee
hereunder, and may accept deposits from, lend money to, and generally engage
in any kind of banking or trust business with, Navistar Financial,
International and the Parent as if it were not the Trustee.
SECTION 7.03. Delegation of Duties. Subject to the first sentence of
Section 4.02(d) and Section 4.07(g), the Trustee may execute any of the
trusts or powers hereof and perform any duty hereunder either directly or by
or through agents or attorneys-in-fact, who may include officers and
employees of Navistar Financial; provided that the Trustee shall directly
hold all Pledged Securities and other "instruments" (as defined in Article 9
of the UCC) and "letters of credit" (as defined in the UCC) delivered
hereunder. The Trustee shall be entitled to advice of counsel concerning all
matters pertaining to such trusts, powers and duties. The Trustee shall not
be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it without gross negligence or willful
misconduct.
SECTION 7.04. Reliance by Trustee. (a) Whenever in the administration of
this Agreement, the Trustee shall deem it necessary or desirable that a
factual matter be proved or established in connection with the Trustee
taking, suffering or omitting any action hereunder, such matter (unless other
evidence in respect thereof is herein specifically prescribed) may be deemed
to be conclusively proved or established by a certificate of a Responsible
Officer delivered to the Trustee and not challenged by any Secured Party and
such certificate shall be full warrant to the Trustee for any action taken,
suffered or omitted in reliance thereon, subject, however, to the provisions
of Section 7.05.
(b) The Trustee may consult with counsel, and any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action
taken or suffered by it hereunder in accordance therewith. The Trustee shall
have the right at any time to seek instructions concerning the administration
of this Agreement from any court of competent jurisdiction.
(c) The Trustee may rely, and shall be fully protected in acting, upon any
resolution, statement, certificate, instrument, opinion, report, notice,
request, consent, order, bond or other paper or document which it has no
reason to believe to be other than genuine and to have been signed or
presented by the proper party or parties or, in the case of facsimile
transmissions, to have been sent by the proper party or parties. Without
limiting the generality of the immediately preceding sentence, the Trustee
may rely, and shall be fully protected in acting, upon the information most
recently delivered to the Trustee by Navistar Financial in accordance with
Section 4.09. In the absence of its gross negligence or willful misconduct,
the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Agreement.
(d) The Trustee shall not be under any obligation to exercise any of the
rights or powers vested in the Trustee by this Agreement at the request or
direction of the Required Secured Parties pursuant to this Agreement unless
the Trustee shall have been provided adequate security and indemnity against
the costs, expenses and liabilities which may be incurred by it in compliance
with such request or direction, including such reasonable advances as may be
requested by the Trustee.
(e) Upon any application or demand by Navistar Financial to the Trustee to
take or permit any action under any of the provisions of this Agreement,
Navistar Financial shall furnish to the Trustee a certificate of a
Responsible Officer stating that all conditions precedent, if any, provided
for in this Agreement relating to the proposed action have been complied
with, and in the case of any such application or demand as to which the
furnishing of any document is specifically required by any provision of this
Agreement relating to such particular application or demand, such additional
document shall also be furnished.
(f) Any Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate of a Responsible Officer or representations made
by a Responsible Officer in a writing filed with the Trustee.
SECTION 7.05. Limitations on Duties of Trustee. (a) Unless a Notice of
Acceleration is in effect, the Trustee shall be obligated to perform such
duties and only such duties as are specifically set forth in this Agreement,
and no implied covenants or obligations shall be read into this Agreement
against the Trustee. If and so long as a Notice of Acceleration is in
effect, the Trustee shall exercise the rights and powers vested in it by this
Agreement, and shall not be liable with respect to any action taken by it, or
omitted to be taken by it, in accordance with the direction of the Required
Secured Parties or directions given to the Trustee pursuant to Section
5.06(b).
(b) Except as herein otherwise expressly provided, the Trustee shall not be
under any obligation to take any action which is discretionary with the
Trustee under the provisions hereof except upon the written request of the
Required Secured Parties. The Trustee shall make available for inspection
and copying by each Lender and each Indenture Trustee each certificate or
other paper furnished to the Trustee by Navistar Financial under or in
respect of this Agreement or any of the Collateral.
(c) Beyond the exercise of reasonable care in the custody thereof, the
Trustee shall have no duty as to any Collateral in its possession or control
or in the possession or control of any agent or bailee or any income thereon
or as to the preservation of rights against prior parties or any other rights
pertaining thereto. The Trustee shall be deemed to have exercised reasonable
care in the custody of the Collateral in its possession if such items are
accorded treatment substantially equal to that which it accords its own
property, and shall not be liable or responsible for any loss or damage
thereto, or for any diminution in the value thereof, by reason of the act or
omission of any warehouseman, carrier, forwarding agency, consignee or other
agent or bailee selected by the Trustee in good faith.
SECTION 7.06. Moneys to be Held in Trust. All moneys received by the
Trustee under or pursuant to any provision of this Agreement shall be held in
trust for the purposes for which they were paid or are held.
SECTION 7.07. Resignation and Removal of the Trustee. (a) The Trustee may
at any time, by giving written notice to Navistar Financial and the Secured
Parties, resign and be discharged of the responsibilities hereby created,
such resignation to become effective upon (i) the appointment of a successor
Trustee, (ii) the approval of such successor Trustee (evidenced in writing)
by Navistar Financial and the Administrative Agent (such approval not to be
unreasonably withheld), and (iii) the acceptance of such appointment by such
successor Trustee. If no successor Trustee shall be appointed and shall have
accepted such appointment within 90 days after the Trustee gives the
aforesaid notice of resignation, the Trustee shall, or any Secured Party may,
apply to any court of competent jurisdiction to appoint a successor Trustee
to act until such time, if any, as a successor Trustee shall have been
appointed as above provided. Any successor Trustee so appointed by such
court shall immediately and without further act be superseded by any
successor Trustee appointed by Navistar Financial and the Administrative
Agent as provided above. So long as no Event of Default has occurred and is
continuing, Navistar Financial may at any time, upon at least 10 days' prior
written notice, remove the Trustee and appoint a successor Trustee with the
approval of the Administrative Agent (such approval not to be unreasonably
withheld), provided that such successor Trustee shall have accepted such
appointment. If an Event of Default has occurred and is continuing, the
Administrative Agent may at any time, upon at least 10 days' prior written
notice, remove the Trustee and appoint a successor Trustee with the approval
of Navistar Financial (such approval not to be unreasonably withheld).
Promptly upon receipt of such notice, the Trustee shall inform the Secured
Parties of the contents thereof. Any Trustee shall be entitled to Trustee's
Fees to the extent incurred or arising, or relating to events occurring,
before such resignation or removal.
(b) If at any time the Trustee shall resign or be removed or
otherwise become incapable of acting, or if at any time a vacancy shall occur
in the office of the Trustee for any other cause, a successor Trustee may, so
long as no Event of Default has occurred and is continuing, be appointed by
Navistar Financial with the approval of the Administrative Agent (such
approval not to be unreasonably withheld); provided that if an Event of
Default has occurred and is continuing, a successor Trustee shall be
appointed by the Administrative Agent with the approval of Navistar Financial
(such approval not to be unreasonably withheld), and the powers, duties,
authority and title of the predecessor Trustee shall be terminated and
cancelled without procuring the resignation of such predecessor Trustee and
without any formality (except as may be required by applicable law) other
than appointment and designation of a successor Trustee in writing duly
acknowledged and delivered to the predecessor Trustee and Navistar
Financial. Such appointment and designation shall be full evidence of the
right and authority to make the same and of all the facts therein recited,
and this Agreement shall vest in such successor Trustee, without any further
act, deed or conveyance, all the estates, properties, rights, powers, trusts,
duties, authority and title of its predecessor Trustee; but such predecessor
Trustee shall, nevertheless, on the written request of Navistar Financial or
the successor Trustee, execute and deliver an instrument transferring to such
successor Trustee all the estates, properties, rights, powers, trusts,
duties, authority and title of such predecessor Trustee hereunder and deliver
all Collateral held by it or its agents to such successor Trustee subject to
the payment of all unpaid Trustee's Fees due and owing to the predecessor
Trustee. Should any deed, conveyance or other instrument in writing from
Navistar Financial be required by any successor Trustee for more fully and
certainly vesting in such successor Trustee the estates, properties, rights,
powers, trusts, duties, authority and title vested or intended to be vested
in the predecessor Trustee, any and all such deeds, conveyances and other
instruments in writing shall, on request of such successor Trustee, be
executed, acknowledged and delivered by Navistar Financial.
SECTION 7.08. Status of Successor Trustees. Every successor Trustee
appointed pursuant to Section 7.07 shall be a bank or trust company in good
standing and having power to act as Trustee hereunder, incorporated under the
laws of the United States of America or any State thereof or the District of
Columbia and having its principal corporate trust office within the 48
contiguous States and shall also have capital, surplus and undivided profits
of not less than $100,000,000, if there be such an institution with such
capital, surplus and undivided profits willing, qualified and able to accept
the trust hereunder upon reasonable or customary terms.
SECTION 7.09. Merger of the Trustee. Any corporation into which the Trustee
may be merged, or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Trustee shall be a
party, shall be Trustee under this Agreement without the execution or filing
of any paper or any further act on the part of the parties hereto.
SECTION 7.10. Co-Trustee; Separate Trustees. (a) If at any time or times
it shall be necessary or prudent in order to conform to any law of any
jurisdiction in which any of the Collateral shall be located, or the Trustee
shall be advised by counsel, satisfactory to it, that it is necessary or
prudent in the interest of the Secured Parties, or the Required Secured
Parties shall in writing so request, or the Trustee shall deem it desirable
for its own protection in the performance of its duties hereunder, the
Trustee and Navistar Financial shall, following consultation with each other,
execute and deliver all instruments and agreements necessary or proper to
constitute another bank or trust company, or one or more persons approved by
the Trustee and Navistar Financial, either to act as co-trustee or
co-trustees (each a "co-trustee") of all or any of the Collateral, jointly
with the Trustee, or to act as separate trustee or trustees of any such
property. If Navistar Financial shall not have joined in the execution of
such instruments and agreements within 10 days after it receives a written
request from the Trustee to do so, or if a Notice of Acceleration is in
effect, the Trustee may act under the foregoing provisions of this Section
without the concurrence of Navistar Financial. Navistar Financial hereby
appoints the Trustee as its agent and attorney to act for it under the
foregoing provisions of this Section in either of such contingencies.
(b) Every separate trustee and every co-trustee, other than any successor
Trustee appointed pursuant to Section 7.07, shall, to the extent permitted by
law, be appointed and act and be such, subject to the following provisions
and conditions:
(i) except as the Required Secured Parties may otherwise expressly direct in
writing, all rights, powers, duties and obligations conferred upon the
Trustee in respect of the custody and management of moneys, marketable
securities and other securities (including, without limitation, Pledged
Securities) shall be exercised solely by the Trustee or, if applicable,
(x) any agent appointed pursuant to Section 4.02(d) and (y) to the
extent set forth in Section 4.07(a), the Concentration Bank;
(ii) all rights, powers, duties and obligations conferred or imposed upon the
Trustee hereunder shall be conferred or imposed and exercised or
performed by the Trustee and such separate trustee or separate trustees
or co-trustee or co-trustees, jointly, as shall be provided in the
instrument appointing such separate trustee or separate trustees or
co-trustee or co-trustees, except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations shall
be exercised and performed by such separate trustee or separate trustees
or co-trustee or co-trustees;
(iii) no power given hereby to, or which it is provided herein may be
exercised by, any such co-trustee or co-trustees or separate trustee or
separate trustees, shall be exercised hereunder by such co-trustee or
co-trustees or separate trustee or separate trustees except jointly
with, or with the consent in writing of, the Trustee, anything contained
herein to the contrary notwithstanding;
(iv) no trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder;
(v) each such separate trustee or co-trustee shall be entitled to the
benefits of Sections 7.12 and 7.13 to the same extent as if such Person
were the Trustee hereunder; and
(vi) Following consultation with each other, Navistar Financial and the
Trustee, at any time by an instrument in writing executed by them
jointly, may accept the resignation of or remove any such separate
trustee or co-trustee and, in that case by an instrument in writing
executed by them jointly, may appoint a successor to such separate
trustee or co-trustee, as the case may be, anything contained herein to
the contrary notwithstanding. If Navistar Financial shall not have
joined in the execution of any such instrument within 10 days after it
receives a written request from the Trustee to do so, or if a Notice of
Acceleration is in effect, the Trustee shall have the power to accept
the resignation of or remove any such separate trustee or co-trustee and
to appoint a successor without the concurrence of Navistar Financial.
Navistar Financial hereby appoints the Trustee its agent and attorney to
act for it in such connection in such contingency. If the Trustee shall
have appointed a separate trustee or separate trustees or co-trustee or
co-trustees as above provided, the Trustee may at any time, by an
instrument in writing, accept the resignation of or remove any such
separate trustee or co-trustee and the successor to any such separate
trustee or co-trustee shall be appointed by Navistar Financial and the
Trustee, or by the Trustee alone pursuant to this Section.
SECTION 7.11. Treatment of Payee or Indorsee by Trustee; Representatives of
Secured Parties. (a) The Trustee may treat the registered holder or, if
none, the payee or indorsee of any promissory note or debenture referred to
in any Secured Instrument as the absolute owner thereof for all purposes and
shall not be affected by any notice to the contrary, whether such promissory
note or debenture shall be past due or not.
(b) Any Person which shall be designated as the duly authorized
representative of one or more Secured Parties to act as such in connection
with any matters pertaining to this Agreement or the Collateral shall present
to the Trustee such documents, including, without limitation, Opinions of
Counsel, as the Trustee may reasonably require, in order to demonstrate to
the Trustee the authority of such Person to act as the representative of such
Secured Parties.
SECTION 7.12. Compensation and Expenses. Navistar Financial shall pay to
the Trustee, from time to time promptly upon written demand (together with
appropriate backup documentation supporting such demand), (i) reasonable
compensation in the amounts agreed upon by Navistar Financial and the Trustee
(which shall not be limited by any provision of law in regard to compensation
of a trustee of an express trust unless such provision may not effectively be
waived) for its services hereunder and for administering the Trust Estate and
(ii) all of the reasonable fees, costs and expenses incurred by the Trustee
(including, without limitation, the reasonable fees and disbursements of its
counsel and such special counsel as the Trustee elects to retain, any fees,
costs and expenses arising pursuant to computer software license agreements
and any amounts payable by the Trustee to any of its agents, whether on
account of fees, indemnities or otherwise) (A) arising in connection with the
preparation, execution, delivery, modification, and termination of this
Agreement or the enforcement of any of the provisions hereof or (B) incurred
or required to be advanced in connection with the administration of the Trust
Estate, the sale or other disposition of Collateral hereunder and the
preservation, protection or defense of the Trustee's rights hereunder and in
and to the Collateral and the Trust Estate.
SECTION 7.13. Indemnification. (a) Navistar Financial shall pay, and
indemnify and hold harmless the Trustee and its officers, directors,
employees and agents from and against, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any, kind or nature whatsoever, unless arising from the
gross negligence or willful misconduct of the indemnitee, with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement by the Trustee or any of its directors, officers, agents or
employees. As security for such payment and for the payment of all other
Trustee's Fees, the Trustee shall have a Lien prior to all other Secured
Parties upon all the Collateral; provided that the foregoing is not intended
to relieve Navistar Financial of its obligation to pay Trustee's Fees.
(b) In any suit, proceeding or action brought by the Trustee under or with
respect to the Collateral for any sum owing hereunder or to enforce any
provision hereof, Navistar Financial will save, indemnify and hold harmless
the Trustee, its agents and employees and the holders of Secured Obligations
from and against all expense, loss or damage suffered by reason of any
defense, setoff, counterclaim, recoupment or reduction of liability
whatsoever of the obligor thereunder, arising out of a breach by Navistar
Financial of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in favor of such obligor or
its successors from Navistar Financial, and all such obligations of Navistar
Financial shall be and remain enforceable against and only against Navistar
Financial and shall not be enforceable against the Trustee, its agents or
employees or any other Secured Party.
ARTICLE VIII
RELEASE OF COLLATERAL
SECTION 8.01. Permitted Releases. Unless a Notice of Acceleration is in
effect, the Trustee may, at any time and from time to time prior to the
termination of the Trustee's Security Interest and release of all Collateral
pursuant to Sections 8.02 and 8.03, release any portion of the Collateral
with the prior written consent of the Releasing Secured Parties; provided
that the Trustee shall have received a certificate of a Responsible Officer
of Navistar Financial to the effect that no default, or event or condition
which with notice or lapse of time or both would constitute a default, exists
or, immediately after such release, will exist with respect to any of the
Indenture Obligations. Upon any release in accordance with this Section
8.01, the Trustee will promptly, at Navistar Financial's written request and
expense, execute and deliver to Navistar Financial such documents as Navistar
Financial shall reasonably request to evidence such release.
SECTION 8.02. Conditions to Termination of Security Interest and Release of
All Collateral. The Trustee's Security Interest shall terminate and all
right, title and interest of the Trustee in and to the Collateral shall
terminate and shall revert to Navistar Financial and its assigns upon the
request of Navistar Financial as provided in Section 8.03 if:
(i) no default, or event or condition which with notice or lapse of time or
both would constitute a default, exists or, immediately after such
termination, will exist with respect to any of the Indenture Obligations
or any Letter of Credit;
(ii) all principal of and interest on the Loans and all other amounts due
under the Credit Agreement and the 364-Day Credit Agreement shall have
been paid in full or shall have been extended (or refinanced) on an
unsecured basis; and
(iii) the respective Commitments of the Lenders under the Credit Agreement and
the 364-Day Credit Agreement shall have terminated (except to the extent
that the relevant Lenders shall have agreed to maintain such respective
Commitments on an unsecured basis).
SECTION 8.03. Procedure for Termination and Release. (a) Upon satisfaction
of the conditions set forth in Section 8.02 necessary for terminating the
Trustee's Security Interest in the Collateral, Navistar Financial may request
the termination of such security interest and the release of the Collateral
by delivering to the Trustee written notice (a "Collateral Release Notice"),
signed by a Responsible Officer of Navistar Financial. Such Collateral
Release Notice shall certify that the conditions for release set forth in
Section 8.02 have been satisfied. Promptly upon receiving a Collateral
Release Notice, the Trustee shall mail a copy thereof (and of the
accompanying accountants' certificate, if any) to each Secured Party.
(b) Upon the termination of the Trustee's Security Interest and the release
of the Collateral, the Trustee will promptly, at Navistar Financial's written
request and expense, (i) execute and deliver to Navistar Financial such
documents as Navistar Financial or its assigns shall reasonably request to
evidence the termination of such security interest or the release of the
Collateral and (ii) deliver or cause to be delivered to Navistar Financial,
all property of Navistar Financial then held by the Trustee, any co-trustee
or any of their respective agents. Any release of Collateral shall be
without prejudice to the rights of the Trustee or any successor Trustee to
charge and be reimbursed for any expenditures which it may thereafter incur
in connection herewith.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. Unless otherwise specified in this Agreement, all
notices, requests, demands, consents or other communications given to
Navistar Financial, the Trustee or any Secured Party shall be given in
writing or by facsimile transmission and shall be deemed to have been duly
given when personally delivered or when duly deposited in the mails,
registered or certified mail postage prepaid, or when transmitted by
facsimile transmission, addressed (i) if to Navistar Financial or the
Trustee, to such party at its address, telecopy number specified on the
signature pages hereof or any other address, telecopy number which such party
shall have specified for the purpose of communications hereunder, by notice
in writing to the party sending such communication or (ii) if to any Secured
Party, to it at its address, telecopy number specified from time to time by
it or in the list provided by Navistar Financial to the Trustee pursuant to
Section 4.09; provided that any notice, request or demand to or upon the
Trustee shall not be effective until received.
SECTION 9.02. No Waivers. No failure on the part of the Trustee, any
co-trustee, any separate trustee or any Secured Party to exercise, no course
of dealing with respect to, and no delay in exercising, any right, power or
privilege under this Agreement shall operate as a waiver thereof nor shall
any single or partial exercise of any such right, power or privilege preclude
any other or further exercise thereof or the exercise of any other right,
power or privilege.
SECTION 9.03. Amendments, Supplements and Waivers. (a) With the consent of
the Required Secured Parties, the Trustee and Navistar Financial may, from
time to time, enter into written agreements supplemental hereto for the
purpose of adding any provisions to this Agreement, waiving any provisions
hereof or changing in any manner the rights of the Trustee, the Secured
Parties, the holders of Secured Obligations or Navistar Financial hereunder;
provided that no such supplemental agreement shall (i) amend, modify or waive
any provision of this subsection (a) without the consent of each Secured
Party, (ii) change the definition of "Required Secured Parties" or the
definition of "Required Lenders" incorporated by reference therein, or change
the definition of "Releasing Secured Parties" without the consent of each
Secured Party adversely affected thereby, (iii) amend, modify or waive any
provision of this Agreement which requires the consent of all of the
Releasing Secured Parties without the consent of all of the Releasing Secured
Parties, (iv) amend, modify or waive any provision of Section 6.04 or the
definition of "Secured Obligations" without the consent of (x) each Secured
Party whose rights would be adversely affected thereby and (y) each Indenture
Trustee of a Debt Indenture under which rights to equal and ratable security
would be adversely affected thereby, or (v) amend, modify or waive any
provision of Article VII hereof or alter the duties or obligations of the
Trustee hereunder without the consent of the Trustee. Any such supplemental
agreement shall be binding upon Navistar Financial, the Secured Parties, the
holders of Secured Obligations, the Trustee and their respective successors.
The Trustee shall not enter into any such supplemental agreement unless it
shall have received an Opinion of Counsel to the effect that such
supplemental agreement will not result in a breach of any provision or
covenant contained in any Debt Indenture which requires the securing of the
indebtedness outstanding thereunder equally and ratably with other
obligations or indebtedness of Navistar Financial.
(b) Without the consent of any Secured Party, the Trustee and Navistar
Financial, at any time and from time to time, may enter into one or more
agreements supplemental hereto, in form satisfactory to the Trustee, (i) to
add to the covenants of Navistar Financial for the benefit of the Secured
Parties or to surrender any right or power herein conferred upon Navistar
Financial, (ii) to mortgage or pledge to the Trustee, or grant a security
interest in favor of the Trustee in, any property or assets as additional
security for the Secured Obligations, or (iii) to cure any ambiguity, to
correct or supplement any provision herein which may be defective or
inconsistent with any other provision herein, or to make any other provision
with respect to matters or questions arising hereunder which shall not be
inconsistent with any provision hereof; provided that any such action
contemplated by this clause (iii) shall not adversely affect the interests of
the Secured Parties.
SECTION 9.04. Headings. The table of contents and the headings of Articles
and Sections have been included herein for convenience only and should not be
considered in interpreting this Agreement.
SECTION 9.05. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.
SECTION 9.06. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of each of the parties hereto and shall inure to the
benefit of each of the Secured Parties and their respective successors and
assigns and nothing herein is intended or shall be construed to give any
other Person any right, remedy or claim under, to or in respect of this
Agreement or any Collateral. In addition, the final sentence of Section
2.06(d) shall inure to the benefit of the holders of any Existing Senior
Liens.
SECTION 9.07. Currency Conversions. In calculating the amount of Secured
Obligations for any purpose hereunder, including, without limitation, voting
or distribution purposes, the amount of any Secured Obligation which is
denominated in a currency other than Dollars shall be converted into Dollars
at the spot rate of exchange in London that appears on the display page,
applicable to such currency, on the Reuters System (or other such page as may
replace such page on such service for the purpose of displaying the spot rate
of exchange in London) for the conversion of such currency into Dollars;
provided that if at any time there shall no longer exist such a page on such
service, the spot rate of exchange shall be determined by reference to
another similar rate publishing service selected by the Administrative Agent
and if no such similar rate publishing service is available, by reference to
the published rate of the Administrative Agent in effect at such date for
similar commercial transactions.
SECTION 9.08. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, except as
otherwise required by mandatory provisions of law; provided that all
provisions of this Agreement relating to the Trustee's Security Interest in
any UCC Deposit Account shall be governed by and construed in accordance with
the substantive laws of the applicable UCC Deposit Account Jurisdiction
without regard to the choice of law principles of such jurisdiction.
SECTION 9.09. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures thereto and hereto
were upon the same instrument.
SECTION 9.10. Termination. This Agreement shall terminate when the security
interest granted hereunder has terminated and all the Collateral has been
released; provided that the provisions of Sections 4.10, 4.11, 7.12 and 7.13
shall not be affected by any such termination.
-------------------------------------------------------------------------------
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first written above.
NAVISTAR FINANCIAL CORPORATION
By____________________________________
Title:
0000 Xxxx Xxxx Xxxx
Xxxxxxx Xxxxxxx, XX 00000
Telecopy number: (000) 000-0000
Attention: Treasurer
Copies of notices should be sent to each of the
following:
Navistar Financial Corporation
0000 Xxxx Xxxx Xxxx
Xxxxxxx Xxxxxxx, XX 00000
Telecopy number: (000) 000-0000
Attention: General Counsel
International Truck and Engine Corporation
0000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000-0000
Telecopy number: (000) 000-0000
Attention: Treasurer
BANKERS TRUST COMPANY
By_____________________________________
Title:
Bankers Trust Company
Corporate Trust & Agency Services
Four Albany Street, MS NYC05-0401
Xxx Xxxx, XX 00000
Telecopy number: (000) 000-0000
Attention: Xxxxx Xxxxxxxxxxxx
--------------------------------------------------------------------------------
STATE OF ILLINOIS )
: ss:
COUNTY OF XXXX )
On the __ day of June, 2001, before me personally came
_____________________ and, to me personally known and known to me to be the
persons described in and who executed the foregoing instrument as
______________________ of NAVISTAR FINANCIAL CORPORATION, who, being by me
duly sworn, did depose and say that he resides at
___________________________; that he is ______________________ of NAVISTAR
FINANCIAL CORPORATION, one of the corporations described in and which
executed the foregoing instrument; that said instrument was signed and sealed
on behalf of said corporation by order of its Board of Directors; that he
signed his name thereto by like order; and that he acknowledged said
instrument to be the free act and deed of said corporation.
_______________________________________
[NOTARIAL SEAL]
My commission expires:
--------------------------------------------------------------------------------
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
On the __ day of June, 2001, before me personally came
___________________ and ____________________, to me personally known and
known to me to be the persons described in and who executed the foregoing
instrument as ___________________ of BANKERS TRUST COMPANY, who, being by me
duly sworn, did depose and say that he resides at ____________________; that
he is ________________________ of BANKERS TRUST COMPANY, one of the
corporations described in and which executed the foregoing instrument; that
said instrument was signed and sealed on behalf of said corporation by order
of its Board of Directors; that he signed his name thereto by like order; and
that he acknowledged said instrument to be the free act and deed of said
corporation.
_______________________________________
[NOTARIAL SEAL]
My commission expires:
--------------------------------------------------------------------------------
SCHEDULE A
EXISTING DEBT INDENTURES
Indenture, dated as of May 30, 1997, between Navistar Financial and
The Chase Manhattan Bank, as trustee, pursuant to which $100,000,000
aggregate principal amount of 9% Senior Subordinated Notes Due 2002 are
outstanding as of the date hereof.
--------------------------------------------------------------------------------
SCHEDULE B
PERMITTED RECEIVABLES SALE AGREEMENTS
Dealer Note Master Trust
1. Purchase Agreement, dated June 8, 1995, by and between NFC and
NFSC.
1997-B Owner Trust
2. Purchase Agreement dated, November 5, 1997, between NFC and
NFRRC as Purchaser with respect to Navistar Financial 1997-B
Owner Trust.
1998-A Owner Trust
3. Purchase Agreement, dated June 4, 1998, between NFC and NFRRC
as Purchaser with respect to Navistar Financial 1998-A Owner
Trust.
1998 PARCO Sale
4. Purchase Agreement, dated as of November 13, 1998, between NFC
and NFRRC as Purchaser.
1999-A Owner Trust
5. Purchase Agreement, dated as of June 3, 1999, between NFC and
NFRRC as Purchaser with respect to Navistar Financial 1999-A
Owner Trust.
1999-B Retail
6. The Receivables Sale Agreement, dated as November 12, 1999,
between NFC and NFRRC as Purchaser.
2000-A Owner Trust
7. Purchase Agreement, dated as of March 9, 2000, between NFC and
NFRRC as Purchaser with respect to Navistar Financial 2000-A
Owner Trust.
Delaware Funding Corporation
8. Purchase Agreement, dated as of August 16, 2000, between NFC,
as Seller and TRAC, as Purchaser.
TRIP Retail Warehousing Facility
9. Receivables Purchase Agreement, dated as of October 16, 2000,
between TRIP and NFC.
2000-B Owner Trust
10. Purchase Agreement, dated as of November 1, 2000, between NFC
and NFRRC as Purchaser with respect to Navistar Financial
2000-B Owner Trust.
Truck Engine Receivables Master Trust
11. Receivables Purchase Agreement, dated as of November 21, 2000,
between NFC and Truck Engine Receivables Financing Co.
("TERFCO").
2000-C Retail
12. Receivables Sale Agreement, dated as of December 21, 2000,
between NFRRC and NFC.
2001-A Owner Trust
13. Purchase Agreement, dated as of April 27, 2001, between NFC
and NFRRC as Purchaser with respect to Navistar Financial
2001-A Owner Trust.
--------------------------------------------------------------------------------
SCHEDULE C
LIST OF COLLECTION BANKS, LOCK-BOXES,
SUSPENSE ACCOUNTS AND COLLECTION ACCOUNTS
COLLECTION BANK SUSPENSE COLLECTION
AND ADDRESS LOCK-BOXES ACCOUNTS ACCOUNTS
Bank of America No. 98454 Harco Leasing
---------------------- Account No.
231 X. XxXxxxx St. 0000000000
Xxxxxxx, XX 00000
No. 96070
Retail Suspense
Account No.
8188902116
No. 99438 Wholesale
Suspense Account
No. 8188302119
Dealer ACH
Receipts Acct.
No. 1233729140
Northern Trust No. 1852 Retail Deposit Retail Deposit
000 Xxxxx Xxxxxx Xx. Account Account No.
Xxxxxxx, XX 00000 No. 12114 12114
--------------------------------------------------------------------------------
SCHEDULE D
LIST OF PROCEEDS
ACCOUNT BANKS AND PROCEEDS DEPOSIT ACCOUNTS
Proceeds
Account Bank Proceeds
and Address Deposit Account
The Chase No. 000-0000-00
Manhattan Bank
(formerly
Chemical Bank
Corporation)
------------------
000 X. 00xx Xxxxxx
Xxx Xxxx, XX
00000
--------------------------------------------------------------------------------
SCHEDULE E
SUBSIDIARIES AND CAPITALIZATION
Subsidiary Shares
1. Navistar Financial Retail Receivables 1,000 shares of common
Corporation stock, par value
$1.00 per share
2. Navistar Financial Securities 1,000 shares of common
Corporation stock, par value
$1.00 per share
3. Harco Leasing Company, Inc. 13,618 shares of common
stock, par value
$1.00 per share
4. Truck Retail Instalment Paper Corp. 1,000 shares of common
stock, par value
$1.00 per share
5. Harco National Insurance Company, an 291,667 shares of
Illinois corporation common stock, par
value $12.00 per
share
6. Harco National Insurance Company 180,000 shares of
preferred stock, par
value $12.00 per
share;
29,000 shares of common
stock, par value
$12.00 per share
7. Harco Holdings, Inc. 1,000 shares of common
stock, par value
$1.00 per share
8. Navistar, Inc. 1,000 shares of common
stock, par value
$10.00 per share
9. Navistar Leasing Corporation 1,000 shares of common
stock, par value
$10.00 per share
10. Truck Engine Receivables Financing Co. 1,000 shares of common
stock, par value
$0.01 per share
11. Truck Retail Accounts Corporation 1,000 shares of common
stock, par value
$0.01 per share
--------------------------------------------------------------------------------
SCHEDULE F
INSTRUMENTS
A. Subsidiary Notes
Navistar Financial 1999-A Owner Trust Class B 6.22% Asset Backed Note No. R-2
(Navistar Financial Retail Receivables Corporation)
Navistar Financial 1998-A Owner Trust Class B 6.10% Asset Backed Note No. R-2
Navistar Financial Corporation Capital Contribution Note in the amount of
$16,366,674
Harco Leasing Company, Inc. Second Amended and Restated Grid Note in the
amount of $200,000,000
Navistar Financial Securities Corporation Promissory Note in the amount of
$25,000,000
Navistar Financial Retail Receivables Corporation Revolving Note
Truck Retail Instalment Paper Corp. Subordinated Revolving Note
Truck Retail Instalment Paper Corp. Revolving Note
Navistar Financial Securities Corporation Master Revolving Note
Servicios Financieros Navistar, S.A. de C.V. Promissory Note in the amount of
$20,000,000
Arrendadora Financiera Navistar, S.A. de C.V. Promissory Note in the amount
of $20,000,000
B. Other Instruments
Navistar Financial 1991-1 Grantor Trust 6.40% Asset Backed Certificate, Class
B
Navistar Financial 1997-B Owner Trust Certificate
Navistar Financial 1998-A Owner Trust Certificate
Navistar Financial 1999-A Owner Trust Certificate
Navistar Financial 2000-A Owner Trust Certificate
Navistar Financial 2000-B Owner Trust Certificate
Navistar Financial 2001-A Owner Trust Certificate
--------------------------------------------------------------------------------
EXHIBIT A
PERFECTION CERTIFICATE
The undersigned, the chief legal officer of NAVISTAR FINANCIAL
CORPORATION, a Delaware corporation ("Navistar Financial"), hereby certifies
with reference to the Security, Pledge and Trust Agreement dated as of June
8, 2001 (the "Agreement") between Navistar Financial and BANKERS TRUST
COMPANY, as Trustee (terms defined therein being used herein as therein
defined), to the Trustee and each Secured Party as follows:
1. Names. (a) The exact corporate name of Navistar Financial as
it appears in its certificate of incorporation is as follows:
Navistar Financial Corporation
(b) Set forth below is each other corporate name Navistar
Financial has had since its organization, together with the date of the
relevant change:
Name changed from International Harvester Credit Corporation on
2/20/86
(c) Navistar Financial has not changed its identity or corporate
structure in any way within the past five years.
(d) The following is a list of all other names (including trade
names or similar appellations) used by Navistar Financial or any of its
divisions or other business units at any time during the past five years:
International Finance Group
IFG
2. Current Locations. (a) The chief executive office of Navistar
Financial is located at the following address:
Mailing Address County State
0000 Xxxx Xxxx Xxxx
Xxxxxxx Xxxxxxx, XX 00000 Xxxx Illinois
(b) Navistar Financial from time to time maintains Inventory
and/or Equipment in more than one county and more than one town in each state
(other than Hawaii). Navistar Financial also maintains Inventory and/or
Equipment in the District of Columbia.
3. Unusual Transactions. All Inventory and Equipment has been
acquired by Navistar Financial in the ordinary course of its business.
4. File Search Reports. Attached hereto as Schedule 4(A) is a
true copy of a file search report from the Secretary of State of Illinois.
Attached hereto as Schedule 4(B) is a true copy of each financing statement
or other filing identified in such file search report.
5. UCC Filings. . A duly signed financing statement on Form
UCC-1 in substantially the form of Schedule 5(A) hereto has been duly filed in
the Uniform Commercial Code filing office in each jurisdiction identified in
Schedule 5(B) hereto.
6. Schedule of Filings. Attached hereto as Schedule 6 is a
schedule setting forth filing information with respect to the filings
referred to in paragraph 5 above.
7. Filing Fees. All filing fees and taxes payable in connection
with the filings described in paragraph 5 above that have been made as of the
date hereof have been paid.
8. Instruments. As of the date hereof, none of the Collateral
(other than the Subsidiary Notes and the residual interest certificates) is
evidenced by any Instrument.
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IN WITNESS WHEREOF, I have hereunto set my hand this 8th day of
June, 2001.
Title: Chief Legal
Officer
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SCHEDULE 5(A)
Description of Collateral
All accounts, chattel paper, contract rights, general intangibles,
inventory, equipment, documents, instruments and securities, now owned or
hereafter acquired, wherever located, and all proceeds thereof, and as set
forth in Annex A hereto.
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SCHEDULE 5(B)
FILING LOCATIONS
Jurisdiction Filing Office
Alabama Secretary of State
Alaska Department of Natural Resources
Arizona Secretary of State
Arkansas Secretary of State
California Secretary of State
Colorado Secretary of State
Connecticut Secretary of State
Delaware Secretary of State
District of Columbia Recorder of Deeds
Florida Department of State
Georgia Clerk of the Superior Court of DeKalb
County
Idaho Secretary of State
Illinois Secretary of State
Indiana Secretary of State
Iowa Secretary of State
Kansas Secretary of State
Kentucky Secretary of State
Louisiana Recorder of Mortgages of Orleans Parish
Maine Secretary of State
Maryland Department of Assessments and Taxation
Massachusetts Secretary of State
Michigan Secretary of State
Minnesota Secretary of State
Mississippi Secretary of State
Missouri Secretary of State
Montana Secretary of State
Nebraska Secretary of State
Nevada Secretary of State
New Hampshire Secretary of State
New Jersey Department of Treasury, Division of
Revenue/Commercial Recording UCC Section
New Mexico Secretary of Xxxxx
Xxx Xxxx Xxxxxxxxxx xx Xxxxx
Xxxxx Xxxxxxxx Secretary of State
North Dakota Secretary of State
Ohio Secretary of State
Oklahoma County Clerk of Oklahoma County
Oregon Secretary of State
Pennsylvania Secretary of Commonwealth
Rhode Island Secretary of State
South Carolina Secretary of State
South Dakota Secretary of State
Tennessee Secretary of State
Texas Secretary of State
Utah Division of Corporations and Commercial
Code
Vermont Secretary of State
Virginia State Corporation Commission
Washington Department of Licensing
West Virginia Secretary of State
Wisconsin Department of Financial Institutions,
Division of Corporate and Consumer
Services
Wyoming Secretary of State
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SCHEDULE 6
SCHEDULE OF FILINGS
Debtor Filing Office File Number Date of Filing*
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EXHIBIT B
CONFIRMATION
To: Bankers Trust Company, as Trustee
Navistar Financial Corporation
Re: Purchase for the Account of Bankers Trust Company,
as Trustee, of the marketable securities indicated below
Account Number:______________
Dear Sirs:
Reference is made to the Security, Pledge and Trust Agreement dated
as of June 8, 2001 (as the same may be amended from time to time, the
"Agreement") between Navistar Financial Corporation (with its successors,
"Navistar Financial") and Bankers Trust Company, as trustee (with its
successors in such capacity, the "Trustee"). Terms defined in the Agreement
and not otherwise defined herein have, as used herein, the respective
meanings provided for therein.
We hereby confirm that we have purchased for the account of the
Trustee the marketable securities identified on Schedule I hereto as to which
ownership or the existence of a security interest is evidenced by entries on
the books of a "securities intermediary" (as defined in the UCC), custodian
or other entity. In addition, we hereby confirm that (a) we are a Permitted
Financial Intermediary for purposes of the Agreement and the above-referenced
purchase, (b) we have made such purchase through the above-referenced
Securities Account of the Trustee, (c) we have made appropriate entries on
our books to identify such marketable securities as being held for the
Trustee, (d) we have received a copy of the Agreement executed by Navistar
Financial and the Trustee and (e) such marketable securities [consist of
direct obligations of the United States held in book-entry form at the
Federal Reserve Bank of New York] [consist of specific certificated
securities in our possession] [constitute or are part of a fungible bulk of
"certificated securities" (as defined in the UCC) in our possession or of
"uncertificated securities" (as so defined) registered in our name]
[constitute or are part of a fungible bulk of "securities" (as defined in the
UCC) shown on our account on the books of another "securities intermediary"
(as so defined)].2
We agree as follows with respect to the above-referenced marketable
securities: (a) we will have no right of compensation from any Person other
than Navistar Financial; (b) we will look solely to Navistar Financial for
payment of our expenses and charges, if any, in connection with any
marketable securities held for the account of the Trustee or in connection
with following the Trustee's instructions with regard thereto; (c) such
marketable securities will be maintained free and clear of all Liens in our
favor or in favor of anyone claiming by, through or under us; and (d) if
certificates shall at any time be issued to us with regard to such marketable
securities, we shall hold such certificates as the Trustee's bailee and agent.
This Confirmation shall be governed by and construed in accordance
with the laws of the State of New York.
Very truly yours,
(Permitted Financial Intermediary)
By:
Title:
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SCHEDULE I
* Indicate lapse date, if other than fifth anniversary.
2 Insert one of the four bracketed clauses, as appropriate.
