AMENDMENT NO. 3 TO THE POOLING AND SERVICING AGREEMENT
AMENDMENT
NO. 3 TO
THE
THIS
AMENDMENT NO. 3 (this "Amendment") is made as of July 17, 1998, by and among
Navistar Financial Securities Corporation, a Delaware corporation ("NFSC"),
Navistar Financial Corporation, a Delaware corporation ("NFC"), and The Bank
of
New York, as Master Trust Trustee (the "Master Trust Trustee").
NFSC,
as
Seller, NFC, as Servicer, The Chase Manhattan Bank (formerly known as Chemical
Bank), as 1990 Trust Trustee, and the Master Trust Trustee are parties to a
Pooling and Servicing Agreement, dated as of June 8, 1995, and amended by
Amendment No. 1, dated as of September 12, 1995 and by Amendment No. 2,
dated March 27, 1996 (as amended, the "Pooling and Servicing
Agreement"). In order to (i) include within the definition of
Eligible Investments certain additional investments and (ii) change the
concentration of Eligible Investments allowed in the Series Principal Account,
Excess Funding Account, Negative Carry Account and the Liquidity Reserve
Account, the Seller, the Servicer and the Master Trust Trustee have agreed
to
amend the Pooling and Servicing Agreement in the manner set forth
herein. Capitalized terms used herein but not otherwise defined have
the meanings set forth in the Pooling and Servicing Agreement.
1. Amendment
to Section
1.01. The definition of "Eligible Investments" in
Section 1.01 of the Pooling and Servicing Agreement is hereby deleted in its
entirety and replaced with the following:
“Eligible
Investments” shall
mean
(a) book-entry securities, negotiable
instruments or securities represented by instruments in bearer or
registered form having (except in the case of clauses (iv) or
vii) below) remaining maturities occurring not later than the
Distribution Date next succeeding the Master Trust Trustee's acquisition
thereof, except as otherwise described herein or the related Supplement, that
evidence:
(
i
) direct
obligations of, and obligations fully guaranteed as to timely payment by,
the United States of America;
(ii) demand
deposits, time deposits or certificates of deposit of, or bankers' acceptances
issued by, any depository institution or trust company incorporated under the
laws of the United States of America or any state thereof (or any domestic
branch of a foreign bank) and subject to supervision and examination by federal
or state banking or depository institution authorities; provided, however, that at
the time of the Master Trust's investment or contractual commitment to invest
therein, the commercial paper or other short-term unsecured debt obligations
(other than such obligations the rating of which is based on the credit of
a
person or entity other than such depository institution or trust company) of
such depository institution or trust company shall have a credit rating not
lower than the highest investment category for short term unsecured debt
obligations granted by the applicable Rating Agency from each Rating Agency
then
Rating the affected Series of Investor Certificates;
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(iii) commercial
paper having, at the time of the Master Trust's investment or contractual
commitment to invest therein, a rating not lower than the highest investment
category for short term unsecured debt obligations granted by the applicable
Rating Agency from each Rating Agency then Rating the affected Series of
Investor Certificates;
(iv) except
during an Investment Period, investments in money market funds or common trust
funds having a rating not lower than the highest investment category for short
term unsecured debt obligations granted by the applicable Rating Agency from
each Rating Agency then Rating the affected Series of Investor Certificates
or
otherwise approved in writing by each of such Rating Agencies (including funds
for which the Master Trust Trustee or the 1990 Trust Trustee or any of their
respective affiliates is investment manager or advisor, so long as such fund
shall have such rating);
(v) repurchase
obligations (x) with respect to any security that is a direct obligation of,
or
fully guaranteed by, the United States of America or any agency or
instrumentality thereof the obligations of which are backed by the full faith
and credit of the United States of America, in either case, entered into with
a
depository institution or trust company (acting as principal) described in
clause (ii) or (y) the counterparty for which has a rating not lower than the
highest investment category for short term unsecured debt obligations granted
by
the applicable Rating Agency from each Rating Agency then Rating the affected
Series of Investor Certificates, the collateral for which is held by a custodial
bank for the benefit of the Trust or the Indenture Trustee, is marked to market
daily and is maintained in an amount that exceeds the amounts of such repurchase
obligation, and which required liquidation of the collateral immediately upon
the amount of such collateral being less than the amount of such repurchase
obligation (unless the counterparty immediately satisfies the repurchase
obligation upon being notified of such shortfall); or
(vi
) commercial paper master notes where the issuer has, at the time of
the Master Trust’s investment or contractual commitment to invest therein, a
rating not lower than the highest investment category for short term unsecured
debt obligations granted by the applicable Rating Agency from each Rating Agency
then Rating the affected Series of Investor Certificates; or
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(vii
)
with respect to the Excess Funding Account only, obligations of a trust (the
assets of which consist solely of Investor Certificates issued by the Master
Trust and of one or more liquidity swap arrangements for the benefit of
investors in such trust) having, at the time of the Master Trust’s investment or
contractual commitment to invest therein, a rating not lower than the highest
rating category for short term unsecured debt obligations granted by the
applicable Rating Agency from each Rating Agency then Rating the affected Series
of Investor Certificates; and
(b) any
other investment consisting of a financial asset that by its terms converts
to
cash within a finite period of time, provided that the Rating Agency Condition
is satisfied.
Unless
the Rating Agency Condition is satisfied, Eligible Investments of funds in
the
Series Principal Account, Excess Funding Account, Negative Carry Reserve Fund
and the Liquidity Reserve Account will be subject to the following additional
restrictions: (x) no more than the greater of (A) $1,000,000 and (B)
20% of the aggregate Eligible Investments in all such accounts collectively
shall be obligations of or investments in any single issuer (except that such
20% limitation shall not apply to Eligible Investments of the type specified
in
clause (a)(i) or, with respect to the Excess Funding Account, Eligible
Investments of the type specified in clauses (a)(iv) or (a)(vii)); and (y)
each
Eligible Investment shall be denominated and be payable solely in U.S. dollars,
shall bear interest at a specified rate that is, or is based upon, LIBOR or
a
commercial paper rate, shall entitle the holder to a fixed principal amount
at
maturity and shall have a yield that is not inversely or disproportionately
affected by changes in interest rates.
2. Amendment
to Section
4.02. Clause (b)(ii) of Section 4.02 of the Pooling and
Servicing Agreement is deleted in its entirety and replaced with the
following:
"(ii
) Funds on
deposit in the Excess Funding Account overnight or for a longer period shall
at
all times be invested by the Master Trust Trustee in Eligible Investments at
the
direction of the Servicer or its agent, subject to the restrictions set forth
below and in Section 4.06. Except as otherwise permitted by the
Rating Agencies then rating the Investor Certificates and except for Eligible
Investments of the type specified in clause (vii) of the definition of Eligible
Investments, any Eligible Investments with a stated maturity shall mature no
later than the following Transfer Date. Net interest and earnings
(less investment expenses) on funds on deposit in the Excess Funding Account
shall be included in the calculation of Investment Income for the relevant
Due
Period."
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3. Miscellaneous. This
Amendment shall be construed in accordance with the internal laws of the State
of Illinois, without reference to its conflict of law provisions, except that
the obligations, rights and remedies of the Master Trust Trustee shall be
determined in accordance with the internal laws of the State of New York,
without regard to conflict of law provisions. This Amendment may be
executed in two or more counterparts, each of which shall be an original, but
all of which together constitute one and the same instrument. The
provisions of this Amendment shall be deemed to be incorporated in, and made
a
part of, the Pooling and Servicing Agreement; and the Pooling and Servicing
Agreement, as amended by this Amendment, shall be read, taken and construed
as
one and the same instrument. Promptly after the execution of this
Amendment the Master Trust Trustee shall furnish written notification of the
substance of this Amendment to each Investor Certificateholder.
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IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to the
Pooling and Servicing Agreement to be duly executed by their respective officers
as of the date first written above.
NAVISTAR
FINANCIAL SECURITIES CORPORATION
as
Seller
By: ______________________________________
Its: ______________________________________
NAVISTAR
FINANCIAL CORPORATION
as
Servicer
By: ______________________________________
Its: ______________________________________
THE
BANK
OF NEW YORK
as
Master
Trust Trustee
By: ______________________________________
Its: ______________________________________
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