Exhibit 99.3
SERVICING AGREEMENT
AMONG
NAVISTAR LEASING COMPANY,
HARCO LEASING COMPANY, INC.,
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
THE BANK OF NEW YORK
AS COLLATERAL AGENT,
BANK ONE NATIONAL ASSOCIATION,
AS PORTFOLIO TRUSTEE
NAVISTAR FINANCIAL 200 OWNER TRUST,
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AS ISSUER
AND
NAVISTAR FINANCIAL CORPORATION,
AS SERVICER
DATED AS OF , 200
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS; SERVICING SUPPLEMENT........................................................................2
SECTION 1.01 Certain Defined Terms..................................................................2
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SECTION 1.02 Supplement to Titling Trust Servicing Agreement........................................2
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ARTICLE II
ADMINISTRATION AND SERVICING OF RECEIVABLES..............................................................3
SECTION 2.01 Duties of the Servicer.................................................................3
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SECTION 2.02 Establishment of Accounts..............................................................4
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SECTION 2.03 Collection of Receivables Payments.....................................................8
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SECTION 2.04 Realization Upon Liquidating Receivables...............................................8
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SECTION 2.05 Maintenance of Insurance Policies......................................................9
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SECTION 2.06 Maintenance of Security Interests in Vehicles..........................................9
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SECTION 2.07 Covenants of the Servicer............................................................10
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SECTION 2.08 Purchase of Receivables Upon Breach of Covenant.......................................10
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SECTION 2.09 Servicing Fee.........................................................................11
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SECTION 2.10 Servicer Expenses.....................................................................11
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SECTION 2.11 Deposits to Collection Account........................................................11
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SECTION 2.12 Collections...........................................................................12
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SECTION 2.13 Application of Collections............................................................12
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SECTION 2.14 Monthly Advances......................................................................13
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SECTION 2.15 Additional Deposits...................................................................13
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SECTION 2.16 Net Deposits..........................................................................13
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SECTION 2.17 Servicer's Certificate................................................................13
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ARTICLE III
STATEMENTS AND REPORTS..................................................................................14
SECTION 3.01 Annual Statement as to Compliance; Notice of Servicer Default; Tax Reports............14
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SECTION 3.02 Annual Accountants' Report............................................................15
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SECTION 3.03 Access to Certain Documentation and Information Regarding
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Receivables ..........................................................................16
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SECTION 3.04 Maintenance of Composite Schedule of Receivables......................................16
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SECTION 3.05 Amendments to Composite Schedule of Receivables.......................................16
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SECTION 3.06 Maintenance of Systems and Receivables List...........................................16
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ARTICLE IV
THE CUSTODIAN...........................................................................................17
SECTION 4.01 Custody of Receivable Files...........................................................17
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SECTION 4.02 Duties of Servicer as Custodian.......................................................18
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SECTION 4.03 Custodian's Indemnification...........................................................19
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SECTION 4.04 Effective Period and Termination......................................................19
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ARTICLE V
REPRESENTATIONS AND WARRANTIESOF THE SERVICER...........................................................19
SECTION 5.01 Representations and Warranties of the Servicer........................................19
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ARTICLE VI
THE SERVICER............................................................................................21
SECTION 6.01 Merger or Consolidation of, or Assumption of the Obligations
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of, the Servicer .....................................................................21
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SECTION 6.02 Limitation on Liability of Servicer and Others........................................21
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SECTION 6.03 Delegation of Duties..................................................................22
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SECTION 6.04 Servicer Not to Resign................................................................22
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SECTION 6.05 Servicer Indemnification of the Indenture Trustee and the Owner Trustee...............22
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ARTICLE VII
DEFAULT.................................................................................................23
SECTION 7.01 Servicer Defaults.....................................................................23
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SECTION 7.02 Consequences of a Servicer Default....................................................24
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SECTION 7.03 Indenture Trustee to Act; Appointment of Successor....................................25
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SECTION 7.04 Notification to Securityholders.......................................................25
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SECTION 7.05 Repayment of Advances.................................................................26
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SECTION 7.06 Waiver of Past Defaults...............................................................26
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ARTICLE VIII
MISCELLANEOUS...........................................................................................26
SECTION 8.01 Amendment.............................................................................26
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SECTION 8.02 Termination...........................................................................26
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SECTION 8.03 Notices 27
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SECTION 8.04 Governing Law.........................................................................27
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SECTION 8.05 Severability..........................................................................27
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SECTION 8.06 Assignment............................................................................27
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SECTION 8.07 Successors and Assigns................................................................27
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SECTION 8.08 Counterparts..........................................................................27
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SECTION 8.09 Headings and Cross-References.........................................................27
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SECTION 8.10 No Petition Covenants.................................................................28
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SERVICING AGREEMENT
SERVICING AGREEMENT, dated as of , 200 (as it may be
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further amended, supplemented or modified, this "Agreement"), among Navistar
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Financial Retail Receivables Corporation, a Delaware corporation ("NFRRC"),
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Navistar Financial 200 Owner Trust, a Delaware business trust (the "Issuer"),
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under the Trust Agreement ("Owner Trustee"), Navistar Leasing Company, a
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Delaware business trust (the "Titling Trust"), Navistar Financial Corporation, a
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Delaware corporation (hereinafter, together with its successors and assigns,
"NFC" or, in its capacity as servicer hereunder, the "Servicer"), The Bank of
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New York, a New York banking corporation (the "Collateral Agent"), Bank One,
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National Association, a national banking association, as Portfolio Trustee (the
"Series 200 Portfolio Interest Trustee") and Harco Leasing Company, Inc., a
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wholly owned subsidiary of NFC and a Delaware corporation (hereinafter, together
with its successors and assigns,"Harco Leasing").
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R E C I T A L S:
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WHEREAS, NFC has been performing servicing obligations relating to the
Titling Trust Assets pursuant to the Titling Trust Servicing Agreement;
WHEREAS, pursuant to the Titling Trust Agreement a portion of the
General Trust Assets have been allocated to the Series 200 Portfolio Interest;
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WHEREAS, NFRRC and NFC are parties to the Purchase Agreement, pursuant
to which NFRRC will purchase the Series 200 Portfolio Interest and the Retail
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Leases and other Titling Trust Assets allocated thereto and certain Retail Notes
and the Related Retail Note Assets with respect thereto from NFC;
WHEREAS, the Issuer will issue Notes pursuant to the Indenture between
the Issuer and , a , as indenture trustee (the "Indenture
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Trustee"), and exchange the Notes and the Certificates for the Series 200
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Portfolio Interest (and the Retail Leases allocated thereto) and certain Retail
Notes and the Related Retail Note Assets with respect thereto from NFRRC
pursuant to the Pooling Agreement;
WHEREAS, the Servicer is willing to continue its servicing functions
as it relates to the Titling Trust Assets comprising the Series 200 Portfolio
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Interest pursuant to the Titling Trust Servicing Agreement and this Agreement
for and in consideration of the fees and other benefits set forth in this
Agreement;
WHEREAS, the Servicer desires to perform the servicing obligations set
forth herein relating to the Retail Notes owned by the Issuer for and in
consideration of the fees and other benefits set forth in this Agreement; and
WHEREAS, the parties wish to set forth the terms and conditions upon
which the Receivables (including the Retail Leases and Related Titling Trust
Assets allocated to the Series 200 Portfolio Interest) are to be serviced by
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the Servicer;
NOW, THEREFORE, in consideration of the foregoing, the other good and
valuable consideration and the mutual terms and covenants contained herein, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS; SERVICING SUPPLEMENT
SECTION 1.01 Certain Defined Terms. Capitalized terms used in the above
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recitals and in this Agreement shall have the respective meanings assigned them
in Appendix A to the Pooling Agreement dated as of the date hereof between the
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Issuer and NFRRC, unless otherwise defined herein. The rules of construction set
forth in Part II of Appendix A to the Pooling Agreement shall be applicable to
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this Agreement.
SECTION 1.02 Supplement to Titling Trust Servicing Agreement.
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(a) Pursuant to Section 5.13 of the Titling Trust Agreement, each of
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the Titling Trust, Harco Leasing, NFC, NFRRC and the Issuer hereby appoints NFC
as the Servicer with respect to the Series 200 Portfolio Interest and the
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Series 200 Portfolio Assets, to serve in accordance with, and subject to, the
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terms of the Titling Trust Servicing Agreement, this Agreement and the other
Basic Documents.
(b) The Servicer shall account to the Series 200 Portfolio Trustee,
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the Issuer and the Indenture Trustee with respect to the Series 200 Portfolio
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Interest separately from any other Portfolio Interests.
(c) This Agreement shall constitute a "Portfolio Servicing Agreement
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Supplement" under the Titling Trust Servicing Agreement with respect to the
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Series 200 Portfolio Interest and the Series 200 Portfolio Assets. Except as
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otherwise specifically provided herein or in the other Basic Documents, the
parties to the Titling Trust Servicing Agreement shall continue to be bound by
all provisions of the Titling Trust Servicing Agreement with respect to the
Series 200 Portfolio Interest and the Series 200 Portfolio Assets, including
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the provisions of Article III thereof relating to the administration and
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servicing of the Retail Leases. To the extent that the provisions of the Titling
Trust Servicing Agreement (as expressly amended, supplemented or waived by this
Agreement) are not directly inconsistent with the provisions set forth herein,
the provisions of the Titling Trust Servicing Agreement shall be made a part of
this Agreement and shall govern the servicing of the Series 200 Portfolio
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Interest and the Series 200 Portfolio Assets. However, in the event of any
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conflict between the provisions of the Titling Trust Servicing Agreement (as
expressly amended, supplemented or waived by this Agreement) and the provisions
set forth or in
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any other Basic Document, the provisions set forth herein or in such other Basic
Document shall prevail.
(d) For purposes of determining the Servicer's obligations with
respect to the servicing of the Series 200 Portfolio Interest and the Series
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200 Portfolio Assets under this Agreement, general references in the Titling
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Trust Servicing Agreement to: (i) a Portfolio Interest shall be deemed to refer
more specifically to the Series 200 Portfolio Interest; (ii) a Portfolio
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Servicing Agreement Supplement shall be deemed to refer more specifically to
this Agreement; and (iii) a Portfolio Supplement shall be deemed to refer more
specifically to the Series 200 Portfolio Supplement.
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(e) The Servicer shall perform the obligations specified for it in the
Series 200 Portfolio Interest.
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ARTICLE II
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 2.01 Duties of the Servicer. The Servicer is hereby appointed and
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authorized to act as agent for the Owner with respect to servicing the
Receivables and in such capacity shall manage, service, administer and make
collections on the Receivables with reasonable care, using that degree of skill
and attention that the Servicer exercises with respect to comparable [medium and
heavy duty] truck, bus and trailer receivables that it services for itself or
others. The Servicer hereby accepts such appointment and authorization and
agrees to perform the duties of Servicer with respect to the Receivables set
forth herein. The Servicer's duties with respect to all Receivables shall
include collection and posting of all payments, responding to inquiries of
Obligors on the Receivables, investigating delinquencies, sending payment
coupons to Obligors, reporting tax information to Obligors, policing the
collateral securing the Receivables, accounting for collections with respect
thereto and performing the other duties specified herein. With respect to
Receivables which are Retail Leases and the related Financed Vehicles, the
Servicer's duties shall also include those matters specified in the Titling
Trust Servicing Agreement. Subject to the provisions of Section 2.02, the
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Servicer shall follow its customary standards, policies and procedures and shall
have full power and authority, acting alone, to do any and all things in
connection with such managing, servicing, administration and collection that it
may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer is hereby
authorized and empowered by the Owner and the Collateral Agent pursuant to this
Section 2.01, to execute and deliver any and all instruments of satisfaction or
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cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables and the related Financed
Vehicles. The Servicer is hereby authorized to commence in the name of the Owner
or, to the extent necessary, in its own name, a legal proceeding to enforce a
Liquidating Receivable as contemplated by Section 2.04, and to commence or
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participate in any legal proceeding (including a bankruptcy proceeding) relating
to or involving a Receivable (including a Liquidating Receivable).
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If the Servicer commences or participates in any such legal proceeding in its
own name, the Owner and the Collateral Trustee shall thereupon be deemed to have
automatically assigned such Receivable to the Servicer solely for purposes of
commencing and participating in any such proceeding as a party or claimant, and
the Servicer is hereby authorized and empowered by the Owner and the Collateral
Trustee, to execute and deliver in the Servicer's name any notices, demands,
claims, complaints, responses, affidavits or other documents or instruments in
connection with any such proceeding. If in any proceeding it is held that the
Servicer may not enforce a Receivable on the ground that it is not a real party
in interest or a holder entitled to enforce the Receivable, each of the Owner
and the Collateral Trustee shall, at the Servicer's expense and written
directions, take such reasonable steps as the Servicer reasonably deems
necessary to enforce the Receivable, including bringing suit in the name of such
Person. The Owner and the Collateral Trustee, upon the written request of the
Servicer, shall furnish the Servicer with any powers of attorney and other
documents and take any other steps which the Servicer may reasonably deem
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties under this Agreement and the other Basic Documents. Except
to the extent required by the preceding three sentences, the authority and
rights granted to the Servicer in this Section 2.01 shall be nonexclusive and
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shall not be construed to be in derogation of any equivalent authority and
rights of the Owner and the Collateral Trustee.
SECTION 2.02 Establishment of Accounts.
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(a) (i) The Servicer, for the benefit of the Securityholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account known as the Navistar Financial 200 - Owner Trust Collection Account
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(the "Collection Account"), bearing an additional designation clearly indicating
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that the funds deposited therein are held for the benefit of the
Securityholders.
(ii) The Servicer, for the benefit of the Noteholders, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit Account
known as the Navistar Financial 200 - Owner Trust Note Distribution Account
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(the "Note Distribution Account"), bearing an additional designation clearly
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indicating that the funds deposited therein are held for the benefit of the
Noteholders.
(iii) Pursuant to the Trust Agreement, the Servicer, for the benefit
of the Certificateholders, shall establish and maintain in the name of the
Issuer an Eligible Deposit Account known as the Navistar Financial 200 - Owner
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Trust Certificate Distribution Account (the "Certificate Distribution Account"),
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bearing an additional designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders.
(iv) The Servicer, for the benefit of the Noteholders, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit Account
known as the Navistar Financial 200 - Owner Trust Reserve Account (the "Reserve
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Account"), bearing an additional designation clearly indicating that the funds
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deposited therein are held for the benefit of the Noteholders.
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(v) The Servicer, for the benefit of the Noteholders, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit Account
known as the Navistar Financial 200 - Owner Trust Pre-Funding Account (the
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"Pre-Funding Account"), bearing an additional designation clearly indicating
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that the funds deposited therein are held for the benefit of the Noteholders.
(vi) The Servicer, for the benefit of the Securityholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account known as the Navistar 200 - Owner Trust Negative Carry Account (the
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"Negative Carry Account") bearing an additional designation clearly indicating
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that the funds deposited therein are held for the benefit of the
Securityholders.
(b) (i) Each of the Designated Accounts shall be initially established
with the Indenture Trustee and shall be maintained with the Indenture Trustee so
long as (A) the short-term unsecured debt obligations of the Indenture Trustee
have the Required Deposit Rating or (B) each of the Designated Accounts are
maintained in the corporate trust department of the Indenture Trustee. All
amounts held in such accounts (including amounts, if any, which the Servicer is
required to remit daily to the Collection Account pursuant to Section 2.11)
shall, to the extent permitted by applicable laws, rules and regulations, be
invested, at the written direction of the Servicer, by such bank or trust
company in Eligible Investments; provided, that funds in the Collection Account
in an amount not in excess of 20% of the Aggregate Receivables Balance as of the
preceding Accounting Date may be invested in investments which have a rating
from S&P of "A-1" rather than "A-1+," if such investments otherwise constitute
Eligible Investments. Such written direction shall constitute certification by
the Servicer that any such investment is authorized by this Section 2.02. Funds
deposited in the Reserve Account, the Negative Carry Account and the Pre-Funding
Account shall be invested in Eligible Investments which mature prior to the next
Distribution Date; provided, that such investments may mature on a later date if
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the Rating Agency Condition is satisfied with respect thereto. Investments in
Eligible Investments shall be made in the name of the Indenture Trustee or its
nominee, and such investments shall not be sold or disposed of prior to their
maturity. Should the short-term unsecured debt obligations of the Indenture
Trustee (or any other bank or trust company with which the Designated Accounts
are maintained) no longer have the Required Deposit Rating, then the Servicer
shall within 10 Business Days (or such longer period, not to exceed 30 calendar
days, upon satisfaction of the Rating Agency Condition with respect thereto),
with the Indenture Trustee's assistance as necessary, cause the Designated
Accounts (A) to be moved to a bank or trust company, the short-term unsecured
debt obligations of which shall have the Required Deposit Rating, or (B) to be
moved to the corporate trust department of the Indenture Trustee. Except with
respect to Investment Earnings on amounts on deposit in the Pre-Funding Account,
Investment Earnings on funds deposited in the Designated Accounts shall be
deposited into the Certificate Distribution Account for distribution to the
Certificateholders, except when the Indenture Trustee is acting as successor
Servicer in which case such Investment Earnings shall be payable to the
Indenture Trustee as successor Servicer. The Indenture Trustee or the other
Person holding the Designated Accounts as provided in this Section 2.02(b)(i)
shall be the "Securities Intermediary." If the Securities Intermediary shall be
a Person other than the Indenture
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Trustee, the Servicer shall obtain the express agreement of such Person to the
obligations of the Securities Intermediary set forth in this Section 2.02.
(ii) With respect to the Designated Account Property, the Securities
Intermediary agrees, by its acceptance hereof, that:
(A) The Designated Accounts are accounts to which Financial Assets
will be credited.
(B) All securities or other property underlying any Financial Assets
credited to the Designated Accounts shall be registered in the name of the
Securities Intermediary, indorsed to the Securities Intermediary or in
blank or credited to another securities account maintained in the name of
the Securities Intermediary and in no case will any Financial Asset
credited to any of the Designated Accounts be registered in the name of the
Issuer, the Servicer or the Seller, payable to the order of the Issuer, the
Servicer or the Seller or specially endorsed to the Issuer, the Servicer or
the Seller except to the extent the foregoing have been specially indorsed
to the Securities Intermediary or in blank.
(C) All property delivered to the Securities Intermediary pursuant to
this Agreement will be promptly credited to the appropriate Designated
Account.
(D) Each item of property (whether investment property, Financial
Asset, security, instrument or cash) credited to a Designated Account shall
be treated as a "financial asset" within the meaning of Section 8-102(a)(9)
of the New York UCC.
(E) If at any time the Securities Intermediary shall receive any order
from the Indenture Trustee directing transfer or redemption of any
Financial Asset relating to the Designated Accounts, the Securities
Intermediary shall comply with such entitlement order without further
consent by the Issuer, the Servicer, the Seller or any other Person.
(F) The Designated Accounts shall be governed by the laws of the State
of New York, regardless of any provision in any other agreement. For
purposes of the UCC, New York shall be deemed to be the Securities
Intermediary's jurisdiction and the Designated Accounts (as well as the
Securities Entitlements related thereto) shall be governed by the laws of
the State of New York.
(G) The Securities Intermediary has not entered into, and until the
termination of this Agreement will not enter into, any agreement with any
other person relating to the Designated Accounts and/or any Financial
Assets credited thereto pursuant to which it has agreed to comply with
entitlement orders (as defined in Section 8-102(a)(8) of the New York UCC)
of such other person and the Securities Intermediary has not entered into,
and until the termination of this Agreement will not enter into, any
agreement with the Issuer, the Seller, the Servicer or the Indenture
Trustee purporting to limit or condition the obligation of the
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Securities Intermediary to comply with entitlement orders as set forth in
Section 2.02(b)(ii)(E).
(H) Except for the claims and interest of the Indenture Trustee and of
the Issuer in the Designated Accounts, the Securities Intermediary knows of
no claim to, or interest in, the Designated Accounts or in any Financial
Asset credited thereto. If any other person asserts any lien, encumbrance
or adverse claim (including any writ, garnishment, judgment, warrant of
attachment, execution or similar process) against the Designated Accounts
or in any Financial Asset carried therein, the Securities Intermediary will
promptly notify the Indenture Trustee, the Servicer and the Issuer thereof.
(I) The Securities Intermediary will promptly send copies of all
statements, confirmations and other correspondence concerning the
Designated Accounts and/or any Designated Account Property simultaneously
to each of the Servicer and the Indenture Trustee at the addresses set
forth in Appendix B to the Pooling Agreement.
(iii) The Servicer shall have the power, revocable by the Indenture
Trustee (or by the Issuer with the consent of the Indenture Trustee) to instruct
the Indenture Trustee to make withdrawals and payments from the Designated
Accounts for the purpose of permitting the Servicer or the Issuer to carry out
its respective duties hereunder or permitting the Indenture Trustee to carry out
its duties under the Indenture.
(iv) The Indenture Trustee shall possess all right, title and interest
in and to all funds on deposit from time to time in the Designated Accounts and
in all proceeds thereof (except Investment Earnings). Except as otherwise
provided herein or in the Indenture, the Designated Accounts shall be under the
sole dominion and control of the Indenture Trustee for the benefit of the
Securityholders.
(v) The Servicer shall not direct the Indenture Trustee to make any
investment of any funds or to sell any investment held in any of the Designated
Accounts unless the security interest granted and perfected in such account
shall continue to be perfected in such investment or the proceeds of such sale,
in either case without any further action by any Person, and, in connection with
any direction to the Indenture Trustee to make any such investment or sale, if
requested by the Indenture Trustee, the Servicer shall deliver to the Indenture
Trustee an Opinion of Counsel, acceptable to the Indenture Trustee, to such
effect.
(c) Pursuant to the Trust Agreement, the Issuer shall possess all
right, title and interest in and to all funds on deposit from time to time in
the Certificate Distribution Account and in all proceeds thereof. Except as
otherwise provided herein or in the Trust Agreement, the Certificate
Distribution Account shall be under the sole dominion and control of the Issuer
for the benefit of the Certificateholders. If, at any time, the Certificate
Distribution Account ceases to be an Eligible Deposit Account, the Servicer
shall within 10 Business Days (or such longer period, not to exceed 30 calendar
days, as to which each Rating Agency may consent) establish a new Certificate
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Distribution Account as an Eligible Deposit Account and shall cause the Issuer
to transfer any cash and/or any investments in the old Certificate Distribution
Account to such new Certificate Distribution Account.
(d) The Indenture Trustee, the Issuer, the Securities Intermediary and
each other Eligible Deposit Institution with whom a Designated Account or the
Certificate Distribution Account is maintained waives any right of set-off,
counterclaim, security interest or bankers' lien to which it might otherwise be
entitled.
SECTION 2.03 Collection of Receivables Payments. The Servicer shall make
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reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same shall become due, and shall
follow such collection practices, policies and procedures as it follows with
respect to comparable [medium and heavy duty] truck, bus and trailer receivables
that it services for itself or others. Except as provided in Section 2.07(c),
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the Servicer is hereby authorized to grant extensions, rebates or adjustments on
a Receivable without the prior consent of the Owner of such Receivable and to
rewrite, in the ordinary course of its business, a Receivable to reflect the
Full Prepayment of a Receivable with respect to any related Financed Vehicle
without the prior consent of the Owner of such Receivable. The Servicer is
authorized in its discretion to waive any prepayment charge, late payment charge
or any other fees that may be collected in the ordinary course of servicing such
Receivable. Subject to Section 2.13 of this Agreement, the Servicer shall
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allocate payments on Receivables between principal and interest in accordance
with the customary servicing procedures it follows with respect to all
comparable [medium and heavy duty] truck, bus and trailer receivables that it
services for itself or others.
SECTION 2.04 Realization Upon Liquidating Receivables.
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(a) The Servicer shall use commercially reasonable efforts, consistent
with its customary servicing procedures, to repossess or otherwise comparably
convert the ownership or otherwise take possession of each Financed Vehicle that
it has reasonably determined should be repossessed or otherwise converted
following a default under the Receivable secured by or relating to each such
Financed Vehicle. The Servicer is authorized to follow such practices, policies
and procedures as it shall deem necessary or advisable and as shall be customary
and usual in its servicing of [medium and heavy duty] truck, bus and trailer
receivables that it services for itself or others, which practices, policies and
procedures may include reasonable efforts to realize upon or obtain benefits of
any lease assignments, proceeds from any Dealer Liability, proceeds from any
International Purchase Obligations, proceeds from any Insurance Policies and
proceeds from any Guaranties, in each case with respect to the Receivables,
selling the related Financed Vehicle or Vehicles at public or private sale or
sales and other actions by the Servicer in order to realize upon any Receivable.
The foregoing is subject to the provision that, in any case in which the
Financed Vehicle shall have suffered damage, the Servicer shall not expend funds
in connection with any repair or towards the repossession of such Financed
Vehicle unless it shall determine in its discretion that such repair or
repossession shall increase the proceeds of liquidation of the related
Receivable
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by an amount greater than or equal to the amount of such expenses. The Servicer
shall be entitled to receive Liquidation Expenses with respect to each
Liquidating Receivable at such time as the Receivable becomes a Liquidating
Receivable in accordance with Section 8.2(b)(i) of the Indenture.
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(b) The Servicer shall pay all costs, expenses and liabilities
incurred by it in connection with any action taken in respect of a Financed
Vehicle; provided, however, that it shall be entitled to reimbursement of such
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costs and expenses to the extent they constitute Liquidation Expenses or
expenses recoverable under an applicable Insurance Policy.
(c) The second sentence of Section 3.5(b) of the Titling Trust
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Servicing Agreement shall not be applicable to the Series 200 Portfolio Assets.
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SECTION 2.05 Maintenance of Insurance Policies.
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(a) The Servicer shall, in accordance with its customary servicing
procedures, require that each Obligor under a Retail Note shall have obtained
physical damage insurance covering each Financed Vehicle as of the execution of
such Retail Note, unless the Servicer has in accordance with its customary
procedures permitted an Obligor to self-insure the Financed Vehicle or Financed
Vehicles securing such Retail Note. The Servicer shall, in accordance with its
customary servicing procedures, monitor such physical damage insurance with
respect to each Financed Vehicle that secures or is related to each Receivable.
(b) With respect to Retail Leases and the related Financed Vehicles,
the Servicer shall comply with the obligations specified in Section 3.8 of the
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Titling Trust Servicing Agreement.
(c) With respect to Retail Leases, the Servicer shall maintain one or
more contingent and excess liability insurance policies (the "primary contingent
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policies") naming the Titling Trust as the insured with at least a $1 million
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limit for each accident and no annual or aggregate limit on the number of
accidents covered. The primary contingent policies will respond if, at the time
of an accident involving a vehicle owned by the Titling Trust that causes bodily
injury and property damages to a third person, the insurance required to be
provided by the Obligor in accordance with the related Retail Lease has not been
provided, is not collectible or has inadequate limits to protect the Titling
Trust. In addition, the Servicer shall maintain excess insurance coverage for
which the Titling Trust is an additional named insured, which coverage has a
deductible not greater than the amount of coverage provided by the primary
contingent policies, and which provides insurance coverage of more than $10
million per occurrence.
SECTION 2.06 Maintenance of Security Interests in Vehicles. The Servicer
---------------------------------------------
shall, in accordance with its customary servicing procedures and at its own
expense, take such steps as are necessary to maintain perfection of the first
priority security interest of the Seller created by a Retail Note in the related
Financed Vehicle or Financed Vehicles and of the first priority security
interest of the Collateral Agent in the Financed Vehicle or Financed Vehicles
related to any Retail Lease.
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The Owner of each Receivable hereby authorizes the Servicer to re-perfect such
security interests as necessary because of the relocation of a Financed Vehicle
or for any other reason.
SECTION 2.07 Covenants of the Servicer. The Servicer hereby makes the
-------------------------
following covenants on which the Issuer is relying in acquiring the Receivables
under the Pooling Agreement and issuing the Securities under the Further
Transfer and Servicing Agreements:
(a) except as contemplated by the other Basic Documents (including the
Titling Trust Servicing Agreement), the Servicer shall not release any Financed
Vehicle from the security or ownership interest securing the related Receivable;
(b) the Servicer shall do nothing to impair the rights of NFRRC, the
Issuer, the Securityholders or the Indenture Trustee in and to such Receivables;
(c) the Servicer shall not amend or otherwise modify any Receivable
such that the Starting Receivable Balance, the Annual Percentage Rate or the
total number of Scheduled Payments is altered or such that the final scheduled
payment on such Receivable will be due any later than , 200 ; and
-------------- -
(d) the Servicer shall not at any time have or in any way attempt to
assert any interest in any Receivables or Related Assets or records related to
the Collateral other than solely for the purpose of collecting or enforcing the
Receivables for the benefit of the Owner and the Collateral Agent and the entire
legal and equitable interest of the Owner of a Receivable in such Receivable and
the Related Assets shall at all times be vested in such Owner.
SECTION 2.08 Purchase of Receivables Upon Breach of Covenant.
-----------------------------------------------
(a) Upon discovery by the Servicer or a Responsible Officer of any of
the Interested Parties or the Collateral Agent of a breach of any of the
covenants set forth in Sections 2.06 and 2.07 with respect to any Receivable,
------------- ----
the party discovering such breach shall give prompt written notice thereof to
the others. As of the second Accounting Date (or, at the Servicer's election,
the first Accounting Date) following notice to or discovery by the Servicer of a
breach of any covenant of the Servicer that materially and adversely affects any
Receivable, unless such breach is cured in all material respects, the Servicer
shall, with respect to such Receivable (an "Administrative Receivable") purchase
-------------------------
such Administrative Receivable from the Issuer at a price equal to the
Administrative Purchase Payment. The Servicer shall pay the Administrative
Purchase Payment as described in Section 2.10.
------------
It is understood and agreed that the obligation of the Servicer to purchase
any Receivable with respect to which such a breach has occurred and is
continuing shall, if such obligation is fulfilled, constitute the sole remedy
against the Servicer for such breach available to any Interested Party or the
Collateral Agent for any such uncured breach.
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(b) Upon receipt of the Administrative Purchase Payment with respect
to a Receivable which is an Administrative Receivable, the Owner and the
Collateral Agent shall each assign, without recourse, representation or
warranty, to the Servicer (and shall take such other actions as the Servicer may
reasonably request in writing to perfect or confirm such assignment) all of such
Person's right, title and interest in, to and under (i) such Administrative
Receivable and all monies due thereon and (ii) all Related Assets with respect
to such Administrative Receivable, such assignment being an assignment outright
and not for security. Upon the assignment of such Administrative Receivable
described in the preceding sentence, the Servicer shall own such Administrative
Receivable, and all such Related Assets, free of any further obligations to such
Person with respect thereto. The Servicer shall contribute any Administrative
Receivable that is a Retail Lease and its Related Assets to the General Interest
in the Titling Trust (or to such other person as shall be designated by Harco
Leasing).
SECTION 2.09 Servicing Fee. In consideration for its services hereunder and
-------------
as compensation for expenses paid as contemplated by Section 2.10, the Servicer
------------
shall be entitled to receive on each Distribution Date a servicing fee (the
"Basic Servicing Fee") for the related Monthly Period equal to one-twelfth of 1%
-------------------
(the "Basic Servicing Fee Rate") multiplied by the Aggregate Receivable Balance
------------------------
as of the last day of the prior Monthly Period. On each Distribution Date, the
Servicer will be paid the Basic Servicing Fee and any unpaid Basic Servicing
Fees from all prior Distribution Dates (collectively, the "Total Servicing Fee")
-------------------
pursuant to Section 8.2(c) of the Indenture to the extent of funds available
therefor. In addition, the Servicer will be entitled to receive any late fees,
prepayment charges or certain similar fees and charges collected during a
Monthly Period (the "Supplemental Servicing Fee"). The Servicer shall retain all
--------------------------
Supplemental Servicing Fees and shall not be obligated to deposit them into the
Collection Account.
SECTION 2.10 Servicer Expenses. The Servicer shall be required to pay all
-----------------
expenses incurred by it in connection with its activities hereunder, including
fees and disbursements of the Issuer, any trustees and independent accountants,
taxes imposed on the Servicer and expenses incurred in connection with
distributions and reports and all other fees and expenses not expressly stated
under this Agreement to be for the account of the Interested Parties or the
Collateral Agent, but excluding federal, state and local income taxes, if any,
of the Issuer or any Securityholder.
SECTION 2.11 Deposits to Collection Account. The Servicer shall remit to
------------------------------
the Indenture Trustee for deposit to the Collection Account all Collections it
receives during each Monthly Period within two Business Days after receipt
thereof. The Servicer shall remit to the Indenture Trustee for deposit (in
immediately available funds) in the Collection Account the aggregate
Administrative Purchase Payments with respect to Administrative Receivables to
be purchased as of the last day of any Monthly Period on the Business Day
immediately preceding the immediately succeeding Distribution Date.
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SECTION 2.12 Collections. In the event that:
-----------
(a) NFC is the Servicer,
(b) a Servicer Default shall not have occurred and be continuing, and
(c) (i) the Servicer satisfies the requirements for monthly
remittances of Collections established by each Rating Agency, and upon
satisfaction of such requirements, each Rating Agency reaffirms the rating of
the Notes at the level at which they would be rated if Collections were remitted
within two Business Days of receipt,
(ii) the short-term unsecured debt of the Servicer is rated at least
A-1 by S&P and P-1 by Xxxxx'x, or
(iii) a standby letter of credit has been issued by an Eligible
Institution which, as of each date during the period that the Servicer is making
monthly remittances of Collections, has an undrawn amount at least equal to 150%
of all Scheduled Payments due in respect of the Receivables for the latest
Monthly Period ended prior to the next succeeding Distribution Date (and the
aggregate amount of unremitted Collections does not at any time exceed 90% of
the undrawn amount of such letter of credit), (each, a "Monthly Remittance
------------------
Condition")
---------
then, the Servicer shall not be required to deposit Collections into the
Collection Account until the Business Day preceding the Distribution Date
following the Monthly Period during which such Collections were received.
Pending deposit into the Collection Account, Collections may be employed by the
Servicer at its own risk and for its own benefit and will not be segregated from
its own funds.
SECTION 2.13 Application of Collections. For the purposes of this
--------------------------
Agreement, all Collections for the related Monthly Period with respect to each
Receivable shall be applied by the Servicer as follows:
(a) All payments by or on behalf of the Obligor or other collections
on a Receivable (including Warranty Payments and Administrative Purchase
Payments but excluding Supplemental Servicing Fees and Investment Earnings)
shall be applied (i) first to reduce Outstanding Monthly Advances, if any, with
-----
respect to such Receivable, (ii) second, to the Scheduled Payment on such
------
Receivable for such Monthly Period, and (iii) third, the remainder shall
-----
constitute, with respect to such Receivable, a Full Prepayment or Partial
Prepayment; and
(b) A Partial Prepayment made on a Receivable, if such a Receivable is
a Retail Note, is applied to reduce the final Scheduled Payment and will
thereafter, to the extent the Partial Prepayment exceeds the final Scheduled
Payment, reduce Scheduled Payments in reverse chronological order beginning with
the penultimate Scheduled Payment. The Rebate related to such Partial Prepayment
will reduce the final Scheduled Payment and will thereafter, to the extent the
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Rebate exceeds the final Scheduled Payment, reduce Scheduled Payments in reverse
chronological order beginning with the penultimate Scheduled Payment.
SECTION 2.14 Monthly Advances. Subject to the following sentence, as of
----------------
each Accounting Date, if the payments received by the Servicer during the
related Monthly Period by or on behalf of the Obligor on a Receivable (other
than an Administrative Receivable, a Warranty Receivable or a Liquidating
Receivable) after application of such payments under Section 2.13(a) shall be
---------------
less than the Scheduled Payment on such Receivable for such Monthly Period,
whether as a result of any extension granted to the Obligor or otherwise, then
the Servicer shall, subject to the following sentence, advance any such
shortfall (such amount, a "Monthly Advance"). The Servicer shall be obligated to
---------------
make a Monthly Advance in respect of a Receivable only to the extent that the
Servicer, in its sole discretion, shall determine that such advance shall be
recoverable (in accordance with the two immediately following sentences) from
subsequent collections or recoveries on such Receivable. Subject to Section 8.2
of the Indenture, the Servicer shall be reimbursed for unreimbursed Outstanding
Monthly Advances with respect to a Receivable from the following sources with
respect to such Receivable, in each case as set forth in this Agreement; (i)
subsequent payments by or on behalf of the Obligor, (ii) Liquidation Proceeds,
(iii) the Administrative Purchase Payment and (iv) the Warranty Payment. At such
time as the Servicer shall determine that Outstanding Monthly Advances with
respect to any Receivable shall not be recoverable from payments with respect to
such Receivable, the Servicer shall be reimbursed from any Collections made on
other Receivables.
SECTION 2.15 Additional Deposits. The Servicer shall deposit in the
-------------------
Collection Account the aggregate Monthly Advances pursuant to Section 2.14. The
------------
Servicer and the Warranty Purchaser shall deposit in the Collection Account the
aggregate Administrative Purchase Payments and Warranty Payments with respect to
Administrative Receivables and Warranty Receivables, respectively. All such
deposits with respect to a Monthly Period shall be made in immediately available
funds on the Transfer Date with respect to the Distribution Date related to such
Monthly Period.
SECTION 2.16 Net Deposits. At any time that (i) NFC shall be the Servicer
------------
and (ii) the Servicer shall be permitted by Section 2.12 of the Servicing
Agreement to remit collections on a basis other than a daily basis, the
Servicer, the Seller, the Issuer, and each Trustee may make any remittances
pursuant to this Article II of the Servicing Agreement or Article VIII of the
Indenture net of amounts to be distributed by the applicable recipient to such
remitting party. Nonetheless, each such party shall account for all of the above
described remittances and distributions as if the amounts were deposited and/or
transferred separately.
SECTION 2.17 Servicer's Certificate.
----------------------
(a) Not later than 10:00 a.m. (Chicago, Illinois time) on each
Determination Date, the Servicer shall deliver to each Trustee and the Rating
Agencies a Servicer's Certificate with respect to the immediately preceding
Monthly Period executed by the President or any Vice
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President of the Servicer containing all information necessary to each such
party for making the calculations, withdrawals, deposits, transfers and
distributions required by Sections 8.2, 8.10, 8.11 and 8.12 of the Indenture,
and all information required to be provided to the Interested Parties under
Section 8.8 of the Indenture. Receivables to be purchased by the Servicer under
Section 2.08 hereof, by NFC pursuant to Section 5.04 of the Purchase Agreement
or by NFRRC under Section 2.06 of the Pooling Agreement as of the last day of
any Monthly Period shall be identified by Receivable number (as set forth in the
Composite Schedule of Receivables). With respect to any Receivables for which
---------------------------------
the Seller is the Owner, the Servicer shall deliver to the Seller such
accountings relating to such Receivables and the actions of the Servicer with
respect thereto as the Seller may reasonably request.
(b) On or before each Determination Date, with respect to the
preceding Monthly Period and the related Distribution Date, the Servicer shall
calculate the Total Available Amount, Collected Amount, the Total Servicing Fee,
the Aggregate Class A Noteholders' Interest Distributable Amount, the Class B
Noteholders' Interest Distributable Amount, the Principal Payment Amount, the
Noteholders' Principal Distributable Amount and all other amounts required to
determine the amounts to be deposited in or paid from each of the Collection
Account, the Pre-Funding Account, the Negative Carry Account, the Note
Distribution Account, the Certificate Distribution Account and the Reserve
Account on the next succeeding Distribution Date and supply such information to
the Issuer and the Indenture Trustee.
(c) On the Closing Date (with respect to the remainder of calendar
year 200 ) and thereafter, within 15 days prior to the end of each calendar year
-
while this Agreement remains in effect (with respect to the next succeeding
calendar year), the Servicer shall deliver to either the Indenture Trustee or
the Owner Trustee, following receipt of a written request, an Officers'
Certificate specifying the days on which banking institutions in Chicago,
Illinois are authorized or obligated by law or executive order to be closed.
ARTICLE III
STATEMENTS AND REPORTS
SECTION 3.01 Annual Statement as to Compliance; Notice of Servicer Default;
-------------------------------------------------------------
Tax Reports.
-----------
(a) The Servicer shall deliver to the Issuer, the Indenture Trustee
and the Collateral Agent, on or before February 1 of each year, beginning with
the first February 1 which is at least twelve months after the Closing Date, an
officer's certificate signed by the Chairman of the Board, Vice Chairman of the
Board, the President or any Vice President of the Servicer, dated as of the
immediately preceding October 31, stating that (i) a review of the activities of
the Servicer during the Servicer's immediately preceding fiscal year (or, with
respect to the first such certificate, such period as shall have elapsed from
the Closing Date to the last day of the Servicer's immediately preceding fiscal
year) and of its performance under this Agreement and the Titling Trust
Servicing
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Agreement has been made under such officer's supervision, and (ii) to such
officer's knowledge, based on such review, the Servicer has fulfilled all its
obligations under this Agreement and the Titling Trust Servicing Agreement
throughout such period, or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to such officer and the
nature and status thereof. A copy of such certificate may be obtained by any
Noteholder or Certificateholder by a request in writing to the Indenture Trustee
or Issuer, respectively, addressed to the Corporate Trust Office of the
Indenture Trustee or the Owner Trustee, respectively.
(b) The Servicer shall deliver to the Issuer, each Trustee, the
Collateral Agent and each Rating Agency, promptly after having obtained
knowledge thereof, but in no event later than five Business Days thereafter,
written notice in an Officer's Certificate of any event which with the giving of
notice or lapse of time, or both, would become a Servicer Default under Section
-------
7.01.
----
(c) The Servicer shall furnish to the Issuer, each Trustee and the
Rating Agencies, on or before February 1 of each year, beginning February 1,
200 , an officer's certificate signed by the Chairman of the Board, Vice
-
Chairman of the Board, the President or any Vice President of the Servicer,
dated as of the immediately preceding October 31, that discloses the existence
of any vicarious tort liability claims relating to the Portfolio Assets on such
date, if any, and the estimated or actual costs of any such claims.
(d) The Servicer shall prepare and deliver to the Issuer and the
Indenture Trustee the annual report described in Section 8.8(b) of the
Indenture.
SECTION 3.02 Annual Accountants' Report.
--------------------------
(a) The Servicer shall cause a firm of independent accountants, who
may also render other services to the Servicer or NFRRC, to deliver to the
Issuer, each Trustee, the Collateral Agent and each Rating Agency, on or before
February 1 of each year, beginning with February 1, with respect to the
------
Servicer's immediately preceding fiscal year, (or, with respect to the first
such report, such period as shall have elapsed from the Closing Date to the last
day of the Servicer's immediately preceding fiscal year), a report (the
"Accountants' Report") addressed to the board of directors of the Servicer, the
-------------------
Issuer, and to each Trustee to the effect that such firm has audited the
financial statements of the Servicer and issued its report thereon and that such
audit (i) was made in accordance with generally accepted auditing standards,
(ii) included tests relating to Receivables serviced for others in accordance
with the requirements of the Uniform Single Audit Program for Mortgage Bankers
(the "Program"), to the extent the procedures in the Program are applicable to
-------
the servicing obligations set forth in this Agreement and the Titling Trust
Servicing Agreement and (iii) except as described in the report, disclosed no
exceptions or errors in the records relating to the Receivables serviced for
others that, in the firm's opinion, paragraph four of the Program requires such
firm to report.
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(b) The Accountants' Report shall also indicate that the firm is
independent of NFRRC and the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
(c) A copy of the Accountant's Report may be obtained by any
Noteholder or Certificateholder by a request in writing to the Indenture Trustee
or the Issuer, addressed to the Corporate Trust Office of the Indenture Trustee
or the Owner Trustee, respectively.
SECTION 3.03 Access to Certain Documentation and Information Regarding
---------------------------------------------------------
Receivables. The Servicer shall provide to the Issuer, each Trustee and
-----------
Securityholders reasonable access to the Servicer's records regarding the
Receivables owned by the Issuer. The Servicer shall provide such access to any
Securityholder only in such cases where a Securityholder is required by
applicable statutes or regulations to review such documentation. In each case,
such access shall be afforded without charge but only upon reasonable request
and during normal business hours at offices of the Servicer designated by the
Servicer. Nothing in this Section 3.03 shall derogate from the obligation of the
------------
Servicer to observe any applicable law prohibiting disclosure of information
regarding Obligors, and the failure of the Servicer to provide access as
provided in this Section 3.03 as a result of such obligation shall not
------------
constitute a breach of this Section 3.03.
------------
SECTION 3.04 Maintenance of Composite Schedule of Receivables. The Servicer
------------------------------------------------
shall maintain at all times a composite schedule (the "Composite Schedule of
---------------------
Receivables") which shall list separately (i) all Retail Notes which are owned
-----------
by the Issuer and (ii) all Retail Leases which are allocated to the Series 200
-
Portfolio Interest. The Composite Schedule of Receivables shall be updated to
reflect all purchases of Receivables during the Funding Period by the Issuer and
all sales of Receivables as a result of a Receivable becoming a Warranty
Receivable or an Administrative Receivable. The Servicer shall deliver to the
Owner Trustee, the Indenture Trustee and the Collateral Agent (provided that the
Servicer need deliver to the Collateral Agent just the portion of the Composite
Schedule of Leases which lists Retail Leases) an updated Composite Schedule of
Receivables on or before each Purchase Date and each Distribution Date.
SECTION 3.05 Amendments to Composite Schedule of Receivables. If the
-----------------------------------------------
Servicer, during a Monthly Period, assigns to a Receivable an account number
that differs from the account number previously identifying such Receivable on
the Composite Schedule of Receivables, the Servicer shall amend the Composite
Schedule of Receivables to report the newly assigned account number. Each
Composite Schedule of Receivables delivered on a Distribution Date pursuant to
Section 3.04 shall list all new account numbers assigned to Receivables during
------------
such Monthly Period and shall show by cross reference the prior account numbers
identifying such Receivables on the previously distributed Composite Schedule of
Receivables.
SECTION 3.06 Maintenance of Systems and Receivables List.
-------------------------------------------
(a) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know the status of such
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Receivable, including payments and recoveries made and payments owing (and the
nature of each) and extensions of any scheduled payments made not less than 45
days prior thereto, and (ii) reconciliation between payments or recoveries on
(or with respect to) each Receivable and the amounts from time to time deposited
in the Collection Account in respect to such Receivable.
(b) The Servicer shall maintain its computer systems so that the
Servicer's master computer records (including any backup archives) that refer to
any Receivable shall indicate clearly that the Receivable is owned by the Issuer
and that such Receivable has been pledged by the Issuer to the Indenture
Trustee. Indication of the Issuer's and the Indenture Trustee's interest in a
Receivable shall be deleted from or modified on the Servicer's computer systems
when, and only when, the Receivable shall have been paid in full, repurchased by
Navistar Financial, purchased by the Servicer or become a Liquidating
Receivable.
(c) If at any time the Servicer shall propose to sell, grant a
security interest in, or otherwise transfer any interest in truck, truck
chassis, bus or trailer receivables to any prospective purchaser, lender or
other transferee, the Servicer shall give to such prospective purchaser, lender
or other transferee computer tapes, records or printouts (including any of those
restored from backup archives) that, if they refer in any manner whatsoever to
any Receivable, indicate clearly that such Receivable has been sold and is owned
by the Issuer and has been pledged to the Indenture Trustee unless such
Receivable has been paid in full, repurchased by Navistar Financial or purchased
by the Servicer.
(d) The Servicer will furnish to the Issuer and the Indenture Trustee
at any time upon request a list of all Receivables then held as part of the
Owner Trust Estate, together with a reconciliation of such list to the Composite
Schedule of Receivables and to each of the Servicer's Certificates furnished
before such request indicating removal of Receivables from the Owner Trust
Estate. Upon request, the Servicer shall furnish a copy of any such list to the
Seller.
(e) The Servicer shall file such financing statements and cause to be
executed and filed such continuation and other statements, all in such manner
and in such places as may be required by law fully to preserve, maintain and
protect the interest of the Issuer under the Pooling Agreement in the
Receivables, the Series 2000 Portfolio Interest and the Series 2000 Portfolio
- -
Certificate and the Indenture Trustee's security interest in the Receivables,
the Series 200 Portfolio Interest and the Portfolio Certificate under the
-
Indenture. The Servicer shall deliver (or cause to be delivered) to the
Indenture Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
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ARTICLE IV
THE CUSTODIAN
SECTION 4.01 Custody of Receivable Files. To assure uniform quality in
---------------------------
servicing the Receivables and to reduce administrative costs, the Owner of each
Receivable hereby appoints the Servicer, and the Servicer hereby accepts such
appointment, to act as agent of the Owner of each Receivable as custodian to
maintain custody of the following documents or instruments with respect to such
Receivable (as to each Receivable, the "Receivable File"), which will be hereby
---------------
constructively delivered to the Owner of the related Receivable and the
Indenture Trustee:
(a) the fully executed original of the Retail Note or Retail Lease, as
the case may be;
(b) documents evidencing or related to any related Insurance Policy;
(c) if such Receivable is a Retail Note, where permitted by law, the
original Certificate of Title (when received) and otherwise such documents, if
any that NFC keeps on file in accordance with its customary procedures
indicating that the Financed Vehicle is owned by the Obligor and subject to the
interest of NFC as first lienholder or secured party;
(d) if such Receivable is a Retail Lease, the original Certificate of
Title and such other documents that NFC is required to maintain pursuant to
Section 3.6 of the Titling Trust Servicing Agreement; and
-----------
(e) any and all other documents that NFC, keeps on file in accordance
with its customary procedures relating to the individual Receivable, Obligor or
Financed Vehicle.
SECTION 4.02 Duties of Servicer as Custodian.
-------------------------------
(a) The Servicer shall hold each Receivable File for the benefit of
the Owner of the related Receivable and maintain such accurate and complete
accounts, records and computer systems pertaining to each Receivable File as
shall enable NFRRC, the Issuer and the Indenture Trustee to comply with their
respective obligations under the Purchase Agreement and the Further Transfer and
Servicing Agreements. Each Receivable shall be identified as such on the books
and records of the Servicer to the extent the Servicer reasonably determines to
be necessary to comply with the terms and conditions of the Purchase Agreement
and, if applicable, the Further Transfer and Servicing Agreements. In performing
its duties as custodian the Servicer shall act with reasonable care, using that
degree of skill and attention that the Servicer exercises with respect to the
receivable files relating to comparable [medium and heavy duty] truck, truck
chassis, bus and trailer receivables that the Servicer services and holds for
itself or others. The Servicer shall conduct, or cause to be conducted, periodic
physical inspections of the Receivable Files held by it under this Agreement,
and of the related accounts, records and computer systems, in such manner as
shall enable the Owner Trustee and the Indenture Trustee to verify the accuracy
of the Servicer's inventory and record
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keeping. The Servicer shall promptly report to each Owner any failure on its
part to hold the Receivable Files and maintain its accounts, records and
computer systems as herein provided and promptly take appropriate action to
remedy any such failure.
(b) The Servicer shall maintain each Receivable File at its principal
office at 0000 Xxxx Xxxx Xxxx, Xxxxxxx Xxxxxxx, Xxxxxxxx 00000, or at such other
office of the Servicer as shall from time to time be identified to the Owners
and the Indenture Trustee upon 60 days' prior written notice. Subject only to
the Custodian's security requirements applicable to its own employees having
access to similar records held by the Servicer and the limitations set forth in
Section 3.03 hereof and otherwise in the Basic Documents, the Servicer shall
------------
permit the Owners, the Indenture Trustee or their duly authorized
representatives, attorneys or auditors to inspect the Receivable Files and the
related accounts, records and computer systems maintained by the Servicer
pursuant hereto at such times as such party may reasonably request.
(c) In general, the Servicer shall attend to all nondiscretionary
details in connection with maintaining custody of the Receivable Files. In
addition, the Servicer shall assist the Owner Trustee generally in the
preparation of routine reports to Securityholders, if any, or to regulatory
bodies to the extent necessitated by the Servicer's custody of the Receivable
Files.
SECTION 4.03 Custodian's Indemnification. The Servicer as custodian shall
---------------------------
indemnify the Issuer, the Indenture Trustee, the Collateral Agent, and the
Noteholders and each of their officers, directors and agents for any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses of any kind whatsoever that may be imposed on, incurred by or asserted
against the Issuer or the Indenture Trustee, any Noteholder or any of their
officers, directors and agents as the result of any improper act or omission in
any way relating to the maintenance and custody by the Servicer as custodian of
the Receivable Files; provided, however, that the Servicer shall not be liable
-------- -------
to the Issuer or the Indenture Trustee for any portion of any such amount
resulting from the willful misfeasance, bad faith or negligence of such Person.
SECTION 4.04 Effective Period and Termination. The Servicer's appointment
--------------------------------
as custodian with respect to a Receivable File hereunder shall become effective
as of the related Purchase Date and shall continue in full force and effect
until terminated pursuant to this Section 4.04. If the Servicer shall resign as
------------
Servicer in accordance with the provisions of this Agreement or if all of the
rights and obligations of any Servicer shall have been terminated under Section
-------
VI, the appointment of such Servicer as custodian shall be terminated. Upon (i)
--
the repurchase of a Warranty Receivable by NFC pursuant to the Purchase
Agreement, (ii) purchase of a Warranty Receivable by NFRRC pursuant to the
Pooling Agreement or (iii) purchase of an Administrative Receivable by the
Servicer pursuant to Section 2.08(a) of this Agreement, the Servicer shall
--------------
deliver the related Receivable File to or at the direction of the purchaser.
Upon delivery of such Receivable File, the Servicer's obligations with respect
to such Receivable File shall terminate.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE SERVICER
SECTION 5.01 Representations and Warranties of the Servicer. The Servicer
----------------------------------------------
hereby represents and warrants to NFRRC and the Issuer that as of each Purchase
Date:
(a) Organization and Good Standing. The Servicer has been duly
------------------------------
organized and is validly existing as a corporation, and in good standing under
the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties are presently owned
and such business is presently conducted, and had at all relevant times, and now
has, power, authority and legal right to service the Receivables as provided in
this Agreement and the Titling Trust Servicing Agreement.
(b) Due qualification. The Servicer is duly qualified to do business
-----------------
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or lease of
property or the conduct of its business (including the servicing of the
Receivables as required by this Agreement and the Titling Trust Servicing
Agreement) requires such qualification.
(c) Power and Authority. The Servicer has the power and authority to
-------------------
execute and deliver this Agreement, the Titling Trust Servicing Agreement and to
perform its obligations hereunder and thereunder and the execution, delivery and
performance by the Servicer of this Agreement and the Titling Trust Servicing
Agreement have been duly authorized by all necessary corporate action on the
part of the Servicer. Except as expressly contemplated in the Basic Documents,
no consent or authorization of, filing with, or other act by or in respect of,
any Governmental Authority or other Person is required in connection with the
execution, delivery, performance, validity or enforceability against the
Servicer of this Agreement and the Titling Trust Servicing Agreement.
(d) Binding Obligation. This Agreement and the Titling Trust Servicing
------------------
Agreement each constitutes a legal, valid and binding obligation of the Servicer
enforceable against the Servicer in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights in general and by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
(e) No Violation. The execution and delivery of this Agreement and the
------------
Titling Trust Servicing Agreement by the Servicer and its performance of its
obligations hereunder and thereunder will not violate any Requirement of Law or
Contractual Obligation of the Servicer and will not result in, or require, the
creation or imposition of any Lien on any of its property or assets pursuant to
any such Requirement of Law or Contractual Obligation other than as contemplated
by the Basic Documents.
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(f) No Proceedings. There are no actions, proceedings or, to the
--------------
Servicer's knowledge, investigations pending or, to the Servicer's knowledge,
threatened before any Governmental Authority (i) asserting the invalidity of
this Agreement or the Titling Trust Servicing Agreement, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this Agreement or
the Titling Trust Servicing Agreement or the issuance of the Securities, or
(iii) seeking any determination or ruling that would reasonably be expected to
have a Material Adverse Effect with respect to the Servicer.
(g) No Consent. Except as expressly contemplated by the Basic
----------
Documents, no consent or authorization of, filing with, or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the execution, delivery, performance, validity or enforceability
by or against the Servicer of this Agreement or the Titling Trust Servicing
Agreement.
ARTICLE VI
THE SERVICER
SECTION 6.01 Merger or Consolidation of, or Assumption of the Obligations
------------------------------------------------------------
of, the Servicer. Any Person (a) into which the Servicer may be merged or
----------------
consolidated, (b) resulting from any merger, conversion or consolidation to
which the Servicer shall be a party, (c) succeeding to the business of the
Servicer, or (d) more than 50% of the voting stock or other interest of which is
owned directly or indirectly by NIC and which is otherwise servicing NFC's
receivables, which Person in any of the foregoing cases executes an agreement of
assumption to perform every obligation of the Servicer under this Agreement
shall be the successor to the Servicer under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties to this Agreement, notwithstanding anything in this Agreement to the
contrary. The Servicer shall provide notice of any merger, consolidation or
succession pursuant to this Section 6.01 to the Rating Agencies, the Owner
------------
Trustee and the Indenture Trustee.
SECTION 6.02 Limitation on Liability of Servicer and Others.
----------------------------------------------
(a) Neither the Servicer nor any of the directors or officers or
employees or agents of the Servicer shall be under any liability to the Issuer
or any Noteholder, except as specifically provided in this Agreement, for any
action taken or for refraining from the taking of any action pursuant to this
Agreement or any other Further Transfer and Servicing Agreement or for errors in
judgment; provided, however, that this provision shall not protect the Servicer
-------- -------
or any such Person against any liability that would otherwise be imposed by
reason of willful misfeasance, bad faith or negligence (except errors in
judgment) in the performance of the Servicer's duties or by reason of reckless
disregard of obligations and duties under the Further Transfer and Servicing
Agreements. The Servicer and any director, officer or employee or agent of the
Servicer may rely in good faith on the advice of counsel or on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising under this Agreement.
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(b) Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its duties to service the Receivables in accordance with this
Agreement and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable action that it
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may deem necessary or desirable in respect of this Agreement and the rights and
duties of the parties to this Agreement and the interests of the Securityholders
under this Agreement and the Noteholders and (to the extent expressly provided
therein) the Certificateholders under the Indenture and the interests of the
Certificateholders under the Trust Agreement. In such event, the legal expenses
and costs for such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Issuer and the Servicer shall be entitled
to be reimbursed therefor.
SECTION 6.03 Delegation of Duties. So long as NFC acts as Servicer, the
--------------------
Servicer may, at any time without notice or consent, delegate any duties under
this Agreement to any Person more than 50% of the voting stock or other interest
of which is owned, directly or indirectly, by NIC. The Servicer may at any time
perform specific duties as Servicer through subservicers who are in the business
of servicing [medium and heavy duty] truck, truck chassis, bus and trailer
receivables; provided, however, that no such delegation shall relieve the
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Servicer of its responsibility with respect to such duties.
SECTION 6.04 Servicer Not to Resign. Subject to the provisions of Section
---------------------- -------
7.02, the Servicer shall not resign from the obligations and duties imposed on
----
it by this Agreement or the Titling Trust Servicing Agreement as Servicer except
upon determination that the performance of its duties under this Agreement or
the Titling Trust Servicing Agreement is no longer permissible under applicable
law. Any such determination permitting the resignation of the Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Indenture
Trustee. No such resignation shall become effective until the Indenture Trustee
or a successor Servicer shall have assumed the responsibilities and obligations
of the Servicer in accordance with Section 7.02.
------------
SECTION 6.05 Servicer Indemnification of the Indenture Trustee and the
---------------------------------------------------------
Owner Trustee.
-------------
(a) The Servicer shall be liable in accordance with this Agreement
only to the extent of the obligations in this Agreement specifically undertaken
by the Servicer. Such obligations shall include the following:
(i) The Servicer shall defend, indemnify and hold harmless the
Indenture Trustee, the Owner Trustee, the Issuer, the Collateral Agent and the
Interested Parties from and against any and all costs, expenses, losses,
damages, claims and liabilities arising out of or resulting from the use,
ownership or operation by the Servicer or any Affiliate thereof of any Financed
Vehicle;
(ii) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee and the Indenture Trustee from and against any taxes
that may at any time be asserted against any such Person with respect to the
transactions contemplated in this Agreement and the Pooling
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Agreement, including any sales, gross receipts, general corporation, Illinois
corporate income, tangible personal property, privilege or license taxes (but
not including any taxes asserted with respect to, and as of the date of, the
sale of the Receivables to the Owner Trustee or the issuance and original sale
of the Securities, or asserted with respect to ownership of the Receivables, or
federal or other income taxes arising out of distributions on the Securities, or
any fees or other compensation payable to any such Person) and costs and
expenses in defending against the same;
(iii) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Collateral Agent and the
Interested Parties from and against any and all costs, expenses, losses, claims,
damages, and liabilities to the extent that such cost, expense, loss, claim,
damage, or liability arose out of, or was imposed upon such Person through the
negligence, willful misfeasance or bad faith of the Servicer in the performance
of its duties under this Agreement and any other Transfer and Servicing
Agreements or by reason of reckless disregard of its obligations and duties
under any of the Transfer and Servicing Agreements; and
(iv) The Servicer (other than the Indenture Trustee in its capacity as
successor Servicer pursuant to Section 7.03 hereof) shall indemnify, defend and
hold harmless each Trustee and their respective agents, officers, directors and
servants, from and against all costs, expenses, losses, claims, damages and
liabilities arising out of or incurred in connection with (x) in the case of the
Owner Trustee, the Indenture Trustee's performance of its duties under the Basic
Documents, (y) in the case of the Indenture Trustee, the Owner Trustee's
performance of its duties under the Basic Documents or (z) the acceptance,
administration or performance by, or action or inaction of, the applicable
Trustee of the trusts and duties contained in this Agreement, the Basic
Documents, the Indenture (in the case of the Indenture Trustee), including the
administration of the Collateral, and the Trust Agreement (in the case of the
Owner Trustee), including the administration of the Owner Trust Estate, except
in each case to the extent that such cost, expense, loss, claim, damage or
liability: (A) is due to the willful misfeasance, bad faith or negligence
(except for errors in judgment) of the Person seeking to be indemnified, (B) to
the extent otherwise payable to the Indenture Trustee, arises from the Indenture
Trustee's breach of any of its representations or warranties in Section 6.13 of
the Indenture or (C) to the extent otherwise payable to the Owner Trustee,
arises from the Owner Trustee's breach of any of its representations or
warranties set forth in Section 6.6 of the Trust Agreement.
(b) Indemnification under this Section 6.05 shall survive the
resignation or removal of the Owner Trustee or the Indenture Trustee or the
termination of this Agreement and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Servicer has made any indemnity
payments pursuant to this Section 7.01 and the recipient thereafter collects any
of such amounts from others, the recipient shall promptly repay such amounts
collected to the Servicer, without interest.
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ARTICLE VII
DEFAULT
SECTION 7.01 Servicer Defaults. Each of the following shall constitute a
-----------------
"Servicer Default":
----------------
(a) any failure by the Servicer to deliver to the Indenture Trustee
for deposit in any of the Designated Accounts or to the Owner Trustee for
deposit in the Certificate Distribution Account any required payment or to
direct the Indenture Trustee to make any required distributions therefrom, in
each case which failure continues unremedied for five Business Days after the
earlier of written notice from the applicable Trustee, is received by the
Servicer or discovery of such failure by an officer of the Servicer;
(b) any failure by the Servicer duly to observe or perform in any
material respect any other covenant or agreement of the Servicer set forth in
this Agreement, the Titling Trust Servicing Agreement or any other Basic
Documents which failure materially and adversely affects the rights of the
Securityholders and which continues unremedied for 60 days after the giving of
written notice of such failure (A) to the Servicer by either Trustee or (B) to
the Servicer and to either Trustee by the holders of not less than 25% of the
Outstanding Amount of the Controlling Class;
(c) any representation, warranty or certification made by the Servicer
pursuant to this Agreement , the Titling Trust Servicing Agreement or any other
Basic Documents shall prove to have been incorrect in any material respect when
made, and if the consequences of such representation, warranty or certification
being incorrect shall be susceptible of remedy in all material respects, such
consequences shall not be remedied in all material respects within 30 days after
the Servicer first becomes aware or is advised that such representation,
warranty or certification was incorrect in a material respect; and
(d) the occurrence of an Insolvency Event with respect to the
Servicer.
SECTION 7.02 Consequences of a Servicer Default. If a Servicer Default
----------------------------------
shall occur and be continuing, the Indenture Trustee or holders of Securities
evidencing not less than a majority of the Outstanding Amount of the Controlling
Class may, in addition to other rights and remedies available in a court of law
or equity to damages, injunctive relief and specific performance, terminate all
the rights and obligations of the Servicer hereunder, under the Titling Trust
Servicing Agreement, and under all sub-servicing agreements whereupon the
Indenture Trustee will succeed to all the responsibilities, duties and
liabilities of the Servicer under this Agreement and the Titling Trust Servicing
Agreement and will be entitled to similar compensation arrangements. On or after
the receipt by the Servicer of such written notice, all authority and power of
the Servicer under this Agreement and the Titling Trust Servicing Agreement,
whether with respect to the Receivables or otherwise, shall pass to and be
vested in the Indenture Trustee pursuant to and under this Section 7.02. Upon
------------
the receipt of such notice, the Servicer's appointment as custodian shall be
terminated and, upon instruction from the Indenture Trustee, the Servicer shall
release any
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Receivable File to the Indenture Trustee, or its respective agent or assignee,
as the case may be, at such place or places as the Indenture Trustee may
designate, as soon as practicable. The Servicer shall be deemed to have received
proper instructions with respect to the Receivable Files upon its receipt of
written instructions signed by an officer of the Indenture Trustee. The
Indenture Trustee is hereby authorized and empowered to execute and deliver, on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement of the Receivables and related
documents, or otherwise. The predecessor Servicer agrees to cooperate with
either Trustee or the successor Servicer in effecting the termination of the
responsibilities and rights of the Servicer under this Agreement and the Titling
Trust Servicing Agreement, including the transfer to either Trustee for
administration by it of all cash amounts that shall at the time be held by the
Servicer for deposit, or that shall have been deposited by the Servicer in the
Collection Account, the Negative Carry Account, the Pre-Funding Account, the
Reserve Account, the Note Distribution Account or the Certificate Distribution
Account or thereafter received that shall at any time be held with respect to
the Receivables by the Servicer.
SECTION 7.03 Indenture Trustee to Act; Appointment of Successor. On and
--------------------------------------------------
after the time the Servicer receives a notice of termination pursuant to Section
-------
7.02, the Indenture Trustee shall be the successor in all respects to the
----
Servicer in its capacity as servicer under this Agreement and the Titling Trust
Servicing Agreement and the transactions set forth or provided for in this
Agreement and the Titling Trust Servicing Agreement, and shall be subject to all
the responsibilities, restrictions, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions of this Agreement and the
Titling Trust Servicing Agreement; provided, however, that the predecessor
-------- -------
Servicer shall remain liable for, and the successor Servicer shall have no
liability for, any indemnification obligations of the Servicer arising as a
result of acts, omissions or occurrences during the period in which the
predecessor Servicer was the Servicer; and provided, further, that NFC shall
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remain liable for all such indemnification obligations of the Servicer without
regard to whether it is still Servicer hereunder. As compensation therefor, the
Indenture Trustee shall be entitled to such compensation (whether payable out of
the Collection Account or otherwise) as the Servicer would have been entitled to
under this Agreement if no such notice of termination had been given including,
but not limited to, the Total Servicing Fee and Supplemental Servicing Fees and
shall be entitled to Investment Earnings as set forth in Section 2.02(b) hereof.
Notwithstanding the above, the Indenture Trustee may, if it shall be unwilling
so to act, or shall, if it is legally unable so to act, appoint, or petition a
court of competent jurisdiction to appoint, a successor (i) having a net worth
of not less than $100,000,000 and (ii) whose regular business includes the
servicing of receivables of the type included in the Collateral, as the
successor to the Servicer under this Agreement and the Titling Trust Servicing
Agreement in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer under this Agreement and the Titling Trust
Servicing Agreement. In connection with such appointment and assumption, the
Indenture Trustee may make such arrangements for the compensation of such
successor out of payments on Receivables as it and such successor shall agree;
provided, however, that no such compensation shall be in excess of that
-------- -------
permitted the Servicer under this Agreement and the Titling Trust Servicing
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Agreement. The Indenture Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.
SECTION 7.04 Notification to Securityholders. Upon any termination of, or
-------------------------------
appointment of a successor to, the Servicer pursuant to this Article VII, the
Indenture Trustee shall give prompt written notice thereof to the Noteholders
and the Rating Agencies and the Owner Trustee shall give prompt written notice
thereof to the Certificateholders.
SECTION 7.05 Repayment of Advances. If a successor Servicer shall be
---------------------
appointed, the predecessor Servicer shall be entitled to receive, to the extent
of available funds, reimbursement for Outstanding Monthly Advances pursuant to
Section 2.14 in the manner specified in Section 8.2 of the Indenture with
respect to all Monthly Advances made by such predecessor Servicer. The successor
Servicer shall not be entitled to reimbursement for Monthly Advances made by the
predecessor Servicer.
SECTION 7.06 Waiver of Past Defaults. The Indenture Trustee, at the
-----------------------
direction of the holders of not less than a majority of the Outstanding Amount
of the Controlling Class, may waive any default by the Servicer in the
performance of its obligations hereunder and its consequences, except a default
in making any required deposits to or payments from any of the Designated
Accounts in accordance with this Agreement. Upon any such waiver of a past
default, such default shall cease to exist, and any Servicer Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon. The Servicer shall give written notice of
each such waiver to the Rating Agencies.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 Amendment. This Agreement may be amended from time to time
---------
(subject to any expressly applicable amendment provision of the Further Transfer
and Servicing Agreements) by a written amendment duly executed and delivered by
the parties hereto; provided, however, that this Agreement may not be amended
-------- -------
unless such amendment is in accordance with the provisions of Section 5.01 of
the Pooling Agreement as if such Section 5.01 were contained herein and were
applicable to this Agreement. Prior to the execution of any such amendment, the
Servicer shall furnish written notification of the substance of such amendment
to each of the Rating Agencies.
SECTION 8.02 Termination. The respective obligations and responsibilities
-----------
of the parties hereto pursuant to this Agreement shall terminate upon the
earlier of:
(a) the maturity or other liquidation of the last Receivable and the
disposition of any amounts received upon liquidation of any such remaining
Receivables or
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(b) the termination of the Pooling Agreement pursuant to Section 4.02
thereof.
SECTION 8.03 Notices. All notices, requests and demands to NFRRC, the
-------
Servicer, either Trustee or Rating Agencies under this Agreement shall be
delivered as specified in Appendix B to the Pooling Agreement.
SECTION 8.04 Governing Law. All questions concerning the construction,
-------------
validity and interpretation of this Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Illinois,
without giving effect to any choice of law or conflict provision or rule
(whether of the State of Illinois or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Illinois.
SECTION 8.05 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating 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 8.06 Assignment. Except to the extent permitted by Article VI or as
---------- ----------
required by Article VII, the Servicer may not assign its rights or delegate its
-----------
obligations hereunder or under the Titling Trust Servicing Agreement. The
Servicer acknowledges that the Issuer shall assign all of its rights, title and
interest in this Agreement to the Indenture Trustee on behalf of the Noteholders
pursuant to the Indenture. The Servicer agrees that the Indenture Trustee, to
the extent provided in the Indenture, shall be entitled to enforce the terms of
this Agreement and the rights (including, without limitation, the right to grant
or withhold any consent or waiver) of Issuer directly against the Servicer.
Until the satisfaction and discharge of all obligations of the Issuer, the
Servicer further agrees that, in respect of its obligations hereunder, it will
act at the direction of and in accordance with all requests and instructions
from the Indenture Trustee given in accordance with the Indenture. The Indenture
Trustee shall have the rights of a third-party beneficiary under this Agreement.
The Servicer shall deliver copies of all statements, reports, Opinions of
Counsel, notices, requests, demands and other documents to be delivered by the
Servicer to Issuer pursuant to the terms hereof to the Indenture Trustee.
SECTION 8.07 Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the parties hereto, and their respective
successors and permitted assigns. Except as otherwise provided in Section 6.02
------------
or in this Article VIII, no other Person shall have any right or obligation
------------
hereunder.
SECTION 8.08 Counterparts. This Agreement may be executed by the parties
------------
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
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SECTION 8.09 Headings and Cross-References. The various headings in this
-----------------------------
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement.
SECTION 8.10 No Petition Covenants. Notwithstanding any prior termination
---------------------
of this Agreement, the Servicer shall not, prior to the date which is one year
and one day after payment in full of all obligations and the final distribution
with respect to the Securities to the Note Distribution Account or the
Certificate Distribution Account, as applicable, acquiesce, petition or
otherwise invoke or cause the Issuer or NFRRC to invoke or join any other Person
in instituting the process of any court or government authority for the purpose
of commencing or sustaining a case against the Issuer or NFRRC any bankruptcy,
reorganization, arrangement, insolvency, liquidation proceeding, or similar law
of the United States or any state of the United States.
[END OF PAGE]
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Servicing
Agreement to be duly executed by their respective officers duly authorized
as of the day and year first above written.
NAVISTAR FINANCIAL CORPORATION,
as Servicer
By:
-------------------------------------------------------
Name:
Title:
NAVISTAR FINANCIAL RETAIL
RECEIVABLES CORPORATION
By:
--------------------------------------------------------
Name:
Title:
HARCO LEASING COMPANY, INC.
By:
--------------------------------------------------------
Name:
Title:
THE BANK OF NEW YORK
not in its individual capacity, but solely
as Collateral Agent
By:
--------------------------------------------------------
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION
not in its individual capacity, but solely as Portfolio
Trustee
By:
--------------------------------------------------------
Name:
Title:
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NAVISTAR FINANCIAL 200 OWNER TRUST
-
By:
--------------------------------------------------------
not in its individual capacity, but solely as Owner Trustee
[NAME OF INDENTURE TRUSTEE]
not in its individual capacity, but solely
as Indenture Trustee
By:
--------------------------------------------------------
Name:
Title:
The Indenture Trustee, in its role as Securities
Intermediary, hereby acknowledges its undertaking as
set forth in Section 2.02
By:
--------------------------------------------------------
Name:
Title:
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