EXHIBIT 4.1
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NAVISTAR FINANCIAL SECURITIES CORPORATION
Seller
NAVISTAR FINANCIAL CORPORATION
Servicer
and
THE BANK OF NEW YORK
Master Trust Trustee
on behalf of the Series 2000-VFC Certificateholders
__________________________________
SERIES 2000-VFC SUPPLEMENT
Dated as of January 28, 2000
to
POOLING AND SERVICING AGREEMENT
Dated as of June 8, 1995
__________________________________
Floating Rate
Dealer Note Asset Backed Certificates, Series 2000-VFC
DEALER NOTE MASTER TRUST
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TABLE OF CONTENTS
ARTICLE I
CREATION OF SERIES 2000-VFC AND
THE SERIES 2000-VFC CERTIFICATES.......................................................... 1
SECTION 1.01 Designation.................................................................. 1
SECTION 1.02 Incremental Fundings......................................................... 2
SECTION 1.03 Optional Early Pay Out....................................................... 2
ARTICLE II
DEFINITIONS............................................................................... 3
SECTION 2.01 Definitions.................................................................. 3
ARTICLE III
SERVICING FEE............................................................................. 15
SECTION 3.01 Servicing Compensation....................................................... 15
ARTICLE IV
RIGHTS OF SERIES 2000-VFC CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS........................................ 16
SECTION 4.01 Rights of the Series 2000-VFC Certificateholders............................. 16
SECTION 4.02 Establishment of Series Principal Account, Spread Account,
Liquidity Reserve Account and Incremental Funding Reserve Account.................... 17
SECTION 4.03 [Reserved]................................................................... 20
SECTION 4.04 Application of Available Certificateholder Interest Collections.............. 20
SECTION 4.05 Application of Available Seller's Finance Charge Collections,
Spread Account and Liquidity Reserve Account to Deficiency Amount.................... 22
SECTION 4.06 Investor Charge-Offs......................................................... 22
SECTION 4.07 Application of Seller's Finance Charge Collections........................... 23
SECTION 4.08 Application of Series Allocable Principal Collections........................ 23
SECTION 4.09 Shared Principal Collections................................................. 25
SECTION 4.10 Distributions to Series 2000-VFC Certificateholders.......................... 26
SECTION 4.11 [Reserved]................................................................... 26
SECTION 4.12 Partial Month Due Period..................................................... 26
SECTION 4.13 Additional Rights upon the Occurrence of Certain Events...................... 27
ARTICLE V DISTRIBUTIONS AND REPORTS
TO SERIES 2000-VFC CERTIFICATEHOLDERS..................................................... 28
SECTION 5.01 Distributions............................................................... 28
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SECTION 5.02 Monthly and Annual Certificateholders' Statement............................ 28
ARTICLE VI
EARLY AMORTIZATION EVENTS................................................................. 31
SECTION 6.01 Additional Early Amortization Events........................................ 31
ARTICLE VII
OTHER SERIES PROVISIONS................................................................... 33
SECTION 7.01 Conveyance of Dealer Notes................................................... 33
SECTION 7.02 Tax Treatment................................................................ 33
ARTICLE VIII
FINAL DISTRIBUTIONS....................................................................... 34
SECTION 8.01 Sale of Investors' Interest Pursuant to Section 2.07 of the Agreement;
Distributions Pursuant to Section 2.03 or 12.03 of the Agreement..................... 34
SECTION 8.02 Distribution of Proceeds of Sale, Disposition or Liquidation of the
Dealer Notes Pursuant to Section 9.02 of the Agreement............................... 35
ARTICLE IX
MISCELLANEOUS PROVISIONS.................................................................. 36
SECTION 9.01 Ratification of Agreement................................................... 36
SECTION 9.02 Counterparts................................................................ 36
SECTION 9.03 GOVERNING LAW............................................................... 36
SIGNATURES..................................................................................... 42
EXHIBITS
Exhibit A - Form of Investor Certificate
Exhibit B - Form of Monthly Servicer and Settlement Statement
ii
SERIES 2000-VFC SUPPLEMENT
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TO POOLING AND SERVICING AGREEMENT
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SERIES 2000-VFC SUPPLEMENT dated as of January 28, 2000 (the "Series
Supplement"), by and among NAVISTAR FINANCIAL SECURITIES CORPORATION, a Delaware
corporation, as Seller (the "Seller"), NAVISTAR FINANCIAL CORPORATION, a
Delaware corporation, as Servicer (the "Servicer"), and THE BANK OF NEW YORK, a
New York banking corporation, as trustee (together with its successors in trust
thereunder as provided in the Agreement referred to below, the "Master Trust
Trustee") under the Pooling and Servicing Agreement, dated as of June 8, 1995
(as amended and supplemented, the "Agreement") among the Seller, the Servicer,
the Master Trust Trustee and The Chase Manhattan Bank (formerly know as Chemical
Bank), as trustee under the 1990 Trust Agreement.
Section 6.09 of the Agreement provides that the Seller may from time
to time direct the Master Trust Trustee to issue, on behalf of the Master Trust,
one or more new Series of Investor Certificates representing fractional
undivided interests in the Master Trust. The Principal Terms of any new Series
are to be set forth in a Supplement to the Agreement.
Pursuant to this Series Supplement, the Seller and the Master Trust
Trustee shall create a new Series of Investor Certificates and specify the
Principal Terms thereof.
ARTICLE 1
CREATION OF SERIES 2000-VFC AND
THE SERIES 2000-VFC CERTIFICATES
SECTION 1.01 Designation.
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(a) There is hereby created a new Series pursuant to the Agreement
and this Series Supplement to be known as the "Floating Rate Dealer Note Asset
Backed Certificates Series 2000-VFC." The interest of the Investor
Certificateholders in Series 2000-VFC shall be represented by the Series 2000-
VFC Certificates. The Series 2000-VFC Certificates are a series of variable
funding certificates, meaning that their Funded Amount may be increased from
time to time during the Revolving Period as Incremental Fundings are made under
the Certificate Purchase Agreement and may be decreased from time to time, as
Investor Principal Collections or certain other funds are distributed to the
Series 2000-VFC Certificateholders for that purpose. The Funded Amount of the
Series 2000-VFC may not at any time exceed the Maximum Funded Amount.
(b) If any term or provision contained herein shall conflict with or
be inconsistent with any term or provision contained in the Agreement, the terms
and provisions of this Series Supplement shall govern with respect to Series
2000-VFC.
SECTION 1.02 Incremental Fundings. Incremental Fundings may occur on any
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Distribution Date to the extent provided in the Certificate Purchase Agreement.
Upon any Incremental Funding, the Funded Amount, the Series Allocation
Percentage, the Floating Allocation Percentage and other terms will be reset to
the extent provided herein and in the Certificate Purchase Agreement.
SECTION 1.03 Optional Early Pay Out.
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(a) On any Funding Change Date falling in the Revolving Period, the
Seller may cause the principal portion of the Certificates to be prepaid in full
or in part, (x) if the aggregate principal amount of such prepayment is greater
than $150,000,000, on not less than five Business days prior written notice by
the Servicer or (y) otherwise, on not less than three Business Days prior
written notice by the Servicer to the Master Trust Trustee and the
Administrative Agent, with Shared Principal Collections as provided in Section
4.03(e) of the Agreement; provided, however that such prepayment shall not be
permitted unless all due (or if the Certificates are paid in full, all accrued)
and unpaid Monthly Interest, Additional Amounts and Non-Use Fees have been paid
in full.
(b) In addition, on any Business Day, the Seller may cause the
principal portion of the Certificates to be prepaid in full or in part, (x) if
the aggregate principal amount of such prepayment is greater than $150,000,000,
on not less than five Business Days prior written notice by the Servicer or (y)
otherwise, on not less than three Business Days prior written notice by the
Servicer to the Master Trust Trustee and the Administrative Agent, with the
proceeds from issuance of a new Series issued substantially contemporaneously
with such prepayment; provided, however that such prepayment shall not be
permitted unless all due (or, if the Certificates are paid in full, all accrued)
and unpaid Monthly Interest, Additional Amounts and Non-Use Fees have been paid
in full.
(c) Servicer shall not give notice of any prepayment pursuant to
Section 1.03(a) unless the Master Trust has funds sufficient to make such
prepayment on the day notice is given and shall not give notice of any
prepayment pursuant to Section 1.03(b) unless the Seller has obtained binding
commitments which may be subject to customary conditions from one or more
persons to purchase the new series in such amounts as will yield the net
proceeds necessary to make the prepayment.
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ARTICLE II
DEFINITIONS
SECTION 2.01 Definitions.
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(a) Whenever used in this Series Supplement, the following words and
phrases shall have the following meanings:
"Accrual Period" shall mean with respect to any Distribution Date, if
Monthly Interest is to be calculated on the basis of the CP Rate, the related
Due Period and if Monthly Interest is to be calculated on the basis of the
Alternate Rate, the related Distribution Period.
"Additional Amounts" shall have the meaning specified in the
Certificate Purchase Agreement.
"Adjusted Invested Amount" shall mean, with respect to any
Distribution Date, an amount (which shall never be less than zero) equal to the
Initial Invested Amount as of the related Determination Date, plus the Available
Subordinated Amount as of the end of the related Transfer Date, plus the amount
of any Incremental Funding to be made on that Distribution Date, if any, minus
the aggregate amount of Investor Charge-Offs since the end of the Revolving
Period not reimbursed on or prior to such Distribution Date; provided that, for
purposes of calculating the Series Allocation Percentage, the Series 2000-VFC
shall be deemed to have been outstanding as of January 25, 2000 with respect to
allocations of Principal Collections and related concepts and as of December 26,
1999 with respect to Finance Charge Collections and related concepts, in each
case with an Adjusted Invested Amount of $346,500,000.
"Administrative Agent" shall have the meaning specified in the
Certificate Purchase Agreement.
"Amortization Period" shall mean, unless an Early Amortization Event
shall have occurred prior thereto, the period commencing on the Amortization
Period Commencement Date, and ending upon the first to occur of (a) the
commencement of an Early Amortization Period, (b) the payment in full to Series
2000-VFC Certificateholders of the outstanding Funded Amount and (c) the Series
Termination Date.
"Amortization Period Commencement Date" shall mean the first day of
the Due Period occurring after the Purchase Expiration Date then in effect.
"Amortizing Due Period" shall have the meaning specified in Section
4.12.
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"Available Certificateholder Interest Collections" shall mean, with
respect to any Due Period, the sum of (a) Investor Finance Charge Collections
for such Due Period and (b) Investment Income for that Due Period.
"Available Draw Funds" shall have the meaning specified in Section
4.05(b).
"Available Seller's Finance Charge Collections" shall mean, with
respect to any Due Period, an amount equal to the product of (a) the excess of
(i) the Seller's Percentage for such Due Period over (ii) the result (if
positive) of the Excess Seller's Percentage for such Due Period minus the
Required Excess Seller Interest Percentage and (b) Series Allocable Finance
Charge Collections for such Due Period; provided, however, that Available
Seller's Finance Charge Collections shall be zero for any Due Period to the
extent the Available Subordinated Amount equals or is reduced to zero on the
Transfer Date related to such Due Period.
"Available Seller's Principal Collections" shall mean, with respect to
any Business Day, an amount equal to the product of (a) the excess of (i) the
Seller's Percentage for the Due Period in which such Business Day occurs over
(ii) the Excess Seller's Percentage for such Due Period and (b) Series Allocable
Principal Collections for such Business Day; provided, however, that Available
Seller's Principal Collections shall be zero for any Business Day to the extent
the Available Subordinated Amount equals or is reduced to zero on the Transfer
Date immediately preceding such Business Day.
"Available Subordinated Amount" shall mean for each Transfer Date
(before giving effect to all adjustments in the Available Subordinated Amount
thereto on such Transfer Date), the lesser of (i) the Maximum Subordinated
Amount as of such Transfer Date (or, in the case of the first Transfer Date
after the Closing Date $46,500,000) and (ii) the sum of (a) the Available
Subordinated Amount as of the end of the preceding Transfer Date and (b) any
Incremental Subordinated Amount with respect to the Distribution Date related to
such preceding Transfer Date, if any.
"Average Coverage Differential" shall be determined, on any
Determination Date, by reference to the Coverage Differentials for each of the
related Due Period and the three immediately preceding Due Periods, and shall
equal the sum of the three highest such Coverage Differentials divided by three.
Average Coverage Differential shall be expressed as a percentage, and shall be
rounded to the nearest one-hundredth of a percentage point.
"Business Day" shall mean, with respect to Series 2000-VFC, any day
other than a Saturday, a Sunday, or a day on which banking institutions in New
York, New York, Chicago, Illinois, or the city in which the Corporate Trust
Office is located, or in connection with the determination of LIBOR, London,
England, are authorized or obligated by law or executive order to be closed or
remain closed.
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"Certificate Purchase Agreement" shall mean the Certificate Purchase
Agreement, dated as of the Closing Date, among the Seller, the Servicer and the
other parties thereto, as amended, supplemented or otherwise modified from time
to time.
"Certificate Rate" shall mean, for any Distribution Date, the
percentage equivalent of a fraction (a) the numerator of which is the product of
(i) Monthly Interest to be paid on the Distribution Date (excluding any portion
thereof consisting of Monthly Interest carried over from the prior Distribution
Date and interest on such unpaid Monthly Interest), and (ii) a fraction, the
numerator of which is 365 and the denominator of which is the number of days in
which such Monthly Interest was calculated and (b) the denominator of which is
the weighted average Funded Amount for such Accrual Period.
"Closing Date" shall mean January 28, 2000.
"Coverage Differential" shall mean, with respect to any Due Period,
the result of (a) the Portfolio Yield for such Due Period minus (b) the sum of
(i) the Certificate Rate for the related Distribution Date and (ii) one percent
(1%). Coverage Differential shall be expressed as a percentage, and shall be
rounded to the nearest one-hundredth of a percentage point.
"Deficiency Amount" shall have the meaning specified in Section
4.05(a).
"Draw Amount" shall mean, with respect to any Transfer Date, the least
of (a) the Deficiency Amount for such Transfer Date, (b) the Available
Subordinated Amount as of the end of the preceding Transfer Date plus any
Incremental Subordinated Amount with respect to the Distribution Date related to
such preceding Transfer Date, if any, and (c) Available Draw Funds for such
Transfer Date.
"Early Amortization Event" shall mean, with respect to Series 2000-
VFC, any event specified in Section 9.01(c) of the Agreement, together with any
additional Early Amortization Event specified in Section 6.01 of this Series
Supplement, but shall not mean any other event specified in Section 9.01 of the
Agreement.
"Early Amortization Period" shall mean an Early Amortization Period
with respect to Series 2000-VFC that occurs as a result of any event specified
in Section 9.01(c) of the Agreement or any Early Amortization Event specified in
Section 6.01 of this Series Supplement.
"Early Amortization Period Shortfall Amount" shall have the meaning
specified in Section 4.08(e).
"Eligible Investments" shall mean
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(a) book-entry securities, negotiable instruments or securities represented
by instruments in bearer or registered form having (except in the case of
clause (iv) below) remaining maturities occurring not later than the
Distribution Date next succeeding the Master Trust Trustee's acquisition
thereof, except as otherwise described herein, 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 ▇▇▇▇▇'▇ and S&P;
(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 ▇▇▇▇▇'▇ and S&P;
(iv) 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 ▇▇▇▇▇'▇ and
S&P or otherwise approved in writing by the Administrative Agent
(including funds for which the Master Trust Trustee or any of its
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
6
term unsecured debt obligations granted by ▇▇▇▇▇'▇ and S&P, the
collateral for which is held by a custodial bank for the benefit
of the Master Trust or the Master Trust 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
▇▇▇▇▇'▇ and S&P; and
(b) any other investment consisting of a financial asset that by its
terms converts to cash within a finite period of time approved by
the Administrative Agent.
Unless approved by the Administrative Agent, Eligible Investments of
funds in the Series Principal Account 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)); 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.
"Excess Seller's Percentage" shall mean, with respect to any Due Period,
a percentage (which percentage shall never be less than 0% nor more than 100%)
equal to the excess of (a) the Seller's Percentage for such Due Period, over (b)
the percentage equivalent (which percentage shall never be less than 0% nor more
than 100%) of a fraction, the numerator of which is the Available Subordinated
Amount as of the end of the related Transfer Date, plus any Incremental
Subordinated Amount with respect to the Distribution Date related to such
Transfer Date, if any, and the denominator of which is the product of (x) the
sum of the aggregate principal amount of Dealer Notes in the Master Trust and
the aggregate principal amount of funds on deposit in the Excess Funding
Account, both as of the end of the immediately preceding Due Period and (y) the
Series 2000-VFC Allocation Percentage for the Due Period for which the Excess
Seller's Percentage is being calculated.
7
"Excess Seller's Principal Collections" shall mean, with respect to
any Business Day during a Due Period, the product of (a) Series Allocable
Principal Collections for such Business Day and (b) the Excess Seller's
Percentage for such Due Period.
"Expected Payment Date" shall mean the Distribution Date in the
calendar month beginning six months after the Amortization Period Commencement
Date.
"Floating Allocation Percentage" shall mean, with respect to any Due
Period , the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is the Invested Amount as of the immediately
preceding Distribution Date (after giving effect to all increases and reductions
thereof on such Distribution Date) and the denominator of which is the product
of (a) the sum of the aggregate principal amount of Dealer Notes in the Master
Trust and the aggregate principal amount of funds on deposit in the Excess
Funding Account, both as of the end of the immediately preceding Due Period, and
(b) the Series 2000-VFC Allocation Percentage for the Due Period for which the
Floating Allocation Percentage is being calculated.
"Funded Amount" shall have the meaning specified in the Certificate
Purchase Agreement.
"Funding Change Date" shall mean any Distribution Date.
"Incremental Funded Amount" shall mean the amount of the increase in
the Funded Amount occurring as a result of any Incremental Funding, which amount
shall equal the aggregate amount of the purchase prices paid with respect to
such Incremental Funding pursuant to the Certificate Purchase Agreement.
"Incremental Funding" shall have the meaning specified in the
Certificate Purchase Agreement.
"Incremental Funding Reserve Account" shall have the meaning specified
in Section 4.02(d)(i).
"Incremental Funding Reserve Deposit Amount" shall mean (a) zero, with
respect to any Distribution Date on which the Incremental Funded Amount is zero;
and (b) with respect to any Distribution Date on which the Incremental Funded
Amount is greater than zero, the positive difference of (x) the product of (i)
the Incremental Funded Amount, (ii) the Certificate Rate for such Distribution
Date, (iii) 1.25 and (iv) a fraction, the numerator of which is the actual
number of days remaining in the Due Period in which such Distribution Date
occurs, including such Distribution Date, and the denominator of which is 360;
and (y) the balance in the Incremental Funding Reserve Account after giving
effect to any withdrawals therefrom on such Distribution Date.
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Incremental Subordinated Amount" shall mean, with respect to any
Distribution Date on which there is an Incremental Funding, the product of (i)
the Incremental Funded Amount on such Distribution Date and (ii) the
Subordinated Percentage.
"Initial Funded Amount" shall mean $300,000,000.
"Initial Invested Amount" shall mean, on any Determination Date (for
purposes of any reference in the Pooling and Servicing Agreement to the "Initial
Invested Amount" or the "initial invested amount" of a Series), (a) during the
Revolving Period, the Invested Amount as of such date or (b) during an
Amortization Period or an Early Amortization Period, the Invested Amount as of
the last day of the Revolving Period.
"Initial Spread Account Required Amount" shall mean $3,750,000.
"Invested Amount" shall mean, with respect to any Distribution Date,
an amount (which shall never be less than zero) equal to the Funded Amount minus
the sum of (i) the aggregate amount, if any, of unreimbursed Investor Charge-
Offs and (ii) the aggregate amount of Series Principal Account Losses on or
prior to such Distribution Date.
"Investment Income" shall mean, for any Due Period with respect to
Series 2000-VFC, the sum of (i) income during such Due Period from the
investment of funds on deposit in the Series Principal Account and the Spread
Account and (ii) the product of (a) the Series Allocation Percentage for such
Due Period and (b) income from the investment of funds on deposit in the
Collections Account and the Excess Funding Account.
"Investor Charge-Off" shall have the meaning specified in Section
4.06.
"Investor Dealer Note Losses" shall mean, with respect to any Due
Period, the product of (a) the Floating Allocation Percentage for such Due
Period and (b) Series Allocable Dealer Note Losses for such Due Period.
"Investor Finance Charge Collections" shall mean, with respect to any
Due Period, an amount equal to the product of (a) the Floating Allocation
Percentage for such Due Period and (b) Series Allocable Finance Charge
Collections for such Due Period.
"Investor Principal Collections" shall mean, with respect to any
Business Day, the sum of (a) the product of (i) with respect to the Revolving
Period, the Floating Allocation Percentage and with respect to the Amortization
Period or any Early Amortization Period, the Principal Allocation Percentage, in
either case for the Due Period in which such Business Day occurs and (ii) Series
Allocable Principal Collections for such Business Day and (b) on any Transfer
Date, the amount, if any, of Available Certificateholder Interest Collections
treated as Investor Principal Collections pursuant to Sections 4.04(a)(iii) and
(iv).
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"Investor Servicing Fee" shall have the meaning specified in Section
3.01.
"LIBOR" shall have the meaning specified in the Certificate Purchase
Agreement.
"Liquidity Reserve Account" shall have the meaning specified in
Section 4.02(c)(i).
"Maximum Funded Amount" shall have the meaning specified in the
Certificate Purchase Agreement.
"Maximum Subordinated Amount" shall mean, with respect to any Transfer
Date related to a Due Period, the product of (a) the Invested Amount as of the
preceding Distribution Date and (b) the Subordinated Percentage; provided,
however, that with respect to a Transfer Date related to a Due Period occurring
during an Early Amortization Period, the Maximum Subordinated Amount shall not
decline until the Invested Amount equals the Maximum Subordinated Amount, and
thereafter the Maximum Subordinated Amount shall equal the Invested Amount.
"Minimum Series 2000-VFC Seller's Interest" shall mean, with respect
to any Business Day, the sum of (a) the Available Subordinated Amount as of the
end of the preceding Transfer Date, (b) the Incremental Subordinated Amount with
respect to the Distribution Date related to such preceding Transfer Date, if
any, and (c) the Required Excess Seller Interest as of the end of the preceding
Distribution Date.
"Monthly Interest" shall have the meaning specified in the Certificate
Purchase Agreement.
"Monthly Servicing Fee" shall have the meaning specified in Section
3.01.
"New Vehicle Monthly Interest Rate" shall mean, with respect to any
Due Period, the product of (a) the per annum rate of interest and finance
charges billed by NFC during such Due Period on New Vehicle Dealer Notes and (b)
the quotient of (i) the number of days during such Due Period and (ii) the
actual number of days in the related calendar year.
"Non-Use Fee" shall have the meaning specified in the Certificate
Purchase Agreement.
"Portfolio Yield" shall mean, with respect to any Due Period, the
product of (a) the quotient of (i) Finance Charges for such Due Period and (ii)
the daily average principal amount of Dealer Notes outstanding during such Due
Period and (b) a fraction, the numerator of which is 365 and the denominator of
which is the actual number of days elapsed during such Due
10
Period. Portfolio Yield shall be expressed as a percentage, and shall be rounded
to the nearest one-hundredth of a percentage point.
"Principal Allocation Percentage" shall mean, with respect to any Due
Period occurring during the Amortization Period or any Early Amortization
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is the Invested Amount as of the end of the
Revolving Period and the denominator of which is equal to the product of (a) the
sum of the aggregate amount of Dealer Notes in the Master Trust and the
aggregate principal amount of funds on deposit in the Excess Funding Account,
both as of the end of the Revolving Period and (b) the Series 2000-VFC
Allocation Percentage for the Due Period for which the Principal Allocation
Percentage is being calculated.
"Principal Shortfall" shall mean, with respect to Series 2000-VFC, the
Series 2000-VFC Principal Shortfall.
"Projected Dealer Note Income" shall mean, on any Transfer Date, an
amount equal to the sum of (a) the product of (i) the principal amount of Dealer
Notes financing new vehicles outstanding on such Transfer Date, (ii) the New
Vehicle Monthly Interest Rate for the Due Period in which such Transfer Date
occurs and (iii) the Series 2000-VFC Allocation Percentage for such Due Period
and (b) the product of (i) the principal amount of Dealer Notes financing used
vehicles outstanding on such Transfer Date, (ii) the Used Vehicle Monthly
Interest Rate for such Due Period and (iii) the Series 2000-VFC Allocation
Percentage for such Due Period.
"Projected Monthly Interest" shall mean, on any Transfer Date, an
amount equal to the product of (a) the Certificate Rate for the related
Distribution Date, (b) the Invested Amount as of the immediately preceding
Distribution Date, (c) the result of (i) the actual number of days in such
Accrual Period divided by (ii) 360 and (d) 1.25.
"Projected Monthly Servicing Fee" shall mean, on any Transfer Date
with respect to the Due Period in which such Transfer Date occurs, an amount
equal to one-twelfth of the product of (a) 1%, (b) the aggregate principal
amount of Dealer Notes as of such Transfer Date, (c) the Series 2000-VFC
Allocation Percentage for the Due Period related to such Transfer Date and (d)
the Floating Allocation Percentage for the Due Period related to such Transfer
Date.
"Projected Spread" shall mean, with respect to the Distribution Date
next following the Distribution Date to which such Transfer Date relates, the
sum of (a) the positive amount, if any, by which (i) the sum of (A) Projected
Monthly Interest for such Distribution Date, and (B) the Projected Monthly
Servicing Fee for the Due Period in which such Transfer Date occurs exceeds (ii)
the Projected Dealer Note Income as of such Transfer Date and (b) 1.25% of the
Invested Amount as of such Distribution Date.
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"Purchase Expiration Date" shall have the meaning specified in the
Certificate Purchase Agreement.
"Reassignment Amount" shall mean, with respect to any Distribution
Date, after giving effect to any deposits and distributions otherwise to be made
on such Distribution Date, the sum of (a) the Invested Amount on such
Distribution Date, (b) accrued and unpaid interest thereon and (c) accrued and
unpaid Non-Use Fees and Additional Amounts.
"Remaining Available Seller's Principal Calculations" shall have the
meaning specified in Section 4.08(d).
"Required Excess Seller Interest" shall mean, with respect to any
Business Day, 3.0% of the Invested Amount as of the end of the preceding
Distribution Date (and such percentage shall be the "Required Excess Seller
Interest Percentage").
"Required Subordinated Amount" shall mean, with respect to any
Transfer Date related to a Due Period, an amount equal to 87.1% of the Maximum
Subordinated Amount as of such Transfer Date.
"Revolving Due Period" shall have the meaning specified in Section
4.12.
"Revolving Period" shall mean, unless an Early Amortization Event
shall have occurred prior thereto, the period beginning on the Closing Date and
ending on the earlier of (a) the close of business on the Business Day
immediately preceding the Amortization Period Commencement Date and (b) the
close of business on the Business Day immediately preceding the day on which an
Early Amortization Event occurs.
"Seller's Percentage" shall mean, with respect to any Due Period, 100%
minus (a) the Floating Allocation Percentage for such Due Period, when used with
respect to Finance Charge Collections and Dealer Note Losses at all times or
Principal Collections during the Revolving Period, and (b) the Principal
Allocation Percentage for such Due Period, when used with respect to Principal
Collections during the Amortization Period or any Early Amortization Period.
"Seller's Principal Collections" shall mean, with respect to any
Business Day, an amount equal to the sum of (a) Available Seller's Principal
Collections for such Business Day and (b) Excess Seller's Principal Collections
for such Business Day.
"Series 2000-VFC" shall mean the Series of Investor Certificates, the
terms of which are specified in this Series Supplement.
12
"Series 2000-VFC Accounts" shall mean, collectively, the Series
Principal Account, the Distribution Account maintained for the Series 2000-VFC
Certificateholders, the Liquidity Reserve Account, the Incremental Funding
Reserve Account and the Spread Account.
"Series 2000-VFC Allocation Percentage" shall mean the Series
Allocation Percentage with respect to Series 2000-VFC.
"Series 2000-VFC Certificateholders" shall mean the holders of Series
2000-VFC Certificates.
"Series 2000-VFC Certificateholders' Interest" shall mean that portion
of the Certificateholders' Interest evidenced by the Series 2000-VFC
Certificates.
"Series 2000-VFC Certificates" shall mean any one of the certificates
executed by the Seller and authenticated by the Master Trust Trustee,
substantially in the form of Exhibit A.
---------
"Series 2000-VFC Principal Shortfall" shall equal, with respect to any
Business Day during any Early Amortization Period, the excess, if any, of the
Invested Amount (reduced by (i) amounts on deposit in the Series Principal
Account and (ii) the aggregate amount of Series Principal Account Losses for the
Due Period in which such Business Day occurs) as of the immediately preceding
Distribution Date over Investor Principal Collections for such Business Day.
"Series 2000-VFC Shared Principal Collections" shall have the meaning
specified in Section 4.09(b).
"Series 2000-VFC Shared Seller Principal Collections" shall have the
meaning specified in Section 4.08(d)(iv).
"Series Allocable Dealer Note Losses" shall mean, with respect to any
Due Period, the product of (a) the Series 2000-VFC Allocation Percentage for
such Due Period and (b) Dealer Note Losses for such Due Period.
"Series Allocable Finance Charge Collections" shall mean, with respect
to any Due Period, the product of (a) the Series 2000-VFC Allocation Percentage
for such Due Period and (b) the amount of Finance Charge Collections for such
Due Period.
"Series Allocable Principal Collections" shall mean, with respect to
any Business Day, the sum of (a) the product of (i) the Series 2000-VFC
Allocation Percentage for the related Due Period and (ii) the amount of
Principal Collections deposited in the Collections Account on such Business Day
and (b) if the Amortization Period Commencement Date occurs on such Business
Day, the product of (i) the Series 2000-VFC Allocation Percentage for such Due
Period
13
and (ii) the amount of funds on deposit in the Excess Funding Account on such
Amortization Period Commencement Date.
"Series Invested Amount" shall mean, with respect to Series 2000-VFC,
the Invested Amount.
"Series Principal Account" shall have the meaning specified in Section
4.02(a)(i).
"Series Principal Account Losses" shall mean losses of principal on
investment of funds in the Series Principal Account.
"Series Termination Date" shall mean the Distribution Date 36 months
after the Expected Payment Date.
"Spread Account" shall have the meaning specified in Section
4.02(b)(i).
"Spread Account Deposit Amount" shall mean, with respect to any
Transfer Date, the amount, if any, by which the Projected Spread exceeds the
amount of funds on deposit in the Spread Account.
"Subject Month" shall have the meaning specified in Section 4.12.
"Subordinated Percentage" shall mean 15.5%.
"Turnover" shall have the meaning specified in Section 6.01(k).
"Used Vehicle Monthly Interest Rate" shall mean, with respect to any
Due Period, the product of (i) the per annum rate of interest and finance
charges billed by NFC during such Due Period on Used Vehicle Dealer Notes and
(ii) the quotient of (a) a number equal to the number of days during such Due
Period and (b) the actual number of days in the related calendar year.
(b) As used in this Series Supplement and in the Agreement with
respect to Series 2000-VFC, "highest investment category" shall mean (i) in the
case of Standard & Poor's, A-1+, AAA, AAAm, or AAAm-G, as applicable, and (ii)
in the case of ▇▇▇▇▇'▇, P-1 or Aaa, as applicable.
(c) All capitalized terms used herein and not otherwise defined
herein have the same meanings ascribed to them in the Agreement or, if not
defined therein, in the Certificate Purchase Agreement.
14
(d) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Series Supplement shall refer to this Series Supplement
as a whole and not to any particular provision of this Series Supplement;
references to any Article, Section or Exhibit are references to Articles,
Sections and Exhibits in or to this Series Supplement unless otherwise
specified; and the term "including" means "including without limitation."
(e) As used in this Series Supplement, references to the Available
Subordinated Amount "as of the end" of a Transfer Date shall mean the Available
Subordinated Amount as of such Transfer Date, after giving effect to all
increases and reductions thereof pursuant to Article IV hereof.
(f) As used in this Series Supplement, accounting terms which are not
defined, and accounting terms partly defined, herein shall have the respective
meanings given to them under generally accepted accounting principles as in
effect on the date hereof. To the extent that the definitions of accounting
terms in this Series Supplement are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Series Supplement will control.
(g) With respect to any Distribution Date or Transfer Date, the
"related Due Period" and the "related Distribution Period" will mean the Due
Period and Distribution Period, respectively, immediately preceding such
Distribution Date or Transfer Date, and the relationships between Due Periods
and Distribution Periods will be correlative to the foregoing relationships.
With respect to any LIBOR Determination Date, the "related Distribution Period"
will mean the Distribution Period beginning on the Distribution Date immediately
following such LIBOR Determination Date.
(h) Each defined term used in this Series Supplement has a comparable
meaning when used in its plural or singular form. Each gender-specific term
used in this Series Supplement has a comparable meaning whether used in a
masculine, feminine or gender-neutral form.
ARTICLE III
SERVICING FEE
SECTION 3.01 Servicing Compensation. The monthly servicing fee (the
----------------------
"Monthly Servicing Fee") shall be payable to the Servicer, in arrears, on each
Distribution Date in respect of a Due Period (or portion thereof) occurring
prior to the earlier of the first Distribution Date following the Series
Termination Date and the first Distribution Date on which the Invested Amount is
zero, in an amount equal to one-twelfth of the result of (a) 1% multiplied by
(b) the aggregate principal amount of Dealer Notes outstanding as of the last
day of such Due Period and multiplied by (c) the Series 2000-VFC Allocation
Percentage with respect to such Due Period. The share of the Monthly Servicing
Fee allocable to the Series 2000-VFC Certificateholders with
15
respect to any Transfer Date (the "Investor Servicing Fee") shall be equal to
the product of (a) the Monthly Servicing Fee and (b) the Floating Allocation
Percentage with respect to such Due Period. The remainder of the Monthly
Servicing Fee shall be paid by the Seller and in no event shall the Master
Trust, the Master Trust Trustee or the Series 2000-VFC Certificateholders be
liable for the share of the Monthly Servicing Fee to be paid by the Seller; and
the remainder of the Servicing Fee shall be paid by the Seller and the Investor
Certificateholders of other Series and the Series 2000-VFC Certificateholders
shall in no event be liable for the share of the Servicing Fee to be paid by the
Seller or the Investor Certificateholders of other Series. The Investor
Servicing Fee shall be payable to the Servicer solely to the extent amounts are
available for distribution in accordance with the terms of this Series
Supplement.
The Servicer will be permitted, in its sole discretion, to waive the
Monthly Servicing Fee for any Distribution Date by notice to the Master Trust
Trustee on or before the related Determination Date; provided, however, that the
Servicer believes that sufficient Series Allocable Finance Charge Collections
will be available on any future Distribution Date to pay the Investor Servicing
Fee relating to the waived Monthly Servicing Fee. If the Servicer so waives the
Monthly Servicing Fee for any Distribution Date, the Monthly Servicing Fee and
the Investor Servicing Fee for such Distribution Date shall be deemed to be zero
for all purposes of this Series Supplement and the Agreement; provided, however,
that such Investor Servicing Fee shall be paid on a future date solely to the
extent amounts are available therefor pursuant to Section 4.04(a)(vi); and
provided further that, to the extent any such waived Investor Servicing Fee is
so paid, the related portion of the Monthly Servicing Fee to be paid by the
Seller shall be paid by the Seller to the Servicer.
ARTICLE IV
RIGHTS OF SERIES 2000-VFC CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.01 Rights of the Series 2000-VFC Certificateholders. The
------------------------------------------------
Series 2000-VFC Certificates shall represent fractional undivided interests in
the Master Trust, consisting of the right to receive, to the extent necessary to
make the required payments with respect to the Series 2000-VFC Certificates at
the times and in the amounts specified in this Series Supplement, Collections
allocated to Series 2000-VFC pursuant to Article IV of the Agreement and this
Article IV, funds on deposit in the Collections Account and the Excess Funding
Account allocable to Series 2000-VFC Certificateholders pursuant to Article IV
of the Agreement and this Article IV, and funds on deposit in the Series 2000-
VFC Accounts (collectively, the "Series 2000-VFC Certificateholders' Interest"),
it being understood that the Series 2000-VFC Certificates shall not represent
any interest in any Series Account or Enhancement for the benefit of any other
Series or Class. The Servicer shall apply, or instruct the Master Trust Trustee
to apply, all funds on deposit in the Collections Account and Excess Funding
Account allocable to the Series 2000-VFC Certificates, and all funds on deposit
in the Series Principal Account, the Spread Account, the Incremental Funding
Reserve Account and the
16
Distribution Account maintained for the Series 2000-VFC Certificateholders, as
described in this Article IV.
SECTION 4.02 Establishment of Series Principal Account, Spread Account,
----------------------------------------------------------
Liquidity Reserve Account and Incremental Funding Reserve Account.
-----------------------------------------------------------------
(a) Series Principal Account.
------------------------
(i) On or prior to the commencement of an Early Amortization
Period or the Amortization Period, the Master Trust Trustee, for the
benefit of the Series 2000-VFC Certificateholders, shall establish and
maintain in the name of the Master Trust an Eligible Deposit Account
bearing a designation clearly indicating that the funds deposited therein
are held for the benefit of the Series 2000-VFC Certificateholders (the
"Series Principal Account"). The Master Trust Trustee shall possess all
right, title and interest in all funds on deposit from time to time in the
Series Principal Account and in all proceeds thereof. Pursuant to authority
granted to it pursuant to Section 3.01(b) of the Agreement, the Servicer
shall have the revocable power to instruct the Master Trust Trustee to
withdraw funds from the Series Principal Account for the purpose of
carrying out the duties of the Servicer under this Series Supplement and
the Agreement. The Servicer at all times shall maintain accurate records
reflecting each transaction in the Series Principal Account.
(ii) Funds on deposit in the Series Principal Account overnight
or for a longer period shall at all times be invested in Eligible
Investments at the direction of the Servicer or its agent, subject to the
restrictions set forth in the Agreement and subject to the requirement that
each such Eligible Investment shall have a stated maturity on or prior to
the following Transfer Date (or such longer maturity as shall be allowed
upon the written consent of the Administrative Agent). Net interest and
earnings (less investment expenses) on funds on deposit in the Series
Principal Account, if any, shall be allocated and distributed as provided
in Section 4.04.
(b) Spread Account.
--------------
(i) The Master Trust Trustee, for the benefit of the Series
2000-VFC Certificateholders, shall cause to be established and maintained
in the name of the Master Trust, an Eligible Deposit Account bearing a
designation clearly indicating that the funds deposited therein are held
for the benefit of the Series 2000-VFC Certificateholders (the "Spread
Account"). The Master Trust Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Spread Account
and in all proceeds thereof. Pursuant to authority granted to it pursuant
to Section 3.01(b) of the Agreement, the Servicer shall have the revocable
power to instruct the Master Trust Trustee to withdraw funds from the
Spread Account for the purpose of carrying out the duties of the Servicer
17
under this Series Supplement and the Agreement. The Servicer at all times
shall maintain accurate records reflecting each transaction in the Spread
Account. As of the Closing Date, the Servicer shall cause to be deposited
in the Spread Account an amount equal to the Initial Spread Account
Required Amount.
(ii) Funds on deposit in the Spread Account overnight or for a
longer period shall at all times be invested in Eligible Investments at the
direction of the Servicer or its agent, subject to the restrictions set
forth in the Agreement and subject to the requirement that each such
Eligible Investment shall have a stated maturity on or prior to the
following Transfer Date. Net interest and earnings (less investment
expenses) on funds on deposit in the Spread Account, if any, shall be
allocated and distributed as provided in Section 4.04.
(iii) On any Transfer Date related to a Due Period on which the
amount of funds on deposit in the Spread Account is greater than the
Projected Spread on such Transfer Date, the Servicer shall withdraw the
amount of such excess from the Spread Account and allocate and pay such
excess to the Seller.
(iv) Upon the commencement of and during an Early Amortization
Period, the Master Trust Trustee will deposit all funds in the Spread
Account into the Liquidity Reserve Account, and no additional funds shall
be deposited into the Spread Account.
(c) Liquidity Reserve Account.
-------------------------
(i) The Master Trust Trustee, for the benefit of the Seller,
shall establish on or prior to the commencement of an Early Amortization
Period and maintain or cause to be established and maintained in the name
of the Master Trust Trustee, an Eligible Deposit Account bearing a
designation clearly indicating that the funds deposited therein are held
for the benefit of the Seller (the "Liquidity Reserve Account"). The Seller
shall possess all right, title and interest in all funds on deposit from
time to time in the Liquidity Reserve Account and in all proceeds thereof;
provided, however, that no funds on deposit in the Liquidity Reserve
Account shall be paid to the Seller if such payment would reduce the funds
in such account below an amount equal to the Available Subordinated Amount.
Pursuant to authority granted to it pursuant to Section 3.01(b) of the
Agreement, the Servicer shall have the revocable power to instruct the
Master Trust Trustee to withdraw funds from the Liquidity Reserve Account
for the purpose of fulfilling the obligations of the Seller under this
Series Supplement and the Agreement. The Servicer at all times shall
maintain accurate records reflecting transactions in the Liquidity Reserve
Account.
18
(ii) Funds on deposit in the Liquidity Reserve Account overnight
or for a longer period shall at all times be invested in Eligible
Investments at the direction of the Seller or its agent, subject to the
restrictions set forth in the Agreement. Any Eligible Investment with a
stated maturity shall mature on or prior to the following Transfer Date.
All net interest and earnings (less investment expenses) on funds on
deposit in the Liquidity Reserve Account, if any, shall be paid to the
Seller. On any Transfer Date on which the amount on deposit in the
Liquidity Reserve Account exceeds the Available Subordinated Amount as of
the end of such Transfer Date, the Servicer shall withdraw the amount of
such excess from the Liquidity Reserve Account and allocate and pay such
excess to the Seller.
(d) Incremental Funding Reserve Account.
-----------------------------------
(i) The Master Trust Trustee, for the benefit of the Series
2000-VFC Certificateholders, shall establish on or prior to the
commencement of an Early Amortization Period and maintain or cause to be
established and maintained in the name of the Master Trust Trustee, an
Eligible Deposit Account bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Series 2000-VFC
Certificateholders, (the "Incremental Funding Reserve Account"). The Master
Trust Trustee shall possess all right, title and interest in all funds on
deposit from time to time in the Incremental Funding Reserve Account and
in all proceeds thereof. Pursuant to authority granted to it pursuant to
Section 3.01(b) of the Agreement, the Servicer shall have the revocable
power to instruct the Master Trust Trustee to withdraw funds from the
Incremental Funding Reserve Account for the purpose of fulfilling the
obligations of the Servicer under this Series Supplement and the Agreement.
The Servicer at all times shall maintain accurate records reflecting
transactions in the Incremental Funding Reserve Account.
(ii) Funds on deposit in the Incremental Funding Reserve
Account overnight or for a longer period shall at all times be invested in
Eligible Investments at the direction of the Servicer or its agent, subject
to the restrictions set forth in the Agreement. Any Eligible Investment
with a stated maturity shall mature on or prior to the following Transfer
Date. All net interest and earnings (less investment expenses) on funds on
deposit in the Incremental Funding Reserve Account, if any, shall be paid
to the Seller.
(e) Replacement Series 2000-VFC Accounts. If, at any time, any of
------------------------------------
the Series 2000-VFC Accounts ceases to be an Eligible Deposit Account, the
Master Trust Trustee (or the Servicer on its behalf) shall upon the earlier of
(a) 30 calendar days, or (b) the next Determination Date, establish a new Series
2000-VFC Account meeting the conditions specified in paragraphs (a), (b), (c) or
(d) above, as applicable, as an Eligible Deposit Account and shall transfer any
cash and/or any investments to such new Series 2000-VFC Account. Neither the
19
Seller, the Servicer nor any person or entity claiming by, through or under the
Seller, the Servicer or any such person or entity shall have any right, title or
interest in, or any right to withdraw any amount from, any Series 2000-VFC
Account, except as expressly provided herein.
SECTION 4.03 [Reserved].
----------
SECTION 4.04 Application of Available Certificateholder Interest
---------------------------------------------------
Collections
-----------
(a) Application of Available Certificateholder Interest Collections.
---------------------------------------------------------------
On each Transfer Date related to a Due Period, the Master Trust Trustee, acting
in accordance with instructions from the Servicer, shall apply Available
Certificateholder Interest Collections for such Due Period in the following
amounts and in the following order of priority:
(i) Investor Servicing Fee. An amount equal to the Investor
----------------------
Servicing Fee for such Due Period (unless such amount has been netted
against deposits to the Collections Account or waived) shall be allocated
and paid to the Servicer.
(ii) Monthly Interest. An amount equal to Monthly Interest
----------------
for the Distribution Date shall be deposited in the Distribution Account.
(iiA) Non-Use Fees. An amount equal to the Non-Use Fees for
------------
the related Distribution Date shall be deposited in the Distribution
Account.
(iiB) Additional Amounts. An amount equal to the Additional
------------------
Amounts for the related Distribution Date, but not in excess of 0.40% of
the Invested Amount as of the Distribution Date immediately preceding the
related Due Period, shall be deposited into the Distribution Account.
(iii) Investor Dealer Note Losses. An amount equal to the
---------------------------
Investor Dealer Note Losses, if any, for such Due Period shall be
reimbursed by being treated as Investor Principal Collections for such
Transfer Date.
(iv) Reimbursement of Investor Charge-Offs. An amount equal to
-------------------------------------
the aggregate amount of unreimbursed Investor Charge-Offs, if any, for any
prior Due Period shall be reimbursed by being treated as Investor Principal
Collections for such Transfer Date.
(v) Spread Account Deposit Amount. An amount equal to the
-----------------------------
Spread Account Deposit Amount, if any, for such Transfer Date shall be
deposited into the Spread Account.
20
(vi) Deferred Investor Servicing Fee. An amount equal to the
-------------------------------
aggregate outstanding amounts of the Investor Servicing Fee which have been
previously waived pursuant to Section 3.01 (unless such amounts have been
waived again) shall be allocated and paid to the Servicer.
(vii) Reinstatement of Available Subordinated Amount. An amount
----------------------------------------------
equal to the excess, if any, of the Maximum Subordinated Amount as of the
end of the preceding Transfer Date over the Available Subordinated Amount
as of the end of the preceding Transfer Date shall be (A) during the
Revolving Period or the Amortization, allocated and paid to the Seller or
(B) during an Early Amortization Period, deposited in the Liquidity Reserve
Account, and in either case (A) or (B) the Available Subordinated Amount
shall be reinstated by the amount of such payment or deposit.
(viiA) Additional Amounts. An amount equal to any Additional
------------------
Amounts for the related Distribution Date not paid pursuant to Section
4.04(iiB) shall be deposited into the Distribution Account.
(viiB) Incremental Funding Reserve Deposit Amount. An amount
------------------------------------------
equal to the Incremental Funding Reserve Deposit Amount, if any, shall be
deposited into the Incremental Funding Reserve Account.
(viii) Excess Interest Collections. Any remaining Available
---------------------------
Certificateholder Interest Collections shall be treated as Excess Interest
Collections, and applied pursuant to Section 4.03(f) of the Agreement.
If Available Certificateholder Interest Collections are not sufficient to
satisfy the application described in clauses (i) through (viiA) above on any
Transfer Date, then funds on deposit in the Incremental Funding Reserve Account
will be applied in the manner described in clause (ii) above. After such
application, any remaining funds in the Incremental Funding Reserve Account
shall be paid to the Seller. If Available Certificateholder Interest
Collections, plus amounts allocated from the Incremental Funding Reserve Account
as described above, are not sufficient to satisfy each of the applications
described in clauses (i) through (viiA) above on any Transfer Date, then Excess
Interest Collections from other Series allocable to Series 2000-VFC will be
applied as Available Certificateholder Interest Collections in the priority and
the manner described in clauses (i) through (viiA) above. If Excess Interest
Collections are less than the shortfalls for all Series that provide for
allocations of Excess Interest Collections, such Excess Interest Collections
shall be allocable to shortfalls for Series 2000-VFC and any other Series that
so provides pro rata based on the relative amounts of each Series' shortfall.
21
SECTION 4.05 Application of Available Seller's Finance Charge Collections,
------------------------------------------------------------
Spread Account and Liquidity Reserve Account to Deficiency Amount.
-----------------------------------------------------------------
(a) On each Transfer Date, the Servicer shall determine the amount
(the "Deficiency Amount"), if any, by which the amount of the entire allocations
required on such Transfer Date by Sections 4.04(a)(i) through (iv) exceeds the
amount of Available Certificateholder Interest Collections for such Due Period
and Excess Interest Collections allocated to Series 2000-VFC on such Transfer
Date, if any, for the related Due Period.
(b) If the Deficiency Amount for any Transfer Date is greater than
zero, the Master Trust Trustee, acting in accordance with instructions from the
Servicer, shall apply available funds from the following sources in the
following order of priority in the same manner as Available Certificateholder
Interest Collections, each of which applications shall reduce such Deficiency
Amount (all such available funds being the "Available Draw Funds" for such
Transfer Date):
(i) Available Seller's Finance Charge Collections;
(ii) funds on deposit in the Spread Account;
(iii) for any Transfer Date occurring during any Early
Amortization Period, funds on deposit in the Liquidity Reserve Account;
provided, however, that the amount applied pursuant to this Section 4.05(b)
shall not exceed the Draw Amount. The Available Subordinated Amount shall be
reduced by the aggregate amount of Available Draw Funds applied pursuant to this
Section 4.05(b).
(c) If all of the amounts applied pursuant to Section 4.05(a) and (b)
are insufficient to make the entire application described in Section
4.04(a)(iii), the Available Subordinated Amount shall be reduced (but not below
zero) by the amount of such deficiency and any remaining Investor Dealer Note
Losses shall be deemed to be reimbursed to the extent of such reduction.
SECTION 4.06 Investor Charge-Offs. If, for any Transfer Date on which the
--------------------
Available Subordinated Amount equals or is reduced to zero (after giving effect
to the allocations, distributions, withdrawals and deposits to be made on such
Transfer Date) and the Deficiency Amount for such Transfer Date (as reduced by
the applications required by Section 4.05 of this Series Supplement) is greater
than zero, the Invested Amount shall be reduced by the lesser of (i) such
remaining Deficiency Amount for such Transfer Date and (ii) the amount of
Investor Dealer Note Losses for the related Due Period remaining unreimbursed
after all applications of funds or reductions of the Available Subordinated
Amount pursuant to Section 4.04 and 4.05 (such lesser amount being an "Investor
Charge-Off").
22
SECTION 4.07 Application of Seller's Finance Charge Collections.
--------------------------------------------------
(a) Application of Available Seller's Finance Charge Collections. On
------------------------------------------------------------
each Transfer Date related to a Due Period, the Master Trust Trustee, acting in
accordance with instructions from the Servicer, shall withdraw and apply from
the Collections Account to the extent of Available Seller's Finance Charge
Collections for such Due Period, the following amounts in the following order of
priority:
(i) On each Transfer Date related to a Due Period for which a
Deficiency Amount exists, the amount required by Section 4.05(b)(i) shall
be applied as specified in Section 4.05(b).
(ii) On each Transfer Date related to a Due Period occurring
during an Early Amortization Period, the amount, if any, by which the
Available Subordinated Amount as of the end of such Transfer Date exceeds
the amount of funds on deposit in the Liquidity Reserve Account shall be
deposited in the Liquidity Reserve Account.
(iii) On each Transfer Date on which the full Spread Account
Deposit Amount was not deposited in the Spread Account pursuant to Section
4.04(a)(v), an amount equal to the shortfall in such Spread Account Deposit
Amount shall be deposited in the Spread Account.
(iv) Any remaining Available Seller's Finance Charge Collections
for the related Due Period shall be allocated and paid to the Seller.
(b) Application of Series Allocable Finance Charge Collections to the
-----------------------------------------------------------------
Seller. On each Transfer Date related to a Due Period, the Master Trust
------
Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collections Account and allocate and pay to the Seller an
amount equal to the product of (i) the result of the Excess Seller's Percentage
for such Due Period minus the Required Excess Seller Interest Percentage and
(ii) Series Allocable Finance Charge Collections for such Due Period.
SECTION 4.08 Application of Series Allocable Principal Collections. On
-----------------------------------------------------
each Business Day, the Master Trust Trustee, acting in accordance with
instructions from the Servicer, shall withdraw Series Allocable Principal
Collections for such Business Day from the Collections Account and apply such
funds in the following amounts:
(a) Investor Principal Collections During Revolving Period. During
------------------------------------------------------
the Revolving Period, an amount equal to Investor Principal Collections for such
Business Day shall be treated as Shared Principal Collections, and applied,
pursuant to the written direction of the Servicer, pursuant to Section 4.03(e)
of the Agreement.
23
(b) Investor Principal Collections during Amortization Period or
------------------------------------------------------------
Early Amortization Period. During the Amortization Period or any Early
-------------------------
Amortization Period, Investor Principal Collections for such Business Day shall
be allocated to the Series 2000-VFC Certificateholders and deposited into the
Series Principal Account to the extent the Invested Amount as of the preceding
Distribution Date exceeds the amount of funds on deposit in the Series Principal
Account on such Business Day. Any Investor Principal Collections remaining after
the applications described in the preceding sentence shall be treated as Shared
Principal Collections, and applied, pursuant to the written direction of the
Servicer, pursuant to Section 4.03(e) of the Agreement.
(c) Seller's Principal Collections During the Revolving Period.
----------------------------------------------------------
During the Revolving Period, all Seller's Principal Collections for such
Business Day shall be deemed to be Series 2000-VFC Shared Seller Principal
Collections and shall be allocated as provided in Section 4.08(d)(iii).
(d) Seller's Principal Collections During Amortization Period or
------------------------------------------------------------
Early Amortization Period; Shared Seller Principal Collections.
--------------------------------------------------------------
(i) During the Amortization Period, Available Seller's Principal
Collections for such Business Day shall be deemed to be "Remaining Available
Seller's Principal Collections," which shall be included in Series 2000-VFC
Shared Seller Principal Collections and allocated as provided in clause (iii)
below. During the Amortization Period, Excess Seller's Principal Collections
shall be included in Series 2000-VFC Shared Seller Principal Collections and
allocated as provided in clause (iii) below.
(ii) During any Early Amortization Period Available Seller's
Principal Collections for such Business Day shall be deposited in the Liquidity
Reserve Account to the extent the Available Subordinated Amount as of the end of
the immediately preceding Transfer Date exceeds the amount of funds on deposit
in the Liquidity Reserve Account (including amounts deposited pursuant to
Section 4.07(a)(ii)). The amount required to be deposited pursuant to the
preceding sentence shall be reduced by the amount of Available Seller's Finance
Charge Collections deposited in the Liquidity Reserve Account on such Business
Day. Any remaining Available Seller's Principal Collections for such Business
Day shall be deemed to be "Remaining Available Seller's Principal Collections."
During any Early Amortization Period, all Excess Seller's Principal Collections,
all Remaining Available Seller's Principal Collections and all shared seller
principal collections of any other Series that provides for shared seller
principal collections not allocated in respect of principal shortfalls shall be
allocated and paid to the Seller or deposited in the Excess Funding Account to
the extent necessary to maintain the Master Trust Seller's Interest at an amount
equal to (or, in the Seller's discretion, greater than) the Minimum Master Trust
Seller's Interest.
24
(iii) During the Revolving Period or the Amortization Period,
Series 2000-VFC Shared Seller Principal Collections, if any, and shared seller
principal collections for any other Series that provides for shared seller
principal collections shall be determined on each business day and allocated in
the following priority: (i) to any other Series to the extent such Series
provides for the use of shared seller principal collections in respect of
principal shortfalls, (ii) to the Excess Funding Account to the extent necessary
to maintain the Master Trust Seller's Interest at an amount equal to (or, in the
discretion of the Seller, greater than) the Minimum Master Trust Seller's
Interest, (iii) at the election of the Seller, retained and allocated to the
Series 2000-VFC Certificateholders and deposited in the Series Principal Account
on the related Transfer Date to make any prepayments as described in Section
1.03 and (iv) to the Seller. If shared seller principal collections for all
Series are less than the shortfalls for which shared seller principal
collections may be used, then such shared seller principal collections will be
allocated to all such shortfalls pro rata based on the relative amounts of each
such shortfall.
(iv) "Series 2000-VFC Shared Seller Principal Collections" means
on each business day (i) during a Revolving Period, all Available Seller's
Principal Collections and all Excess Seller's Principal Collections and
(ii) during an Amortization Period, all Remaining Available Seller's
Principal Collections and all Excess Seller's Principal Collections. There
shall be no Series 2000-VFC Shared Seller Principal Collections during any
Early Amortization Period.
(e) If on any Distribution Date during an Early Amortization Period
after the application of all funds to be allocated or distributed on such date
the excess, if any, of (x) the Invested Amount over (y) the amount in the Series
Principal Account (the "Early Amortization Period Shortfall Amount") is less
than or equal to the aggregate amount of funds contained in the Liquidity
Reserve Account then funds shall be withdrawn in an amount equal to the Early
Amortization Period Shortfall Amount and shall be deposited in the Series
Principal Account.
SECTION 4.09 Shared Principal Collections.
----------------------------
(a) That portion of Shared Principal Collections for any Business Day
equal to the amount of Series 2000-VFC Shared Principal Collections for such
Business Day will be allocated to Series 2000-VFC and will be applied in the
same manner as Investor Principal Collections pursuant to Section 4.08(b) and
otherwise will be deposited in the Excess Funding Account to the extent
necessary to maintain the Master Trust Seller's Interest at an amount equal to
(or, in the discretion of the Seller, greater than) the Minimum Master Trust
Seller's Interest or allocated to the Seller.
(b) "Series 2000-VFC Shared Principal Collections," with respect to
any Business Day, shall mean an amount equal to the Series 2000-VFC Principal
Shortfall for such Business Day; provided, however, that, if the aggregate
amount of Shared Principal Collections for all Series for such Business Day is
less than the aggregate amount of Principal Shortfalls for
25
all Series for such Business Day, then Series 2000-VFC Shared Principal
Collections for such Business Day shall equal the product of (x) Shared
Principal Collections for all Series for such Business Day and (y) a fraction,
the numerator of which is the Series 2000-VFC Principal Shortfall for such
Business Day and denominator of which is the aggregate amount of Principal
Shortfalls for all Series for such Business Day; provided further that if Shared
Principal Collections are not required to be applied to any other Series, the
Seller may direct that all or any portion of such Shared Principal Collections
be retained and allocated to the Series 2000-VFC Certificateholders and
deposited in the Series Principal Account on the related Transfer Date to make
any prepayment permitted by Section 1.03.
SECTION 4.10 Distributions to Series 2000-VFC Certificateholders. On each
---------------------------------------------------
Transfer Date, after all allocations to the Distribution Account and the Series
Principal Account for the related Transfer Date have been made, the Master Trust
Trustee, acting in accordance with instructions from the Servicer, shall
transfer to the Distribution Account the funds on deposit in the Series
Principal Account and shall make, without duplication, the following
distributions from the Distribution Account:
(a) Interest Distributions. On each Distribution Date (including the
----------------------
Expected Payment Date), Monthly Interest, Non-Use Fees and Additional Amounts
will be distributed as such to the Series 2000-VFC Certificateholders to the
extent of the amount on deposit in the Distribution Account for such purpose.
(b) Amortization Period and Early Amortization Period. On each
-------------------------------------------------
Distribution Date related to a Due Period occurring during an Amortization
Period or an Early Amortization Period, in addition to the amount described in
(a) above, amounts on deposit in the Series Principal Account will be
distributed as principal (up to a maximum of the Invested Amount on such
Distribution Date) on the Series 2000-VFC Certificates.
(c) Revolving Period. On each Distribution Date relating to a Due
----------------
Period during the Revolving Period, in addition to the amount described in (a)
above, amounts on deposit in the Series Principal Account will be distributed as
principal (up to a maximum of the Invested Amount on such Distribution Date) on
the Series 2000-VFC Certificates.
SECTION 4.11 [Reserved]
SECTION 4.12 Partial Month Due Period. The allocation and distribution
------------------------
provisions in this Series Supplement are based upon the assumptions that each
Due Period will be a calendar month and that each Due Period will have a unique
related Transfer Date and Distribution Date. However, under certain
circumstances (such as the occurrence of an Early Amortization Event, the
Revolving Period could end on a date other than the last day of a calendar month
(the period from the first day of such month (the "Subject Month") to and
including the date of such occurrence being referred to herein as the "Revolving
Due Period"), and an Early Amortization
26
Period could commence on a date other than the first day of a calendar month
(the period from such other date until the last day of the Subject Month being
the "Amortizing Due Period"). If such a circumstance occurs, then the Servicer,
the Seller and the Master Trust Trustee shall observe the following rules:
(i) the Transfer Date for both the Revolving Due Period and the
Amortizing Due Period shall be the date on which the Transfer Date would
have occurred if the Subject Month had been an ordinary Due Period;
(ii) the allocations and distributions of Finance Charge
Collections (and all items derived from Finance Charge Collections, such as
Available Certificateholder Interest Collections and Available Seller's
Finance Charge Collections) and Dealer Note Losses occurring during the
Subject Month shall be made as if the Subject Month were one Due Period,
without any distinction between the Revolving Due Period and the Amortizing
Due Period; and
(iii) two separate sets of allocations and distributions of
Principal Collections (and all items derived from Principal Collections,
such as Investor Principal Collections and Seller's Principal Collections)
shall be made on such Transfer Date, according to whether such Principal
Collections were received during the Revolving Due Period (in which case
allocations and distributions shall be made as provided in Sections 4.08(a)
and (c)) or the Amortizing Due Period (in which case allocations and
distributions shall be made as provided in Sections 4.08(b) and (d)).
SECTION 4.13 Additional Rights upon the Occurrence of Certain Events.
-------------------------------------------------------
Notwithstanding the provisions of Section 9.02(a) of the Agreement, if any
insolvency event occurs with respect to the Seller, Navistar International
Corporation, Navistar International Transportation Corp. or Navistar Financial
Corporation on the day of such insolvency event, the Seller will (subject to the
actions of the Certificateholders) immediately cease to transfer Dealer Notes to
the Master Trust, and promptly give notice to the Master Trust Trustee of such
insolvency event. Under the terms of the Pooling and Servicing Agreement, if an
insolvency event occurs with respect to the Seller prior to the date on which
the Series 2000-VFC Certificates issued by the Master Trust have been paid in
full, then within 15 days the Master Trust Trustee will publish a notice of such
insolvency event stating that the Master Trust Trustee intends to sell,
liquidate or otherwise dispose of the Dealer Notes in a commercially reasonable
manner and on commercially reasonable terms, unless within a specified period of
time Certificate holders representing more than 50% of the aggregate series
invested amount of the certificates of each such Series and each person holding
a Supplemental Certificate, instruct the Master Trust Trustee not to sell,
dispose of or otherwise liquidate the Dealer Notes and to continue transferring
Dealer Notes as before such insolvency event.
ARTICLE V
27
DISTRIBUTIONS AND REPORTS
-------------------------
TO SERIES 2000-VFC CERTIFICATEHOLDERS
-------------------------------------
SECTION 5.01 Distributions.
-------------
(a) The Paying Agent shall distribute (in accordance with the Monthly
Servicer Certificate and Settlement Statement delivered by the Servicer to the
Master Trust Trustee and the Paying Agent pursuant to Section 3.04(d) of the
Agreement) to each Series 2000-VFC Certificateholder of record on the preceding
Record Date (other than as provided in Section 12.02 of the Agreement respecting
a final distribution) on each Distribution Date such Certificateholder's pro
rata share (based on the aggregate fractional undivided interests represented by
the Series 2000-VFC Certificates held by such Certificateholder) of the amounts
on deposit in the Series 2000-VFC Accounts as is payable to the Series 2000-VFC
Certificateholders on such Distribution Date pursuant to Sections 4.10 (a), (b)
and (c).
(b) Except as provided in Section 12.03 of the Agreement with respect
to a final distribution, distributions to Series 2000-VFC Certificateholders
hereunder shall be made to each Series 2000-VFC Certificateholder by wire
transfer of immediately available funds to the account specified by such Series
2000-VFC Certificateholder without presentation or surrender of any Series 2000-
VFC Certificate or the making of any notation thereon.
SECTION 5.02 Monthly and Annual Certificateholders' Statement.
------------------------------------------------
(a) Monthly Series 2000-VFC Certificateholders' Statement. At
-----------------------------------------------------
least two Business Days prior to each Distribution Date, the Servicer will
provide to the Master Trust Trustee and the Paying Agent, and on each
Distribution Date, the Paying Agent shall forward to each Series 2000-VFC
Certificateholder a Monthly Servicer Certificate and Settlement Statement
substantially in the form of Exhibit B with such changes as the Servicer shall
---------
deem necessary or appropriate, prepared by the Servicer and delivered to the
Master Trust Trustee setting forth, among other things, the following
information:
(i) the aggregate amount of Collections, including the
aggregate amount of Finance Charge Collections and the aggregate amount of
Principal Collections for the related Due Period;
(ii) the Series 2000-VFC Allocation Percentage, the Floating
Allocation Percentage and the Principal Allocation Percentage (if
applicable) for the related Due Period;
(iii) the total amount to be distributed on the Series 2000-VFC
Certificates on such Distribution Date;
28
(iv) the amount, if any, of such distribution allocable to the
Invested Amount;
(v) the amount, if any, of such distribution allocable to
interest on the Series 2000-VFC Certificates;
(vi) Dealer Note Losses for the related Due Period;
(vii) the Draw Amount as of the related Transfer Date, if any;
(viii) the amount of the Investor Charge-Offs and the amount of
reimbursement thereof as of the related Transfer Date;
(ix) the amount of the Investor Servicing Fee to be paid on
such Distribution Date;
(x) the amount of any Incremental Funding or prepayment to
occur on such Distribution Date, the aggregate amount on deposit in the
Incremental Funding Reserve Account as of the related Transfer Date, if
any, the amount thereof, if any, allocated to pay Monthly Interest for such
Distribution Date, the amount, if any, thereof to be distributed to the
Seller, the Incremental Funding Reserve Account Deposit Amount for such
Distribution Date, if any, and the Incremental Subordinated Amount, if any,
for such Distribution Date;
(xi) the Invested Amount (after giving effect to all
distributions that will occur on such Distribution Date);
(xii) the aggregate amount of Dealer Notes and funds on deposit
in each of the Excess Funding Account, Series Principal Account and Spread
Account as of the end of the last day of the related Due Period (after
giving effect to payments and adjustments made pursuant to Article IV of
this Series Supplement and of the Agreement);
(xiii) the Available Subordinated Amount as of the end of the
related Transfer Date;
(xiv) with respect to Eligible Investments in the Series
Principal Account, the Excess Funding Account and the Liquidity Reserve
Account, as of the last day of the related Due Period, the aggregate amount
of funds invested in Eligible Investments in each such Series Account, a
brief description of each such Eligible Investment and amount invested in
each such Eligible Investment, the rate of interest
29
applicable to each such Eligible Investment and the rating of each such
Eligible Investment;
(xv) the Dealers with the five largest aggregate outstanding
principal amounts of Dealer Notes in the Master Trust as of the end of the
related Due Period;
(xvi) the aggregate outstanding principal amount of Dealer
Notes issued to finance OEM Vehicles as of the end of the related Due
Period;
(xvii) the percentages and all other information calculated
pursuant to Section 6.01 to determine whether an Early Amortization Event
has occurred;
(xviii) the amount of Excess Interest Collections and Investor
Principal Collections treated as Shared Principal Collections, each for the
related Due Period, and the amount of such Excess Interest Collections and
Shared Principal Collections allocated to other Series; and
(xix) the amount of Remaining Available Seller's Principal
Collections, the amount of Excess Seller's Principal Collections and
Remaining Available Seller's Principal Collections treated as Series 2000-
VFC Shared Seller Principal Collections, the amount of Shared Seller
Principal Collections from other Series, and the amount of Shared Seller
Principal Collections allocated to Series 2000-VFC and to other Series,
each for the related Due Period.
(b) [Reserved]
(c) A copy of the statement provided pursuant to subsection (a) will
be made available for inspection at the Corporate Trust Office.
(d) Annual Certificateholder's Tax Statement. On or about January 31
----------------------------------------
of each calendar year, beginning with calendar year 2001, the Master Trust
Trustee shall furnish to the Servicer and Paying Agent a list of each Person who
at any time during the preceding calendar year was a Series 2000-VFC
Certificateholder and received any payment thereon and the dates such Person
held a Series 2000-VFC Certificate, and the Paying Agent shall furnish to each
such Series 2000-VFC Certificateholder a statement prepared by the Paying Agent
containing the information prepared by the Master Trust Trustee which is
required to be contained in the statement to Series 2000-VFC Certificateholders
as set forth in Sections 5.02(a)(iii)-(a)(v) above, aggregated for such calendar
year or the applicable portion thereof during which such Person was a Series
2000-VFC Certificateholder, together with such other customary information as
the Master Trust Trustee or the Servicer deems necessary or desirable to enable
the Series 2000-VFC Certificateholders to prepare their tax returns, including
information (to be supplied by the Servicer to the Master Trust Trustee)
regarding original issue discount on the Series 2000-VFC
30
Certificates, if any. Such obligation of the Paying Agent shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Master Trust Trustee pursuant to any requirements of
the Internal Revenue Code as from time to time in effect.
ARTICLE VI
EARLY AMORTIZATION EVENTS
-------------------------
SECTION 6.01 Additional Early Amortization Events. The occurrence of any
------------------------------------
of the following events shall, immediately upon the occurrence thereof without
notice or other action on the part of the Master Trust Trustee or the Series
2000-VFC Certificateholders, be deemed to be an Early Amortization Event solely
with respect to Series 2000-VFC:
(a) the Invested Amount is not reduced to zero by the Expected
Payment Date;
(b) the United States government or any agency or instrumentality
thereof files a notice of a lien under Internal Revenue Code (S)6323 or any
similar statutory provision (including, but not limited to, (S)302(f) or (S)4068
of ERISA) on the assets of NFC or NFSC which is or may in the future be prior to
the lien of the Master Trust Trustee or the assets of the Master Trust
(including, without limitation, proceeds of the Dealer Notes);
(c) failure on the part of the Seller (i) to make any payment,
distribution or deposit required under the Agreement within five business days
of the date required or (ii) to observe or perform in any material respect any
other material covenants or agreements of the Seller, which continues unremedied
for a period of 60 days after written notice of such failure shall have been
given to the Seller;
(d) any representation or warranty made by the Seller pursuant to the
Agreement or any information contained in the schedule of Dealer Notes delivered
thereunder or this Series Supplement shall prove to have been incorrect in any
material respect when made or when delivered, which representation, warranty or
schedule, or the circumstances or condition that caused such representation,
warranty or schedule to be incorrect, continues to be incorrect or uncured in
any material respect for a period of 60 days after written notice of such
incorrectness shall have been given to the Seller and as a result of which the
interests of the Series 2000-VFC Certificateholders are materially and adversely
affected, except that an Early Amortization Event shall not be deemed to occur
if the Seller has repurchased the related Dealer Notes or all such Dealer Notes,
if applicable, during such period in accordance with the provisions of the
Agreement;
31
(e) the Seller shall become legally unable for any reason to transfer
Dealer Notes to the Master Trust in accordance with the provisions of the
Agreement;
(f) on any Transfer Date related to a Due Period, the Available
Subordinated Amount for such Transfer Date will be reduced to an amount less
than the Required Subordinated Amount;
(g) any Servicer Termination Event shall occur for which the Servicer
has received a notice of termination;
(h) the delivery by the Seller to the Master Trust Trustee of a
notice stating that the Seller will no longer continue to sell Dealer Notes to
the Master Trust commencing on the date specified in such notice;
(i) the Average Coverage Differential shall be equal to or less than
negative two percent (-2.00%) on each of three consecutive Determination Dates;
(j) at the end of any Due Period, the Master Trust Seller's Interest
is reduced to an amount less than the Master Trust Minimum Seller's Interest and
the Seller has failed to assign additional Dealer Notes to the Master Trust in
the amount of such deficiency within ten Business Days following the end of such
Due Period;
(k) on any Determination Date, the quotient of (i) the product of (a)
the sum of Dealer Note Collections for each of the related Due Period and the
two immediately preceding Due Periods and (b) four divided by (ii) the daily
average principal amount of Dealer Notes outstanding during such Due Periods
("Turnover") is less than 1.7;
(l) on any Determination Date, the quotient of (i) the sum of Dealer
Note Losses for each of the related Due Period and the five immediately
preceding Due Periods and (ii) the sum of Principal Collections for each of the
related Due Period and the five immediately preceding Due Periods, is greater
than or equal to one percent (1.00%);
(m) [Reserved]
(n) any of the Seller, NITC, NIC or NFC shall file a petition
commencing a voluntary case under any chapter of the federal bankruptcy laws; or
the Seller or NFC shall file a petition or answer or consent seeking
reorganization, arrangement, adjustment or composition under any other similar
applicable federal law, or shall consent to the filing of any such petition,
answer or consent; or the Seller, NITC, NIC or NFC shall appoint, or consent to
the appointment of a custodian, receiver, liquidator, trustee, assignee,
sequestrator or other similar official in bankruptcy or insolvency of it or of
any substantial part of its property; or the Seller, NITC, NIC
32
or NFC shall make an assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become due;
(o) any order for relief against any of the Seller, NITC, NIC or NFC
shall have been entered by a court having jurisdiction in the premises under any
chapter of the federal bankruptcy laws, and such order shall have continued
undischarged or unstayed for a period of 120 days; or a decree or order by a
court having jurisdiction in the premises shall have been entered approving as
properly filed a petition seeking reorganization, arrangement, adjustment, or
composition of the Seller, NITC, NIC or NFC under any other similar applicable
federal law, and such decree or order shall have continued undischarged or
unstayed for a period of 120 days; or a decree or order of a court having
jurisdiction in the premises for the appointment of a custodian, receiver,
liquidator, trustee, assignee, sequestrator or other similar official in
bankruptcy or insolvency of the Seller, NITC, NIC or NFC of any substantial part
of their property, or for the winding up or liquidation of their affairs, shall
have been entered, and such decree or order shall have remained in force
undischarged or unstayed for a period of 120 days; and
(p) failure on the part of NITC to make a deposit in the Interest
Deposit Account required by the terms of the Interest Deposit Agreement on or
before the date occurring five Business Days after the date such deposit is
required by the Interest Deposit Agreement to be made.
ARTICLE VII
OTHER SERIES PROVISIONS
-----------------------
SECTION 7.01 Conveyance of Dealer Notes. Upon the date on which each
--------------------------
other Series is either no longer outstanding or the fully funded date has
occurred with respect thereto, the Master Trust Trustee shall sell, assign and
convey to the Seller or its designee, without recourse, representations or
warranty, all right, title and interest of the Master Trust in the Dealer Notes,
whether then existing or thereafter created, all security interests in the
Financed Vehicles with respect thereto, all monies due or to become due and all
amounts received with respect thereto and all proceeds thereof except for
amounts on deposit in the Collections Account that are allocable to Investor
Certificates and amounts on deposit in any Series Account. The Master Trust
Trustee shall execute and deliver such instruments of transfer and assignment,
in each case without recourse, as shall be reasonably requested by the Seller to
vest in the Seller or its designee all right, title and interest which the
Master Trust had in all such property.
SECTION 7.02 Tax Treatment. The Seller has entered into the Agreement
-------------
and this Series Supplement and the Series 2000-VFC Certificates have been issued
with the intention that the Series 2000-VFC Certificates will qualify under
applicable tax law as indebtedness secured by the Master Trust assets
attributable to the Series 2000-VFC Certificates. The Seller and each
33
Series 2000-VFC Certificateholder and Certificate Owner, by the acceptance of
its Series 2000-VFC Certificate or Book-Entry Certificate, as applicable, agrees
to treat the Series 2000-VFC Certificates as indebtedness secured by the Master
Trust assets attributable to the Series 2000-VFC Certificates, for Federal
income taxes, state and local income and franchise taxes and any other taxes
imposed on or measured by income in whole or in part.
ARTICLE VIII
FINAL DISTRIBUTIONS
-------------------
SECTION 8.01 Sale of Investors' Interest Pursuant to Section 2.07 of the
-----------------------------------------------------------
Agreement; Distributions Pursuant to Section 2.03 or 12.03 of the Agreement.
---------------------------------------------------------------------------
(a) The amount to be paid by the Seller to the Collections Account
with respect to Series 2000-VFC in connection with a purchase of the
Certificateholders' Interest pursuant to Section 2.07 of the Agreement shall
equal the Reassignment Amount for the Distribution Date on which such purchase
occurs.
(b) With respect to the Reassignment Amount, if any, deposited into
the Collections Account pursuant to this Section 8.01 of this Series Supplement
or Section 2.07 of the Agreement or any proceeds deposited into the Collections
Account pursuant to Section 12.03(c) of the Agreement, the Master Trust Trustee
shall, not later than 12:00 noon, New York City time, on the Distribution Date
on which such amounts are deposited (or, if such date is not a Distribution
Date, on the immediately following Distribution Date) (in the priority set forth
below): (i) first, deposit the Invested Amount on such Distribution Date into
-----
the Series Principal Account, (ii) second, deposit the amount of accrued and
------
unpaid interest on the unpaid balance of the Series 2000-VFC Certificates in the
Distribution Account, (iii) third, deposit the amount of accrued but unpaid
-----
Non-Use Fees and Additional Amounts in the Distribution Account, and (iv)
fourth, pay the remainder of any such Reassignment Amounts to the Seller.
------
(c) Notwithstanding any other provision to the contrary in this
Series Supplement or the Agreement, the entire amount deposited in the Series
Principal Account on a Distribution Date pursuant to Section 8.01(b) and all
other amounts on deposit therein shall be distributed in full to the Series
2000-VFC Certificateholders on such Distribution Date and any distribution made
pursuant to this paragraph (c) shall be deemed to be a final distribution
pursuant to Section 12.03 of the Agreement with respect to Series 2000-VFC.
34
SECTION 8.02 Distribution of Proceeds of Sale, Disposition or Liquidation
------------------------------------------------------------
of the Dealer Notes Pursuant to Section 9.02 of the Agreement.
-------------------------------------------------------------
(a) Not later than 12:00 noon, New York City time, on the
Distribution Date following the date on which the Insolvency Proceeds are
deposited into the Collections Account pursuant to Section 9.02(b) of the
Agreement, the Master Trust Trustee shall first (in each case, after giving
effect to any deposits and distributions otherwise to be made on such
Distribution Date) deduct an amount equal to the Invested Amount on such
Distribution Date from the portion of the Insolvency Proceeds allocated to
Series Allocable Principal Collections and deposit such amount in the Series
Principal Account; provided that the amount of such deposit shall not exceed the
product of (x) the portion of the Insolvency Proceeds allocated to Series
Allocable Principal Collections and (y) 100% minus the Excess Seller's
Percentage with respect to the related Due Period. The remainder of the portion
of the Insolvency Proceeds allocated to Series Allocable Principal Collections
shall be allocated to the Master Trust Seller's Interest and shall be
distributed on such Distribution Date to the Seller.
(b) Not later than 12:00 noon, New York City time, on such
Distribution Date, the Master Trust Trustee shall first (in each case, after
giving effect to any deposits and distributions otherwise to be made on such
Distribution Date) deduct an amount equal to the sum of (i) Monthly Interest for
such Distribution Date and (ii) any accrued but unpaid Non-Use Fees and
Additional Amounts, from the portion of the Insolvency Proceeds allocated to
Series Allocable Finance Charge Collections and deposit such amount in the
Distribution Account; provided that the amount of such distribution shall not
exceed the product of (x) the portion of the Insolvency Proceeds allocated to
Series Allocable Finance Charge Collections and (y) 100% minus the Excess
Seller's Percentage with respect to the related Due Period. The remainder of the
portion of the Insolvency Proceeds allocated to Series Allocable Finance Charge
Collections shall be allocated to the Master Trust Seller's Interest and shall
be distributed on such Distribution Date to the Seller.
(c) Notwithstanding anything to the contrary in this Series
Supplement or the Agreement, the entire amount deposited in the Series Principal
Account and the Distribution Account pursuant to this Section 8.02 and all other
amounts on deposit therein shall be distributed in full to the Series 2000-VFC
Certificateholders on the Distribution Date on which funds are deposited
pursuant to this Section 8.02 (or, if not so deposited on a Distribution Date,
on the immediately following Distribution Date) and any distribution made
pursuant to this Section 8.02 shall be deemed to be a final distribution
pursuant to Section 12.03 of the Agreement with respect to Series 2000-VFC.
35
ARTICLE IX
MISCELLANEOUS PROVISIONS
------------------------
SECTION 9.01 Ratification of Agreement. As supplemented by this Series
-------------------------
Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Series Supplement shall be read, taken and
construed as one and the same instrument.
SECTION 9.02 Counterparts. This Series Supplement may be executed in two
------------
or more counterparts (and by different parties on separate counterparts) each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
SECTION 9.03 GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED,
-------------
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED, 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.
[END OF PAGE]
[SIGNATURE PAGE FOLLOWS]
36
IN WITNESS WHEREOF, the Seller, the Servicer and the Master Trust
Trustee have caused this Series Supplement to be duly executed by their
respective officers as of the day and year first above written.
NAVISTAR FINANCIAL SECURITIES CORPORATION
as Seller
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President & CEO
NAVISTAR FINANCIAL CORPORATION
as Servicer
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President & CEO
THE BANK OF NEW YORK
as Master Trust Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Treasurer
