EXHIBIT 10.69
RECEIVABLES PURCHASE AGREEMENT
dated as of July 30, 2004
Among
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION, as Seller,
NAVISTAR FINANCIAL CORPORATION, as Servicer,
THUNDER BAY FUNDING, LLC,
as Company,
and
ROYAL BANK OF CANADA,
as Agent
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TABLE OF CONTENTS
Page
ARTICLE I PURCHASE ARRANGEMENTS...................................2
Section 1.1 Purchase of Purchaser Interest.................2
Section 1.2 Transfers and Assignments; Custody
of Receivables Files.......................... 2
Section 1.3 Payment Requirements...........................2
Section 1.4 Establishment of Designated Accounts...........2
ARTICLE II PAYMENTS AND COLLECTIONS...............................2
Section 2.1 General Settlement Procedures..................2
Section 2.2 Withdrawals from Reserve Account...............2
Section 2.3 Payment Rescission.............................2
Section 2.4 Clean Up Call..................................2
Section 2.5 Monthly Report.................................2
Section 2.6 Deposits Net of Total Servicing Fee............2
Section 2.7 Investment Policy and Procedure................2
Section 2.9 Distributions by Agent.........................2
ARTICLE III REPRESENTATIONS AND WARRANTIES........................2
Section 3.1 Representations and Warranties of
Seller Parties.................................2
ARTICLE IV CONDITIONS OF PURCHASES................................2
Section 4.1 Conditions Precedent to Purchase...............2
ARTICLE V COVENANTS...............................................2
Section 5.1 Affirmative Covenants of the Seller Parties....2
Section 5.2 Covenants of the Servicer......................2
Section 5.3 Covenant of the Agent..........................2
Section 5.4 Replacement of Financial Institutions..........2
ARTICLE VI ADMINISTRATION AND COLLECTION..........................2
Section 6.1 General Duties of the Servicer.................2
Section 6.2 Collection of Receivables Payments.............2
Section 6.3 Realization Upon Liquidating Receivables.......2
Section 6.4 Maintenance of Insurance Policies..............2
Section 6.5 Maintenance of Security Interests
in Vehicles....................................2
Section 6.6 Total and Supplemental Servicing Fees;
Payment of Certain Expenses by Servicer........2
Section 6.7 Monthly Advances...............................2
Section 6.8 Additional Deposits............................2
Section 6.9 Annual Statement as to Compliance..............2
Section 6.10 Annual Independent Accountants'Report.........2
Section 6.11 Assignment of Administrative Receivables
and Warranty Receivables......................2
Section 6.12 Collection Account............................2
Section 6.13 Delegation of Duties..........................2
Section 6.14 Servicer Not to Resign........................2
Section 6.15 Appointment of Successor......................2
Section 6.16 Merger or Consolidation of or Assumption
of the Obligations of, the Servicer...........2
ARTICLE VII SERVICER DEFAULTS.....................................2
Section 7.1 Servicer Defaults.............................2
Section 7.2 Remedies......................................2
ARTICLE VIII INDEMNIFICATION......................................2
Section 8.1 Indemnities by the Seller Parties.............2
Section 8.2 Increased Cost and Reduced Return.............2
Section 8.3 Other Costs and Expense.......................2
ARTICLE IX MISCELLANEOUS..........................................2
Section 9.1 Waivers and Amendments........................2
Section 9.2 Notices.......................................2
Section 9.3 Ratable Payments..............................2
Section 9.4 Protection of Ownership Interests
of the Purchasers.............................2
Section 9.5 Confidentiality...............................2
Section 9.6 Bankruptcy Petition...........................2
Section 9.7 Limitation of Liability.......................2
Section 9.8 CHOICE OF LAW.................................2
Section 9.9 CONSENT TO JURISDICTION.......................2
Section 9.10 WAIVER OF JURY TRIAL..........................2
Section 9.11 Integration; Binding Effect; Survival of
Terms.........................................2
Section 9.12 Counterparts; Severability; Section
References....................................2
Section 9.14 Characterization..............................2
Section 9.15 Non-Recourse Obligations......................2
EXHIBITS
Exhibit I Definitions
Exhibit II Places of Business of the Seller Parties;
Locations of Records; Federal Employer
Identification Number(s)
Exhibit III Form of Monthly Report
SCHEDULES
Schedule A Documents to be Delivered to Agent
Schedule B Schedule of Receivables
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NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
RECEIVABLES PURCHASE AGREEMENT
This Receivables Purchase Agreement dated as of July 30,
2004, is among Navistar Financial Retail Receivables Corporation,
a Delaware corporation ("Seller" or "NFRRC"), Navistar Financial
Corporation, a Delaware corporation ("NFC"), as Servicer (the
Servicer together with the Seller, the "Seller Parties" and each
a "Seller Party"), Thunder Bay Funding, LLC (the "Company"), and
Royal Bank of Canada, as agent for the Purchasers hereunder or
any successor agent hereunder (together with its successors and
assigns hereunder, the "Agent"). Unless defined elsewhere
herein, capitalized terms used in this Agreement shall have the
meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Seller desires to transfer and assign an undivided ownership
interest in a specified pool of Receivables (as defined herein)
to the Company on the date of this Agreement (as defined herein)
which it acquired from NFC, and the Company desires to acquire
such interest on the date of this Agreement, in each case subject
to the terms of this Agreement.
The Seller, the Company, and the Agent desire to appoint NFC
as the Servicer under this Agreement, and NFC desires to act as
Servicer, in consideration of the fees and other benefits and
subject to the terms and conditions set forth in this Agreement.
ARTICLE I
PURCHASE ARRANGEMENTS
Section 1.1 Purchase of Purchaser Interest.
(a) Upon the terms and subject to the conditions hereof, on the
date hereof Seller hereby sells and assigns the Purchaser
Interest to the Agent for the benefit of the Purchasers.
(b) The aggregate Purchase Price for the Purchaser Interest
conveyed hereunder shall be $324,999,999.66, which is payable by
wire transfer of immediately available funds to a bank account of
Seller designated in writing by Seller to the Agent.
Section 1.2 Transfers and Assignments; Custody of
Receivables Files.
(a) On the date hereof, the Seller shall deposit the Initial
Reserve Account Deposit into the Reserve Account.
(b) Within two Business Days after the date hereof, the Servicer
shall cause to be deposited into the Collection Account all
Collections (from whatever source) on or with respect to
Receivables received by the Servicer on or after the Cutoff Date
and on or prior to the date hereof.
(c) In connection with the sale, transfer and assignment of
Receivables to the Seller from NFC pursuant to the Sale
Agreement, the Seller, simultaneously with the execution and
delivery of this Agreement, shall enter into the Custodian
Agreement with the Custodian, pursuant to which the Seller shall
revocably appoint the Custodian, and the Custodian shall accept
such appointment, to act as Custodian.
(d) The Purchasers acknowledge and agree that (a) the rights
pursuant to the International Purchase Obligations are personal
to NFC, and only the proceeds of such rights are being assigned
to the Purchasers pursuant to the terms hereof, (b) the
Purchasers are not, and are not intended to be, third party
beneficiaries of such rights, and (c) accordingly such rights are
not exercisable by, enforceable by, or for the benefit of, or
preserved for the benefit of, the Purchasers. The Purchasers
hereby agree to and accept the appointment and authorization of
NFC as Servicer hereunder subject to the terms and conditions set
forth in this Agreement.
Section 1.3 Payment Requirements. All amounts to be
paid or deposited by the Seller or the Servicer to the Agent or
any Purchaser pursuant to any provision of this Agreement shall
be paid or deposited in immediately available funds in accordance
with the terms hereof no later than 11:00 a.m. (Chicago time) on
the day when due; provided however, that (i) with respect to any
intrabank transfer from any Designated Account to the Agent, the
Purchasers or another Designated Account, it will be sufficient
if the Servicer shall provide the Agent with notice that such
transfer should be made, no later than 12:30 p.m. (Chicago time)
on the day when due, and (ii) with respect to any transfer into
the Collection Account, it shall be sufficient if such transfer
is received by the Securities Intermediary at any time on the day
it is due, it being understood that if such transfer into the
Collection Account is received by the Securities Intermediary
after its internal payment deadline, Investment Earnings may not
be credited to the Collection Account for that night for such
late arriving funds. Amounts payable to the Agent shall be paid
to the Agent by deposit into Account No. XXXXXXX at Deutsche Bank
Trust Company Americas, ABA #XXXXXX, Reference Navistar Pool
2004-RBC, until otherwise notified by the Agent. Except as
otherwise provided herein, all computations of Yield, per annum
fees hereunder and per annum fees under the Fee Letter shall be
made on the basis of a year of 360 days for the actual number of
days elapsed; provided however, that computations of interest at
the Base Rate shall be made on the basis of a year of 365 days or
366 days, as applicable, for the actual number of day elapsed.
If any amount hereunder shall be payable on a day which is not a
Business Day, such amount shall be payable on the next succeeding
Business Day.
Section 1.4 Establishment of Designated Accounts.
(a) The Servicer, for the benefit of the Agent and the
Purchasers, shall establish and maintain in the name of the
Agent, an account titled "Royal Bank of Canada, as Agent-Navistar
Financial 2004-RBC Collection Account" (the "Collection Account")
and an account titled "Royal Bank of Canada, as Agent-Navistar
Financial 2004-RBC Reserve Account" (the "Reserve Account"), each
of which will be an Eligible Account bearing a designation that
the funds deposited therein are held for the benefit of the Agent
and Purchasers. The Designated Accounts and any Eligible
Investments on deposit in the Designated Accounts shall be
subject to the exclusive custody and control of the Agent and the
Agent shall have sole signature authority with respect thereto.
(b) The Securities Intermediary when requested by the Servicer
shall invest the funds in the Reserve Account in Eligible
Investments selected by the Servicer, held in the name of the
Securities Intermediary for the benefit of the Agent and the
Purchasers. Funds deposited in the Reserve Account shall be
invested in Eligible Investments which mature on or prior to the
next Settlement Date. Any income or other gain from such
Eligible Investments shall be retained in the Reserve Account, to
the extent the amount on deposit is less than the Specified
Reserve Account Balance. Any Investment Earnings on funds in the
Reserve Account not required to be retained in the Reserve
Account pursuant to the preceding sentence shall be deposited
into the Collection Account one Business Day prior to each
Settlement Date and shall be treated as a part of Collected
Interest for the Monthly Period related to such Settlement Date.
The Servicer shall determine the Specified Reserve Account
Balance for each Settlement Date.
(c) The Securities Intermediary when requested by the Servicer
shall invest the funds in the Collection Account in Eligible
Investments selected by the Servicer, held in the name of the
Securities Intermediary for the benefit of the Agent and the
Purchasers, which shall mature no later than the Business Day
preceding the Settlement Date. Any income or other gain from
such Eligible Investments in the Collection Account shall be
retained in the Collection Account and shall be treated as a part
of Collected Interest for the Monthly Period related to such
Settlement Date.
ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 General Settlement Procedures.
(a) The Servicer shall remit to the Collection Account all
Collections including all Insurance Proceeds, all Liquidation
Proceeds, proceeds from any Dealer Liability, and proceeds from
any International Purchase Obligations, within two Business Days
after receipt thereof. The Agent shall notify the Servicer of
the Yield and Net Swap Amount with respect to any Settlement
Period within three (3) Business Days after the end of such
Settlement Period. On or before each Determination Date, with
respect to the preceding Monthly Period and the related
Settlement Date, the Servicer shall calculate the Total Available
Amount, Collected Interest, Collected Principal, the Total
Servicing Fee, and, provided that the Agent has supplied the
Servicer with the Yield and Net Swap Amount for the related
Settlement Period, other amounts required to determine the
amounts to be deposited in or paid from each of the Collection
Account and the Reserve Account on the next succeeding Settlement
Date. If at any time the Seller receives any Collections, the
Seller shall promptly pay such Collections to the Servicer and,
at all times prior to such payment, such Collections shall be
held in trust by the Seller for the exclusive benefit of the
Purchasers and the Agent.
(b) On or before (but not more than two Business Days before)
the Business Day preceding each Settlement Date, the Servicer
shall cause to be made (including, in the case of clause (ii), by
instructing the Securities Intermediary in accordance with
Section 2.2 (a)) the following withdrawals, deposits, transfers
and distributions in the amounts set forth in the Monthly Report
for such Settlement Date:
(i) from the Collection Account to the Servicer, in immediately
available funds, reimbursement of Outstanding Monthly
Advances pursuant to Section 6.7, payments of
Liquidation Expenses with respect to Receivables which
became Liquidating Receivables during the related
Monthly Period pursuant to Section 6.3 and any unpaid
Liquidation Expenses from prior periods;
(ii) from the Reserve Account to the Collection Account, the
lesser of (A) the amount of cash or other immediately
available funds therein on such date and (B) the
amount, if any, by which (I) the sum of the Total
Servicing Fee with respect to the preceding Monthly
Period, the Yield for such Settlement Period and the
Net Swap Amount for the related Settlement Period, the
Facility Fee with respect to the related Settlement
Period, and the Principal Distributable Amount for the
related Settlement Date, exceeds (II) the Available
Amount for such Settlement Date; and
(iii) the Servicer shall deposit, out of its own funds, the Net
Swap Adjustment Amount into the Collection Account and
Reserve Account as follows: (A) into the Collection
Account, the excess, if any, of the amount specified
in clause (B) of Section 2.1(b)(ii) over the amount
specified in clause (A) of Section 2.1(b)(ii) and (B)
the remainder, if any, into the Reserve Account.
(c) On each Settlement Date, the Agent at the request of the
Servicer shall apply amounts on deposit in the Collection
Account, to the extent of the Total Available Amount, as follows:
(i) first, if the Servicer is not the Seller or an Affiliate of
the Seller, to pay the Total Servicing Fee to the
Servicer with respect to the related Monthly Period,
(ii) second, to the reimbursement of the Agent's costs of
collection and enforcement of this Agreement,
(iii) third, to pay the Agent for distribution to the Purchasers
an amount equal to the sum of (A) the sum of the Yield
for the related Settlement Period and the Net Swap
Amount for the related Settlement Period and (B) the
Facility Fee for such Settlement Period,
(iv) fourth, if the Servicer is the Seller or an Affiliate of the
Seller, to pay the Total Servicing Fee to the Servicer
with respect to the related Monthly Period,
(v) fifth, to pay to the Agent for distribution to the
Purchasers, an amount equal to the Principal
Distributable Amount for such Settlement Date to be
applied to reduce the Capital of the Purchaser Interest,
(vi) sixth, to pay to the Reserve Account, an amount equal to the
excess, if any, of the Specified Reserve Account
Balance over the amount of funds then on deposit in the
Reserve Account,
(vii) seventh, for payment of all other Obligations which are
payable on or before such Settlement Date to the Agent
or the Purchasers and which have not otherwise been
paid (other than Warranty Payments owed by NFC or the
Servicer and Optional Purchase Proceeds), and
(viii) eighth, if no Servicer Default has occurred and is
continuing, the remaining balance, if any, to the
Seller, unless there is a Servicer Default, at which
time the remaining balance shall be used to reduce the
Capital and any other Aggregate Unpaids.
(d) All payments by or on behalf of an Obligor with respect to a
Receivable (excluding Supplemental Servicing Fees) shall be
applied (i) first, to reduce Outstanding Monthly Advances, if
any, with respect to such Receivable, as described in Section
6.7, (ii) second, to the Scheduled Payment for such Monthly Period
with respect to such Receivable, and (iii) third, the remainder
shall constitute, with respect to such Receivable, a Full
Prepayment or Partial Prepayment.
(e) A Partial Prepayment made on a Receivable is applied to
reduce the final Scheduled Payment and will thereafter, to the
extent the Partial Prepayment exceeds the final Scheduled
Payment, reduce Scheduled Payments in reverse chronological order
beginning with the penultimate Scheduled Payment. The Rebate
related to such Partial Prepayment will reduce the final
Scheduled Payment and will thereafter, to the extent the Rebate
exceeds the final Scheduled Payment, reduce Scheduled Payments in
reverse chronological order beginning with the penultimate
Scheduled Payment.
Section 2.2 Withdrawals from Reserve Account.
(a) The Servicer shall notify (with a copy to the Agent) the
Securities Intermediary of the amount of, and the Securities
Intermediary shall make, the withdrawals from the Reserve Account
required pursuant to Sections 1.4(b) and 2.1(b)(ii). On each
Settlement Date, to the extent that the funds in the Reserve
Account exceed the Specified Reserve Account Balance and so long
as no Servicer Default shall have occurred and be continuing, the
Servicer may notify (with a copy to the Agent) the Securities
Intermediary of the amount of, and the Securities Intermediary
shall withdraw the amount of, such excess from the Reserve
Account and distribute the same to the Seller. Upon the
occurrence of a Servicer Default, the Servicer shall notify (with
a copy to the Agent) the Securities Intermediary of the amount
of, and the Securities Intermediary shall withdraw, all amounts
on deposit in the Reserve Account for application in accordance
with Section 2.1(c). To the extent that any funds remain in the
Reserve Account after the Aggregate Unpaids have been
indefeasibly reduced to zero, such funds shall be withdrawn and
distributed to, or as directed by, the Seller. Each Monthly
Report shall specify the amount, if any, which is scheduled to be
withdrawn from the Reserve Account and distributed to the Seller
on the next succeeding Settlement Date.
(b) If the Servicer, pursuant to Section 6.7, determines on any
Settlement Date that it is required to make a Monthly Advance and
does not do so from its own funds, the Servicer shall notify
(with a copy to the Agent) the Securities Intermediary of the
amount of such shortfall, and the Securities Intermediary shall
withdraw, funds from the Reserve Account up to the amount of such
shortfall and deposit them in the Collection Account to cover any
such shortfall. Such payment shall be deemed to have been made
by the Servicer pursuant to Section 2.1 for purposes of making
distributions pursuant to this Agreement, but shall not otherwise
satisfy the Servicer's obligation to deliver the amount of the
Monthly Advances to the Collection Account, and the Servicer
shall within two Business Days replace any funds in the Reserve
Account so used. The Servicer shall not be entitled to
reimbursement for any such deemed Monthly Advances unless and
until the Servicer shall have replaced such funds in the Reserve
Account.
Section 2.3 Payment Rescission. No payment of any
of the Aggregate Unpaids shall be considered paid or applied
hereunder to the extent that, at any time, all or any portion of
such payment or application is rescinded by application of law or
judicial authority, or must otherwise be returned or refunded for
any reason. Seller shall remain obligated for the amount of any
payment or application so rescinded, returned or refunded, and
shall promptly pay to the Agent (for application to the Person or
Persons who suffered such rescission, return or refund) the full
amount thereof, plus the Default Fee from the date of any such
rescission, return or refunding.
Section 2.4 Clean Up Call. As of the last day of
any Monthly Period as of which the Capital is 10% or less of the
Initial Aggregate Receivables Balance, the Servicer shall have
the option to purchase all (but not less than all) of the
Purchaser Interest (the "Clean-up Call"); provided, however, that
the Servicer may not exercise the Clean-up Call if the Optional
Purchase Proceeds are insufficient to repay all Aggregate
Unpaids. To exercise such option, the Servicer shall provide the
Agent with not less than 10 Business Days' prior written notice
of its intention to do so (the "Clean-up Call Notice"). On or
before the day preceding the related Settlement Date, the
Servicer shall deposit in the Collection Account an amount equal
to the aggregate Administrative Purchase Payments for the
Receivables (including Liquidating Receivables), included in the
Purchaser Interest (less the Liquidation Expenses to be incurred
in connection with the recovery thereof). The foregoing amounts
(the "Optional Purchase Proceeds") shall be paid by the Servicer
into the Collection Account for distribution to the Agent and the
Purchasers in accordance with Section 2.1.
Section 2.5 Monthly Report Not later than 10:00
a.m. (Chicago time) on each Determination Date, the Servicer
shall deliver to the Agent a Monthly Report with respect to the
immediately preceding Monthly Period, executed by any Authorized
Officer of the Servicer, containing all information necessary for
making the calculations, withdrawals, deposits, transfers and
distributions required by this Article II.
Section 2.6 Deposits Net of Total Servicing Fee.
Any provision herein to the contrary notwithstanding, for so long
as (i) NFC is the Servicer hereunder and (ii) no Servicer Default
has occurred and is continuing, the deposits into the Collection
Account pursuant to Section 2.1(a) may be made net of the Total
Servicing Fee to be distributed to the Servicer pursuant to
Sections 2.1(c)(iv) (so long as Collected Interest not yet
distributed is sufficient therefor). Nonetheless, the Servicer
shall account for the Total Servicing Fee in the Monthly Report
as if such amount had been deposited into the Collection Account
and/or transferred separately.
Section 2.7 Investment Policy and Procedure.
Investments in Eligible Investments shall be made in the name of
the Securities Intermediary, and such investments shall not be
sold or disposed of prior to their maturity. The Servicer shall
from time to time appoint a person, which shall initially be
JPMorgan Chase Bank, to act as "Securities Intermediary" , who
shall qualify as a "securities intermediary" within the meaning
of Section 8-102 of the UCC in effect in the State of New York.
The Servicer shall provide notice of such appointment to the
Agent and shall use reasonable efforts to obtain the express
agreement of such Person to the obligations of the Securities
Intermediary set forth in Sections 1.4, 2.1, 2.2, 2.7 and 6.12, a
copy of which agreement shall be delivered to the Agent.
(a) With respect to the Designated Account Property, the
Securities Intermediary agrees, by its acceptance hereof, that:
(i) The Designated Accounts are accounts to which Financial
Assets will be credited and are "securities accounts"
within the meaning of Section 8-501 of the UCC.
(ii) All securities or other property underlying any Financial
Assets credited to the Designated Accounts shall be
registered in the name of the Securities Intermediary,
indorsed to the Securities Intermediary or in blank or
credited to another securities account maintained in
the name of the Securities Intermediary and in no case
will any Financial Asset credited to any of the
Designated Accounts be registered in the name of the
Agent, the Company, the Servicer or the Seller, payable
to the order of the Agent, the Company, the Servicer or
the Seller or specially indorsed to the Agent, the
Company, the Servicer or the Seller except to the
extent the foregoing have been specially indorsed to
the Securities Intermediary or in blank.
(iii) All property delivered to the Securities Intermediary
pursuant to this Agreement will be promptly credited to
the appropriate Designated Account as directed by the
Servicer or as otherwise provided herein.
(iv) Each item of property (whether investment property,
Financial Asset, security, instrument or cash) credited
to a Designated Account shall be treated as a
"financial asset" within the meaning of Section
8-102(a)(9) of the New York UCC.
(v) If at any time the Securities Intermediary shall receive any
order from the Agent directing transfer or redemption
of any Financial Asset relating to the Securities
Accounts, the Securities Intermediary shall comply with
such entitlement order without further consent by the
Financial Institutions, the Company, the Servicer, the
Seller or any other Person.
(vi) The Designated Accounts shall be governed by the laws of the
State of New York, regardless of any provision in any
other agreement. For purposes of the UCC, New York
shall be deemed to be the Securities Intermediary's
jurisdiction and the Designated Accounts (as well as
the Securities Entitlements related thereto) shall be
governed by the laws of the State of New York.
(vii) The Securities Intermediary has not entered into, and until
the termination of this Agreement will not enter into,
any agreement with any other Person relating to the
Designated Accounts and/or any Financial Assets
credited thereto pursuant to which it has agreed to
comply with entitlement orders (as defined in Section
8-102(a)(8) of the New York UCC) of such other Person
and the Securities Intermediary has not entered into,
and until the termination of this Agreement will not
enter into, any agreement with the Financial
Institutions, any Company, the Seller, the Servicer or
the Agent purporting to limit or condition the
obligation of the Securities Intermediary to comply
with entitlement orders as set forth in Section
2.7(a)(v) above.
(viii) Except for the claims and interest of the Agent, and
the Company in the Designated Accounts, the Securities
Intermediary knows of no claim to, or interest in, the
Designated Accounts or in any Financial Asset credited
thereto. If any other person asserts any lien,
encumbrance or adverse claim (including any writ,
garnishment, judgment, warrant of attachment, execution
or similar process) against the Designated Accounts or
in any Financial Asset carried therein, the Securities
Intermediary will promptly notify the Agent, the
Company, and the Servicer thereof.
(ix) The Securities Intermediary will promptly send copies of all
statements, confirmations and other correspondence
concerning the Designated Accounts and/or any
Designated Account Property simultaneously to each of
the Servicer and the Agent at the addresses set forth
in the signature pages hereof.
(b) The Servicer shall have the right, revocable by the Agent to
notify the Securities Intermediary (with a copy to the Agent) of
the amounts to be withdrawn and paid, and the Securities
Intermediary shall make such withdrawals and payments, from the
Designated Accounts for the purpose of permitting the Servicer to
carry out its duties hereunder or permitting the Agent to carry
out its duties hereunder.
(c) The Agent shall possess all right, title and interest in and
to all funds on deposit from time to time in the Designated
Accounts and in all proceeds thereof. The Designated Accounts
shall be under the sole dominion and control of the Agent for the
benefit of the Agent and the Purchasers.
(d) The Servicer shall not direct the Securities Intermediary to
make any investment of any funds or to sell any investment held
in any of the Designated Accounts unless the security interest
granted and perfected in such account shall continue to be
perfected in such investment or the proceeds of such sale, in
either case without any further action by any Person, and, in
connection with any direction to the Agent to make any such
investment or sale, if requested by the Securities Intermediary,
the Servicer shall deliver to the Securities Intermediary an
opinion of counsel, acceptable to the Securities Intermediary, to
such effect.
(e) The Seller shall pay all fees and expenses of the Securities
Intermediary. The Securities Intermediary shall have no right of
offset against amounts in the Designated Accounts.
Section 2.8 Default Fees. If any Person fails to
pay any of the Obligations when due, such Person agrees to pay,
on demand, the Default Fee in respect thereof until paid.
Notwithstanding the foregoing, no provision of this Agreement or
the Fee Letter shall require the payment or permit the collection
of any amounts hereunder in excess of the maximum permitted by
applicable law.
Section 2.9 Distributions by Agent. All
distributions to the Agent under any clause of Section 2.1(c) or
any other provision of this Agreement in respect of amounts owing
to the Agent and the Purchasers shall be allocated and paid by
the Agent to the Purchasers as the Agent and the Purchasers shall
agree.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of Seller
Parties. As of the date hereof (or with respect to
representations and warranties that speak expressly as of another
date, then as of such other date), each Seller Party hereby
represents and warrants to the Agent and the Purchasers, as to
itself, that:
(a) Corporate Existence and Power. Such Seller Party is a
corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation, and is duly
qualified to do business and is in good standing as a foreign
corporation, and has and holds all corporate power and all
governmental licenses, authorizations, consents and approvals
required to carry on its business in each jurisdiction in which
its business is conducted.
(b) Power and Authority; Due Authorization Execution and
Delivery. The execution and delivery by such Seller Party of this
Agreement and each other Transaction Document to which it is a
party, and the performance of its obligations hereunder and
thereunder and, in the case of Seller only, Seller's use of the
proceeds of sales made hereunder, are within its corporate powers
and authority and have been duly authorized by all necessary
corporate action on its part. This Agreement and each other
Transaction Document to which such Seller Party is a party has
been duly executed and delivered by such Seller Party.
(c) No Conflict. The execution and delivery by such Seller
Party of this Agreement and each other Transaction Document to
which it is a party, and the performance of its obligations
hereunder and thereunder do not contravene or violate (i) its
certificate or articles of incorporation or by-laws, (ii) any
law, rule or regulation applicable to it, (iii) any restrictions
under any material agreement, contract or instrument to which it
is a party or by which it or any of its property is bound, or
(iv) any order, writ, judgment, award, injunction or decree
binding on or affecting it or its property.
(d) Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due
execution and delivery by such Seller Party of this Agreement and
each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of such Seller Party's knowledge,
threatened, against or affecting such Seller Party, or any of its
properties, in or before any court, arbitrator or other body,
that would result in a Material Adverse Change.
(f) Binding Effect. This Agreement and each other Transaction
Document to which such Seller Party is a party constitute the
legal, valid and binding obligations of such Seller Party
enforceable against such Seller Party in accordance with their
respective terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or limiting creditors' rights generally
and by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(g) Use of Proceeds. No proceeds of any sale hereunder will be
used (i) for a purpose that violates, or would be inconsistent
with, Regulation T, U or X promulgated by the Board of Governors
of the Federal Reserve System from time to time or (ii) to
acquire any security in any transaction which is subject to
Section 13 or 14 of the Securities Exchange Act of 1934, as
amended.
(h) Good Title. Immediately prior to each purchase hereunder,
the Seller shall be the legal and beneficial owner of the
Receivables and Related Security with respect thereto, free and
clear of any Adverse Claim. All necessary actions have been
taken, including the filing of all financing statements or other
similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect
Seller's ownership interest in each Receivable and the Related
Security.
(i) Perfection. This Agreement, together with the filing of the
financing statements contemplated hereby, is effective to, and
shall transfer to the Agent for the benefit of the Purchaser (and
the Agent for the benefit of the Purchaser shall acquire from
Seller) a valid and perfected first priority undivided ownership
interest in each Receivable existing or hereafter arising and in
the Related Security with respect thereto, free and clear of any
Adverse Claim. All necessary actions have been taken, including
the filing of all financing statements or other similar
instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions, to perfect the
Agent's (on behalf of the Purchaser) ownership interest in the
Receivables and, the Related Security.
(j) Places of Business. The principal place of business and
chief executive office of such Seller Party and the offices where
it keeps all of its Records are located at the address(es) listed
on Exhibit II or such other locations of which the Agent has been
notified in accordance with Section 5.2(a) in jurisdictions where
all action required to continue the perfection of the Agent's
security interest in the Receivables and the Related Security has
been taken and completed. Seller's Federal Employer
Identification Number is correctly set forth on Exhibit II.
(k) Not a Holding Company or an Investment Company. Such Seller
Party is not a "holding company" or a "subsidiary holding
company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or any successor
statute. Such Seller Party is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or
any successor statute.
(l) Taxes. Such Seller Party will do nothing to materially
impair the rights, title and interest of any Purchaser in and to
the Purchaser Interest and will pay when due (or contest in good
faith) any taxes, including without limitation any sales tax,
excise tax or other similar tax or charge, payable in connection
with the Receivables and their creation and satisfaction.
(m) Financial Condition. In the case of the Seller only, the
Seller is solvent and able to pay its debts when due, and is not
the subject of any case or proceeding, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, arrangement,
adjustment of debts, winding-up, liquidation, dissolution,
composition, receivership, trusteeship, custodianship, or any
other proceeding regarding relief of debtors or enforcement of
creditors' rights; Seller shall not take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the foregoing cases or proceedings; and
Seller is not a defendant in any case, proceeding or other action
seeking issuance of a writ or warrant of attachment, execution,
distraint or similar process against all or any part of its
assets.
ARTICLE IV
CONDITIONS OF PURCHASES
Section 4.1 Conditions Precedent to Purchase. The
purchase of a Purchaser Interest under this Agreement is subject
to the conditions precedent that (a) the Agent shall have
received on or before the date of such purchase those documents
listed on Schedule A and (b) the Agent shall have received all
fees and expenses required to be paid on such date pursuant to
the terms of this Agreement and the Fee Letter.
ARTICLE V
COVENANTS
Section 5.1 Affirmative Covenants of the Seller
Parties. Until the date on which the Aggregate Unpaids have been
indefeasibly paid in full and this Agreement terminates in
accordance with its terms, each Seller Party hereby covenants, as
to itself, as set forth below:
(a) Financial Reporting. Such Seller Party will maintain, for
itself and each of its Subsidiaries, a system of accounting
established and administered in accordance with generally
accepted accounting principles, and furnish to the Agent:
(i) Annual Reporting. Within 120 days after the close of its
fiscal year, the annual report for Servicer for such
fiscal year on Form 10-K, in the form filed with the
Securities and Exchange Commission.
(ii) Quarterly Reporting. Within 45 days after the close of the
first three (3) quarterly periods of its fiscal year,
the quarterly reports for Servicer on Form 10-Q, in the
form filed with the Securities and Exchange Commission,
as at the close of each such period.
(iii) Other Information. Promptly, from time to time, such other
information, documents, records or reports relating to
the Receivables or the condition or operations,
financial or otherwise, of such Seller Party as the
Agent may from time to time reasonably request in order
to protect the interests of the Agent and the
Purchasers under or as contemplated by this Agreement.
(b) Notices. Such Seller Party will notify the Agent in writing
of any of the following promptly upon learning of the occurrence
thereof, describing the same and, if applicable, the steps being
taken with respect thereto:
(i) Servicer Defaults. The occurrence of each Servicer Default,
by a statement of an Authorized Officer of such Seller
Party.
(ii) Sale Agreement. Any request for waivers, consents or
modifications of the Sale Agreement.
(c) Compliance with Laws and Preservation of Corporate
Existence. Such Seller Party will comply in all respects with all
applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject. Such
Seller Party will preserve and maintain its corporate existence,
rights, franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified in good standing
as a foreign corporation in each jurisdiction where its business
is conducted, except where the failure to so preserve and
maintain or qualify would not result in a Material Adverse Change.
(d) Audits. Such Seller Party will furnish to the Agent from
time to time such information with respect to it and the
Receivables as the Agent may reasonably request. Such Seller
Party shall permit the Agent and its agents and representatives,
at their own expense (unless a Servicer Default has occurred and
is continuing (including, without limitation, by reason of a
failure to deliver the reports required by Section 6.9 or Section
6.10 and the expiration of the grace period specified in Section
7.1(c)), in which case, at the expense of the Servicer) during
normal business hours on 48 hours prior notice: (i) to examine
and make copies of and abstracts from all Records in the
possession or under the control of such Person relating to the
Receivables and the Related Security, including, without
limitation, the related Contracts, and (ii) to visit the offices
and properties of such Person for the purpose of examining such
materials described in clause (i) above, and to discuss matters
relating to such Person's financial condition or the Receivables
and the Related Security or any Person's performance under any of
the Transaction Documents or any Person's performance under the
Contracts and, in each case, with the executive officers of
Seller or the Servicer. Nothing in this Section 5.1(d) shall
affect the obligations of the Servicer to observe any applicable
law prohibiting the disclosure of information regarding the
Obligors, and the failure of the Servicer to provide access to
information as a result of this obligation shall not constitute a
breach of this Section 5.1(d).
(e) Keeping and Marking of Records and Books. The Servicer will
keep proper books and records of account containing full, true
and correct entries in conformity with GAAP (to the extent
applicable). The Servicer will ensure that its computer files
are at all times marked in the fashion specified in Section
4.01(c) of the Sale Agreement.
(f) Taxes on Receivables. Seller will pay when due any taxes
payable in connection with the Receivables, exclusive of taxes on
or measured by income or gross receipts of the Company, the Agent
or any Financial Institution.
(g) Ownership. Seller shall take all necessary action to (i)
vest legal and equitable title to the Designated Receivables, and
the Related Security purchased under the Sale Agreement
irrevocably in Seller, free and clear of any Adverse Claims other
than Adverse Claims in favor of the Agent and the Purchasers
(including, without limitation, the filing of all financing
statements or other similar instruments or documents necessary
under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect Seller's interest in such Designated
Receivables and Related Security and such other action to
perfect, protect or more fully evidence the interest of Seller
therein as the Agent may reasonably request), and (ii) establish
and maintain, in favor of the Agent, for the benefit of the
Purchasers, a valid and perfected first priority undivided
ownership interest (and/or a valid and perfected first priority
security interest) in all Receivables and Related Security, free
and clear of any Adverse Claims other than Adverse Claims in
favor of the Agent for the benefit of the Purchasers (including,
without limitation, the filing of all financing statements or
other similar instruments or documents necessary under the UCC
(or any comparable law) of all appropriate jurisdictions to
perfect the Agent's (for the benefit of the Purchasers) interest
in such Receivables and Related Security and such other action to
perfect, protect or more fully evidence the interest of the Agent
for the benefit of the Purchasers as the Agent may reasonably
request).
(h) Representations and Warranties as to the Receivables. As
collateral security for the performance by the Seller of all the
terms, covenants and agreements on the part of the Seller
(whether as Seller or otherwise) to be performed under this
Agreement or any document delivered in connection with this
Agreement in accordance with the terms thereof, including the
punctual payment when due of all obligations of the Seller
hereunder or thereunder, whether for indemnification payments,
fees, expenses or otherwise, the Seller hereby assigns to the
Agent for its benefit and the ratable benefit of the Purchasers a
security interest in, all of the Seller's right, title and
interest in, to and under (but none of the Seller's obligations
under) all of the following, whether now or hereafter existing or
arising:
(i) the Sale Agreement, including, without limitation, (a) all
rights of the Seller to receive moneys due or to become
due under or pursuant to the Sale Agreement, (b) all
security interests and property subject thereto from
time to time purporting to secure payment of monies due
or to become due under or pursuant to the Sale
Agreement, (c) all rights of the Seller to receive
proceeds of any insurance, indemnity, warranty or
guaranty with respect to the Sale Agreement, (d) claims
of the Seller for damages arising out of or for breach
of or default under the Sale Agreement, and (e) the
right of the Seller to compel performance and otherwise
exercise all remedies thereunder;
(ii) all Receivables, the Related Security with respect thereto
and the Collections not otherwise purchased or
scheduled to be purchased under this Agreement;
(iii) to the extent not included in the foregoing, all proceeds of
any and all of the foregoing.
Such assigned right, title and interest includes the
representations and warranties of NFC made to the Seller pursuant
to Sections 3.01 and 3.02 of the Sale Agreement. The Seller
hereby represents and warrants to the Purchasers that the Seller
has taken no action which would cause such representations and
warranties to be false in any material respect as of the date of
this Agreement. The Seller further acknowledges that each
Purchaser relies on the representations and warranties of the
Seller under this Agreement and of NFC under the Sale Agreement
in accepting the Receivables. The foregoing representation and
warranty speaks as of the date of this Agreement, but shall
survive the sale, transfer and assignment of the Receivables to
the Purchasers.
(i) Repurchase of Receivables Upon Breach of Warranty. Upon
discovery by the Seller or the Servicer of a breach of any of the
representations and warranties in Section 3.01 of the Sale
Agreement (and, with respect to Subsection 3.01(j) of the Sale
Agreement, irrespective of any limitation regarding knowledge of
NFC) or in Article III of this Agreement that materially and
adversely affects the interests of a Purchaser in any Receivable,
the party discovering such breach shall give prompt written
notice thereof to the Agent and the Purchasers. As of the second
Settlement Date following its discovery or its receipt of notice
of such a breach (or, if a Servicer Default has occurred and is
continuing, or, at the applicable Seller Party's election, the
first Accounting Date following such discovery), unless such
breach shall have been cured in all material respects, the
applicable Seller Party shall repurchase the interests of the
Purchasers in such Receivable from the Purchasers on the related
Settlement Date. A Purchaser shall have no affirmative duty to
conduct any investigation as to the occurrence of any event
requiring the repurchase of any Receivable pursuant to this
Section 5.1(i).
The repurchase price to be paid by any Warranty
Purchaser shall be an amount equal to the Warranty Payment. It
is understood and agreed that the obligations of the Warranty
Purchaser to repurchase any Receivable as to which a breach has
occurred and is continuing, shall, if such repurchase obligations
are fulfilled, constitute the sole remedy against the Seller, the
Servicer or NFC for such breach available to any Person. The
Servicer acknowledges its obligations to repurchase
Administrative Receivables from the Purchaser pursuant to Section
5.2(b) hereof and to repurchase Warranty Receivables pursuant to
Section 5.04 of the Sale Agreement.
(j) Corporate Separateness. Seller will maintain its corporate
separateness and distinctiveness from NFC and all other
Affiliates through observation of the following covenants:
(i) Seller shall at all times restrict its activities to (i)
providing financing facilities through the purchase of
any instalment sale contracts, loans, notes, leases,
accounts or other rights to payment from retail
customers in respect of trucks, buses, trailers and
related equipment (including notes of dealers and other
persons that finance the acquisition by such dealer or
other person of a truck, bus, trailer or related
equipment that is leased to a third person or persons)
from NFC and (ii) conducting any ancillary business or
activity as it deems necessary or appropriate to
accomplish its primary purpose. Seller will not amend
its certificate of incorporation ("Certificate of
Incorporation") in any manner which would affect such
restrictions on Seller's activities.
(ii) Seller shall keep separate books and records such that its
own separate financial statements may be readily
prepared and presented apart from any financial
statements consolidated to include NFC or any
subsidiary or affiliate of NFC other than Seller. Any
financial statements of NFC which are presented on a
consolidated basis to include Seller shall contain
notes clearly stating that the Receivables have been
sold to a third party and are not assets of the
consolidated group.
(iii) Seller shall conduct its business solely in its individual
corporate name and otherwise so as not to mislead
others with whom it deals regarding its independent
identity and existence.
(iv) Seller has and will maintain its own separate mailing
address, telephone number and stationery.
(v) Seller will cause to be elected and compensate its
Independent Directors as described in Section 5.1
(j)(xi) below.
(vi) Any allocations of direct, indirect or overhead expenses for
items shared between Seller on the one hand and NFC on
the other hand have been and will be made to the extent
practical on the basis of actual use or value of
services rendered and otherwise on a basis reasonably
related to actual use or the value of services rendered.
(vii) Seller has paid and will pay its own operating expenses and
liabilities from its own funds, except NFC shall pay a
portion of the expenses of Seller incurred in
connection with the transactions contemplated by the
Transaction Documents. Such payment by NFC shall be
treated by NFC as Advances under the Amended and
Restated Intercompany Advance Agreement (the
"Intercompany Advance Agreement") dated as of May 3,
1994, between NFC and Seller.
(viii) Seller shall not commingle or pool its funds or other
assets with those of NFC or any other subsidiary or
affiliate of NFC except as specifically provided in
transaction documents executed in connection with past
pools of receivables and in the Amended and Restated
Operating Agreement dated as of May 3, 1994 (the
"Operating Agreement") between NFC and Seller. Except
as provided in the Operating Agreement, Seller shall
not maintain joint bank accounts or other depository
accounts to which NFC or any other Affiliate of NFC,
other than NFC in its capacity as Servicer, has
independent access.
(ix) Seller is not named, and has not entered any agreement to be
named, directly or indirectly, as a direct or
contingent beneficiary or loss payee on any insurance
policy covering the property of NFC or of any other
subsidiary or Affiliate of NFC.
(x) Each officer and director of Seller shall discharge his or
her respective fiduciary duties and obligations in
accordance with all applicable laws.
(xi) Seller has, and shall continue at all times to have, at
least two Independent Directors (as defined in Seller's
restated Certificate of Incorporation as in effect on
the date hereof) on its board of directors.
(k) Taxes. Such Seller Party shall file all tax returns and
reports required by law to be filed by it and shall promptly pay
all taxes and governmental charges at any time owing, except any
such taxes which are not yet delinquent or are being diligently
contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with generally accepted
accounting principles shall have been set aside on its books.
(l) Transfers, Liens, Etc. Except for the Lien in favor of a
Purchaser created by this Agreement, the Seller Parties shall not
transfer, assign (by operation of law or otherwise) or otherwise
dispose of, or create or suffer to exist any Lien (including,
without limitation, the filing of any financing statement) upon
or with respect to any Receivable or Related Security.
(m) Liens in Force. Except as contemplated in Sections 6.1, 6.4
or 6.5 of this Agreement, the Seller Parties shall not release in
whole or in part any Financed Vehicle or related insurance
contract rights from the security interest securing the
Receivable.
(n) No Impairment. The Seller Parties shall do nothing to
impair the rights of the Seller or any Purchasers in and to the
Receivables.
(o) No Modifications. The Seller Parties shall not amend or
otherwise modify any Receivable such that the Initial Receivable
Balance, the Annual Percentage Rate or the total number of
Scheduled Payments is altered or such that the final scheduled
payment on such Receivable will be due later than August 31,
2012. Any such extension of the final scheduled payment will be
made by the Servicer in accordance with its customary servicing
procedures.
(p) Sale Agreement. The Seller Parties shall not grant any
waiver or consent under, amend or otherwise modify, or terminate
the Sale Agreement without the prior written consent of the Agent.
(q) Name Change. No Seller Party shall change its (i) name,
identity, or corporate structure in any manner that would make
any financing statement or continuation statement filed by it in
connection with the Transaction Documents seriously misleading
within the meaning of Section 9-506(b) of the UCC, or (ii)
jurisdiction of formation, unless it shall have given the Agent
at least 60 days prior written notice thereof and shall file such
financing statements or amendments as may be necessary to
continue the perfection of the Agent's security interest in the
Receivables and the Related Security.
Section 5.2 Covenants of the Servicer. At all times
from the date hereof to the date on which the Aggregate Unpaids
shall be equal to zero, unless the Agent shall otherwise consent
in writing:
(a) Conduct of Business. The Servicer will do all things
necessary to remain duly incorporated, validly existing and in
good standing as a domestic corporation in its jurisdiction of
incorporation and will maintain all requisite authority to
conduct its business in each jurisdiction in which its business
requires such authority except where the failure to so preserve
and maintain or qualify would not result in a Material Adverse
Change.
(b) Purchase of Receivables Upon Breach of Covenant. Upon
discovery by any of the Seller or the Servicer, the Agent and the
Purchasers of a breach of any of the covenants set forth in
Section 6.5 and Sections 5.1 (m), (n) or (o), the party
discovering such breach shall give prompt written notice thereof
to the Agent and the Purchasers. As of the second Accounting
Date following its discovery or receipt of notice of such breach
(or, at the Servicer's election, the first Accounting Date so
following), the Servicer shall, unless it shall have cured such
breach in all material respects, purchase from the Purchasers
their interests in any Receivable materially and adversely
affected by such breach and, on the related Settlement Date, the
Servicer shall pay the Administrative Purchase Payment. It is
understood and agreed that the obligation of the Servicer to
purchase any Receivable with respect to which such a breach has
occurred and is continuing shall, if such obligation is
fulfilled, constitute the sole remedy against the Servicer for
such breach available to any Person.
(c) Servicing Procedures. The Servicer shall not change or
amend its customary servicing procedures in any manner that would
reasonably be expected to materially and adversely affect the
collectibility of the Receivables generally.
Section 5.3 Covenant of the Agent. Until this
Agreement has terminated, the Agent shall maintain the Schedule
of Receivables at its office set forth on the signature page
hereof for inspection during normal business hours by interested
parties.
Section 5.4 Replacement of Financial Institutions.
In the event that the Discount Rate applicable to any portion of
the Purchaser Interest is calculated using the Base Rate as a
result of clause (a) of the definition of "Discount Rate," the
Agent, Seller and Servicer will cooperate to have such Financial
Institution replaced with a Financial Institution that would be
able to fund using the LIBO Rate.
ARTICLE VI
ADMINISTRATION AND COLLECTION
Section 6.1 General Duties of the Servicer. The
Servicer is hereby appointed and authorized by the Agent and the
Purchasers to act as agent for the Agent and the Purchasers and
in such capacity shall manage, service, administer and make
collections on the Receivables with reasonable care using that
degree of skill and attention that the Servicer exercises with
respect to comparable medium and heavy duty truck, bus and
trailer receivables that it services for itself or others. The
Servicer hereby accepts such appointment and authorization and
agrees to perform the duties of Servicer with respect to the
Receivables set forth herein. The Servicer's duties shall
include collection and posting of all payments, responding to
inquiries of Obligors on the Receivables, investigating
delinquencies, sending payment coupons to Obligors, reporting tax
information to Obligors, policing the collateral, accounting for
collections and furnishing monthly and annual statements to the
Purchasers with respect to distributions, generating federal
income tax information and performing the other duties specified
herein. Subject to the provisions of Section 6.2, the Servicer
shall follow its customary standards, policies and procedures and
shall have full power and authority, acting alone, to do any and
all things in connection with such managing, servicing,
administration and collection that it may deem necessary or
desirable.
Without limiting the generality of the foregoing, the
Servicer is hereby authorized and empowered by the Agent and the
Purchasers, pursuant to this Section 6.1, to execute and deliver,
on behalf of the Agent and the Purchasers, any and all
instruments of satisfaction or cancellation, or of partial or
full release or discharge, and all other comparable instruments,
with respect to the Receivables and the Financed Vehicles. The
Servicer is hereby authorized to commence in the name of the
Agent and the Purchasers or, to the extent necessary, in its own
name, a legal proceeding to enforce a Liquidating Receivable as
contemplated by Section 6.3, to enforce all obligations of NFC
and Seller in its capacity as the Seller or otherwise, under each
of the Sale Agreement and this Agreement or to commence or
participate in a legal proceeding (including a bankruptcy
proceeding) relating to or involving a Receivable or a
Liquidating Receivable. If the Servicer commences or
participates in such a legal proceeding in its own name, the
Agent and the Purchasers shall thereupon be deemed to have
automatically assigned such Receivable to the Servicer for
purposes of commencing or participating in any such proceeding as
a party or claimant. The Servicer is hereby authorized and
empowered by the Agent and the Purchasers to execute and deliver
in the Servicer's name any notices, demands, claims, complaints,
responses, affidavits or other documents or instruments in
connection with any such proceeding. The Agent and each
Purchaser, upon the written request of the Servicer, shall
furnish the Servicer with any powers of attorney and other
documents and take any other steps which the Servicer may deem
necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties under this Agreement and the
Purchase Agreement. Except to the extent required by the
preceding two sentences, the authority and rights granted to the
Servicer in this Section 6.1 shall be nonexclusive and shall not
be construed to be in derogation of the retention by the Agent or
the Purchasers of equivalent authority and rights.
Section 6.2 Collection of Receivables Payments. The
Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Receivables as
and when the same shall become due, and shall follow such
collection practices, policies and procedures as it follows with
respect to comparable medium and heavy duty truck, bus and
trailer receivables that it services for itself or others.
Except as provided in Section 5.1(o), the Servicer is hereby
authorized to grant extensions, rebates or adjustments on a
Receivable without the prior consent of the Agent or the
Purchasers and to rewrite, in its ordinary course of business, a
Receivable with respect to any remaining Financed Vehicle or
Vehicles to reflect the Full Prepayment of the portion of such
Receivable relating to one or more of the Financed Vehicles
securing such Receivable without the prior consent of the Agent
or the Purchasers. The Servicer is authorized in its discretion
to waive any prepayment charge, late payment charge or any other
fees that may be collected in the ordinary course of servicing
the Receivables.
Section 6.3 Realization Upon Liquidating
Receivables. The Servicer shall use reasonable efforts,
consistent with its customary servicing procedures, to repossess
or otherwise comparably convert the ownership of each Financed
Vehicle that it has reasonably determined should be repossessed
or otherwise converted following a default under the Receivable
secured by each such Financed Vehicle. The Servicer is
authorized to follow such practices, policies and procedures as
it shall deem necessary or advisable and as shall be customary
and usual in its servicing of medium and heavy duty truck, bus
and trailer receivables that it services for itself or others,
which practices, policies and procedures may include reasonable
efforts to realize upon or obtain benefits of any lease
assignments, proceeds from any Dealer Liability, proceeds from
any International Purchase Obligations, proceeds from any
Insurance Policies and proceeds from any Guaranties, in each case
with respect to the Receivables, selling the related Financed
Vehicle or Financed Vehicles at public or private sale or sales
and other actions by the Servicer in order to realize upon such a
Receivable. The foregoing is subject to the provision that, in
any case in which the Financed Vehicle shall have suffered
damage, the Servicer shall not be required to expend funds in
connection with any repair or towards the repossession of such
Financed Vehicle unless it shall determine in its discretion that
such repair and/or repossession is reasonably likely to increase
the proceeds of liquidation of the related Receivable by an
amount greater than the amount of such expenses. The Servicer
shall be entitled to receive Liquidation Expenses from
Collections with respect to each Liquidating Receivable at such
time as the Receivable becomes a Liquidating Receivable in
accordance with Section 2.1(b). Following the occurrence and
continuation of a Servicer Default, the Agent may, but shall have
no obligation to take any action or commence any proceeding to
realize upon any Liquidating Receivable, any such action or
commencement of proceeding to be at the sole expense of the
Servicer. At such time as the Servicer or the Seller, as the
case may be, has any obligation to pursue the collection of
Receivables and the Agent or a Purchaser possesses any documents
necessary therefor, the Agent or such Purchaser, as the case may
be, agrees to furnish such documents to the Servicer or the
Seller, as the case may be, to the extent and for the period
necessary for the Servicer or the Seller, as the case may be, to
comply with its obligations hereunder.
Section 6.4 Maintenance of Insurance Policies. The
Servicer shall, in accordance with its customary servicing
procedures, require that each Obligor shall have obtained
physical damage insurance covering each Financed Vehicle as of
the execution of the related Receivable, unless the Servicer has
in accordance with its customary servicing procedures permitted
an Obligor to self-insure the Financed Vehicle or Financed
Vehicles securing such Receivable. The Servicer shall, in
accordance with its customary servicing procedures, monitor such
physical damage insurance with respect to each Financed Vehicle
that secures each Receivable.
Section 6.5 Maintenance of Security Interests in
Vehicles. The Servicer shall, in accordance with its customary
servicing procedures and at its own expense, take such steps as
are necessary to maintain perfection of the first priority
security interest created by each Receivable in the related
Financed Vehicle or Financed Vehicles. The Purchasers hereby
authorize the Servicer to re-perfect such security interest as
necessary because of the relocation of a Financed Vehicle or for
any other reason.
Section 6.6 Total and Supplemental Servicing Fees;
Payment of Certain Expenses by Servicer. The Servicer is entitled
to receive the Total Servicing Fee and Supplemental Servicing
Fees out of Collections as provided herein. Subject to any
limitation on the Servicer's liability hereunder, the Servicer
shall be required to pay all expenses incurred by it in
connection with its activities under this Agreement (including
fees and disbursements of the Purchaser, the Financial
Institution, the Agent, and any independent accountants, taxes
imposed on the Servicer, expenses incurred in connection with
distributions and reports to the Agent and the Purchasers and all
other fees and expenses not expressly stated under this Agreement
to be for the account of the Purchasers, but excluding federal,
state and local income and franchise taxes, if any, of any
Purchaser). The Servicer will not have any obligation to deposit
Supplemental Servicing Fees in the Collection Account. To the
extent that any such amount shall be held in the Collection
Account, such amount may be withdrawn therefrom by the Servicer.
Section 6.7 Monthly Advances. Subject to the
following sentence, as of each Settlement Date, if the payments
during the related Monthly Period by or on behalf of the Obligor
on a Receivable (other than an Administrative Receivable, a
Warranty Receivable or a Liquidating Receivable) after
application under Section 2.1 shall be less than the Scheduled
Payment, whether as a result of any extension granted to the
Obligor or otherwise, then the Servicer shall, subject to the
following sentence, advance any such shortfall (such amount, a
"Monthly Advance"). The Servicer shall be obligated to make a
Monthly Advance in respect of a Receivable only to the extent
that the Servicer, in its sole discretion, shall determine that
such advance shall be recoverable (in accordance with the two
immediately following sentences) from subsequent Collections or
recoveries on such Receivable. Subject to Section 2.1, the
Servicer shall be reimbursed for Outstanding Monthly Advances
with respect to a Receivable from the following sources with
respect to such Receivable, in each case as set forth in this
Agreement: (i) subsequent payments by or on behalf of the
Obligor, (ii) collections of Liquidation Proceeds, (iii) the
Administrative Purchase Payment and (iv) the Warranty Payment.
At such time as the Servicer shall determine that any Outstanding
Monthly Advances with respect to any Receivable shall not be
recoverable from payments with respect to such Receivable, the
Servicer shall be reimbursed from any collections made on other
Receivables.
Section 6.8 Additional Deposits. The Servicer shall
deposit in the Collection Account the aggregate Monthly Advances
pursuant to this Section 6.7. The Servicer and the Warranty
Purchaser shall deposit in the Collection Account the aggregate
Administrative Purchase Payments and Warranty Payments with
respect to Administrative Receivables and Warranty Receivables,
respectively. All such deposits with respect to a Monthly Period
shall be made in immediately available funds on the day before
the Settlement Date related to such Monthly Period.
Section 6.9 Annual Statement as to Compliance. The
Servicer shall deliver to the Agent on or before February 1 of
each year, beginning February 1, 2005, an officer's certificate
signed by the President or any Vice President of the Servicer,
dated as of the immediately preceding October 31, stating that
(i) a review of the activities of the Servicer during the
preceding 12-month period (or, with respect to the first such
certificate, such period as shall have elapsed from the date of
this Agreement to the date of such certificate) and of its
performance under this Agreement has been made under such
officer's supervision and (ii) to such officer's knowledge, based
on such review, the Servicer has fulfilled its obligations under
this Agreement in all material respects throughout such period,
or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer
and the nature and status thereof.
Section 6.10 Annual Independent Accountants' Report.
(a) The Servicer shall cause a firm of independent accountants,
who may also render other services to the Servicer or the Seller,
to deliver to the Agent, on or before February 1 of each year,
beginning February 1, 2005 with respect to the twelve months
ended on the immediately preceding October 31 (or, with respect
to the first such report, such period as shall have elapsed from
the date of this Agreement to the date of such certificate), a
report (the "Accountants' Report") addressed to the board of
directors of the Servicer and to the Agent, to the effect that
such firm has audited the financial statements of the Servicer
and issued its report thereon and that such audit (i) was made in
accordance with generally accepted auditing standards, (ii)
included tests relating to retail notes serviced for others in
accordance with the requirements of the Uniform Single Audit
Program for Mortgage Bankers (the "Program,") to the extent the
procedures in the Program are applicable to the servicing
obligations set forth in this Agreement and (iii) except as
described in the report, disclosed no exceptions or errors in the
records relating to retail notes serviced for others that, in the
firm's opinion, paragraph four of the Program requires such firm
to report.
(b) The Accountants' Report shall also indicate that the firm is
independent of the Seller and the Servicer within the meaning of
the Code of Professional Ethics of the American Institute of
Certified Public Accountants.
Section 6.11 Assignment of Administrative Receivables
and Warranty Receivables. Upon receipt of the Administrative
Purchase Payment or the Warranty Payment with respect to an
Administrative Receivable or a Warranty Receivable, respectively,
the Agent, on behalf of the Purchasers, shall assign, without
recourse, representation or warranty, to the Servicer or the
Warranty Purchaser, as applicable, all of such Person's right,
title and interest in, to and under (a) such Administrative
Receivable or Warranty Receivable and all monies due thereon, (b)
the security interests in the related Financed Vehicle and, to
the extent permitted by law, any accessions thereto which are
financed by NFC, (c) benefits of any lease assignments with
respect to the Financed Vehicles, (d) proceeds from any Insurance
Policies with respect to such Receivable, (e) proceeds from
Dealer Liability with respect to such Receivable, proceeds from
any International Purchase Obligations with respect to such
Receivable and proceeds from any Guaranties of such Receivable,
(f) the interests of such Person in certain rebates of premiums
and other amounts relating to the Insurance Policies and any
document relating thereto and (g) the rights of such Person under
the Purchase Agreement and the Custodian Agreement with respect
to such Receivable, such assignment being an assignment outright
and not for security. Upon the assignment of such Receivable
described in the preceding sentence, the Servicer or the Warranty
Purchaser, as applicable, shall own such Receivable, and all such
security and documents, free of any further obligations to the
Agent or any Purchaser with respect thereto. If in any Proceeding
it is held that the Servicer may not enforce a Receivable on the
grounds that it is not a real party in interest or a holder
entitled to enforce the Receivable, the Agent shall, at the
Servicer's expense, take such steps as the Servicer deems
necessary to enforce the Receivable, including bringing suit in
the name of such Person or the names of the Purchasers.
Section 6.12 Collection Account. The Servicer shall
maintain, for the benefit of the Agent and the Purchasers, the
Collection Account for the purpose of receiving and disbursing
all Collections, and all other payments to be made into the
Collection Account. The Collection Account will be an Eligible
Account maintained in the name of the Agent, for the benefit of
the Agent and the Purchasers, and shall be used only for the
collection of the amounts and for application of such amounts as
described in Section 1.4(c) of this Agreement. In the event
there shall have been deposited in the Collection Account any
amount not required to be deposited therein and so identified to
the Agent, such amount shall be withdrawn from the Collection
Account by the Securities Intermediary after notice thereof by
the Servicer to the Securities Intermediary (with a copy to the
Agent) and the Securities Intermediary shall pay such amount to
or in accordance with the instructions of the Servicer, and any
such amounts shall not be deemed to be a part of the Collection
Account. If the Collection Account ceases to be an Eligible
Account, the Agent shall, within ten days of receipt of notice of
such change in eligibility, transfer the Collection Account to an
account meeting the requirements of an Eligible Account.
The Servicer and the Seller agree to take all actions
reasonably necessary, including the filing of appropriate
financing statements and the giving of proper registration
instructions relating to any investments, to protect the Agent's
and the Purchasers' interest in the Collection Account and any
Eligible Investments acquired with moneys therein.
Section 6.13 Delegation of Duties. So long as NFC
acts as Servicer, the Servicer may, at any time without notice or
consent, delegate any duties under this Agreement to any
corporation more than 50% of the voting stock of which is owned,
directly or indirectly, by NFC. The Servicer may at any time
perform specific duties as Servicer through sub-contractors who
are in the business of servicing medium and heavy duty truck, bus
and trailer receivables; provided, however, that no such
delegation shall relieve the Servicer of its responsibility with
respect to such duties.
Section 6.14 Servicer Not to Resign. Subject to the
provisions of Section 7.2, the Servicer shall not resign from the
obligations and duties imposed on it by this Agreement as
Servicer except upon determination that the performance of its
duties under this Agreement is no longer permissible under
applicable law. Any such determination permitting the resignation
of the Servicer shall be evidenced by an opinion of counsel to
such effect delivered to the Agent. No such resignation shall
become effective until the Agent, its designee or a successor
Servicer shall have assumed the responsibilities and obligations
of the Servicer in accordance with Section 6.15.
Section 6.15 Appointment of Successor. On and after
the time the Servicer receives a notice of termination and the
appointment of a successor Servicer pursuant to Section 7.2, such
successor Servicer shall be the successor in all respects to the
Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for in this Agreement;
provided however, that the predecessor Servicer shall remain
liable for, and the successor Servicer shall have no liability
for, any indemnification obligations of the Servicer arising as a
result of acts, omissions or occurrences during the period in
which the predecessor Servicer was the Servicer; and provided
further, that NFC shall remain liable for all such
indemnification obligations of the Servicer without regard to
whether it is still Servicer hereunder. As compensation
therefor, the successor Servicer shall be entitled to such
compensation (whether payable out of the Collection Account or
otherwise) as the predecessor Servicer would have been entitled
to under this Agreement if no such notice of termination had been
given including, but not limited to, the Total Servicing Fee and
Supplemental Servicing Fees; provided, however, in the event the
Agent shall be unable to appoint a successor Servicer reasonably
acceptable to the Agent for the compensation specified herein,
the Agent may make such arrangements for compensation of such
successor Servicer out of payments on the Receivables as it and
such successor Servicer shall agree provided that such
compensation shall not exceed 110% of such successor Servicer's
reasonable costs and expenses in performing its obligations
hereunder as successor Servicer.
Section 6.16 Merger or Consolidation of or Assumption
of the Obligations of, the Servicer. Any corporation (a) into
which the Servicer may be merged or consolidated, (b) resulting
from any merger, conversion or consolidation to which the
Servicer shall be a party, (c) succeeding to the business of the
Servicer, or (d) more than 50% of the voting stock of which is
owned directly or indirectly by NIC and which is otherwise
servicing the Seller's receivables, which corporation in the
foregoing cases (c) or (d) executes an agreement of assumption to
perform every obligation of the Servicer under this Agreement
shall be the successor to the Servicer under this Agreement
without the execution or filing of any paper or any further act
on the part of any of the parties to this Agreement,
notwithstanding anything in this Agreement to the contrary. The
Servicer shall provide notice of any merger, consolidation or
succession pursuant to this Section 6.16 to the Agent.
ARTICLE VII
SERVICER DEFAULTS
Section 7.1 Servicer Defaults. The occurrence of
any one or more of the following events shall constitute a
Servicer Default:
(a) the Servicer shall fail to instruct the Securities
Intermediary to remit to the Agent on any day any amount required
to be remitted to the Agent on such day in respect of Yield, Net
Swap Amounts, Facility Fees or Capital and such failure shall
continue for three (3) Business Days after the date when such
amounts became due;
(b) the Servicer shall fail to deposit, or fail to pay, or fail
to cause to be deposited or paid when due any other amount due
hereunder, and any such failure shall continue for five (5)
Business Days after the earlier of the date on which it has
actual knowledge thereof or the date on which it has received
written notice thereof by the Agent to the Servicer;
(c) failure on the part of the Seller or the Servicer to duly
observe or perform any other covenants or agreements of the
Seller or the Servicer set forth in the Sale Agreement, this
Agreement, or any of the other Transaction Documents, which
failure continues unremedied for a period of thirty (30) days
after the earlier of knowledge thereof or the date on which
written notice of such failure, requiring the same to be
remedied, shall have been given to the Seller or the Servicer, as
applicable, by the Agent;
(d) any representation, warranty, certification or statement
made by the Servicer under this Agreement or in any agreement,
certificate, report, appendix, schedule or document furnished by
the Seller or Servicer to the Agent pursuant to or in connection
with this Agreement shall prove to have been false or misleading
in any material respect as of the time made or deemed made
(including by omission of material information necessary to make
such representation, warranty, certification or statement not
misleading);
(e) the entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver or liquidator for the
Seller or the Servicer, in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or
for the winding up or liquidation of their respective affairs,
and the continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days;
(f) the consent by the Seller or the Servicer to the appointment
of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities, or
similar proceedings of or relating to the Seller or the Servicer
or of or relating to substantially all of their respective
property; or the Seller or the Servicer shall admit in writing
its inability to pay its debts generally as they become due, file
a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; or
(g) a default by the Servicer in the performance of any term,
provision or condition contained in any agreement under which any
indebtedness of the Servicer in excess of $10 million was created
or is governed, the effect of which is to cause any such
indebtedness to become due prior to its stated maturity; or any
such indebtedness shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled
payment or as a result of the voluntary sale or transfer of the
property or assets) prior to the stated maturity date thereof.
Section 7.2 Remedies.
(a) If a Servicer Default shall occur and be continuing, the
Agent by notice then given in writing to the Servicer may, in
addition to other rights and remedies available in a court of law
or equity to damages, injunctive relief and specific performance,
terminate all of the rights and obligations of the Servicer under
this Agreement ("Servicing Transfer"). On or after the receipt
by the Servicer of such written notice, all authority and power
of the Servicer under this Agreement, whether with respect to the
Receivables or otherwise, shall pass to and be vested in a
successor Servicer appointed by the Agent pursuant to and under
this Section 7.2. The successor Servicer is hereby authorized
and empowered to execute and deliver, on behalf of the
predecessor Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all
other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the
transfer and endorsement of the Receivables and related
documents, or otherwise. The predecessor Servicer agrees to
cooperate with the successor Servicer and the Agent in effecting
the termination of the responsibilities and rights of the
predecessor Servicer under this Agreement, including the transfer
to the successor Servicer for administration by it of all cash
amounts that shall at the time be held by the predecessor
Servicer for deposit, or that shall have been deposited by the
predecessor Servicer in the Collection Account or the Reserve
Account or thereafter received with respect to the Receivables
that shall at that time be held by the predecessor Servicer. In
addition to any other amounts that are then payable to the
predecessor Servicer under this Agreement, the predecessor
Servicer shall be entitled to receive from the successor Servicer
reimbursements for any Outstanding Monthly Advances made during
the period prior to the termination of the predecessor Servicer
as Servicer pursuant to this Section 7.2.
(b) The predecessor Servicer shall, within two (2) Business Days
after receiving a notice pursuant to Section 7.2(a) hereof, at
the Servicer's sole expense, permit the successor Servicer and
the Agent access to NFC's files and other records in order to
effect an orderly transfer of servicing.
(c) If at any time there shall be a Servicing Transfer, NFC
will cause to be transmitted and delivered directly to the
successor Servicer, forthwith upon receipt and in the exact form
received, all Collections (properly endorsed, where required, so
that such items may be collected by the successor Servicer) on
account of the Purchaser Interest. All such Collections
consisting of cash shall not be commingled with other items or
monies of NFC for a period longer than two Business Days. If the
Agent or successor Servicer receives items or monies that are not
payments on account of the Purchasers' interest in any
Receivables, such items or monies shall be held in trust by the
Agent or successor Servicer, as applicable, for the Seller's
benefit and delivered promptly to NFC after being so identified
by the Agent or the successor Servicer.
(d) At any time, and from time to time following a Servicing
Transfer, the successor Servicer shall be entitled to notify the
Obligors to make payments directly to the successor Servicer of
amounts due under the Receivables at any time and from time to
time.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Indemnities by the Seller Parties.
Without limiting any other rights that the Agent or any Purchaser
may have hereunder or under applicable law, (A) the Seller hereby
agrees to indemnify (and pay upon demand to) the Agent and each
Purchaser and their respective assigns, officers, directors,
agents and employees (each an "Indemnified Party") from and
against any and all damages, losses, claims, taxes, liabilities,
costs, expenses and for all other amounts payable, including
reasonable attorneys' fees (which attorneys may be employees of
the Agent or such Purchaser) and disbursements (all of the
foregoing being collectively referred to as "Indemnified
Amounts") awarded against or incurred by any of them arising out
of or as a result of this Agreement or the acquisition, either
directly or indirectly, by a Purchaser of an interest in the
Receivables, and (B) the Servicer hereby agrees to indemnify (and
pay upon demand to) each Indemnified Party for Indemnified
Amounts awarded against or incurred by any of them arising out of
the Servicer's activities as Servicer hereunder excluding,
however, in all of the foregoing instances under the preceding
clauses (A) and (B):
(i) Indemnified Amounts to the extent such Indemnified Amounts
resulted from gross negligence or willful misconduct on
the part of the Indemnified Party seeking
indemnification;
(ii) Indemnified Amounts to the extent arising from the acts or
omissions of a successor Servicer;
(iii) Indemnified Amounts to the extent the same includes losses
in respect of Receivables that are uncollectible; or
(iv) taxes imposed by any jurisdiction in which such Indemnified
Party is or would be subject to tax (unless such tax
arises solely as a result of the transactions
contemplated by this Agreement) on or measured by the
overall net income of such Indemnified Party to the
extent that the computation of such taxes is consistent
with the characterization for income tax purposes of
the acquisition by the Purchasers of interests in the
Purchaser Interest as a loan or loans by the Purchasers
to Seller secured by the Receivables, the Related
Security, and the Designated Accounts;
provided, however, that nothing contained in this sentence shall
limit the liability of any Seller Party or limit the recourse of
the Purchasers to any Seller Party for amounts otherwise
specifically provided to be paid by such Seller Party under the
terms of this Agreement.
Without limiting the generality of the foregoing indemnification,
Seller shall indemnify the Agent and the Purchasers for
Indemnified Amounts (including, without limitation, losses in
respect of uncollectible receivables, regardless of whether
reimbursement therefor would constitute recourse to Seller or the
Servicer) relating to or resulting from:
(a) any representation or warranty made by any Seller Party or
the Originator (or any officers of any such Person) under or in
connection with this Agreement, any other Transaction Document or
any other information or report delivered by any such Person
pursuant hereto or thereto, which shall have been false or
incorrect when made or deemed made;
(b) the failure by Seller, the Servicer or the Originator to
comply with any applicable law, rule or regulation with respect
to any Receivable or Contract related thereto, or the
nonconformity of any Receivable or Contract included therein with
any such applicable law, rule or regulation or any failure of the
Originator to keep or perform any of its obligations, express or
implied, with respect to any Contract;
(c) any failure of Seller, the Servicer or the Originator to
perform its duties, covenants or other obligations in accordance
with the provisions of this Agreement or any other Transaction
Document;
(d) any products liability, personal injury or damage suit, or
other similar claim arising out of or in connection with
merchandise, insurance or services that are the subject of any
Contract or any Receivable;
(e) any dispute, claim, counterclaim, offset or defense (other
than discharge in bankruptcy of the Obligor) of the Obligor to
the payment of any Receivable (including, without limitation, a
defense based on such Receivable or the related Contract not
being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any
other claim resulting from the sale of the merchandise or service
related to such Receivable or the furnishing or failure to
furnish such merchandise or services;
(f) the commingling of Collections of Receivables at any time
with other funds;
(g) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document,
the transactions contemplated hereby, the use of the proceeds of
a purchase, the ownership of the Purchaser Interest or any other
investigation, litigation or proceeding relating to Seller, the
Servicer or the Originator in which any Indemnified Party becomes
involved as a result of any of the transactions contemplated
hereby;
(h) any inability to litigate any claim against any Obligor in
respect of any Receivable as a result of such Obligor being
immune from civil and commercial law and suit on the grounds of
sovereignty or otherwise from any legal action, suit or
proceeding;
(i) any failure of Seller to acquire and maintain legal and
equitable title to, and ownership of any Receivable and the
Related Security and Collections with respect thereto from the
Originator, free and clear of any Adverse Claim (other than as
created hereunder); or any failure of Seller to give reasonably
equivalent value to the Originator under the Receivables Sale
Agreement in consideration of the transfer by the Originator of
any Receivable, or any attempt by any Person to void such
transfer under statutory provisions or common law or equitable
action;
(j) any failure to vest and maintain vested in the Agent for the
benefit of the Purchasers, or to transfer to the Agent for the
benefit of the Purchasers, legal and equitable title to, and
ownership of, a first priority perfected undivided ownership
interest (to the extent of the Purchaser Interest contemplated
hereunder) or security interest in the Receivables and the
Related Security free and clear of any Adverse Claim (except as
created by the Transaction Documents);
(k) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the
UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivable and the Related Security;
(l) any action or omission by any Seller Party which reduces or
impairs the rights of the Agent or the Purchasers with respect to
any Receivable or the value of any such Receivable;
(m) any attempt by any Person to void the purchase of the
Purchaser Interest hereunder under statutory provisions or common
law or equitable action; and
(n) any claim by any party arising from the activities of the
Seller or Servicer in administering, servicing or collecting any
Receivable.
Section 8.2 Increased Cost and Reduced Return. If
after the date hereof, any Financial Institution shall be charged
any fee, expense or increased cost on account of the adoption of
any applicable law, rule or regulation (including any applicable
law, rule or regulation regarding capital adequacy) or any change
therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof
or any accounting board or authority (whether or not part of
government) which is responsible for the establishment or
interpretation of national or international accounting
principles, or compliance with any request or directive (whether
or not having the force of law) of any such authority, central
bank or comparable agency or accounting board or authority (a
"Regulatory Change"): (i) that subjects any Financial Institution
to any charge or withholding on or with respect to any Funding
Agreement or a Financial Institution's obligations under a
Funding Agreement, or on or with respect to the Receivables, or
changes the basis of taxation of payments to any Financial
Institution of any amounts payable under any Funding Agreement
(except for changes in the rate of tax on the overall net income
of a Financial Institution) or taxes excluded by Section 8.1 or
(ii) that imposes, modifies or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account
of a Financial Institution, or credit extended by a Financial
Institution pursuant to a Funding Agreement or (iii) that imposes
any other condition the result of which is to increase the cost
to a Financial Institution of performing its obligations under a
Funding Agreement, or to reduce the rate of return on a Financial
Institution's capital as a consequence of its obligations under a
Funding Agreement, or to reduce the amount of any sum received or
receivable by a Financial Institution under a Funding Agreement
or to require any payment calculated by reference to the amount
of interests or loans held or interest received by it, then, upon
demand by the Agent, Seller shall pay to the Agent, for the
benefit of the relevant Financial Institution, such amounts
charged to such Financial Institution or such amounts to
otherwise compensate such Financial Institution for such
increased cost or such reduction.
Section 8.3 Other Costs and Expenses. Seller shall
pay to the Agent on demand any and all costs and expenses of the
Agent and the Purchasers, if any, including reasonable counsel
fees and expenses in connection with the enforcement of this
Agreement and the other documents delivered hereunder and in
connection with any restructuring or workout of this Agreement or
such documents, or the administration of this Agreement following
an Servicer Default.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Waivers and Amendments.
(a) No failure or delay on the part of the Agent or any
Purchaser in exercising any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or remedy preclude
any other further exercise thereof or the exercise of any other
power, right or remedy. The rights and remedies herein provided
shall be cumulative and nonexclusive of any rights or remedies
provided by law. Any waiver of this Agreement shall be effective
only in the specific instance and for the specific purpose for
which given.
(b) No provision of this Agreement may be amended, supplemented
or modified except in writing executed by the Seller, the
Servicer and the Agent (on its own behalf and on behalf of the
Purchasers).
Section 9.2 Notices. Except as provided in this
Section 9.2, all communications and notices provided for
hereunder shall be in writing (including bank wire, telecopy or
electronic facsimile transmission, or similar writing) and shall
be given to the other parties hereto at their respective
addresses and telecopy numbers set forth on the signature pages
hereof or at such other address or telecopy number as such Person
may hereafter specify for the purpose of notice to each of the
other parties hereto. Each such notice or other communication
shall be effective (i) if given by telecopy upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the
time such communication is deposited in the mail with first class
postage prepaid or (iii) if given by any other means, when
received at the address specified in this Section 9.2. Seller
hereby authorizes the Agent to effect purchases and Discount Rate
selections based on telephonic notices made by any Person whom
the Agent in good faith believes to be acting on behalf of
Seller. Seller agrees to deliver promptly to the Agent a written
confirmation of each telephonic notice signed by an authorized
officer of Seller; provided, however, the absence of such
confirmation shall not affect the validity of such notice. If
the written confirmation differs from the action taken by the
Agent, the records of the Agent shall govern absent manifest
error.
Section 9.3 Ratable Payments. If any Purchaser,
whether by setoff or otherwise, has payment made to it with
respect to any portion of the Aggregate Unpaids owing to such
Purchaser in a greater proportion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate
Unpaids, such Purchaser agrees, promptly upon demand, to purchase
for cash without recourse or warranty a portion of such Aggregate
Unpaids held by the other Purchasers so that after such purchase
each Purchaser will hold its ratable proportion of such Aggregate
Unpaids; provided that if all or any portion of such excess
amount is thereafter recovered from such Purchaser, such purchase
shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
Section 9.4 Protection of Ownership Interests of the
Purchasers.
(a) Seller agrees that from time to time, at its expense, it
will promptly execute and deliver all instruments and documents,
and take all actions, that may be necessary or desirable, or that
the Agent may request, to perfect, protect or more fully evidence
the Purchaser Interest, or to enable the Agent or the Purchasers
to exercise and enforce their rights and remedies hereunder. At
any time, after the occurrence of an Servicer Default the Agent
may, or the Agent may direct Seller or the Servicer to, notify
the Obligors of Receivables, at Seller's expense, of the
ownership or security interests of the Purchasers under this
Agreement and may also direct that payments of all amounts due or
that become due under any or all Receivables be made directly to
the Agent or its designee. Seller or the Servicer (as
applicable) shall, at any Purchaser's request, withhold the
identity of such Purchaser in any such notification.
(b) If any Seller Party fails to perform any of its obligations
hereunder, the Agent or any Purchaser may (but shall not be
required to) perform, or cause performance of, such obligations,
and the Agent's or such Purchaser's costs and expenses incurred
in connection therewith shall be payable by Seller as provided in
Section 8.3. Each Seller Party irrevocably authorizes the Agent
at any time and from time to time in the sole discretion of the
Agent, and appoints the Agent as its attorney-in-fact, to act on
behalf of such Seller Party (i) to execute on behalf of Seller as
debtor and to file financing statements necessary or desirable in
the Agent's sole discretion to perfect and to maintain the
perfection and priority of the interest of the Purchasers in the
Receivables and (ii) to file a carbon, photographic or other
reproduction of this Agreement or any financing statement with
respect to the Receivables as a financing statement in such
offices as the Agent in its sole discretion deems necessary or
desirable to perfect and to maintain the perfection and priority
of the interests of the Purchasers in the Receivables. This
appointment is coupled with an interest and is irrevocable.
Section 9.5 Confidentiality.
(a) Each Seller Party and each Purchaser shall maintain and
shall cause each of its employees and officers to maintain the
confidentiality of this Agreement and the other confidential or
proprietary information with respect to the Agent and any Company
and their respective businesses obtained by it or them in
connection with the structuring, negotiating and execution of the
transactions contemplated herein, except that such Seller Party
and such Purchaser and its officers and employees may disclose
such information to such Seller Party's and such Purchaser's
external accountants and attorneys and as required by any
applicable law or order of any judicial or administrative
proceeding.
(b) Anything herein to the contrary notwithstanding, each Seller
Party hereby consents to the disclosure of any nonpublic
information with respect to it (i) to the Agent, the Financial
Institutions or any Company by each other, (ii) by the Agent or
the Purchasers to any prospective or actual assignee or
participant of any of them and (iii) by the Agent to any rating
agency, holder of any membership interest in the Company,
Commercial Paper dealer or provider of a surety, guaranty or
credit or liquidity enhancement to the Company or any entity
organized for the purpose of purchasing, or making loans secured
by, financial assets for which Royal Bank of Canada acts as the
administrative agent and to any officers, directors, employees,
outside accountants and attorneys of any of the foregoing. In
addition, the Purchasers and the Agent may disclose any such
nonpublic information pursuant to any law, rule, regulation,
direction, request or order of any judicial, administrative or
regulatory authority or proceedings (whether or not having the
force or effect of law).
Section 9.6 Bankruptcy Petition. Seller, the
Servicer, the Agent, the Company and each Financial Institution
hereby covenants and agrees that, prior to the date that is one
year and one day after the payment in full of all outstanding
senior indebtedness of the Seller or the Company, it will not
institute against, or join any other Person in instituting
against the Seller or the Company, respectively, any bankruptcy,
reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the
United States or any state of the United States.
Section 9.7 Limitation of Liability. Except with
respect to any claim arising out of the willful misconduct or
gross negligence of the Company or the Agent, no claim may be
made by any Seller Party or any other Person against the Company
or the Agent or their respective Affiliates, directors, officers,
employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out
of or related to the transactions contemplated by this Agreement,
or any act, omission or event occurring in connection therewith;
and each Seller Party hereby waives, releases, and agrees not to
▇▇▇ upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor.
Section 9.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND
NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK.
Section 9.9 CONSENT TO JURISDICTION. EACH PARTY
HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW
YORK, NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH
PERSON PURSUANT TO THIS AGREEMENT AND EACH PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS
TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
Section 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO
HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY THE
SELLER PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.
Section 9.11 Integration; Binding Effect; Survival of
Terms.
(a) This Agreement and each other Transaction Document contain
the final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and
shall constitute the entire agreement among the parties hereto
with respect to the subject matter hereof superseding all prior
oral or written understandings.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns (including any trustee in bankruptcy). This
Agreement shall create and constitute the continuing obligations
of the parties hereto in accordance with its terms and shall
remain in full force and effect until terminated in accordance
with its terms; provided, however, that the rights and remedies
with respect to (i) any breach of any representation and warranty
made by any Seller Party pursuant to Article III, (ii) the
indemnification and payment provisions of Article VIII shall be
continuing and shall survive any termination of this Agreement.
Section 9.12 Counterparts; Severability; Section
References. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which when taken together shall
constitute one and the same Agreement. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile
shall be effective as delivery of a manually executed counterpart
of this Agreement. Any provisions of this Agreement which are
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. Unless otherwise expressly
indicated, all references herein to "Article," "Section,"
"Schedule" or "Exhibit" shall mean articles and sections of, and
schedules and exhibits to, this Agreement.
Section 9.13 Assignments. The Seller and each
Financial Institution hereby agree and consent to the complete or
partial assignment by the Company of all or any portion of its
rights under, interest in, title to the Purchaser Interest to the
Financial Institutions. Further, the Seller and each Financial
Institution hereby agree that any assignee of the Company of all
or any portion of its rights under, interest in or title to the
Purchaser Interest of the Company shall have all of the rights
and benefits under this Agreement as if the term "the Company"
explicitly referred to such party, and no such assignment shall
in any way impair the rights and benefits of the Company
hereunder. Neither the Seller nor the Servicer shall have the
right to assign its rights or obligations under this Agreement.
Section 9.14 Characterization.
(a) It is the intention of the parties hereto that each purchase
hereunder shall constitute and be treated as an absolute and
irrevocable sale, which purchase shall provide the Agent for the
benefit of the Purchasers with the full benefits of ownership of
the applicable Purchaser Interest. Except as specifically
provided in this Agreement, each sale of a Purchaser Interest
hereunder is made without recourse to Seller; provided, however,
that (i) Seller shall be liable to each Purchaser and the Agent
for all representations, warranties, covenants and indemnities
made by Seller pursuant to the terms of this Agreement, and (ii)
such sale does not constitute and is not intended to result in an
assumption by any Purchaser or the Agent or any assignee thereof
of any obligation of Seller or the Originator or any other person
arising in connection with the Receivables, the Related Security,
or the related Contracts, or any other obligations of Seller or
the Originator. However, notwithstanding the foregoing, the
parties will treat the transactions under this Agreement as debt
for tax purposes.
(b) In addition to any ownership interest which the Agent for
the benefit of the Purchasers may from time to time acquire
pursuant hereto, the Seller hereby grants to the Agent for the
ratable benefit of the Purchasers a valid and perfected security
interest in all of the Seller's right, title and interest in, to
and under all Receivables now existing or hereafter arising, the
Collections, each Designated Account, all Designated Account
Property, all other Related Security, all other rights and
payments relating to such Receivables, and all proceeds of any
thereof prior to all other liens on and security interests
therein to secure the prompt and complete payment of the
Aggregate Unpaids. After a Servicer Default, the Agent and the
Purchasers shall have, in addition to the rights and remedies
that they may have under this Agreement, all other rights and
remedies provided to a secured creditor after default under the
UCC and other applicable law, which rights and remedies shall be
cumulative.
Section 9.15 Non-Recourse Obligations.
(a) Notwithstanding anything to the contrary contained herein,
the obligations of the Seller under the Transaction Documents are
limited recourse obligations of the Seller and shall be payable
only at such time as funds are available therefor thereunder from
the Receivables, the Related Security, the Collections, the
Designated Accounts and the other rights transferred to the
Seller pursuant to the Sale Agreement or specified in this
Agreement, and, to the extent funds are not so available to pay
such obligations, the claims relating thereto shall not
constitute a claim against the Seller but shall continue to
accrue.
(b) The Seller shall be liable in accordance with this Agreement
and the other Transaction Documents only to the extent of the
obligations in this Agreement or any other Transaction Documents
specifically undertaken by the Seller.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized
officers as of the date hereof.
NAVISTAR FINANCIAL RETAIL
RECEIVABLES CORPORATION
By:
Name:
Title:
Address: c/o Navistar Financial Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
NAVISTAR FINANCIAL CORPORATION
By:
Name:
Title:
Address: c/o Navistar Financial Corporation
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
THUNDER BAY FUNDING, LLC.
By: Royal Bank of Canada,
as attorney-in-fact
By:
Name:
Title:
Address: c/o Royal Bank of Canada
North American Securitization
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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ROYAL BANK OF CANADA
as Agent
By:
Name:
Title:
Address: Royal Bank of Canada
North American Securitization
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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EXHIBIT I
DEFINITIONS
As used in this Agreement, the following terms shall have
the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Accounting Date" shall mean, with respect to a Settlement
Date, the last day of the related Monthly Period.
"Actual Payment"shall mean, with respect to a Settlement
Date and to a Receivable, all payments received by the Servicer
from or for the account of the Obligor during the related Monthly
Period (and, in the case of the first Settlement Date, all
payments received by the Servicer from or for the account of the
Obligor on or after the Cutoff Date) except for any Overdue
Payments or Supplemental Servicing Fees.
"Administrative Purchase Payment" shall mean, with respect
to a Settlement Date and to an Administrative Receivable
purchased as of the related Accounting Date, a release of all
claims for reimbursement of Monthly Advances made on such
Administrative Receivable plus a payment equal to the sum of (i)
the sum of the Scheduled Payments on such Administrative
Receivable due after the Accounting Date minus the Rebate, (ii)
any reimbursement made pursuant to the last sentence of Section
6.7 of this Agreement with respect to such Receivable, and (iii)
all past due Scheduled Payments with respect to which a Monthly
Advance has not been made.
"Administrative Receivable" shall mean, a Receivable which
the Servicer is required to purchase as of an Accounting Date
pursuant to Section 5.2(b) of this Agreement or which the
Servicer has elected to repurchase as of an Accounting Date
pursuant to Section 2.4 of this Agreement.
"Adverse Claim" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's
assets or properties in favor of any other Person.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or
under direct or indirect common control with, such Person or any
Subsidiary of such Person. A Person shall be deemed to control
another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through
ownership of stock, by contract or otherwise.
"Agent" has the meaning set forth in the preamble to this
Agreement.
"Agreement" or "Purchase Agreement" means this Receivables
Purchase Agreement, as it may be amended or modified and in
effect from time to time.
"Aggregate Losses" means, with respect to a Monthly Period,
the sum of (i) the aggregate of the Receivable Balances of all
Receivables newly designated during such Monthly Period as
Liquidating Receivables, plus (ii) the aggregate principal
portion of Scheduled Payments due but not received with respect
to all such Receivables prior to the date any such Receivable was
designated a Liquidating Receivable minus (iii) Liquidation
Proceeds collected during such Monthly Period with respect to all
Liquidating Receivables.
"Aggregate Receivables Balance" means as of any date, the
sum of the Receivable Balances of all outstanding Receivables
(other than Liquidating Receivables).
"Aggregate Unpaids" means, at any time, an amount equal to
the sum of all accrued and unpaid fees under the Fee Letter, the
sum of the Yield and Net Swap Amounts, Capital and all other
unpaid Obligations (whether due or accrued) at such time.
"Annual Percentage Rate" or "APR" of a Receivable shall mean
the annual rate of Finance Charges stated in the Receivable.
"Authorized Officer" shall mean, with respect to any Seller
Party, its respective controller, treasurer, chief financial
officer, or president.
"Available Amount" shall mean, with respect to a Settlement
Date, the sum of the Collected Interest and the Collected
Principal for such Settlement Date.
"Base Rate" means the rate of interest announced by Royal
Bank of Canada in New York, New York, from time to time in its
sole discretion, as its prime commercial lending rate (which rate
is not necessarily the lowest rate that Royal Bank of Canada
charges any corporate customer).
"Basic Servicing Fee" shall mean, with respect to a Monthly
Period, the fee payable to the Servicer for services rendered
during such Monthly Period, which shall be equal to one-twelfth
of the Basic Servicing Fee Rate multiplied by the Aggregate
Receivables Balance as of the first day of such Monthly Period.
"Basic Servicing Fee Rate" shall mean 1.0% per annum.
"Broken Funding Costs" means for the Purchaser Interest or
any portion thereof that (i) is assigned by the Company to a
Financial Institution, (ii) does not become the subject of a
Clean-up Call following delivery of the Clean-up Call Notice or
(iii) is terminated prior to the date on which it was originally
scheduled to end, an amount equal to the excess, if any, of (A)
the Yield (as applicable) that would have accrued during the
remainder of the Settlement Period determined by the Agent to
relate to such portion of the Purchaser Interest (as applicable)
subsequent to the date of such assignment or termination (or, in
the case of such Clean-up Call, the date on which such Clean-up
Call was to have occurred pursuant to the Clean-up Call Notice)
of the Capital of the Purchaser Interest if such Clean-up Call,
assignment or termination had not occurred or if such Clean-up
Call Notice had not been delivered, over (B) the sum of (x) to
the extent all or a portion of such Capital remains allocated to
the Purchaser Interest, the Yield actually accrued during the
remainder of such period on such Capital for such portion of the
Purchaser Interest, and (y) to the extent such Capital does not
remain allocated to the Purchaser Interest, the income, if any,
actually received during the remainder of such period by the
holder of such portion of the Purchaser Interest from investing
the portion of such Capital not so allocated. In the event that
the amount referred to in clause (B) exceeds the amount referred
to in clause (A), the relevant Purchaser or Purchasers agree to
pay to Seller the amount of such excess. All Broken Funding
Costs shall be due and payable hereunder upon demand.
"Business Day" means any day on which banks are not
authorized or required to close in New York, New York or Chicago,
Illinois, and, if the applicable Business Day relates to any
computation or payment to be made with respect to the LIBO Rate,
any day on which dealings in dollar deposits are carried on in
the London interbank market.
"Capital" of the Purchaser Interest means, at any time, (A)
the Purchase Price of the Purchaser Interest, minus (B) the
amounts applied pursuant to clauses (v) and (viii) of Section
2.1(c) to reduce the Capital of the Purchaser Interest in
accordance with the terms and conditions of this Agreement;
provided that such Capital shall be restored (in accordance with
Section 2.4) in the amount of any Collections or other payments
so received and applied if at any time the distribution of such
Collections or payments are rescinded, returned or refunded for
any reason.
"Collected Interest" shall mean, with respect to any
Settlement Date, the sum of the following amounts with respect to
the related Monthly Period, in each case computed in accordance
with the actuarial method: (i) that portion of all collections on
Receivables (other than Liquidating Receivables) allocable to
interest or Prepayment Surplus, (ii) that portion of all
Liquidation Proceeds allocable to interest in accordance with the
Servicer's customary servicing procedures, (iii) that portion of
all Monthly Advances allocable to interest, (iv) that portion of
all Warranty Payments, Administrative Purchase Payments or the
Optional Purchase Proceeds allocable to accrued interest or
Prepayment Surplus, and (v) any Investment Earnings funds
invested in Eligible Investments in the Collection Account and
Reserve Account; minus an amount equal to the sum of (x) all
amounts received on any Receivable (other than a Liquidating
Receivable) to the extent of the aggregate Outstanding Monthly
Advances of interest with respect to such Receivable and (y)
Liquidation Proceeds with respect to a particular Receivable to
the extent of the Outstanding Monthly Advances of interest
thereon.
"Collected Principal" shall mean, with respect to any
Settlement Date, the sum of the following amounts with respect to
the related Monthly Period in each case computed in accordance
with the actuarial method: (i) that portion of all collections
on Receivables (other than Liquidating Receivables) allocable to
principal, (ii) that portion of Liquidation Proceeds allocable to
principal in accordance with the Servicer's customary servicing
procedures, (iii) that portion of all Monthly Advances allocable
to principal, (iv) that portion of all Warranty Payments,
Administrative Purchase Payments or the Optional Purchase
Proceeds allocable to principal, and (v) that portion of all
Prepayments allocable to principal; less an amount equal to the
sum of (x) amounts received on any Receivable (other than a
Liquidating Receivable) to the extent of the aggregate
Outstanding Monthly Advances of principal with respect to such
Receivable and (y) Liquidation Proceeds with respect to a
particular Receivable to the extent of the Outstanding Monthly
Advances of principal and amounts representing reimbursement for
Liquidation Expenses with respect to such Receivables pursuant to
this Agreement.
"Collection Account" shall mean the account designated as
such, established and maintained pursuant to Section 1.4 hereof.
"Collections" shall mean all cash collections and other cash
proceeds of the Receivables (other than Supplemental Servicing
Fees) received by the Servicer or in the Collection Account,
including, without limitation, (a) Collected Interest, (b)
Collected Principal and (c) recoveries and cash proceeds of
Related Security with respect to the Receivables.
"Company" has the meaning set forth in the preamble to this
Agreement.
"Company Rate" for any portion of a Settlement Period for
any portion of the Purchaser Interest means, to the extent the
Company funds such portion of the Purchaser Interest for such
portion of the Settlement Period by issuing commercial paper, the
rate (or if more than one rate, the weighted average of the
rates) at which commercial paper notes of the Company issued to
fund such portion of the Purchaser Interest may be sold by any
placement agent or commercial paper dealer selected by the Agent
on behalf of the Company, as agreed between each such agent or
dealer and the Agent and notice of such rate has been given by
the Agent to the Servicer; provided if the rate (or rates ) as
agreed between any such agent or dealer and the Agent for any
such portion of the Settlement Period for any portion of the
Purchaser Interest is a discount rate (or rates), then such rate
shall be the rate (or if more than one rate, the weighted average
of the rates) resulting from converting such discount rate (or
rates) to an interest-bearing equivalent rate per annum plus in
each case any and all commissions of placement agents and
commercial paper dealers in respect of commercial paper notes
issued to fund the purchase or maintenance of any such portion of
the Purchaser Interest.
"Contract" means, with respect to any Receivable, the retail
note or any other documentation which evidences such Receivable.
"Custodian" shall mean NFC, as Servicer, or another
custodian named from time to time in the Custodian Agreement.
"Custodian Agreement" shall mean the Custodian Agreement,
dated as of July 30, 2004, between the Custodian and the Seller,
as amended, modified or supplemented from time to time.
"Cutoff Date" shall mean July 10, 2004.
"Dealer" shall mean (i) a Person with whom International or
an Affiliate of International has a valid dealer
sales/maintenance agreement to sell International vehicles, (ii)
a Person with whom NFC has an agreement to extend new or used
truck floor plan financing terms or (iii) a truck, bus, or
trailer equipment manufacturer with whom International or an
Affiliate of International has a valid agreement to sell
International vehicles.
"Dealer Liability" shall mean, with respect to a Receivable,
all rights, claims and actions of NFC against the Dealer which
originated the Receivable or which sold the Financed Vehicle(s)
which gave rise to such Receivable and any successor Dealer for
recourse or reimbursement of any losses, costs or expenses
arising as a result of a default by the Obligor on such
Receivable.
"Default Fee" means with respect to any amount due and
payable by Seller in respect of any Aggregate Unpaids, an amount
equal to interest on any such unpaid Aggregate Unpaids at a rate
per annum equal to the Base Rate.
"Delinquency Percentage" shall mean, with respect to a
Settlement Date, the aggregate Remaining Gross Balances of all
outstanding Receivables which are 61 days or more past due as of
the related Accounting Date, as determined in accordance with the
Servicer's normal practices, expressed as a percentage of the
aggregate Remaining Gross Balances of all outstanding Receivables
on such Accounting Date.
"Designated Account" means each of the Collection Account
and the Reserve Account.
"Designated Account Property" shall mean the Designated
Accounts, all amounts, investments, and other property held from
time to time in the Designated Accounts (whether held in the form
of deposit accounts, book-entry securities, instruments, cash,
uncertificated securities or otherwise), and all proceeds of the
foregoing.
"Designated Receivables" has the meaning set forth in
Section 2.01(a) of the Sale Agreement.
"Determination Date," with respect to a Settlement Date,
shall mean the day that is two (2) Business Days prior to such
Settlement Date.
"Discount Rate" means, for any portion of a Settlement
Period for any portion of the Purchaser Interest, an interest
rate per annum equal to the LIBO Rate for such portion of the
Settlement Period; provided, however, that in the case of
(a) any such portion of such Settlement Period beginning on or
after the date a Financial Institution shall have notified the
Agent that
(i) the introduction of or any change
in or in the interpretation of any law or regulation
makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for
such Financial Institution to fund such portion of the
Purchaser Interest at the rate set forth above (and
such Financial Institution shall not have subsequently
notified the Agent that such circumstances no longer
exist),
(i) U.S. dollar deposits in the London interbank market in the
relevant amounts and for the relevant portion of the
Settlement Period are not available,
(ii) adequate and reasonable means do not exist for ascertaining
the LIBO Rate for the relevant Settlement Period, or
(iii) the LIBO Rate determined pursuant hereto does not accurately
reflect the cost of the Financial Institution (as
conclusively determined by the Agent) of maintaining
such portion of the Purchaser Interest during such
portion of the Settlement Period, or
(b) any portion of the Settlement Period as to which the Agent
does not receive notice, by no later than 12:00 noon (New York
City time) on the second Business Day preceding the first day of
such portion of the Settlement Period, that the Purchaser
Interest will not be funded by the issuance of commercial paper,
the "Discount Rate" for each such portion of the Settlement
Period shall be an interest rate per annum equal to the Base Rate
in effect on the first day of such portion of the Settlement
Period.
"Eligible Account" shall mean either (i) a segregated trust
account with the trust department of a depository institution
organized under the laws of the United States of America or any
State thereof or the District of Columbia (or any domestic branch
of a foreign bank), having a long-term deposit rating of at least
Baa3 by Moody's, having trust powers and acting as trustee for
funds deposited in such account, or (ii) a segregated deposit
account with a depository institution organized under the laws of
the United States of America or any State thereof (or any
domestic branch of a foreign bank) the long-term deposit
obligations of which are rated A3 or higher by Moody's and the
short-term debt obligations of which are rated "A-1" by S&P and
"P-1" by Moody's.
"Eligible Investments" shall mean any of the following:
(a) Negotiable instruments or securities represented by
instruments in bearer or registered or in book-entry form which
evidence (i) obligations fully guaranteed by the United States of
America; (ii) time deposits in, or bankers acceptances issued by,
any depositary institution or trust company incorporated under
the laws of the United States of America or any state thereof and
subject to supervision and examination by Federal or state
banking or depositary institution authorities; provided, however,
that at the time of investment or contractual commitment to
invest therein, the certificates of deposit or short-term
deposits, if any, or long-term unsecured debt obligations (other
than such obligation whose rating is based on collateral or on
the credit of a Person other than such institution or trust
company) of such depositary institution or trust company shall
have a credit rating from Moody's and S&P of at least "P-l" and
"A-1", respectively, in the case of the certificates of deposit or
short-term deposits, or a rating not lower than one of the two
highest investment categories granted by Moody's and by S&
(iii) certificates of deposit having, at the time of investment
or contractual commitment to invest therein, a rating from
Moody's and S&P of at least "P-1" and "A-1", respectively; or (iv)
investments in money market funds rated in the highest investment
category or otherwise approved in writing by the applicable
rating agencies;
(b) Demand deposits in any depositary institution or trust
company referred to in (a)(ii) above;
(c) Commercial paper (having original or remaining
maturities of no more than 30 days) having, at the time of
investment or contractual commitment to invest therein, a credit
rating from Moody's and S&P of at least "P- 1" and "A-1",
respectively;
(d) Eurodollar time deposits having a credit rating from
Moody's and S&P of at least "P-1" and "A-1", respectively;
(e) Repurchase agreements involving any of the Eligible
Investments described in clauses (a)(i), (a)(iii) and (d) of this
definition so long as the other party to the repurchase agreement
has at the time of investment therein, a rating from Moody's and
S&P of at least "P-1" and "A-1", respectively;
(f) Commercial paper master notes having, at the time of
the investment or contractual commitment to invest therein, a
credit rating from Moody's and S&P of at least "P-1" and "A-1",
respectively; and
(g) Any other investment permitted by the Agent.
"Facility Fee" shall mean, with respect to a Settlement
Period, a fee payable to Agent in the amount specified in the Fee
Letter.
"Fee Letter" means that certain letter agreement dated as of
the date hereof among the Seller, the Originator and the Agent,
as it may be amended or modified and in effect from time to time.
"Finance Charges" means, with respect to a Contract, any
finance, interest, late payment charges or similar charges owing
by an Obligor pursuant to such Contract.
"Financed Vehicle" means a new or used medium or heavy duty
truck, bus or trailer, together with any accessions thereto which
were financed by NFC, securing an Obligor's indebtedness under a
Receivable. A Receivable may be secured by one or more Financed
Vehicles.
"Financial Asset" has the meaning given such term in Article
8 of the UCC. As used herein, the Financial Asset "related to" a
Security Entitlement is the Financial Asset in which the
entitlement holder (as defined in Article 8 of the UCC) holding
such Security Entitlement has the rights and property interest
specified in Article 8 of the UCC.
"Financial Institutions" means each bank or other financial
institution which provides liquidity or credit support to the
Company in connection with the transactions contemplated by the
Purchase Agreement.
"Full Prepayment" shall mean, with respect to a Settlement
Date, that portion of an Actual Payment (other than the Scheduled
Payment), which with respect to (i) any Receivable, is sufficient
to prepay such Receivable in full (after application of the
Scheduled Payment), or (ii) a Receivable secured by multiple
Financed Vehicles, equals the unpaid principal amount of the
Receivable relating to any Financed Vehicle, as determined by the
Servicer in accordance with its customary servicing procedures.
"Funding Agreement" means any agreement or instrument
executed by any Financial Institution with or for the benefit of
the Company providing for liquidity or credit support for the
commercial paper of the Company issued in connection with the
Purchase Agreement.
"Gross Swap Adjustment Amount" means, for any Settlement
Date, the sum of (a) Yield for the related Settlement Period in
excess of the amount payable by RBC as floating rate payor (prior
to netting) under the RBC Swap as a result of the actual
amortization of Capital differing from the expected amortization
of Capital as set forth in the confirmation attached to the RBC
Swap or as a result of any difference between the rate payable by
RBC as the floating rate payor under the RBC Swap and the rate at
which the Yield accrues on the Purchaser Interest and (b) the
excess, if any, of the amounts payable by the Company (prior to
netting) as the fixed rate payor under the RBC Swap over the
amount obtained by multiplying the fixed rate specified under the
RBC Swap and the Capital outstanding at such time.
"Guaranties" shall mean, with respect to any Receivable,
personal or commercial guaranties of an Obligor's performance
with respect thereto.
"Initial Aggregate Receivables Balance" shall mean the sum
of the Initial Receivable Balances of the Receivables as of the
Cutoff Date, which is $324,999,999.66.
"Initial Gross Receivable Balance" shall mean, with respect
to any Receivable as of the Cutoff Date, the Initial Receivable
Balance plus, in the case of Receivables classified by the
Servicer as "finance charge - included contracts," the Finance
Charges included in the Scheduled Payments due on or after the
Cutoff Date.
"Initial Receivable Balance" shall mean, with respect to a
Receivable, the aggregate principal amount advanced under such
Receivable toward the purchase price of the Financed Vehicle or
Financed Vehicles, including insurance premiums, service and
warranty contracts, federal excise and sales taxes and other
items customarily financed as part of such Receivables and
related costs, less payments received from the Obligor prior to
the Cutoff Date with respect to such Receivable allocable on the
basis of the actuarial method to principal.
"Initial Reserve Account Deposit" shall mean, with respect
to the date of this Agreement,
8.03% of the Initial Aggregate Receivables Balance.
"Insurance Policy" shall mean, with respect to a Receivable,
an insurance policy covering physical damage, credit life, credit
disability, theft, mechanical breakdown or similar event to each
Financed Vehicle securing such Receivable.
"Insurance Proceeds" shall mean, with respect to any
Receivable, proceeds of any Insurance Policy with respect to such
Receivable.
"International" shall mean International Truck and Engine
Corp., a Delaware corporation, and its successors and assigns.
"International Purchase Obligations" shall mean certain
obligations of International, subject to limitations, to purchase
Financed Vehicles securing Liquidating Receivables pursuant to
Article IV, "NFC/International Retail Repossession Purchase and
Remarketing Agreement" and other provisions of the Master
Intercompany Agreement by and between NFC and International dated
as of April 26, 1993, as such Master Intercompany Agreement may
be amended, supplemented, restated or otherwise modified.
"Investment Earnings" means investment earnings on funds
deposited in the Designated Accounts, net of losses and
investment expenses, during the applicable Monthly Period.
"LIBO Rate" means the rate per annum equal to the sum of (I)
the result of (a) the applicable British Bankers' Association
Interest Settlement Rate for deposits in U.S. dollars appearing
on Reuters Screen FRBD as of 11:00 a.m. (London time) two
Business Days prior to the first day of the relevant period
selected by the Servicer or the Seller with the consent of the
Agent, and having a maturity equal to such period, provided that,
(i) if Reuters Screen FRBD is not available to the Agent for any
reason, the applicable LIBO Rate for the relevant period shall
instead be the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars as reported by any
other generally recognized financial information service as of
11:00 a.m. (London time) two Business Days prior to the first day
of such period, and having a maturity equal to such period, and
(ii) if no such British Bankers' Association Interest Settlement
Rate is available to the Agent, the applicable LIBO Rate for the
relevant period shall instead be the rate determined by the Agent
to be the rate at which Royal Bank of Canada offers to place
deposits in U.S. dollars with first-class banks in the London
interbank market at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such period, in the
approximate amount to be funded at the LIBO Rate and having a
maturity equal to such period, divided by (b) one minus the
maximum aggregate reserve requirement (including all basic,
supplemental, marginal or other reserves) which is imposed
against the Agent in respect of Eurocurrency liabilities, as
defined in Regulation D of the Board of Governors of the Federal
Reserve System as in effect from time to time (expressed as a
decimal), applicable to such period and (II) 1.00% per annum.
"Lien" shall mean, any security interest, lien, charge,
pledge, equity or encumbrance of any kind other than liens for
taxes not yet due and payable, mechanics' liens, any liens that
attach by operation of law, and any liens being contested by
appropriate measures.
"Liquidating Receivable" shall mean a Receivable (i) as to
which the Servicer (a) has reasonably determined, in accordance
with its customary servicing procedures, that eventual payment of
amounts owing on such Receivable is unlikely, or (b) has
repossessed the Financed Vehicle or all Financed Vehicles
securing the Receivable or (ii) as to which any related Scheduled
Payment is at least 210 days overdue.
"Liquidation Expenses" shall mean, with respect to a
Liquidating Receivable, an amount not to exceed $750 (or such
greater amount as the Servicer determines necessary in accordance
with its customary procedures to refurbish and dispose of a
repossessed Financed Vehicle) as an allowance for amounts charged
to the account of the Obligor, in keeping with the Servicer's
customary procedures, for repossession, refurbishment and
disposition of the Financed Vehicle including out-of-pocket costs
related to the liquidation.
"Liquidation Proceeds" shall mean, with respect to a
Liquidating Receivable, all amounts realized with respect to such
Receivables, including benefits of any lease assignments,
Insurance Proceeds, proceeds from any Dealer Liability, proceeds
from any International Purchase Obligations and proceeds from any
Guaranties, net of amounts that are required to be refunded to
the Obligor on such Receivable.
"Material Adverse Change" means a material adverse change in
the financial condition or operations of any Seller Party and its
Subsidiaries, or (ii) the ability of any Seller Party to perform
its obligations under this Agreement or any other Transaction
Document.
"Monthly Advance" shall mean the amount, as of an Accounting
Date, which the Servicer is required to advance on the respective
Receivable pursuant to Section 6.7 of this Agreement.
"Monthly Period" shall mean, with respect to a Determination
Date and a Settlement Date, the calendar month preceding the
month in which such date occurs.
"Monthly Principal Distributable Amount" shall mean, with
respect to any Settlement Date, the sum of: (i) the principal
portion of all Scheduled Payments due with respect to the related
Monthly Period on the Receivables (other than Liquidating
Receivables), (ii) the principal portion of all Prepayments
received during the related Monthly Period (except to the extent
included in (i) above) and (iii) the Receivable Balance of each
Receivable that the Servicer purchased, the Seller repurchased or
that became a Liquidating Receivable during the related Monthly
Period (except to the extent included in (i) or (ii) above).
"Monthly Report" means a report, in substantially the form
of Exhibit III hereto (appropriately completed), furnished by the
Servicer to the Agent pursuant to Section 2.5.
"Moody's" means ▇▇▇▇▇'▇ Investors Service or its successor.
"Net Swap Adjustment Amount" means, for any Settlement Date,
the lesser of (a) the Gross Swap Adjustment Amount and (b) the
excess, if any, by which the Specified Reserve Account Balance
for such Settlement Date exceeds the amount that would be on
deposit in the Reserve Account on such Settlement Date if the Net
Swap Adjustment Amount were not deposited by the Servicer into
the applicable Designated Account and applied on such Settlement
Date.
"Net Swap Amount" means, for any Settlement Period, an
amount (which may be negative) equal to the amount payable on the
related Settlement Date by the fixed rate payor under the RBC
Swap minus the amount payable by the floating rate payor under
the RBC Swap, in each case assuming that the RBC Swap is in full
force and effect and no default has occurred and is continuing
thereunder.
"NIC" means Navistar International Corporation, a Delaware
corporation.
"Obligations" means (i) the Facility Fee, (ii) all amounts
payable as the sum of Yield and Net Swap Amounts, (iii) all
amounts payable pursuant to Article VIII, if any, (iv) the Total
Servicing Fee, (v) all Broken Funding Costs, (vi) all Default
Fees, (vii) all Warranty Payments, and (viii) if the Clean-up
Call has been exercised, all Optional Purchase Proceeds. Unless
otherwise specified herein, all Obligations which arise during a
Monthly Period and of which the Servicer has been notified on or
before the tenth day of the month following the end of such
Monthly Period shall be payable on the Settlement Date related to
such Monthly Period out of (and to the extent of) funds available
for such purpose as specified in Section 2.1(c).
"Obligor" means, with respect to any Receivable, the
purchaser or any co-purchaser of the related Financed Vehicle or
Financed Vehicles or any other Person, other than the maker of
any Guaranty, who owes payments under a Receivable.
"Optional Purchase Proceeds" has the meaning it is given in
Section 2.4.
"Originator" means NFC, in its capacity as Seller under the
Sale Agreement.
"Outstanding Monthly Advances" shall mean, on an Accounting
Date with respect to a Receivable, the sum of all Monthly
Advances made as or of the Accounting Date minus all payments or
collections as of or prior to such Accounting Date which are
specified in Section 6.7 of this Agreement as reducing
Outstanding Monthly Advances with respect to such Receivable.
"Overdue Payment" shall mean, with respect to a Settlement
Date and to a Receivable, all payments received during the
related Monthly Period in excess of any Supplemental Servicing
Fees, to the extent of the Outstanding Monthly Advances relating
to such Receivable.
"Partial Prepayment" shall mean, with respect to a
Settlement Date and to any Receivable, the portion of an Actual
Payment in excess of the Scheduled Payment which equals one or
more future Scheduled Payments but does not constitute a Full
Prepayment and results in a Rebate in accordance with the
Servicer's customary procedures.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, limited liability company, joint
venture or other entity, or a government or any political
subdivision or agency thereof.
"Prepayment" shall mean, with respect to a Settlement Date
and to a Receivable, the portion of an Actual Payment in excess
of the Scheduled Payment.
"Prepayment Surplus" shall mean, with respect to any
Settlement Date on which a Prepayment is to be applied with
respect to a Receivable, that portion of such Prepayment, net of
any Rebate to the Obligor of the portion of the Scheduled
Payments attributable to unearned Finance Charges, which is not
allocable to principal in accordance with the actuarial method.
"Principal Carryover Distributable Amount" shall mean, with
respect to any Settlement Date, the excess of the Principal
Distributable Amount with respect to the immediately preceding
Settlement Date over the amount that was actually paid to the
Agent to reduce the Capital on such immediately preceding
Settlement Date.
"Principal Distributable Amount" shall mean, with respect to
any Settlement Date, the sum of the Monthly Principal
Distributable Amount and the Principal Carryover Distributable
Amount with respect to such Settlement Date, not to exceed the
Capital outstanding as of that Settlement Date.
"Purchase Price" means the amount of consideration paid for
the Purchaser Interest hereunder.
"Purchaser" means Thunder Bay Funding, LLC or a Financial
Institution, as applicable.
"Purchaser Interest" means, at any time, an undivided
ownership interest in (i) each and every Receivable identified on
the Schedule of Receivables, (ii) all Related Security with
respect to each such Receivable and (iii) Collections with
respect to, and other proceeds of, each such Receivable and
Related Security.
"RBC Swap" means the swap between Royal Bank of Canada and
Thunder Bay Funding, LLC dated approximately the date hereof as
amended from time to time with the consent of the Seller.
"Rebate" shall mean, with respect to a given date and to a
Receivable, the rebate under such Receivable that is or would be
payable to the Obligor for unearned Finance Charges or any other
charges that are or would be subject to a rebate to the Obligor
upon the payment of a Partial Prepayment or a Full Prepayment.
"Receivable" shall mean one of the retail loans evidenced by
a note or any other documentation and secured by one or more new
or used medium or heavy duty trucks, buses or trailers, which
loan is identified on the Schedule of Receivables, whether
constituting an account, chattel paper, instrument or general
intangible, and includes, without limitation, the obligation to
pay any Finance Charges with respect thereto.
"Receivable Balance" shall mean, with respect to any
Receivable, as of an Accounting Date, the Initial Receivable
Balance thereof minus the sum of the following amounts, in each
case computed in accordance with the actuarial method: (i) that
portion of all Scheduled Payments allocated to principal due on
or after the Cutoff Date and on or prior to the Accounting Date,
(ii) that portion of all Warranty Payments or Administrative
Purchase Payments allocated to principal, (iii) that portion of
all Prepayments allocated to principal, and (iv) that portion of
the following received and allocated to principal by the
Servicer: benefits of any lease assignments, proceeds from any
Insurance Policies, Liquidation Proceeds, proceeds from any
Dealer Liability, proceeds from any International Purchase
Obligations and proceeds from Guaranties.
"Receivable File" shall mean the following documents
pertaining to a particular Receivable:
(a) the fully executed original of the retail note for each
Receivable;
(b) documents evidencing or related to any Insurance Policy;
(c) the original credit application of each Obligor, fully
executed by each such Obligor on NFC's customary form, or on a
form approved by NFC, for such application;
(d) where permitted by law, the original certificate of
title (when received) and otherwise such documents, if any, that
NFC keeps on file in accordance with its customary servicing
procedures indicating that the Financed Vehicle is owned by the
Obligor and subject to the interest of NFC as first lienholder or
secured party; and
(e) any and all other documents that NFC keeps on file in
accordance with its customary servicing procedures relating to
the individual Receivable, Obligor or Financed Vehicle.
"Records" means, with respect to any Receivable, all
Contracts and other documents, books, records and other
information (including, without limitation, computer programs,
tapes, disks, punch cards, data processing software and related
property and rights) relating to such Receivable, any Related
Security therefor and the related Obligor.
"Regulatory Change" has the meaning set forth in Section 8.2.
"Related Security" shall mean, with respect to the
Receivables:
(a) the security interests in the Financed Vehicles granted
by Obligors under the terms of the Receivables and, to the extent
permitted by law, any accessions thereto that are financed by NFC;
(b) all other security interests or liens and property, if
any, purporting to secure payment of such Receivable, whether
pursuant to a Contract related to such Receivable or otherwise,
together with all financing statements and security agreements
describing any collateral securing such Receivable;
(c) the benefits of any lease assignments with respect to
the related Financed Vehicles;
(d) any proceeds from any Insurance Policies with respect
to the Receivables;
(e) any proceeds from Dealer Liability with respect to the
Receivables, proceeds from any International Purchase Obligations
with respect to the Receivables (subject to the limitations set
forth in Section 1.2(d) of this Agreement) and proceeds from any
guaranties of Receivables;
(f) all of the Seller's right, title and interest in, to
and under the Sale Agreement, the Assignment of the Designated
Receivables and the Related Security (as defined in the Sale
Agreement) with respect to the Receivables and the Custodian
Agreement, including the right of the Seller to cause NFC to
perform its obligations thereunder (including the obligation to
repurchase Receivables under certain circumstances);
(g) all guaranties, letters of credit and other agreements
or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether
pursuant to the Contract related to such Receivable or otherwise
(other than the International Purchase Obligations);
(h) all Records and Receivables Files relating to such
Receivables;
(i) all of the Seller's right, title and interest in the
Designated Accounts and the monies therein; and
(j) all proceeds of any of the foregoing.
"Remaining Gross Balance" shall mean, with respect to any
Receivable (other than a Liquidating Receivable) and as of an
Accounting Date, the Initial Gross Receivable Balance thereof
minus the sum of (i) the portion of all Actual Payments with
respect to such Receivable, (ii) any Warranty Payment or
Administrative Purchase Payment with respect to any such
Receivable, (iii) any Prepayments applied to reduce the Initial
Gross Receivable Balance of any such Receivable and (iv) proceeds
from any Insurance Policies with respect to such Receivable, plus
for any Receivable not classified by the Servicer as a "finance
charge - included contract," the portion of the payments
specified in the preceding clauses (i), (ii), (iii) or (iv) above
allocable in accordance with the actuarial method to Finance
Charges; provided, however, that the Remaining Gross Balance of
any Receivable that has been designated a Liquidating Receivable
during the related Monthly Period shall equal zero.
"Reserve Account" shall mean the account designated as such,
established and maintained pursuant to Section 1.4 hereof.
"S&P" shall mean Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, together with its
successors.
"Sale Agreement" means that certain Receivables Sale
Agreement, dated as of July 30, 2004, between Originator and
Seller, as the same may be amended, restated or otherwise
modified from time to time.
"Scheduled Payment" shall mean a payment which (i) is in the
amount required under the terms of a Receivable in effect as of
the Cutoff Date, except, in the case of any Receivable secured by
more than one Financed Vehicle, for any changes in the terms of
such Receivable resulting from a Full Prepayment with respect to
any Financed Vehicle related thereto, (ii) is payable by the
Obligor and (iii) includes Finance Charges equivalent to the
Annual Percentage Rate. When "Scheduled Payment" is used with
reference to a Settlement Date, it means the payment which is due
in the related Monthly Period; provided, that in the case of the
first Settlement Date, the Scheduled Payment shall include all
such payments due from the Obligor on or after the Cutoff Date
through the end of the Monthly Period related to the first
Settlement Date.
"Schedule of Receivables" shall mean the schedule of
Receivables annexed to this Agreement as Schedule B.
"Securities and Exchange Commission" shall mean the U.S.
administrative agency charged with principal responsibility for
the enforcement and administration of the federal securities laws.
"Securities Intermediary" has the meaning given such term in
Section 2.7 of this Agreement.
"Security Entitlement" has the meaning given such term in
Section 8-102(a)(17) of the New York UCC.
"Seller" has the meaning set forth in the preamble to this
Agreement.
"Seller Parties" has the meaning set forth in the preamble
to this Agreement.
"Servicer" means at any time the Person (which may be the
Agent) then authorized pursuant to Article VI to service,
administer and collect Receivables.
"Servicer Default" shall mean the occurrence of any event
described in Section 7.1 of this Agreement.
"Settlement Date" means the 18th day of each month (or, if
such day is not a Business Day, then the next Business Day).
"Settlement Period" means a period of one calendar month;
provided that the initial Settlement Period means the period from
(and including) the date of the initial purchase hereunder to
(and including) the last day of the calendar month thereafter.
"Specified Reserve Account Balance" shall mean, with respect
to any Settlement Date, the lesser of (i) the Aggregate Unpaids
as of such Settlement Date, and (ii) the greater of:
(a) 9.5% of the Aggregate Receivables Balance as of the
close of business on the last day of the related Monthly Period,
provided that if on any Settlement Date (i) the product
(expressed as a percentage) of (A) twelve and (B) a fraction, the
numerator of which is equal to the sum of the Aggregate Losses
plus Liquidation Proceeds for each of the Monthly Periods which
are the fifth, fourth and third Monthly Periods preceding the
Monthly Period in which such Settlement Date occurs, minus the
sum of the Liquidation Proceeds for the Monthly Periods which are
the first, second and third Monthly Periods preceding the Monthly
Period in which such Settlement Date occurs, and the denominator
of which is the sum of the Remaining Gross Balances of all
outstanding Receivables as of the last day of each of the sixth,
fifth and fourth Monthly Periods preceding the Monthly Period in
which such Settlement Date occurs, exceeds 1.5% or (ii) the
average of the Delinquency Percentages for the preceding three
months exceeds 2.0%, then the percentage of the Aggregate
Receivables Balance referred to this clause (a), shall be equal
to 11.00%; and
(b) 4.0% of the Initial Aggregate Receivables Balance.
"Subsidiary" of a Person means (i) any corporation more than
50% of the outstanding securities having ordinary voting power of
which shall at the time be owned or controlled, directly or
indirectly, by such Person or by one or more of its Subsidiaries
or by such Person and one or more of its Subsidiaries, or (ii)
any partnership, association, joint venture, limited liability
company or similar business organization more than 50% of the
ownership interests having ordinary voting power of which shall
at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall
mean a Subsidiary of Seller.
"Supplemental Servicing Fee" shall mean all late fees,
prepayment charges and other administrative fees and expenses or
similar charges allowed by applicable law with respect to the
Receivables, collected (from whatever source) on the Receivables
during the applicable Monthly Period.
"Total Available Amount" shall mean, with respect to a
Settlement Date, the sum of the Available Amount, the amount
transferred to the Collection Account from the Reserve Account
pursuant to Section 2.1(b)(ii), and the amount transferred into
the Collection Account by the Servicer pursuant to Section
2.1(b)(iii).
"Total Servicing Fee" shall mean the sum of the Basic
Servicing Fee and any unpaid Basic Servicing Fees from all prior
Settlement Dates.
"Transaction Documents" means, collectively, this Agreement,
the Sale Agreement, the assignment to be delivered to NFRRC by
NFC thereunder, the Custodian Agreement, the Fee Letter, and all
other instruments, documents and agreements executed and
delivered in connection herewith.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the specified jurisdiction.
"Uncertificated Security" shall mean, as of any date, has
the meaning given to such term under the applicable UCC as in
effect on such date.
"Warranty Payment" shall mean, with respect to a Settlement
Date and to a Warranty Receivable repurchased as of the related
Accounting Date, the sum of (i) the sum of all remaining
Scheduled Payments on such Warranty Receivable due after the
Accounting Date, (ii) all past due Scheduled Payments with
respect to which a Monthly Advance has not been made, (iii) any
reimbursement made pursuant to the last sentence of Section 6.7
of this Agreement with respect to such Warranty Receivable, and
(iv) all Outstanding Monthly Advances made on such Warranty
Receivable, minus (x) the rebate, calculated in accordance with
the actuarial method, that would be payable to the Obligor on
such Warranty Receivable were the Obligor to prepay such
Receivable in full on such day and (y) any Liquidation Proceeds
(to the extent applied to reduce the Receivable Balance of such
Warranty Receivable) previously received by the Purchasers with
respect to such Warranty Receivable.
"Warranty Purchaser" shall mean either (i) the Seller
pursuant to Section 5.1(i) of this Agreement or (ii) NFC pursuant
to Section 5.04 of the Sale Agreement.
"Warranty Receivable" shall mean a Receivable which the
Warranty Purchaser has become obligated to repurchase pursuant to
Section 5.1(i) of this Agreement or Section 5.04 of the Sale
Agreement.
"Yield" means, for any Settlement Period, the sum of:
(a) for any portion of such Settlement Period during
which the Company funded the Purchaser Interest during such
portion of the Settlement Period through the issuance of
commercial paper,
CR x C x ED
360
(b) for any portion of such Settlement Period during
which the Company did not fund the Purchaser Interest through
the issuance of commercial paper,
DR x C x ED
360
where:
CR = the Company Rate for the portion of the
Purchaser Interest for such portion of the
Settlement Period
C = the Capital of the Purchaser Interest during
such portion of the Settlement Period
ED = the actual number of days elapsed during such
portion of the Settlement Period
DR = the Discount Rate for the Purchaser Interest
for such portion of the Settlement Period
provided that no provision of this Agreement shall require
the payment or permit the collection of Yield in excess of the
maximum permitted by applicable law; and provided further that
Yield for the Purchaser Interest shall not be considered paid by
any distribution to the extent that at any time all or a portion
of such distribution is rescinded or must otherwise be returned
for any reason.
All accounting terms not specifically defined herein shall
be construed in accordance with generally accepted accounting
principles. All terms used in Article 9 of the UCC in the State
of New York, and not specifically defined herein, are used herein
as defined in such Article 9.
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EXHIBIT II
PLACES OF BUSINESS OF THE SELLER PARTIES;
LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBER(S)
Navistar Financial Corporation
Place of Business: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location of Records: Same
Jurisdiction of Formation: Delaware
F.E.I.N.: ▇▇-▇▇▇▇▇▇▇
Navistar Financial Retail Receivables Corporation
Place of Business: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Location of Records: Same
F.E.I.N.: ▇▇-▇▇▇▇▇▇▇
Jurisdiction of Formation: Delaware
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EXHIBIT III
FORM OF MONTHLY REPORT
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SCHEDULE A
DOCUMENTS TO BE DELIVERED TO THE AGENT
ON OR PRIOR TO THE INITIAL PURCHASE
1. Copy of the Resolutions of the Board of Directors of each
Seller Party certified by its Secretary authorizing such
Seller Party's execution, delivery and performance of this
Agreement and the other documents to be delivered by it
hereunder.
2. Articles or Certificate of Incorporation of each Seller
Party certified by the Secretary of State of its
jurisdiction of incorporation on or within thirty (30) days
prior to the initial Purchase.
3. Good Standing Certificate for each Seller Party issued by
the Secretaries of State of Delaware and Illinois.
4. A certificate of the Secretary of each Seller Party
certifying (i) the names and signatures of the officers
authorized on its behalf to execute this Agreement and any
other documents to be delivered by it thereunder and (ii) a
copy of such Seller Party's By-Laws.
5. A favorable opinion of legal counsel for the Seller Parties
(which may include in-house counsel) reasonably acceptable
to the Agent which addresses the following matters and such
other matters as the Agent may reasonably request:
- authorization, execution and delivery of the
Transaction Documents
- enforceability of the Transaction Documents
against the Seller Parties thereto
- perfection and priority of security interests
- true sale of the Designated Receivables from Truck
Retail Instalment Paper Corp. to NFC and of the
Receivables from NFC to the Seller, and
non-consolidation of the Seller with NFC
6. For each Purchaser that is not incorporated under the laws
of the United States of America, or a state thereof, two
duly completed copies of United States Internal Revenue
Service Form W-8BEN or W-8ECI certifying in either case that
such Purchaser is entitled to receive payments under the
Agreement without deduction or withholding of any United
States federal income taxes.
7. An executed copy of the Receivables Sale Agreement, together
with copies of each of the documents delivered pursuant to
Section 3.1 thereof.
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SCHEDULE B
SCHEDULE OF RECEIVABLES