EXHIBIT 10.2
POOLING AND SERVICING AGREEMENT
AMONG
NAVISTAR FINANCIAL CORPORATION
SERVICER
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
SELLER
AND
NAVISTAR FINANCIAL 1994-C OWNER TRUST
ISSUER
DATED AS OF DECEMBER 15, 1994
TABLE OF CONTENTS
Page
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01. Definitions 1
ARTICLE II
CONVEYANCE OF RECEIVABLES; ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Receivables 1
SECTION 2.02. Custody of Receivable Files 2
SECTION 2.03. Acceptance by Issuer; Limitation on
Transfer of NITC Purchase Obligations 3
SECTION 2.04. Representations and Warranties as to the
Receivables 3
SECTION 2.05. Repurchase of Receivables Upon Breach of
Warranty 4
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01. Duties of the Servicer 4
SECTION 3.02. Collection of Receivables Payments 6
SECTION 3.03. [Reserved] 6
SECTION 3.04. Realization Upon Liquidating
Receivables 6
SECTION 3.05. Maintenance of Insurance Policies 6
SECTION 3.06. Maintenance of Security Interests in
Vehicles 7
SECTION 3.07. Covenants of the Servicer 7
SECTION 3.08. Purchase of Receivables Upon Breach of
Covenant 7
SECTION 3.09. Total and Supplemental Servicing Fees;
Payment of Certain Expenses by Servicer 8
SECTION 3.10. Servicer's Certificate 8
SECTION 3.11. Application of Collections 8
ARTICLE IV
SERVICER'S COVENANTS; DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 4.01. Annual Statement as to Compliance:
Notice of Servicer Default 9
SECTION 4.02. Annual Independent Accountants' Report 9
SECTION 4.03. Access to Certain Documentation and
Information Regarding Receivables 10
SECTION 4.04. Amendments to Schedule of Receivables 10
SECTION 4.05. Assignment of Administrative Receivables
and Warranty Receivables 11
SECTION 4.06. Distributions 11
SECTION 4.07. Reserve Account 13
SECTION 4.08. Net Deposits 14
SECTION 4.09. Statements to Securityholders 14
ARTICLE V
CERTIFICATEHOLDER AND NOTEHOLDER STATEMENTS AND ACCOUNTS;
COLLECTIONS, DEPOSITS AND INVESTMENTS; ADVANCES
SECTION 5.01. Establishment of Accounts 16
SECTION 5.02. Collections 19
SECTION 5.03. Investment Earnings and Supplemental
Servicing Fees 19
SECTION 5.04. Monthly Advances 20
SECTION 5.05. Additional Deposits 20
ARTICLE VI
THE SELLER; REPRESENTATIONS AND WARRANTIES
OF THE SELLER AND THE SERVICER
SECTION 6.01. Representations and Warranties of the
Seller and the Servicer 20
SECTION 6.02. Liability of Seller 23
SECTION 6.03. Merger or Consolidation of, or
Assumption of the Obligations of, Seller;
Amendment of Certificate of Incorporation 23
SECTION 6.04. Limitation on Liability of Seller and
Others 24
SECTION 6.05. Seller May Own Securities 24
ARTICLE VII
LIABILITIES OF SERVICER AND OTHERS
SECTION 7.01. Liability of Servicer; Indemnities 24
SECTION 7.02. Merger or Consolidation of, or
Assumption of the Obligations of, the Servicer 26
SECTION 7.03. Limitation on Liability of Servicer and
Others 26
SECTION 7.04. Delegation of Duties 27
SECTION 7.05. Servicer Not to Resign 27
ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Defaults 28
SECTION 8.02. Consequences of a Servicer Default 29
SECTION 8.03. Indenture Trustee to Act; Appointment of
Successor 29
SECTION 8.04. Notification to Securityholders 30
SECTION 8.05. Waiver of Past Defaults 30
SECTION 8.06. Repayment of Advances 31
ARTICLE IX
TERMINATION
SECTION 9.01. Optional Purchase of All Receivables 31
SECTION 9.02. Sale of Assets; Termination 31
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment 33
SECTION 10.02. Protection of Title to Owner Trust
Estate 34
SECTION 10.03. Notices 36
SECTION 10.04. Governing Law 36
SECTION 10.05. Severability of Provisions 36
SECTION 10.06. Assignment 37
SECTION 10.07. Third-Party Beneficiaries 37
SECTION 10.08. Separate Counterparts 37
SECTION 10.09. Headings and Cross-References 37
SECTION 10.10. Assignment to Indenture Trustee 37
SECTION 10.11. No Petition Covenants 37
SECTION 10.12. Limitation of Liability of the Trustees 38
SECTION 10.13. Business Day Certificate 38
EXHIBIT A
Form of Assignment
EXHIBIT B
Locations of Schedule of Receivables
APPENDIX A
Defined Terms and Rules of Construction
APPENDIX B
Notice Addresses and Procedures
THIS POOLING AND SERVICING AGREEMENT is made as of December
15, 1994 by and among Navistar Financial Corporation, a Delaware
corporation ("NFC" and, in its capacity as Servicer hereunder,
the "Servicer"), Navistar Financial Retail Receivables
Corporation, a Delaware corporation ("NFRRC" and, in its capacity
as the Seller hereunder, the "Seller"), and Navistar Financial
1994-C Owner Trust, a Delaware business trust (the "Issuer").
WHEREAS, NFC has sold the Receivables to the Seller pursuant
to the Purchase Agreement.
WHEREAS, the Seller desires to sell the Receivables to the
Issuer in exchange for the Securities pursuant to the terms of
this Agreement, and the Servicer desires to perform the servicing
obligations set forth herein for and in consideration of the fees
and other benefits set forth in this Agreement.
WHEREAS, the Seller and the Issuer wish to set forth the
terms pursuant to which the Receivables are to be sold by the
Seller to the Issuer and serviced by the Servicer.
NOW, THEREFORE, in consideration of the foregoing, the other
good and valuable consideration and the mutual terms and
covenants contained herein, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01. Definitions. Certain capitalized terms used
in the above recitals and in this Agreement are defined in and
shall have the respective meanings assigned them in Part I of
Appendix A to this Agreement. All references herein to "the
Agreement" or "this Agreement" are to this Pooling and Servicing
Agreement as it may be amended, supplemented or modified from
time to time, the exhibits hereto and the capitalized terms used
herein which are defined in such Appendix A, and all references
herein to Articles, Sections and subsections are to Articles,
Sections or subsections of this Agreement unless otherwise
specified. The rules of construction set forth in Part II of
such Appendix A shall be applicable to this Agreement.
ARTICLE II
CONVEYANCE OF RECEIVABLES; ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Receivables. In consideration
of the Issuer's delivery of the Securities to, or upon the order
of, the Seller, the Seller does hereby enter into this Agreement
and agree to fulfill all of its obligations hereunder and to
sell, transfer, assign and otherwise convey to the Issuer,
without recourse, pursuant to an assignment in the form attached
hereto as Exhibit A, all right, title and interest of the Seller
in, to and under:
(a) the Receivables listed on the Schedule of Receivables
and all monies paid thereon (including Liquidation Proceeds) and
due thereunder on and after the Cutoff Date;
(b) the security interests in the Financed Vehicles granted
by Obligors pursuant to the Receivables and, to the extent
permitted by law, any accessions thereto which are financed by
NFC;
(c) the benefits of any lease assignments with respect to
the 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 NITC Purchase Obligations with
respect to the Receivables (subject to the limitations set forth
in Section 2.03) and proceeds from any Guaranties of Receivables;
(f) the Purchase Agreement 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); and
(g) any proceeds of the property described in clauses (a),
(b), (c) and (f) above.
It is the intention of the Seller that the transfer and
assignment contemplated by this Agreement shall constitute a sale
of the Receivables from the Seller to the Issuer and the
beneficial interest in and title to the Purchased Property shall
not be part of the Seller's estate in the event of the filing of
a bankruptcy petition by or against the Seller under any
bankruptcy law. Within two Business Days after the Closing Date,
the Seller shall cause to be deposited into the Collection
Account all collections (from whatever source) on or with respect
to the Purchased Property received by the Seller pursuant to
Section 5.07 of the Purchase Agreement. The Seller and the
Servicer intend to treat such transfer and assignment as a sale
for accounting and tax purposes. Notwithstanding the foregoing,
in the event a court of competent jurisdiction determines that
such transfer and assignment did not constitute such a sale or
that such beneficial interest is a part of the Seller's estate,
then (i) the Seller shall be deemed to have granted to the Issuer
a first priority perfected security interest in all of the
Seller's right title and interest in, to and under the assets
conveyed pursuant to this Agreement, and the Seller hereby grants
such security interest and (ii) the assets conveyed pursuant to
this Agreement shall be deemed to include all rights, powers and
options (but none of the obligations, if any) of the Seller under
any agreement or instrument included in the assets conveyed
pursuant to this Agreement, including the immediate and
continuing right to claim for, collect, receive and give receipt
for principal and interest payments in respect of the Receivables
included in the assets conveyed pursuant to this Agreement and
all other monies payable under the Receivables conveyed pursuant
to this Agreement, to give and receive notices and other
communications, to make waivers or other agreements, to exercise
all rights and options, to bring Proceedings in the name of the
Seller or otherwise and generally to do and receive anything that
the Seller is or may be entitled to do or receive under or with
respect to the assets conveyed pursuant to this Agreement. For
purposes of such grant, this Agreement shall constitute a
security agreement under the UCC.
SECTION 2.02. Custody of Receivable Files. In connection
with the sale, transfer and assignment of the Receivables to the
Seller pursuant to the Purchase 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 the agent of the Seller as Custodian of the following
documents or instruments which shall be constructively delivered
to the Owner Trustee with respect to each Receivable:
(a) the fully executed original of the Retail Note for such
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 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 procedures relating to the
individual Receivable, Obligor or Financed Vehicle.
Pursuant to Section 2.01(f), the rights of the Seller under the
Custodian Agreement are being assigned to the Issuer.
SECTION 2.03. Acceptance by Issuer; Limitation on Transfer
of NITC Purchase Obligations. The Issuer does hereby accept all
consideration conveyed by the Seller pursuant to Section 2.01,
and declares that the Issuer shall hold such consideration upon
the trust set forth in the Trust Agreement for the benefit of
Certificateholders, subject to the terms and conditions of the
Trust Agreement, Indenture and this Agreement; provided, however,
that the Issuer acknowledges and agrees that (a) the rights
pursuant to the NITC Purchase Obligations are personal to NFC,
and only the proceeds of such rights are being assigned to the
Issuer pursuant to the terms hereof, (b) the Issuer is not or is
not intended to be a third-party beneficiary 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
Issuer. The Issuer hereby agrees and accepts the appointment and
authorization of NFC as Servicer under Section 3.01. The parties
agree that this Agreement, the Indenture and the Trust Agreement
constitute the Further Transfer and Servicing Agreements for
purposes of the Purchase Agreement.
SECTION 2.04. Representations and Warranties as to the
Receivables. Pursuant to Section 2.01(f), the Seller assigns to
the Issuer all of its right, title and interest in, to and under
the Purchase Agreement. Such assigned right, title and interest
includes the representations and warranties of NFC made to the
Seller pursuant to Section 3.01 of the Purchase Agreement. The
Seller hereby represents and warrants to the Issuer that the
Seller has taken no action which would cause such representations
and warranties to be false in any material respect as of the
Closing Date. The Seller further acknowledges that the Issuer
relies on the representations and warranties of the Seller under
this Agreement and of NFC under the Purchase Agreement in
accepting the Receivables in trust and executing and delivering
the Securities. The foregoing representation and warranty speaks
as of the Closing Date, but shall survive the sale, transfer and
assignment of the Receivables to the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
SECTION 2.05. Repurchase of Receivables Upon Breach of
Warranty. Upon discovery by the Seller, the Servicer or either
Trustee of a breach of any of the representations and warranties
in Section 3.01 of the Purchase Agreement (and, with respect to
subsection 3.01(j) of the Purchase Agreement, irrespective of any
limitation regarding knowledge of NFC) or in Section 2.04 or
Section 6.01 of this Agreement that materially and adversely
affects the interests of the Securityholders in any Receivable,
the party discovering such breach shall give prompt written
notice thereof to the others. As of the second Accounting Date
following its discovery or its receipt of notice of breach (or,
at the Seller's election, the first Accounting Date following
such discovery), unless such breach shall have been cured in all
material respects, in the event of a breach of the
representations and warranties made by the Seller in Section 2.04
or Section 6.01, the Seller shall repurchase such Receivable from
the Issuer on the related Distribution Date. The Owner Trustee
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 2.05.
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 obligation 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 Interested
Party. The Servicer acknowledges its obligations to repurchase
Administrative Receivables from the Issuer pursuant to Section
3.08 hereof and to repurchase Warranty Receivables pursuant to
Section 5.04 of the Purchase Agreement.
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.01. Duties of the Servicer. The Servicer is
hereby appointed and authorized to act as agent for the Owner of
the Receivables and in such capacity shall manage, service,
administer and make collections on the Receivables with
reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to comparable medium and
heavy duty truck, bus and trailer receivables that it services
for itself or others. The Servicer hereby accepts such
appointment and authorization and agrees to perform the duties of
Servicer with respect to the Receivables set forth herein. The
Servicer's duties 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 Owner of any Receivables with respect to
distributions, generating federal income tax information and
performing the other duties specified herein. Subject to the
provisions of Section 3.02, 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 Owner of the
Receivables, pursuant to this Section 3.01, to execute and
deliver, on behalf of all Interested Parties, or any of them, 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 Owner of such Receivable or, to the extent necessary,
in its own name, a legal proceeding to enforce a Liquidating
Receivable as contemplated by Section 3.04, to enforce all
obligations of NFC and NFRRC, in its capacity as the Seller or
otherwise, under each of the Purchase Agreement and the Further
Transfer and Servicing Agreements 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 Owner of such Receivable
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 Owner of a
Receivable 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. Any Owner of Receivables, 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 other Further
Transfer and Servicing Agreements. Except to the extent required
by the preceding two sentences, the authority and rights granted
to the Servicer in this Section 3.01 shall be nonexclusive and
shall not be construed to be in derogation of the retention by
the Owner of a Receivable of equivalent authority and rights.
SECTION 3.02. 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 subsection 3.07(c), the Servicer is hereby
authorized to grant extensions, rebates or adjustments on a
Receivable without the prior consent of the Owner of such
Receivable and to rewrite, in its ordinary course of business, a
Receivable to reflect the Full Prepayment of a Receivable with
respect to any Financed Vehicle without the prior consent of the
Owner of such Receivable. The Servicer is authorized in its
discretion to waive any prepayment charge, late payment charge or
any other fees that may be collected in the ordinary course of
servicing such Receivable.
SECTION 3.03. [Reserved].
SECTION 3.04. 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 NITC
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 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
shall 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
with respect to each Liquidating Receivable at such time as the
Receivable becomes a Liquidating Receivable in accordance with
subsection 4.06(b)(ii).
SECTION 3.05. 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 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 3.06. Maintenance of Security Interests in
Vehicles. The Servicer shall, in accordance with its customary
servicing procedures and at its
own expense, take such steps as are necessary to maintain
perfection of the first priority security interest created by
each Receivable in the related Financed Vehicle or Financed
Vehicles. The Owner of each Receivable hereby authorizes the
Servicer to re-perfect such security interest as necessary
because of the relocation of a Financed Vehicle or for any other
reason.
SECTION 3.07. Covenants of the Servicer. As of the Closing
Date, the Servicer hereby makes the following covenants on which
the Issuer is relying in acquiring the Receivables hereunder and
issuing the Securities under the other Further Transfer and
Servicing Agreements. The Servicer covenants that from and after
the Closing Date:
(a) Liens in Force. Except as contemplated in this
Agreement, the Servicer shall not release in whole or in part any
Financed Vehicle from the security interest securing the related
Receivable;
(b) No Impairment. The Servicer shall do nothing to impair
the rights of NFRRC or any Interested Party in and to the
Receivables; and
(c) No Modifications. The Servicer 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 June 20, 2000.
SECTION 3.08. Purchase of Receivables Upon Breach of
Covenant. Upon discovery by any of the Seller, the Servicer or
any party under the Further Transfer and Servicing Agreements of
a breach of any of the covenants set forth in Sections 3.06
and 3.07, the party discovering such breach shall give prompt
written notice thereof to the others. 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
Owner thereof any Receivable materially and adversely affected by
such breach as determined by such Owner and, on the related
Distribution 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 the Seller or any
Interested Party. Each of the Owner Trustee and the Indenture
Trustee 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 3.08.
SECTION 3.09. 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 in respect of the Receivables
as provided herein. Subject to any limitations 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 Issuer,
any trustees and independent accountants, taxes imposed on the
Servicer, expenses incurred in connection with distributions and
reports to Securityholders and all other fees and expenses not
expressly stated under this Agreement to be for the account of
the Securityholders, but excluding federal, state and local
income and franchise taxes, if any, of the Issuer or any
Securityholder).
SECTION 3.10. Servicer's Certificate. Not later than 10:00
a.m. (Chicago, Illinois time) on each Determination Date, the
Servicer shall deliver to each Trustee and the Rating Agencies a
Servicer's Certificate with respect to the immediately preceding
Monthly Period executed by the President or any Vice
President of the Servicer containing all information necessary to
each such party for making the calculations, withdrawals,
deposits, transfers and distributions required by Section 4.06,
and all information required to be provided to Certificateholders
and Noteholders under subsection 4.09(a). Receivables to be
purchased by the Servicer under Section 3.08 hereof or Section
5.04 of the Purchase Agreement as of the last day of any Monthly
Period shall be identified by Receivable number (as set forth in
the Schedule of Receivables). With respect to any Receivables
for which the Seller is the Owner, the Servicer shall deliver to
the Seller such accountings relating to such Receivables and the
actions of the Servicer with respect thereto as the Seller may
reasonably request.
SECTION 3.11. Application of Collections. For the purposes
of this Agreement, as of each Accounting Date, all collections
for the related Monthly Period with respect to each Receivable
shall be applied by the Servicer as follows:
(a) All payments by or on behalf of the Obligor (excluding
Supplemental Servicing Fees and Investment Earnings) shall be
applied (i) first to reduce Outstanding Monthly Advances, if any,
with respect to such Receivable, as described in Section 5.04,
(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; and
(b) 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.
ARTICLE IV
SERVICER'S COVENANTS; DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 4.01. Annual Statement as to Compliance: Notice of
Servicer Default.
(a) The Servicer shall deliver to each Trustee, on or
before February 1 of each year, beginning February 1, 1996, 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 Closing Date 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 all its
obligations under this Agreement throughout such period, or, if
there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer
and the nature and status thereof. A copy of such certificate may
be obtained by any Noteholder or any Certificateholder by a
request in writing to the Issuer addressed to the Corporate Trust
Office of the Indenture Trustee or the Owner Trustee,
respectively.
(b) The Servicer shall deliver to each Trustee and to the
Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five Business Days
thereafter, written notice in an Officer's Certificate
of any event which with the giving of notice or lapse of time, or
both, would become a Servicer Default under Section 8.01. The
Seller shall deliver to each Trustee, the Servicer and the Rating
Agencies, promptly after having obtained knowledge thereof, but
in no event later than five Business Days thereafter, written
notice in an Officer's Certificate of any event which with the
giving of notice or lapse of time, or both, would become a
Servicer Default under clause (b) of Section 8.01.
SECTION 4.02. 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 each Trustee and the Rating
Agencies, on or before February 1 of each year, beginning
February 1, 1996 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 Closing
Date to the date of such certificate), a report (the
"Accountants' Report") addressed to the board of directors of the
Servicer and to each Trustee, to the effect that such firm has
audited the financial statements of the Servicer and issued its
report thereon and that such audit (i) was made in accordance
with generally accepted auditing standards, (ii) included tests
relating to 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.
(c) A copy of the Accountants' Report may be obtained by
any Noteholder or any Certificateholder by a request in writing
to the Issuer addressed to the Corporate Trust Office of the
Indenture Trustee or the Owner Trustee, respectively.
SECTION 4.03. Access to Certain Documentation and
Information Regarding Receivables. The Servicer shall provide to
each Trustee reasonable access to the documentation regarding the
Receivables. The Servicer shall provide such access to any
Securityholder only in such cases where a Securityholder is
required by applicable statutes or regulations to review such
documentation. In each case, such access shall be afforded
without charge but only upon reasonable request and during normal
business hours at offices of the Servicer designated by the
Servicer. Nothing in this Section 4.03 shall derogate from the
obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding Obligors, and the
failure of the Servicer to provide access as provided in this
Section 4.03 as a result of such obligation shall not constitute
a breach of this Section 4.03.
SECTION 4.04. Amendments to Schedule of Receivables. If
the Servicer, during a Monthly Period, assigns to a Receivable an
account number that differs from the account number previously
identifying such Receivable on the Schedule of Receivables, the
Servicer shall deliver to the Seller and each Trustee on or
before the Distribution Date related to such Monthly Period an
amendment to the Schedule of Receivables to report the newly
assigned account number. Each such amendment shall list all new
account numbers assigned to Receivables during such Monthly
Period and shall show by cross reference the prior account
numbers identifying such Receivables on the Schedule of
Receivables.
SECTION 4.05. 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,
each Trustee 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 NITC Purchase
Obligations with respect to such Receivable and proceeds from any
Guaranties of such Receivable, (f) the interests of such Person
or the Issuer, as applicable, 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 either
Trustee or the Securityholders with respect thereto. If in any
Proceeding it is held that the Servicer may not enforce a
Receivable on the ground that it is not a real party in interest
or a holder entitled to enforce the Receivable, the applicable
Trustee 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
Securityholders.
SECTION 4.06. Distributions.
(a) On or before the day preceding each determination date,
with respect to the preceding Monthly Period and the related
Distribution Date, the Servicer shall calculate the Total
Available Amount, Collected Interest, Collected Principal, the
Total Servicing Fee, the Aggregate Noteholders' Interest
Distributable Amount, the Aggregate Noteholders' Principal
Distributable Amount, the Certificateholders' Interest
Distributable Amount, the Certificateholders' Principal
Distributable Amount and all other amounts required to determine
the amounts to be deposited in or paid from each of the
Collection Account, the Note Distribution Account, the
Certificate Distribution Account and the Reserve Account on the
next succeeding Distribution Date.
(b) On or before the day preceding each Distribution Date,
the Indenture Trustee shall cause to be made the following
withdrawals, deposits, transfers and distributions in the amounts
set forth in the Servicer's Certificate for such Distribution
Date pursuant to Section 3.10:
(i) from the Collection Account to the Servicer, in
immediately available funds, reimbursement of Outstanding
Monthly Advances pursuant to Section 5.04, payments of
Liquidation Expenses with respect to Receivables which
became Liquidating Receivables during the related Monthly
Period pursuant to Section 3.04 and any unpaid Liquidation
Expenses from prior periods; and
(ii) from the Reserve Account to the Collection
Account, the lesser of (A) the amount of cash or other
immediately available funds therein on the day preceding
such Distribution Date and (B) the amount, if any, by which
(I) the sum of the Total Servicing Fee, the Aggregate
Noteholders' Interest Distributable Amount, the
Certificateholders' Interest Distributable Amount, the
Aggregate Noteholders' Principal Distributable Amount and
the Certificateholders' Principal Distributable Amount
exceeds (II) the Available Amount for such Distribution
Date.
(c) Except as otherwise provided in Section 4.06(d), before
12:00 noon, New York City time, on the day preceding each
Distribution Date the Indenture Trustee (based on the information
contained in the Servicer's Certificate delivered on the related
Determination Date pursuant to Section 3.10) shall make the
following distributions from the Collection Account (after the
withdrawals, deposits and transfers specified in Section 4.06(b)
have been made) in the following order of priority:
(i) first, to the Servicer, to the extent of the Total
Available Amount, the Total Servicing Fee;
(ii) second, to the Note Distribution Account, to the
extent of the Total Available Amount (as such amount has
been reduced by the distributions described in clause (i)
above), the Aggregate Noteholders' Interest Distributable
Amount;
(iii) third, to the Certificate Distribution Account, to
the extent of the Total Available Amount (as such amount has
been reduced by the distributions described in clauses (i)
and (ii) above), the Certificateholders' Interest
Distributable Amount;
(iv) fourth, to the Note Distribution Account, to the
extent of the Total Available Amount (as such amount has
been reduced by the distributions described in clauses (i),
(ii) and (iii) above), the Aggregate Noteholders' Principal
Distributable Amount;
(v) fifth, to the Certificate Distribution Account, to
the extent of the Total Available Amount (as such amount has
been reduced by the distributions described in clauses (i)
through (iv), inclusive, above), the Certificateholders'
Principal Distributable Amount; and
(vi) sixth, to the Reserve Account, any portion of the
Total Available Amount remaining after the distributions
described in clauses (i) through (v), inclusive, above.
(d) Notwithstanding the foregoing, at any time that the
Notes have not been paid in full and the principal balance of the
Notes has been declared immediately due and payable following the
occurrence of an Event of Default pursuant to Section 5.2 of the
Indenture, then until such time as the Notes have been paid in
full and the Indenture has been discharged with respect to the
Notes or all Events of Default have been cured or waived as
provided in Section 5.2(b) of the Indenture, no amounts shall be
deposited in or distributed to the Certificate Distribution
Account. Any such amounts otherwise distributable to the
Certificate Distribution Account shall be deposited instead to
the Note Distribution Account as payments of principal on the
Notes.
SECTION 4.07. Reserve Account.
(a) The Servicer, for the benefit of the Securityholders,
shall establish and maintain in the name of the Indenture Trustee
an Eligible Deposit Account known as the Navistar Financial
1994-C Owner Trust Reserve Account (the "Reserve Account") to
include
the money and other property deposited and held therein pursuant
to this Section 4.07(a), Section 4.07(c), and Section 4.06(c).
On the Closing Date, the Seller shall deposit the Reserve Account
Initial Deposit into the Reserve Account. The Reserve Account
shall be the property of the Issuer subject to the rights of the
Indenture Trustee in the Reserve Account Property.
(b) If the amount on deposit in the Reserve Account on any
Distribution Date (after giving effect to all deposits therein or
withdrawals therefrom on such Distribution Date) exceeds the
Specified Reserve Account Balance for such Distribution Date, the
Servicer shall instruct the Indenture Trustee to distribute an
amount equal to any such excess to the Seller. The Seller may at
any time, without consent of the Securityholders, sell, transfer,
convey or assign in any manner its rights to and interests in
distributions from the Reserve Account, including interest
earnings thereon, provided that certain conditions are satisfied,
including: (i) such action will not result in a reduction or
withdrawal of the rating of any class of Notes or Certificates,
(ii) the Seller provides to the Owner Trustee and the Indenture
Trustee an opinion of independent counsel that such action will
not cause the Trust to be treated as an association (or publicly
traded partnership) taxable as a corporation for Federal income
tax purposes, and (iii) such transferee or assignee agrees to
take positions for tax purposes consistent with the tax positions
agreed to be taken by the Seller.
(c) If the Servicer, pursuant to Section 5.04, determines
on any Determination Date that it is required to make a Monthly
Advance and does not do so from its own funds, the Servicer shall
instruct the Indenture Trustee to withdraw funds from the Reserve
Account and deposit them in the Collection Account to cover any
shortfall. Such payment shall be deemed to have been made by the
Servicer pursuant to Section 5.04 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 4.08. Net Deposits. At any time that (i) NFC shall
be the Servicer and (ii) the Servicer shall be permitted by
Section 5.02 to remit collections on a basis other than a daily
basis, the Servicer, the Seller and each Trustee may make any
remittances pursuant to this Article IV net of amounts to be
distributed by the applicable recipient to such remitting party.
Nonetheless, each such party shall account for all of the above
described remittances and distributions as if the amounts were
deposited and/or transferred separately.
SECTION 4.09. Statements to Securityholders.
(a) On each Distribution Date, the Owner Trustee shall
include with each distribution to each Certificateholder, and the
Indenture Trustee shall include with each distribution to each
Noteholder, a statement (which statement shall also be provided
to the Rating Agencies) based on information in the Servicer's
Certificate furnished pursuant to Section 3.10. Each such
statement to be delivered to Certificateholders shall set forth
the following information as to the Certificates with respect to
such Distribution Date or the preceding Monthly Period, as
applicable. Each such statement to be delivered to Noteholders
shall set forth the following information as to the Notes with
respect to such Distribution Date or the preceding Monthly
Period:
(i) the amount of the distribution allocable to
interest on or with respect to each class of Securities;
(ii) the Aggregate Receivables Balance as of the close
of business on the last day of such Monthly Period;
(iii) the amount of Outstanding Monthly Advances with
respect to all Receivables on such Distribution Date;
(iv) the amount of the Total Servicing Fee paid or
payable to the Servicer with respect to the related Monthly
Period;
(v) the amount of Aggregate Losses for the related
Monthly Period;
(vi) the Delinquency Percentage for the related Monthly
Period;
(vii) the sum of all Administrative Purchase Payments
and all Warranty Payments made for the related Monthly
Period;
(viii) the amount of the distribution allocable to
principal of each class of Notes and to the Certificate
Balance of each class of Certificates;
(ix) the Note Principal Balance and the Note Pool
Factor for each class of Notes, and the Certificate Balance
and the Certificate Pool Factor for each class of
Certificates, each after giving effect to all payments
reported under (viii) above on such date;
(x) the amounts, if any, paid to the Servicer or
distributed to Securityholders from amounts on deposit in
the Reserve Account;
(xi) the amount of the Noteholders' Interest Carryover
Shortfall, the Noteholders' Principal Carryover Shortfall,
the Certificateholders' Interest Carryover Shortfall and the
Certificateholders' Principal Carryover Shortfall, if any,
and the change in such amounts from the preceding
Distribution Date; and
(xii) the balance (if any) of the Reserve Account on
such date, after giving effect to distributions,
withdrawals, transfers and deposits made on such date, and
the change in such balance from that of the prior
Distribution Date.
Each amount set forth pursuant to clauses (i), (iv), (viii), (x)
and (xi) above shall be expressed as a dollar amount per $1,000
of initial Note Principal Balance or the initial Certificate
Balance, as applicable. In lieu of preparing and delivering a
separate statement to Securityholders pursuant to this Section, a
Trustee may deliver a copy of the Servicer's Certificate
furnished pursuant to Section 3.10.
(b) Within the prescribed period of time for tax reporting
purposes after the end of each calendar year during the term of
this Agreement, the Servicer shall prepare and execute and the
Indenture Trustee and the Owner Trustee shall mail to each Person
who at any time during such calendar year shall have been a
holder of Notes or Certificates, respectively, and received any
payments thereon, a statement prepared and supplied by the
Servicer containing the sum of the amounts set forth in each of
clauses (i), (iv), (viii), (x) and (xi), for such calendar year
or, if such Person shall have been a Securityholder during a
portion of such calendar year and received any payments thereon,
for the applicable portion of such year, for the purposes of
such Securityholder's preparation of federal income tax returns.
SECTION 4.10. Information Provided to Rating Agencies. In
addition to receiving any information or documents required to be
delivered to any Rating Agency pursuant to any Basic Document,
each Rating Agency may request in writing to the Servicer, and
the Servicer shall deliver, reasonable additional information
necessary to the Rating Agencies to monitor the Securities.
Promptly, but in no event later than five Business Days, after
obtaining knowledge of an Insolvency Event with respect to the
Servicer, the Seller or the Trust, the Servicer shall deliver to
each of the Ratings Agencies notice of such
Insolvency Event. Failure by the Servicer to comply with the
terms of this Section 4.10 shall not constitute a "Servicer
Default", an "Event of Default" or a default under any Basic
Document.
ARTICLE V
CERTIFICATEHOLDER AND NOTEHOLDER STATEMENTS AND ACCOUNTS;
COLLECTIONS, DEPOSITS AND INVESTMENTS; ADVANCES
SECTION 5.01. Establishment of Accounts.
(a) (i) The Servicer, for the benefit of the
Securityholders, shall establish and maintain in the name of the
Indenture Trustee an Eligible Deposit Account known as the
Navistar Financial 1994-C Owner Trust Collection Account (the
"Collection Account"), bearing an additional designation clearly
indicating that the funds deposited therein are held for the
benefit of the Securityholders.
(ii) The Servicer, for the benefit of the Noteholders,
shall establish and maintain in the name of the Indenture Trustee
an Eligible Deposit Account known as the Navistar Financial
1994-C Owner Trust Note Distribution Account (the "Note
Distribution
Account"), bearing an additional designation clearly indicating
that the funds deposited therein are held for the benefit of the
Noteholders.
(iii) Pursuant to the Trust Agreement, the Servicer, for
the benefit of the Certificateholders, shall establish and
maintain at Chemical Bank in the name of the Owner Trustee an
Eligible Deposit Account known as the Navistar Financial 1994-C
Owner Trust Certificate Distribution Account (the "Certificate
Distribution Account") bearing an additional designation clearly
indicating that the funds deposited therein are held for the
benefit of the Certificateholders.
(b) (i) Each of the Designated Accounts shall be initially
established with the Indenture Trustee and shall be maintained
with the Indenture Trustee so long as (A) the short-term
unsecured debt obligations of the Indenture Trustee have the
Required Deposit Rating or (B) each of the Designated Accounts
are maintained in the corporate trust department of the Indenture
Trustee. All amounts held in such accounts (including amounts,
if any, which the Servicer is required to remit daily to the
Collection Account pursuant to Section 5.02) shall, to the extent
permitted by applicable laws, rules and regulations, be invested,
at the written direction of the Servicer, by such bank or trust
company in Eligible Investments; provided, that funds in the
Collection Account in an amount not in excess of 20% of the
Aggregate Receivables Balance as of the preceding Accounting Date
may be invested in investments which have a rating from Standard
& Poor's Ratings Group of "A-1" rather than "A-1+", if such
investments otherwise constitute Eligible Investments. Such
written direction shall constitute certification by the Servicer
that any such investment is authorized by this Section 5.01.
Funds deposited in the Reserve Account shall be invested in
Eligible Investments which mature prior to the next Distribution
Date except, and then only to the extent, as shall be otherwise
permitted by the Rating Agencies. Investments in Eligible
Investments shall be made in the name of the Indenture Trustee or
its nominee, and such investments shall not be sold or disposed
of prior to their maturity. Should the short-term unsecured debt
obligations of the Indenture Trustee (or any other bank or trust
company with which the Designated Accounts are maintained) no
longer have the Required Deposit Rating, then the Servicer shall
within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency shall consent),
with the Indenture Trustee's assistance as necessary, cause the
Designated Accounts (A) to be moved to a bank or trust company,
the short-term unsecured debt obligations of which shall have the
Required Deposit Rating, or (B) to be moved to the corporate
trust department of the Indenture Trustee. Investment
Earnings on funds deposited in the Designated Accounts shall be
payable to the Seller except when the Indenture Trustee is acting
as successor Servicer in which case such Investment Earnings
shall be payable to the Indenture Trustee as successor Servicer.
(ii) With respect to the Designated Account Property,
the Indenture Trustee agrees, by its acceptance hereof, that:
(A) any Designated Account Property that is held
in deposit accounts shall be held solely in Eligible
Deposit Accounts; and each such Eligible Deposit
Account shall be subject to the exclusive custody and
control of the Indenture Trustee, and the Indenture
Trustee shall have sole signature authority with
respect thereto;
(B) any Designated Account Property that
constitutes Physical Property shall be delivered to the
Indenture Trustee in accordance with paragraph (i) of
the definition of "Delivery" and shall be held, pending
maturity or disposition, solely by the Indenture
Trustee or a financial intermediary (as such term is
defined in Section 8-313(4) of the UCC) acting solely
for the Indenture Trustee;
(C) any Designated Account Property that is a
book-entry security held through the Federal Reserve
System pursuant to federal book-entry regulations shall
be delivered in accordance with paragraph (ii) of the
definition of "Delivery" and shall be maintained by the
Indenture Trustee, pending maturity or disposition,
through continued book-entry registration of such
Designated Account Property as described in such
paragraph;
(D) any Designated Account Property that is an
"uncertificated security" under Article 8 of the UCC
and that is not governed by clause (C) above shall be
delivered to the Indenture Trustee in accordance with
paragraph (iii) of the definition of "Delivery" and
shall be maintained by the Indenture Trustee, pending
maturity or disposition, through continued registration
of the Indenture Trustee's (or its nominee's) ownership
of such security; and
(E) the Indenture Trustee shall maintain each
item of Designated Account Property in the particular
Designated Account to which such item originated and
shall not commingle items from different Designated
Accounts.
(iii) The Servicer shall have the power, revocable by
the Indenture Trustee (or by the Owner Trustee with the consent
of the Indenture Trustee) to instruct the Indenture Trustee to
make withdrawals and payments from the Designated Accounts for
the purpose of permitting the Servicer or the Owner Trustee to
carry out its respective duties hereunder or permitting the
Indenture Trustee to carry out its duties under the Indenture.
(iv) The Indenture Trustee shall possess all right,
title and interest in and to all funds on deposit from time to
time in the Designated Accounts and in all proceeds thereof
(except Investment Earnings). Except as otherwise provided herein
or in the Indenture, the Designated Accounts shall be under the
sole dominion and control of the Indenture Trustee for the
benefit of the Securityholders.
(v) The Servicer shall not direct the Indenture
Trustee to make any investment of any funds or to sell any
investment held in any of the Designated
Accounts unless the security interest granted and perfected in
such account shall continue to be perfected in such investment or
the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to
the Indenture Trustee to make any such investment or sale, if
requested by the Indenture Trustee, the Servicer shall deliver to
the Indenture Trustee an Opinion of Counsel, acceptable to the
Indenture Trustee, to such effect.
(c) Pursuant to the Trust Agreement, the Owner Trustee
shall possess all right, title and interest in and to all funds
on deposit from time to time in the Certificate Distribution
Account and in all proceeds thereof. Except as otherwise provided
herein or in the Trust Agreement, the Certificate Distribution
Account shall be under the sole dominion and control of the Owner
Trustee for the benefit of the Certificateholders. If, at any
time, the Certificate Distribution Account ceases to be an
Eligible Deposit Account, the Servicer shall within 10 Business
Days (or such longer period, not to exceed 30 calendar days, as
to which each Rating Agency may consent) establish a new
Certificate Distribution Account as an Eligible Deposit Account
and shall cause the Owner Trustee to transfer any cash and/or any
investments in the old Certificate Distribution Account to such
new Certificate Distribution Account.
(d) The Indenture Trustee, the Owner Trustee and each other
Eligible Deposit Institution with whom a Designated Account or
the Certificate Deposit Account is maintained waives any right of
set-off, counterclaim, security interest or bankers' lien to
which it might otherwise be entitled.
SECTION 5.02. Collections. The Servicer shall remit to the
Collection Account all payments by or on behalf of the Obligors
on the Receivables, all Insurance Proceeds, all Liquidation
Proceeds, proceeds from any Dealer Liability, proceeds from any
NITC Purchase Obligations and proceeds from any Guaranties within
two Business Days after receipt thereof. Notwithstanding the
foregoing, the Servicer shall not be required to remit such
collections within such two Business Days but may remit
collections received during a Monthly Period to the Collection
Account in immediately available funds on the Business Day
immediately preceding the related Distribution Date but only for
so long as (i) NFC is the Servicer, (ii) (x) the Servicer
satisfies the requirements for monthly remittances established by
the Rating Agencies initially rating the Securities, and upon the
satisfaction of such requirements, the Rating Agencies which
initially rated the Securities reaffirm the rating of the
Securities at the level at which they would be rated if
collections were remitted within two Business Days, or (y) the
short-term unsecured debt obligations of NFC are rated at least
A-1+ by Standard & Poor's Ratings Group and P-1 by ▇▇▇▇▇'▇
Investors Service, Inc., and (iii) a Servicer Default shall not
have occurred and be continuing. The Indenture Trustee shall not
be deemed to have knowledge of any event or circumstance under
clause (iii) of the immediately preceding sentence that would
require remittance within two Business Days by the Servicer to
the Collection Account unless the Indenture Trustee has received
notice of such event or circumstance from the Seller or the
Servicer in an Officer's Certificate or from Noteholders whose
Notes evidence not less than 25% of the Outstanding Amount of the
Notes as of the close of the preceding Distribution Date or from
Certificateholders whose Certificates evidence not less the 25%
of the Voting Interests thereof or unless a Responsible Officer
in the Corporate Trust Office with knowledge hereof and
familiarity herewith has actual knowledge of such event or
circumstance. For purposes of this Article V the phrase
"payments by or on behalf of Obligors" shall mean payments made
by Persons other than the Servicer.
SECTION 5.03. Investment Earnings and Supplemental
Servicing Fees. Except as otherwise provided in Section
5.01(b)(1) hereof, the Servicer shall be entitled to receive all
Supplemental Servicing Fees, and the Seller shall be entitled to
receive all Investment Earnings, when and as paid without any
obligation to (a) either Trustee, (b) with respect to the
Supplemental Servicing Fees, the Seller or (c) with respect to
the Investment Earnings, the Servicer, in respect thereof.
Neither the Servicer nor the Seller will have any obligation to
deposit any such amount in any account established hereunder. To
the extent that any such amount shall be held in any account held
by either Trustee, or otherwise established hereunder, such
amount will be withdrawn therefrom and paid to the Servicer or
the Seller, as applicable, upon presentation of a certificate
signed by a Responsible Officer of such Person setting forth, in
reasonable detail, the amount of such Supplemental Servicing Fees
or such Investment Earnings, respectively.
SECTION 5.04. Monthly Advances. Subject to the following
sentence, as of each Accounting 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
subsection 3.11(a) 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 4.07(c), 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 held by the Issuer.
SECTION 5.05. Additional Deposits. The Servicer shall
deposit in the Collection Account the aggregate Monthly Advances
pursuant to Section 5.04. The Servicer and the Seller 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 Distribution Date related to such Monthly Period.
ARTICLE VI
THE SELLER; REPRESENTATIONS AND WARRANTIES
OF THE SELLER AND THE SERVICER
SECTION 6.01. Representations and Warranties of the Seller
and the Servicer. The Seller and the Servicer each make the
following representations and warranties as to itself on which
the Issuer is relying in acquiring the Receivables hereunder and
issuing the Securities under the other Further Transfer and
Servicing Agreements. The following representations and
warranties are made severally by each of the Seller and the
Servicer (for purposes of this Section 6.01, each, a "Party") and
speak as of the Closing Date but shall survive the sale, transfer
and assignment of the Receivables to the Issuer.
(a) Representations and Warranties as to each Party.
(i) Organization and Good Standing. Such Party has
been duly organized and is validly existing as a corporation
in good standing under the laws of the State of Delaware,
with power and authority to own its
properties and to conduct its business as such properties
are presently owned and such business is presently
conducted, and had at all relevant times, and now has,
power, authority and legal right (A) in the case of the
Seller, to acquire and own the Receivables and (B) in the
case of the Servicer, to service the Receivables as provided
in this Agreement;
(ii) Due Qualification. Such Party is duly qualified
to do business as a foreign corporation in good standing,
and has obtained all necessary licenses and approvals in
all jurisdictions in which the ownership or lease of
property or the conduct of its business (including, in the
case of the Servicer, the servicing of the Receivables as
required by this Agreement) requires or shall require such
qualification;
(iii) Power and Authority. Such Party (A) has the power
and authority to execute and deliver the Further Transfer
and Servicing Agreements to which it is a party (as used in
this Section 6.01(a), the "applicable Further Transfer and
Servicing Agreements") and to carry out the respective terms
of such agreements and, (B) in the case of the Seller, has
the power and authority to sell and assign the property to
be sold and assigned to and deposited with the Issuer as
part of the Owner Trust Estate and has duly authorized such
sale and assignment to the Issuer by all necessary corporate
action; and the execution, delivery and performance by such
Party of the applicable Further Transfer and Servicing
Agreements have been duly authorized by such Party by all
necessary corporate action;
(iv) Binding Obligations. The applicable Further
Transfer and Servicing Agreements, when duly executed and
delivered, shall constitute a legal, valid and binding
obligation of such Party enforceable against such Party in
accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of
creditors' rights in general and by general principles of
equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law;
(v) No Violation. The consummation by such Party of
the transactions contemplated by the applicable Further
Transfer and Servicing Agreements and the fulfillment of the
terms of such agreements by such Party shall not conflict
with, result in any breach of any of the terms and
provisions of or constitute (with or without notice or lapse
of time) a default under, the certificate of incorporation
or by-laws of such Party, or any indenture, agreement or
other instrument to which such Party is a party or by which
it is bound, or result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument, other than
the applicable Further Transfer and Servicing Agreements, or
violate any law or, to such Party's knowledge, any order,
rule or regulation applicable to such Party of any court or
of any federal or state regulatory body, administrative
agency or other governmental instrumentality having
jurisdiction over such Party or any of its properties; and
(vi) No Proceedings. There are no proceedings or, to
such Party's knowledge, investigations pending or, to such
Party's knowledge, threatened before any court, regulatory
body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over such
Party or its properties (i) asserting the invalidity of the
applicable Further Transfer and Servicing Agreements, any
Securities issued pursuant thereto and, in the case of the
Seller, the Custodian Agreement or the Administration
Agreement, (ii) seeking to prevent the issuance of such
Securities or the consummation of any of the transactions
contemplated by the applicable Further Transfer and
Servicing Agreements and, in the case of the Seller, the
Custodian Agreement or the Administration Agreement, or
(iii) seeking any determination or ruling that might
materially and adversely affect the performance by such
Party of its obligations under, or the validity or
enforceability of, such Securities, the applicable Further
Transfer and Servicing Agreements or, in the case of the
Seller, the Custodian Agreement or the Administration
Agreement.
(b) Representations and Warranties of the Seller Only.
(i) Good Title. No Receivable has been sold,
transferred, assigned or pledged by the Seller to any Person
other than the Issuer; immediately prior to the conveyance
of the Receivables pursuant to this Agreement the Seller had
good and marketable title thereto, free of any Lien (except
for any Lien which may have existed in accessions to the
Financed Vehicles not financed by NFC); and, upon execution
and delivery of this Agreement by the Seller, the Issuer
shall have all of the right, title and interest of the
Seller in, to and under the Purchased Property free of any
Lien (except for any Lien which may exist in accessions to
the Financed Vehicles not financed by NFC);
(ii) All Filings Made. All filings (including UCC
filings) necessary in any jurisdiction to give the Issuer a
first priority perfected security or ownership interest in
the Purchased Property (to the extent it constitutes Code
Collateral) shall have been made, and the Receivables
constitute Code Collateral; and
(iii) Valid Sale. This Agreement, when duly executed
and delivered, shall constitute a valid sale, transfer and
assignment of the Purchased Property, enforceable against
creditors of and purchasers from the Seller.
(c) Representations and Warranties of the Servicer Only.
(i) Liquidation Expenses. The amounts defined as
"Liquidation Expenses" are a reasonable estimate of such
expenses, reasonably related to the Servicer's experience
for such expenses in servicing comparable medium and heavy
duty truck, bus and trailer receivables.
(ii) Purchase Agreement Representations. The
representations and warranties in Sections 3.01 and 3.02 of
the Purchase Agreement are true as of the Closing
thereunder.
SECTION 6.02. Liability of Seller. The Seller shall be
liable in accordance with this Agreement only to the extent of
the obligations in this Agreement specifically undertaken by the
Seller.
SECTION 6.03. Merger or Consolidation of, or Assumption of
the Obligations of, Seller; Amendment of Certificate of
Incorporation.
(a) Any corporation (i) into which the Seller may be merged
or consolidated, (ii) resulting from any merger or consolidation
to which the Seller shall be a party, (iii) succeeding to the
business of the Seller, or (iv) more than 50% of the voting stock
of which is owned directly or indirectly by NIC, which
corporation in any of the foregoing cases executes an agreement
of assumption to perform every obligation of the Seller under
this Agreement, shall be the successor to the Seller under this
Agreement without the execution or filing of any document or any
further act on the part of any of the parties to this Agreement.
The Seller shall provide 10 days' prior notice of any merger,
consolidation or succession pursuant to this Section 6.03 to the
Rating Agencies.
(b) The Seller hereby agrees that during the term of this
Agreement it shall not amend Articles Third, Fourth, Fifth,
Twelfth or Fourteenth of its Restated Certificate of
Incorporation without obtaining the prior written consent of the
Rating Agencies or without obtaining the prior written consent of
Noteholders whose Notes evidence not less than a majority of the
Outstanding Amount of the Notes as of the close of the preceding
Distribution Date and the prior written consent of the
Certificateholders whose Certificates evidence a majority of the
Voting Interests of such Certificates as of the close of the
preceding Distribution Date; provided, however, the Seller may
amend the foregoing Articles of its Restated Certificate of
Incorporation without the prior written consent of the Rating
Agencies, the Noteholders, the Certificateholders or either
Trustee for the purpose of:
(i) permitting the Seller (A) to enter into an addendum
to the Tax Allocation Agreement effective October 1, 1981
among NITC and certain of its subsidiaries, as amended and
supplemented (the "Tax Allocation Agreement"), such addendum
to be substantially similar to the Fourth Addendum to the
Tax Allocation Agreement effective April 26, 1993 among
NITC, NFC and Navistar Financial Securities Corporation and
(B) to incur other indebtedness where the person to whom the
indebtedness is owing has delivered to the corporation an
undertaking that it will not institute against, or join any
other Person in instituting against, the corporation any
bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding or other proceeding under any federal
or state bankruptcy or similar law, and that it will not
look to property or assets of the corporation in respect to
such obligations, and that such obligations shall not
constitute a claim against the corporation in the event that
the corporation's assets are insufficient to pay in full
such obligations, in each case for one year and one day
after the date on which all rated securities issued pursuant
to Agreements (other than any such securities held by the
corporation); and
(ii) including within the meaning of "Receivables" as
used in the Restated Certificate of Incorporation 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).
SECTION 6.04. Limitation on Liability of Seller and Others.
The Seller and any director or officer or employee or agent of
the Seller may rely in good faith on the advice of counsel or on
any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under this
Agreement. The Seller shall not be under any obligation to
appear in, prosecute or defend any legal action that is not
incidental to its obligations as Seller of the Receivables under
this Agreement and that in its opinion may involve it in any
expense or liability.
SECTION 6.05. Seller May Own Securities. Each of the
Seller and any Person controlling, controlled by or under common
control with the Seller may in its individual or any other
capacity become the owner or pledgee of Securities with the same
rights as it would have if it were not the Seller or an Affiliate
thereof except as otherwise specifically provided herein. Except
as otherwise provided herein, Securities so owned by or pledged
to the Seller or such controlling or commonly controlled Person
shall have an equal and proportionate benefit under the
provisions of this Agreement, without preference, priority or
distinction as among all of such Securities.
ARTICLE VII
LIABILITIES OF SERVICER AND OTHERS
SECTION 7.01. Liability of Servicer; Indemnities.
(a) The Servicer shall be liable in accordance with this
Agreement only to the extent of the obligations in this Agreement
specifically undertaken by the Servicer. Such obligations shall
include the following:
(i) The Servicer shall defend, indemnify and hold
harmless each Trustee, the Issuer and the Securityholders
from and against any and all costs, expenses, losses,
damages, claims and liabilities arising out of or resulting
from the use, ownership or operation by the Servicer or any
Affiliate thereof of any Financed Vehicle;
(ii) The Servicer shall indemnify, defend and hold
harmless each Trustee and the Issuer from and against any
taxes that may at any time be asserted against any such
Person with respect to the transactions contemplated in this
Agreement, including any sales, gross receipts, general
corporation, tangible personal property, privilege or
license taxes (but not including any taxes asserted with
respect to, and as of the date of, the sale of the
Receivables to the Issuer or the issuance and original sale
of the Securities, or asserted with respect to ownership of
the Receivables, or federal or other income taxes arising
out of distributions on the Securities, or any fees or other
compensation payable to any such Person) and costs and
expenses in defending against the same;
(iii) The Servicer shall indemnify, defend and hold
harmless each Trustee, the Issuer and the Securityholders
from and against any and all costs, expenses, losses,
claims, damages, and liabilities to the extent that such
cost, expense, loss, claim, damage, or liability arose out
of, or was imposed upon such Trustee, the Issuer or the
Securityholders through the negligence, willful misfeasance
or bad faith of the Servicer in the performance of its
duties under this Agreement and any other Transfer and
Servicing Agreements or by reason of reckless disregard of
its obligations and duties under any of the Transfer and
Servicing Agreements; and
(iv) The Servicer (other than the Indenture Trustee in
its capacity as successor Servicer pursuant to Section 8.02
hereof) shall indemnify, defend and hold harmless each
Trustee and their respective agents, officers, directors and
servants, from and against all costs, expenses, losses,
claims, damages and liabilities arising out of or incurred
in connection with (x) in the case of the Owner Trustee, the
Indenture Trustee's performance of its duties under the
Basic Documents, (y) in the case of the Indenture Trustee,
the Owner Trustee's performance of its duties under the
Basic Documents or (z) the acceptance, administration or
performance by, or action or inaction of, the applicable
Trustee of the trusts and duties contained in this
Agreement, the Basic Documents, the Indenture (in the case
of the Indenture Trustee), including the administration of
the Trust Estate, and the Trust Agreement (in the case of
the Owner Trustee), including the administration of the
Owner Trust Estate, except in each case to the extent that
such cost, expense, loss, claim, damage or liability: (A)
is due to the willful misfeasance, bad faith or negligence
(except for errors in judgment) of the Person seeking to be
indemnified, (B) to the extent otherwise payable to the
Indenture Trustee, arises from the Indenture Trustee's
breach of any of its representations or warranties in
Section 6.13 of the Indenture or (C) to the extent otherwise
payable to the Owner Trustee, arises from the Owner
Trustee's breach of any of its representations or warranties
set forth in Section 6.6 of the Trust Agreement.
(b) Indemnification under this Section 7.01 shall survive
the resignation or removal of the Owner Trustee or the Indenture
Trustee or the termination of this Agreement and shall include
reasonable fees and expenses of counsel and expenses of
litigation. If the Servicer has made any indemnity payments
pursuant to this Section 7.01 and the recipient thereafter
collects any of such amounts from others, the recipient shall
promptly repay such amounts collected to the Servicer, without
interest.
SECTION 7.02. 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 any of the
foregoing cases executes an agreement of assumption to perform
every obligation of the Servicer under this Agreement shall be
the successor to the Servicer under this Agreement without the
execution or filing of any paper or any further act on the part
of any of the parties to this Agreement, notwithstanding anything
in this Agreement to the contrary. The Servicer shall provide
notice of any merger, consolidation or succession pursuant to
this Section 7.02 to the Rating Agencies.
SECTION 7.03. Limitation on Liability of Servicer and
Others.
(a) Neither the Servicer nor any of the directors or
officers or employees or agents of the Servicer shall be under
any liability to the Issuer or the Securityholders, except as
specifically provided in this Agreement, for any action taken or
for refraining from the taking of any action pursuant to the
Further Transfer and Servicing Agreements or for errors in
judgment; provided, however, that this provision shall not
protect the Servicer or any such Person against any liability
that would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence (except errors in judgment) in the
performance of duties or by reason of reckless disregard of
obligations and duties under the Further Transfer and Servicing
Agreements. The Servicer and any director, officer or employee
or agent of the Servicer may rely in good faith on the advice of
counsel or on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters
arising under this Agreement.
(b) [Reserved]
(c) Except as provided in this Agreement, the Servicer
shall not be under any obligation to appear in, prosecute or
defend any legal action that is not incidental to its duties to
service the Receivables in accordance with this Agreement and
that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties to this
Agreement and the interests of the Securityholders under this
Agreement and the Noteholders and (to the extent expressly
provided therein) the Certificateholders under the Indenture and
the interests of the Certificateholders under the Trust
Agreement. In such event, the legal expenses and costs for such
action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Issuer and the Servicer shall be
entitled to be reimbursed therefor.
(d) The Applicable Trustee shall distribute out of the
Collection Account on a Distribution Date any amounts permitted
for reimbursement pursuant to
subsection 7.03(c) which have not been previously reimbursed
after any deposit to the Reserve Account pursuant to Section
4.06(c)(vi) and before any distribution to the Seller pursuant to
Section 4.07(b); provided, however, that the Applicable Trustee
shall not distribute such amounts if the amount on deposit in the
Reserve Account (after giving effect to all deposits and
withdrawals pursuant to Sections 4.06(b) and (c) and Section
4.07(c), on such Distribution Date) is greater than zero but less
than the Specified Reserve Account Balance for such Distribution
Date.
SECTION 7.04. 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 NIC. 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 7.05. Servicer Not to Resign. Subject to the
provisions of Section 8.02, 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 each Trustee. No such
resignation shall become effective until the Indenture Trustee or
a successor Servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with Section 8.02.
ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Defaults. Each of the following
shall constitute a "Servicer Default":
(a) any failure by the Servicer to deliver to the Indenture
Trustee for deposit in any of the Designated Accounts or to the
Owner Trustee for deposit in the Certificate Distribution Account
any required payment or to direct the Indenture Trustee to make
any required distributions therefrom, which failure continues
unremedied for a period of five Business Days after written
notice is received by the Servicer from the applicable Trustee or
after discovery of such failure by an officer of the Servicer;
(b) failure on the part of the Seller or the Servicer to
duly observe or perform in any material respect any other
covenants or agreements of the Seller or the Servicer set forth
in the Purchase Agreement, this Agreement or any of the other
Further Transfer and Servicing Agreements which failure (i)
materially and adversely affects the rights of Securityholders,
and (ii) continues unremedied for a period of 60 days after 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 either Trustee, or to the Seller or
the Servicer, as applicable, and to either Trustee by Noteholders
whose Notes evidence not less than 25% of the Outstanding Amount
of the Notes as of the close of the preceding Distribution Date
(or, if the Notes have been paid in full, by Certificateholders
whose Certificates evidence not less than 25% of the Voting
Interests as of the close of the preceding Distribution Date);
(c) 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, marshalling 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; or
(d) the consent by the Seller or the Servicer to the
appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling 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.
SECTION 8.02. Consequences of a Servicer Default. If a
Servicer Default shall occur and be continuing, either the
Indenture Trustee or the Noteholders whose Notes evidence not
less than a majority of the Outstanding Amount of the Notes as of
the close of the preceding Distribution Date (or, if the Notes
have been paid in full and the Indenture has been discharged in
accordance with its terms, by the Owner Trustee or
Certificateholders whose Certificates evidence not less than a
majority of the Voting Interests as of the close of the preceding
Distribution Date) by notice then given in writing to the
Servicer and the Owner Trustee (and to the Indenture Trustee if
given by the Securityholders) 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. 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 Securities or the Receivables or otherwise,
shall pass to and be vested in the Indenture Trustee pursuant to
and under this Section 8.02. The Indenture Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or
otherwise. The Servicer agrees to cooperate with either Trustee
in effecting the termination of the responsibilities and rights
of the Servicer under this Agreement, including the transfer to
either Trustee for administration by it of all cash amounts that
shall at the time be held by the Servicer for deposit, or that
shall have been deposited by the Servicer in the Collection
Account, the Note Distribution Account or the Certificate
Distribution Account or thereafter received with respect to the
Receivables that shall at that time be held by the Servicer. In
addition to any other amounts that are then payable to the
Servicer under this Agreement, the Servicer shall be entitled to
receive from the successor Servicer reimbursements for any
Outstanding Monthly Advances made during the period prior to the
notice pursuant to this Section 8.02 which terminates the
obligation and rights of the Servicer under this Agreement.
SECTION 8.03. Indenture Trustee to Act; Appointment of
Successor. On and after the time the Servicer receives a notice
of termination pursuant to Section 8.02, the Indenture Trustee
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, and shall be subject
to all the responsibilities, restrictions, duties and liabilities
relating thereto placed on the Servicer by the terms and
provisions of this Agreement; 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 Navistar
Financial Corporation shall remain liable for all such
indemnification obligations of the Servicer without regard to
whether it is still Servicer hereunder. As compensation
therefor, the Indenture Trustee shall be entitled to such
compensation (whether payable out of the Collection Account or
otherwise) as the Servicer would have been entitled to under this
Agreement if no such notice of termination had been given
including, but not limited to, the Total Servicing Fee and
Supplemental Servicing Fees and shall be entitled to Investment
Earnings as set forth in Section 5.01(b)(i) hereof.
Notwithstanding the above, the Indenture Trustee may, if it shall
be unwilling so to act, or shall, if it is legally unable so to
act, appoint, or petition a court of competent jurisdiction to
appoint, a successor (i) having a net worth of not less than
$100,000,000 and (ii) whose regular business includes the
servicing of medium and heavy duty bus, truck and trailer
receivables, as the successor to the Servicer under this
Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer under
this Agreement. In connection with such appointment and
assumption, the Indenture Trustee may make such arrangements for
the compensation of such successor out of payments on Receivables
as it and such successor shall agree; provided, however, that no
such compensation shall be in excess of that permitted the
Servicer under this Agreement. The Indenture Trustee and such
successor shall take such action, consistent with this Agreement,
as shall be necessary to effectuate any such succession.
SECTION 8.04. Notification to Securityholders. Upon any
termination of, or appointment of a successor to, the Servicer
pursuant to this Article VIII, the Indenture Trustee shall give
prompt written notice thereof to the Noteholders and the Rating
Agencies and the Owner Trustee shall give prompt written notice
thereof to the Certificateholders.
SECTION 8.05. Waiver of Past Defaults. Noteholders whose
Notes evidence not less than a majority of the Outstanding Amount
of the Notes as of the close of the preceding Distribution Date
(or, if all of the Notes have been paid in full and the Indenture
has been discharged in accordance with its terms,
Certificateholders whose Certificates evidence not less than a
majority of the Voting Interests as of the close of the preceding
Distribution Date) may, on behalf of all Securityholders, waive
any default by the Servicer in the performance of its obligations
hereunder and its consequences, except a default in making any
required deposits to or payments from any of the accounts in
accordance with this Agreement. Upon any such waiver of a past
default, such default shall cease to exist, and any Servicer
Default arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent
thereon.
SECTION 8.06. Repayment of Advances. If the identity of
the Servicer shall change, the predecessor Servicer shall be
entitled to receive, to the extent of available funds,
reimbursement for Outstanding Monthly Advances pursuant to
Section 5.04 in the manner specified in Section 4.06, with
respect to all Monthly Advances made by such predecessor
Servicer.
ARTICLE IX
TERMINATION
SECTION 9.01. Optional Purchase of All Receivables. On the
last day of any Monthly Period as of which the Aggregate
Receivables Balance is 10% or less of the Initial Aggregate
Receivables Balance, the Servicer shall have the option to
purchase the assets of the Trust other than the Designated
Accounts and the Certificate Distribution Account. If the
Servicer's long term unsecured debt rating from ▇▇▇▇▇'▇ Investors
Service, Inc. is equal to or higher than Baa3 at
the time that it seeks to exercise such option, then to exercise
such option, the Servicer shall deposit in the Collection Account
an amount equal to the aggregate Administrative Purchase Payments
for the Receivables (including Liquidating Receivables), plus the
appraised value of any such other property held by the Trust
(less the Liquidation Expenses to be incurred in connection with
the recovery thereof), such value to be determined by an
appraiser mutually agreed upon by the Servicer and each Trustee.
If the Servicer's long term unsecured debt rating from ▇▇▇▇▇'▇
Investors Service, Inc. is less than Baa3 at the time that it
seeks to exercise such option, then to exercise such option, the
Servicer shall deposit in the Collection Account an amount equal
to the appraised value of the Receivables (including Liquidating
Receivables), plus the appraised value of any such other property
held by the Trust (less the Liquidation Expenses to be incurred
in connection with the recovery thereof), such values to be
determined by an appraiser mutually agreed upon by the Servicer
and each Trustee; provided, that such amount (when added to any
funds then on deposit in the Designated Accounts and the
Certificate Distribution Account) must be at least equal to the
aggregate Redemption Price of the outstanding Notes to be
redeemed with such proceeds plus the sum of the Certificate
Balance and the Certificateholders' Interest Distributable Amount
for the Distribution Date related to the Monthly Period in which
such option is exercised. Thereupon, the Servicer shall succeed
to all interests in and to the Trust (other than the Designated
Accounts and the Certificate Distribution Account).
SECTION 9.02. Sale of Assets; Termination.
(a) Upon any sale or other disposition of the assets of the
Trust pursuant to Section 7.2 of the Trust Agreement (an
"Insolvency Sale") or Article V of the Indenture (an "Event of
Default Sale"), the Servicer shall instruct the Applicable
Trustee to deposit the proceeds from such Insolvency Sale or
other disposition after all payments and reserves therefrom have
been made or, with respect to an Event of Default Sale, the
amount specified in clause SECOND of Section 5.04(b) of the
Indenture (in either case, the "Insolvency Proceeds") in the
Collection Account. On the day preceding the Distribution Date
on which the Insolvency Proceeds are deposited in the Collection
Account (or, if such proceeds are not so deposited on the day
preceding a Distribution Date, on the day preceding the
Distribution Date immediately following such deposit), the
Servicer shall instruct the Applicable Trustee to make the
following deposits (after the application on the day preceding
such Distribution Date of the Available Amount and funds on
deposit in the Reserve Account pursuant to Sections 4.06 and
4.07) from the Insolvency Proceeds and any funds remaining on
deposit in the Reserve Account (including the proceeds of any
sale of investments therein as described in the following
sentence) in the following priority:
(i) to the Note Distribution Account, any portion of
the Aggregate Noteholders' Interest Distributable Amount not
otherwise deposited into the Note Distribution Account on
the day preceding such Distribution Date;
(ii) to the Note Distribution Account, the Aggregate
Note Principal Balance (after giving effect to the reduction
in the Aggregate Note Principal Balance to result from the
deposits made in the Note Distribution Account on the day
preceding such Distribution Date and on the day preceding
each prior Distribution Date);
(iii) to the Certificate Distribution Account, any
portion of the Certificateholders' Interest Distributable
Amount not otherwise deposited into the Certificate
Distribution Account on the day preceding such Distribution
Date; and
(iv) to the Certificate Distribution Account, the
Certificate Balance (after giving effect to the reduction in
the Certificate Balance
to result from the deposits made in the Certificate
Distribution Account on the day preceding such Distribution
Date).
Subject to Section 5.01(b), any investments on deposit in the
Reserve Account which shall not mature on or before the day
preceding such Distribution Date shall be sold by the Indenture
Trustee at such time as shall result in the Indenture Trustee
receiving the proceeds from such sale not later than the day
immediately preceding such Distribution Date. Any Insolvency
Proceeds remaining after the deposits described above shall be
paid to the Seller.
(b) Notice of any termination of the Trust shall be given
by the Servicer to each Trustee as soon as practicable after the
Servicer has received notice thereof.
(c) Following the satisfaction and discharge of the
Indenture with respect to the Notes, and the payment in full of
the principal and interest on the Notes, the Certificateholders
shall succeed to the rights of the Noteholders hereunder and the
Owner Trustee shall succeed to the rights of, and assume the
obligations of, the Indenture Trustee pursuant to this Agreement
(subject to the continuing obligations of the Indenture Trustee
set forth in Section 4.4 of the Indenture).
(d) After payment to each Trustee, the Securityholders and
the Servicer of all amounts required to be paid under this
Agreement, the Indenture and the Trust Agreement, any amounts on
deposit in the Reserve Account and the Collection Account (after
all other distributions required to be made from such accounts
have been made) shall be paid to the Seller and any other assets
remaining in the Trust shall be distributed to the Seller.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
(a) This Agreement may be amended by the Seller, the
Servicer and the Owner Trustee with the consent of the Indenture
Trustee, but without the consent of any of the Securityholders,
(i) to cure any ambiguity, (ii) to correct or supplement any
provision in this Agreement that may be defective or inconsistent
with any other provision in this Agreement or any other Basic
Document, (iii) to add or supplement any credit enhancement for
the benefit of the Noteholders of any class or the
Certificateholders provided that if any such addition shall
affect any class of Noteholders or Certificateholders differently
than any other class of Noteholders or Certificateholders,
respectively, then such addition shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the
interests of any class of Noteholders or the Certificateholders,
(iv) add to the covenants, restrictions or obligations of the
Seller, the Servicer, or either Trustee or (v) add, change or
eliminate any other provision of this Agreement in any manner
that shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of the
Securityholders.
(b) This Agreement may also be amended from time to time by
the Seller, the Servicer and the Owner Trustee with the consent
of the Indenture Trustee, the consent of Noteholders whose Notes
evidence not less than a majority of the Outstanding Amount of
the Notes as of the close of the preceding Distribution Date and
the consent of Certificateholders whose Certificates evidence not
less than a majority of the Voting Interests as of the close of
the preceding Distribution Date (which consent, whether given
pursuant to this Section 10.01 or pursuant to any other provision
of this Agreement, shall be conclusive and
binding on such Person and on all future holders of such Security
and of any Security issued upon the transfer thereof or in
exchange thereof or in lieu thereof whether or not notation of
such consent is made upon the Security) for the purpose of
adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement, or of modifying in any
manner the rights of the Securityholders; provided, however, that
no such amendment shall (i)(a) increase or reduce in any manner
the amount of, or accelerate or delay the timing of, collections
of payments on Receivables or distributions that shall be
required to be made on any Security, the Interest Rate for any
class of Notes, the Pass Through Rate or the Specified Reserve
Account Balance or (b) reduce the aforesaid percentage required
to consent to any such amendment, without the consent of the
holders of all Securities then outstanding or (ii) amend any
provision of this Agreement (including, Section 10.06) which
requires actions taken under such provision to have the consent
of Noteholders whose Notes evidence greater than a majority of
the Outstanding Amount of the Notes as of the preceding
Distribution Date or of Certificateholders whose Certificates
evidence greater than a majority of the Voting Interests as of
the close of the preceding Distribution Date, in each case
without the consent of the Indenture Trustee and the numbers of
Securityholders described in such Section.
(c) Prior to the execution of any such amendment or
consent, the Indenture Trustee shall furnish written notification
of the substance of such amendment or consent to the Rating
Agencies.
(d) Promptly after the execution of any such amendment or
consent, the Owner Trustee shall furnish written notification of
the substance of such amendment or consent to each
Certificateholder and the Indenture Trustee shall furnish written
notification to each Noteholder.
(e) It shall not be necessary for the consent of
Securityholders pursuant to subsection 10.01(b) to approve the
particular form of any proposed amendment or consent, but it
shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other
consents of Securityholders provided for in this Agreement) and
of evidencing the authorization of the execution thereof by
Securityholders shall be subject to such reasonable requirements
as either Trustee may prescribe, including the establishment of
record dates pursuant to paragraph number 2 of the Depository
Agreements.
(f) Prior to the execution of any amendment to this
Agreement, each Trustee shall be entitled to receive and rely
upon the Opinion of Counsel referred to in subsection 10.02(i)
and an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that
all conditions precedent to the execution and delivery of such
amendment have been satisfied. Each Trustee may, but shall not
be obligated to, enter into any such amendment which affects such
Trustee's own rights, duties or immunities under this Agreement
or otherwise.
(g) Each of NFC and the Seller agrees that such Person
shall not amend or agree to any amendment of the Purchase
Agreement unless such amendment would be permissible under the
terms of this Section 10.01 as if this Section 10.01 were
contained in the Purchase Agreement.
SECTION 10.02. Protection of Title to Owner Trust Estate.
(a) The Seller or the Servicer or both shall execute and
file such financing statements and cause to be executed and filed
such continuation and other statements, all in such manner and in
such places as may be required by law fully to preserve, maintain
and protect the interest of the Securityholders and the Trustees
under this Agreement in the Receivables. The Seller or the
Servicer
or both shall deliver (or cause to be delivered) to each Trustee
file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such
filing.
(b) Neither the Seller nor the Servicer shall change its
name, identity or corporate structure in any manner that would,
could or might make any financing statement or continuation
statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402(7) of the UCC,
unless it shall have given each Trustee at least 60 days prior
written notice thereof.
(c) Each of the Seller and the Servicer shall give each
Trustee at least 60 days prior written notice of any relocation
of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement. The
Servicer shall at all times maintain each office from which it
services Receivables and its principal executive office within
the United States of America.
(d) The Servicer shall maintain accounts and records as to
each Receivable accurately and in sufficient detail to permit (i)
the reader thereof to know at any time the status of such
Receivable, including payments and recoveries made and payments
owing (and the nature of each) and extensions of any scheduled
payments made not less than 45 days prior thereto, and (ii)
reconciliation between payments or recoveries on (or with respect
to) each Receivable and the amounts from time to time deposited
in the Collection Account, the Note Distribution Account and the
Certificate Distribution Account.
(e) The Servicer shall maintain its computer systems so
that, from and after the time of sale under this Agreement of the
Receivables to the Issuer, the Servicer's master computer records
(including any back-up archives) that refer to any Receivable
indicate clearly that the Receivable is owned by the Issuer.
Indication of the Issuer's ownership of a Receivable shall be
deleted from or modified on the Servicer's computer systems when,
and only when, the Receivable has been paid in full or
repurchased by the Seller or purchased by the Servicer.
(f) If at any time the Seller or the Servicer proposes to
sell, grant a security interest in, or otherwise transfer any
interest in medium and heavy duty truck, bus and trailer
receivables to any prospective purchaser, lender or other
transferee, the Servicer shall give to such prospective
purchaser, lender or other transferee computer tapes, records or
print-outs (including any restored from back-up archives) that,
if they refer in any manner whatsoever to any Receivable,
indicate clearly that such Receivable has been sold and is owned
by the Issuer unless such Receivable has been paid in full or
repurchased by the Seller or purchased by the Servicer.
(g) The Servicer shall permit each Trustee and their
respective agents at any time to inspect, audit and make copies
of and abstracts from the Servicer's records regarding any
Receivables then or previously included in the Owner Trust
Estate.
(h) The Servicer shall furnish to each Trustee at any time
upon request a list of all Receivables then held as part of the
Trust, together with a reconciliation of such list to the
Schedule of Receivables and to each of the Servicer's
Certificates furnished before such request indicating removal of
Receivables from the Trust. Upon request, the Servicer shall
furnish a copy of any such list to the Seller. Each Trustee and
the Seller shall hold any such list and the Schedule of
Receivables for examination by interested parties during normal
business hours at their respective offices located at the
addresses set forth in Section 10.03.
(i) The Servicer shall deliver to each Trustee promptly
after the execution and delivery of this Agreement and of each
amendment thereto, an Opinion of Counsel either (a) stating that,
in the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of each
Trustee in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such
details are given, or (b) stating that, in the opinion of such
counsel, no such action is necessary to preserve and protect such
interest.
(j) To the extent required by law, the Seller shall cause
the Securities to be registered with the Securities and Exchange
Commission pursuant to Section 12(b) or Section 12(g) of the
Exchange Act within the time periods specified in such sections.
SECTION 10.03. Notices. All demands, notices and
communications upon or to the Seller, the Servicer, either
Trustee or the Rating Agencies under this Agreement shall be
delivered as specified in Appendix B hereto.
SECTION 10.04. Governing Law. All questions concerning the
construction, validity and interpretation of this Agreement shall
be governed by and construed and enforced in accordance with the
internal laws of the State of Illinois, without giving effect to
any choice of law or conflict provision or rule (whether of the
State of Illinois or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State
of Illinois; provided, however that the duties and immunities of
the Owner Trustee hereunder shall be governed by the laws of the
State of Delaware.
SECTION 10.05. Severability of Provisions. If any one or
more of the covenants, agreements, provisions or terms of this
Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or
terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of
the Certificates or the rights of the holders thereof.
SECTION 10.06. Assignment. Notwithstanding anything to the
contrary contained in this Agreement, this Agreement may not be
assigned by the Seller without the prior written consent of
Noteholders whose Notes evidence not less than 66% of the
Outstanding Amount of the Notes as of the close of the preceding
Distribution Date and of Certificateholders whose Certificates
evidence not less than 66% of the Voting Interests as of the
close of the preceding Distribution Date. The Seller shall
provide notice of any such assignment to the Rating Agencies.
SECTION 10.07. Third-Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the parties
hereto, the Securityholders and the Trustees and their respective
successors and permitted assigns. Except as otherwise provided
in Section 7.01 or in this Article X, no other Person shall have
any right or obligation hereunder.
SECTION 10.08. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of
which when so executed and delivered shall be an original, but
all such counterparts shall together constitute but one and the
same instrument.
SECTION 10.09. Headings and Cross-References. The various
headings in this Agreement are included for convenience only and
shall not affect the meaning or interpretation of any provision
of this Agreement.
SECTION 10.10. Assignment to Indenture Trustee. The Seller
hereby acknowledges and consents to any mortgage, pledge,
assignment and grant of a security interest by the Issuer to the
Indenture Trustee pursuant to the Indenture for the benefit of
the Noteholders and (only to the extent expressly provided in the
Indenture) the Certificateholders of all right, title and
interest of the Issuer in, to and under the Purchased Property
and/or the assignment of any or all of the Issuer's rights and
obligations hereunder to the Indenture Trustee.
SECTION 10.11. No Petition Covenants. Notwithstanding any
prior termination of this Agreement, the Servicer and the Seller
shall not, prior to the date which is one year and one day after
the final distribution with respect to the Securities to the Note
Distribution Account or the Certificate Distribution Account, as
applicable, acquiesce, petition or otherwise invoke or cause the
Issuer to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the
Issuer under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the
Issuer or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of the Issuer.
SECTION 10.12. Limitation of Liability of the Trustees.
(a) Notwithstanding anything contained herein to the
contrary, this Agreement has been acknowledged and accepted by
The Bank of New York not in its individual capacity but solely as
Indenture Trustee and in no event shall The Bank of New York have
any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any
of the certificates, notices or agreements delivered pursuant
hereto, as to all of which recourse shall be had solely to the
assets of the Issuer.
(b) Notwithstanding anything contained herein to the
contrary, this Agreement has been executed by Chemical Bank
Delaware not in its individual capacity but solely in its
capacity as Owner Trustee of the Issuer and in no event shall
Chemical Bank Delaware in its individual capacity or, except as
expressly provided in the Trust Agreement, as Owner Trustee of
the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse
shall be had solely to the assets of the Issuer. For all purposes
of this Agreement, in the performance of its duties or
obligations hereunder or in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and
provisions of Article VI of the Trust Agreement.
SECTION 10.13. Business Day Certificate.
On the Closing Date (with respect to the remainder of
calendar year 1994) and thereafter, within 15 days prior to the
end of each calendar year while this Agreement remains in effect
(with respect to the next succeeding calendar year), the Servicer
shall deliver to either Trustee, following receipt of a written
request by such Trustee, an Officers' Certificate specifying the
days on which banking institutions in Chicago, Illinois are
authorized or obligated by law or executed order to be closed.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of
the day and year first above written.
NAVISTAR FINANCIAL 1994-C OWNER TRUST
By: CHEMICAL BANK DELAWARE, not in its
individual capacity but solely as Owner
Trustee on behalf of the Trust,
By: _________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Trust Officer
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION, as Seller
By: ______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
NAVISTAR FINANCIAL CORPORATION, as
Servicer
By: ______________________________
Name: R. ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
Acknowledged and Accepted:
THE BANK OF NEW YORK, not in
its individual capacity
but solely as Indenture Trustee,
By: ___________________________
Name: ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
Title: Assistant Treasurer
EXHIBIT A
Form of Assignment
For value received, in accordance with the Pooling and
Servicing Agreement, dated as of December 15, 1994 (the "Pooling
and Servicing Agreement"), among Navistar Financial Corporation,
a Delaware corporation ("NFC"), Navistar Financial Retail
Receivables Corporation, a Delaware corporation (the "Seller")
and Navistar Financial 1994-C Owner Trust (the "Issuer"), the
Seller does hereby sell, assign, transfer and otherwise convey
unto the Issuer, without recourse, all right, title and interest
of the Seller in, to and under (i) the Receivables listed on the
Schedule of Receivables and all monies paid thereon (including
Liquidation Proceeds) and due thereunder on and after the Cutoff
Date; (ii) the security interests in the Financed Vehicles
granted by Obligors pursuant to the Receivables and, to the
extent permitted by law, any accessions thereto which are
financed by NFC; (iii) the benefits of any lease assignments with
respect to the Financed Vehicles; (iv) any proceeds from any
Insurance Policies with respect to the Receivables; (v) any
proceeds from Dealer Liability with respect to the Receivables,
proceeds from any NITC Purchase Obligations with respect to the
Receivables (subject to the limitations set forth in Section 2.03
of the Pooling and Servicing Agreement) and proceeds from any
Guaranties of Receivables; (vi) the Purchase Agreement 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)
and (vii) any proceeds of the property described in clauses (i),
(ii), (iii) and (vi) above.
The foregoing sale does not constitute and is not intended
to result in any assumption by the Issuer of any obligation of
the undersigned to the Obligors, Dealers, insurers or any other
Person in connection with the Receivables, the agreements with
Dealers, any Insurance Policies or any agreement or instrument
relating to any of them.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the
undersigned contained in the Pooling and Servicing Agreement and
is to be governed by the Pooling and Servicing Agreement.
Capitalized terms used herein and not otherwise defined
shall have the meaning assigned to them in the Pooling and
Servicing Agreement.
* * * * *
IN WITNESS WHEREOF, the undersigned has caused this
Assignment to be duly executed as of December 15, 1994.
NAVISTAR FINANCIAL RETAIL RECEIVABLES
CORPORATION
By: ______________________________
Name: R. ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
EXHIBIT B
Locations of Schedule of Receivables
The Schedule of Receivables is
on file at the offices of:
1. The Indenture Trustee
2. The Owner Trustee
3. Navistar Financial Corporation
4. Navistar Financial Retail Receivables Corporation
APPENDIX A
PART I - DEFINITIONS
All terms defined in this Appendix shall have the defined
meanings when used in the Basic Documents, unless otherwise
defined therein.
Accountants' Report: The report described in Section 4.02
of the Pooling and Servicing Agreement.
Accounting Date: With respect to a Distribution Date, the
last day of the related Monthly Period, or, with respect to any
initial Distribution Date that occurs in the same calendar month
as the Closing Date, at the close of business on the Closing
Date.
Act: An Act as specified in Section 11.3(a) of the
Indenture.
Actual Payment: With respect to a Distribution 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 Monthly Period, 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.
Administration Agreement: That certain Administration
Agreement, dated as of December 15, 1994 among NFC, as
Administrator, the Trust and the Indenture Trustee, as amended
and supplemented from time to time.
Administrative Purchase Payment: With respect to a
Distribution 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 5.04 of the Pooling and
Servicing 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: A Receivable which the Servicer
is required to purchase as of an Accounting Date pursuant to
Section 3.08 of the Pooling and Servicing Agreement or which the
Servicer has elected to repurchase as of an Accounting Date
pursuant to Section 9.01 of the Pooling and Servicing Agreement.
Administrator: NFC or any successor Administrator under the
Administration Agreement.
Affiliate: With respect to any specified Person, any other
Person controlling, controlled by or under common control with
such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means
the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
Agency Office: The office of the Issuer maintained pursuant
Section 3.2 of the Indenture.
Aggregate Losses: 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 Noteholders' Interest Distributable Amount: With
respect to a Distribution Date, the sum of the Noteholders'
Interest Distributable Amounts for all classes of Notes and the
Noteholders' Interest Carryover Shortfall as of the preceding
Distribution Date.
Aggregate Noteholders' Principal Distributable Amount: With
respect to a Distribution Date, the sum of the Noteholders'
Principal Distributable Amounts for all classes of Notes and the
Noteholders' Principal Carryover Shortfall as of the preceding
Distribution Date.
Aggregate Note Principal Balance: With respect to the close
of a Distribution Date, the sum of the Note Principal Balances
for all classes of Notes.
Aggregate Receivables Balance: As of any date, the sum of
the Receivable Balances of all outstanding Receivables (other
than Liquidating Receivables) held by the Trust on such date.
Annual Percentage Rate: With respect to a Receivable, the
annual rate of finance charges stated in such Receivable.
Applicable Trustee: So long as the Aggregate Note Principal
Balance is greater than zero and the Indenture has not been
discharged in accordance with its terms, the Indenture Trustee,
and thereafter, the Owner Trustee.
Authorized Officer: With respect to the Issuer, any officer
of the Owner Trustee who is authorized to act for the Owner
Trustee in matters relating to the Issuer and who is identified
on the list of Authorized Officers delivered by the Owner Trustee
to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter) and, so
long as the Administration Agreement is in effect, any Vice
President or more senior officer of the Administrator who is
authorized to act for the Administrator in matters relating to
the Issuer and to be acted upon by the Administrator pursuant to
the Administration Agreement and who is identified on the list of
Authorized Officers delivered by the Administrator to the
Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).
Available Amount: With respect to a Distribution Date, the
sum of the Collected Interest and the Collected Principal for
such Distribution Date.
Basic Documents: The Certificate of Trust, the Trust
Agreement, the Purchase Agreement, the Pooling and Servicing
Agreement, the Custodian Agreement, the Administration Agreement,
the Indenture, the Note Depository Agreement, the Certificate
Depository Agreement and the other documents and certificates
delivered in connection therewith.
Basic Servicing Fee: 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: 1.0% per annum.
Book-Entry Certificates: A beneficial interest in the
Certificates, ownership and transfers of which shall be made
through book entries by a Clearing Agency as described in Section
3.11 of the Trust Agreement.
Book-Entry Notes: A beneficial interest in the Notes,
ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 2.10 of the
Indenture.
Business Day: Any day other than a Saturday, a Sunday or
any other day on which banking institutions in New York, New York
or Chicago, Illinois may, or are required to, remain closed.
Business Trust Statute: Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code section 3801 et seq., as the same may
be amended from time to time.
Certificateholder: A Person in whose name a Certificate is
registered pursuant to the terms of the Trust Agreement.
Certificateholders' Interest Carryover Shortfall: With
respect to the close of any Distribution Date, the excess of
(i) the Certificateholders' Interest Distributable Amount for
such Distribution Date, over (ii) the amount that was actually
deposited in the Certificate Distribution Account on the day
preceding such current Distribution Date in respect of interest
on the Certificates.
Certificateholders' Interest Distributable Amount: With
respect to any Distribution Date, the sum of (i) the
Certificateholders' Monthly Interest Distributable Amount for
such Distribution Date, (ii) the Certificateholders' Interest
Carryover Shortfall as of the close of the preceding Distribution
Date and (iii) one-twelfth of the Pass Through Rate multiplied by
the sum of (a) the Noteholders' Principal Carryover Shortfall as
of the preceding Distribution Date and (b) the
Certificateholders' Principal Carryover Shortfall as of the close
of the preceding Distribution Date.
Certificateholders' Monthly Interest Distributable Amount:
With respect to any Distribution Date, interest equal to
one-twelfth of the Pass Through Rate multiplied by the
Certificate
Balance as of the last day of the related Monthly Period (or, in
the case of the first Distribution Date, as of the Closing Date).
Certificateholders' Monthly Principal Distributable Amount:
With respect to any Distribution Date, the lesser of (i) the
Certificateholders' Percentage of the Principal Distributable
Amount for such Distribution Date and (ii) the Certificate
Balance as of the close of the preceding Distribution Date.
Certificateholders' Percentage: With respect to any
Distribution Date, 100% minus the Noteholders' Percentage for
such Distribution Date.
Certificateholders' Principal Carryover Shortfall: With
respect to the close of any Distribution Date, the excess of
(i) the Certificateholders' Principal Distributable Amount for
such Distribution Date, over (ii) the amount that was actually
deposited in the Certificate Distribution Account on the day
preceding such current Distribution Date in respect of
Certificate Balance.
Certificateholders' Principal Distributable Amount: With
respect to any Distribution Date, the sum of the
Certificateholders' Monthly Principal Distributable Amount for
such Distribution Date and any outstanding Certificateholders'
Principal Carryover Shortfall as of the close of the preceding
Distribution Date. In addition, on the Final Scheduled
Distribution Date, the amount required to be distributed to
Certificateholders in respect of the Certificate Balance shall
include the lesser of (i) the sum of the principal
portion of any Scheduled Payments of principal due and remaining
unpaid on each Receivable, in each case in the Trust as of the
last day of the related Monthly Period, and (ii) the amount that
is necessary (after giving effect to the other amounts to be
deposited in the Certificate Distribution Account on the day
preceding such Distribution Date and allocable to payments in
respect of the Certificate Balance) to reduce the Certificate
Balance to zero, in either case after giving effect to any
required distribution of the Aggregate Noteholders' Principal
Distributable Amount to the Note Distribution Account. In
addition, on any Distribution Date on which, after giving effect
to all distributions to the Servicer and the Securityholders on
such Distribution Date, (i) the outstanding principal balance of
the Notes is zero and (ii) the amount on deposit in the Reserve
Account is equal to or greater than the Certificate Balance, the
Certificateholders' Principal Distributable Amount shall include
an amount equal to such Certificate Balance.
Certificate: Any one of the 8.300% Asset Backed
Certificates executed by the Owner Trustee and authenticated by
the Owner Trustee in substantially the form set forth in Exhibit
A to the Trust Agreement.
Certificate Balance: Initially, as of the Closing Date,
$11,029,921.60 (3.5% of the Initial Aggregate Receivables
Balance) and, on any Distribution Date thereafter, the initial
Certificate Balance, reduced by (i) all distributions in respect
of Certificate Balance actually made on or prior to such date to
Certificateholders, (ii) the Noteholders' Principal Carryover
Shortfall as of the preceding Distribution Date and (iii) the
Certificateholders' Principal Carryover Shortfall as of the
preceding Distribution Date.
Certificate Depository Agreement: The Agreement, dated as
of the Closing Date, among the Trust, the Administrator and The
Depository Trust Company (as the initial Clearing Agency),
relating to the Certificates and substantially in the form set
forth in Exhibit C to the Trust Agreement, as the same may be
amended and supplemented from time to time.
Certificate Distribution Account: The account designated as
such, established and maintained pursuant to Section 5.1(a) of
the Trust Agreement.
Certificate of Trust: The certificate of trust of the
Issuer substantially in the form of Exhibit B to the Trust
Agreement to be filed for the Trust pursuant to Section 3810(a)
of the Business Trust Statute.
Certificate Owner: With respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such
Book-Entry Certificate, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant
or as an Indirect Participant, in each case in accordance with
the rules of such Clearing Agency).
Certificate Pool Factor: With respect to any Distribution
Date, a seven-digit decimal figure computed by the Servicer equal
to the remaining Certificate Balance as of the close of such
Distribution Date divided by the initial Certificate Balance.
Certificate Register: The register of Certificates
specified in Section 3.4 of the Trust Agreement.
Certificate Registrar: The registrar at any time of the
Certificate Register, appointed pursuant to Section 3.4(a) of the
Trust Agreement.
Class A-1 Notes: The Class A-1 7.650% Asset Backed Notes in
the aggregate principal amount of $207,000,000.00 issued pursuant
to the Indenture.
Class A-2 Notes: The Class A-2 8.000% Asset Backed Notes in
the aggregate principal amount of $97,000,000.00 issued pursuant
to the Indenture.
Clearing Agency: An organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
Clearing Agency Participant: A securities broker, dealer,
bank, trust company, clearing corporation or other financial
institution or other Person for whom from time to time a Clearing
Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.
Closing Date: December 15, 1994.
Code: The Internal Revenue Code of 1986, as amended from
time to time, and the Treasury Regulations promulgated
thereunder.
Code Collateral: Any property a security interest in
which may be perfected by filing under the applicable UCC.
Collateral: The collateral specified in the Granting Clause
of the Indenture.
Collected Interest: With respect to any Distribution 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 and (iv) that portion
of all Warranty Payments, Administrative Purchase Payments or the
Optional Purchase Proceeds allocable to accrued interest or
Prepayment Surplus; less 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: With respect to any Distribution 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
subsection 4.06(a)(iii) of the Pooling and Servicing Agreement.
Collection Account: The account designated as such,
established and maintained pursuant to Section 5.01(a)(i) of the
Pooling and Servicing Agreement.
Corporate Trust Office: With respect to the Indenture
Trustee or the Owner Trustee, the principal office at which at
any particular time the corporate trust business of the Indenture
Trustee or Owner Trustee, respectively, shall be
administered, which offices at the Closing Date are located, in
the case of the Indenture Trustee, at The Bank of New York, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attn: Corporate Trust
Administration, and in the case of the Owner Trustee, at Chemical
Bank Delaware, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attn: Corporate Trustee Administration.
Custodian: NFC, as Servicer, or another custodian named
from time to time in the Custodian Agreement.
Custodian Agreement: The Custodian Agreement, dated as of
December 15, 1994 between the Custodian and the Seller, as
amended or supplemented from time to time.
Cutoff Date: November 1, 1994.
Dealer: (i) A Person with whom NITC has a valid dealer
sales/maintenance agreement to sell NITC 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 NITC has a valid agreement to sell NITC
vehicles.
Dealer Liability: With respect to a Receivable, all rights,
claims and actions of NFC against the Dealer which originated the
Receivable or which sold the Financed Vehicles(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: Any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
Definitive Certificates: The Certificates specified in
Section 3.13 of the Trust Agreement.
Definitive Notes: The Notes specified in Section 2.12 of
the Indenture.
Delinquency Percentage: With respect to a Distribution
Date, the aggregate Remaining Gross Balances of all outstanding
Receivables which are 61 days or more past due as of the last day
of the related Monthly Period, 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 the last day of such Monthly Period.
Delivery: When used with respect to Designated Account
Property, "Delivery" means:
(i) with respect to bankers' acceptances, commercial
paper, negotiable certificates of deposit and other
obligations that constitute "instruments" within the meaning
of Section 9-105(1)(i) of the UCC and are susceptible of
physical delivery, transfer thereof to the Indenture Trustee
or its nominee or custodian by physical delivery to the
Indenture Trustee or its nominee or custodian endorsed to,
or registered in the name of, the Indenture Trustee or its
nominee or custodian or endorsed in blank, and, with respect
to a certificated security (as defined in Section 8-102 of
the UCC) transfer thereof (a) by delivery of such
certificated security endorsed to, or registered in the name
of, the Indenture Trustee or its nominee or custodian or
endorsed in blank to a financial intermediary (as defined in
Section 8-313(4) of the UCC) and the making by such
financial intermediary of entries on its books and records
identifying such certificated securities as belonging to the
Indenture Trustee or its nominee or custodian and the
sending by such financial
intermediary of a confirmation of the transfer to the
Indenture Trustee or its nominee or custodian of such
certificated security, or (b) by delivery thereof to a
"clearing corporation" (as defined in Section 8-102(3) of
the UCC) and the making by such clearing corporation of
appropriate entries on its books reducing the appropriate
securities account of the transferor and increasing the
appropriate securities account of a financial intermediary
by the amount of such certificated security, the
identification by the clearing corporation of the
certificated securities for the sole and exclusive account
of the financial intermediary, the maintenance of such
certificated securities by such clearing corporation or a
"custodian bank" (as defined in Section 8-102(4) of the UCC)
or the nominee of either subject to the clearing
corporation's exclusive control, the sending of a
confirmation by the financial intermediary of the transfer
to the Indenture Trustee or its nominee or custodian of such
securities and the making by such financial intermediary of
entries on its books and records identifying such
certificated securities as belonging to the Indenture
Trustee or its nominee or custodian (all of the foregoing,
"Physical Property"), and, in any event, any such Physical
Property in registered form shall be in the name of the
Indenture Trustee or its nominee or custodian; and such
additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of
any such Designated Account Property to the Indenture
Trustee or its nominee or custodian, consistent with changes
in applicable law or regulations or the interpretation
thereof;
(ii) with respect to any security issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by
the Federal National Mortgage Association that is a
book-entry security held through the Federal Reserve System
pursuant to Federal book-entry regulations, the following
procedures, all in accordance with applicable law, including
applicable Federal regulations and Articles 8 and 9 of the
UCC: book-entry registration of such Designated Account
Property to an appropriate book-entry account maintained
with a Federal Reserve Bank by a financial intermediary
which is also a "depository" pursuant to applicable Federal
regulations and issuance by such financial intermediary of a
deposit advice or other written confirmation of such
book-entry registration to the Indenture Trustee or its nominee
or custodian of the transfer to the Indenture Trustee or its
nominee or custodian of such book-entry securities; the
making by such financial intermediary of entries in its
books and records identifying such book-entry security held
through the Federal Reserve System pursuant to Federal
book-entry regulations as belonging to the Indenture Trustee or
its nominee or custodian and indicating that such custodian
holds such Designated Account Property solely as agent for
the Indenture Trustee or its nominee or custodian; the
making by the Indenture Trustee of entries in its books and
records establishing that it holds such Designated Account
Property solely as Indenture Trustee under the terms of
Section 5.01 of the Pooling and Servicing Agreement; and
such additional or alternative procedures as may hereafter
become appropriate to effect complete transfer of ownership
of any such Designated Account Property to the Indenture
Trustee or its nominee or custodian, consistent with changes
in applicable law or regulations or the interpretation
thereof; and
(iii) with respect to any such Designated Account
Property that is an uncertificated security under Article 8
of the UCC and that is not governed by clause (ii) above,
registration on the books and records of the issuer thereof
in the name of the financial intermediary, the sending of a
confirmation by the financial intermediary of the transfer
to the Indenture Trustee or its nominee or custodian of such
uncertificated security and the making by such financial
intermediary of entries on its
books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its
nominee or custodian.
Designated Account Property: The Designated Accounts, all
amounts and investments held from time to time in any Designated
Account (whether in the form of deposit accounts, Physical
Property, book-entry securities, uncertificated securities or
otherwise), including the Reserve Account Initial Deposit, and
all proceeds of the foregoing.
Designated Accounts: The Collection Account, the Note
Distribution Account and the Reserve Account, collectively.
Determination Date: The fifteenth day of each calendar
month, or if such fifteenth day is not a Business Day, the next
succeeding Business Day.
Distribution Date: With respect to a Monthly Period, the
20th day of the next succeeding calendar month or, if such 20th
day is not a Business Day, the next succeeding Business Day,
commencing January 20, 1995.
Distributor: A distributor of vehicles and equipment not
manufactured by NITC.
Eligible Deposit Account: Either (i) a segregated account
with an Eligible Institution or (ii) a segregated trust account
with the corporate trust department of a depository institution
organized under the laws of the United States of America or any
one of the states thereof or the District of Columbia (or any
domestic branch of a foreign bank), having corporate trust powers
and acting as trustee for funds deposited in such account so long
as any of the securities of such depository institution have a
credit rating from each Rating Agency in one of its generic
rating categories for long-term unsecured debt which signifies
investment grade.
Eligible Institution: A depository institution organized
under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic
branch of a foreign bank), (A) which has either (1) a long-term
unsecured debt rating of at least "AAA" from Standard & Poor's
Ratings Group and "A2" from ▇▇▇▇▇'▇ Investors Service, Inc. or
(2) a short-term unsecured debt or certificate of deposit rating
of at least "A-1+" from Standard & Poor's Ratings Group and "P-1"
from ▇▇▇▇▇'▇ Investors Service, Inc., (B) whose deposits are
insured by the FDIC and (C) having a combined capital and surplus
of at least $50,000,000 as set forth in its most recent published
annual report of condition.
Eligible Investments: Book-entry securities, negotiable
instruments or securities represented by instruments in bearer or
registered form which evidence:
(i) direct obligations of, and obligations fully
guaranteed as to timely payment of principal and interest
by, the United States of America;
(ii) demand deposits, time deposits or certificates of
deposit of any depository institution or trust company
incorporated under the laws of the United States of America
or any state thereof (or any domestic branch of a foreign
bank) and subject to supervision and examination by Federal
or State banking or depository institution authorities;
provided, however, that at the time of the investment or
contractual commitment to invest therein, the commercial
paper or other short-term unsecured debt obligations (other
than such obligations the rating of which is based on the
credit of a Person other than such depository institution or
trust company) thereof shall have a credit rating from each
of the Rating
Agencies in the highest investment category for short-term
unsecured debt obligations or certificates of deposit
granted thereby;
(iii) commercial paper having, at the time of the
investment or contractual commitment to invest therein, a
rating from each of the Rating Agencies in the highest
investment category for short-term unsecured debt
obligations or certificates of deposit granted thereby;
(iv) investments in money market or common trust funds
having a rating from each of the Rating Agencies in the
highest investment category for short-term unsecured debt
obligations or certificates of deposit granted thereby
(including funds for which the Indenture Trustee or the
Owner Trustee or any of their respective affiliates is
investment manager or advisor, so long as such fund shall
have such rating);
(v) bankers' acceptances issued by any depository
institution or trust company referred to in clause (ii)
above;
(vi) repurchase obligations with respect to any
security that is a direct obligation of, or fully guaranteed
by, the United States of America or any agency or
instrumentality thereof the obligations of which are backed
by the full faith and credit of the United States of
America, in either case entered into with (A) a depository
institution or trust company (acting as principal) described
in clause (B) or (B) a depository institution or trust
company the deposits of which are insured by FDIC; and
(vii) any other investment permitted by each of the
Rating Agencies.
in each case, other than as permitted by the Rating Agencies,
maturing not later than the Business Day immediately preceding
the next Distribution Date.
ERISA: The Employee Retirement Income Security Act of 1974,
as amended.
Event of Default: An event described in Section 5.1 of the
Indenture.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
Executive Officer: With respect to any corporation, the
Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer, President, Executive Vice President, any Vice President,
the Secretary or the Treasurer of such corporation; and with
respect to any partnership, any general partner thereof.
Expenses: The expenses described in Section 6.9 of the
Trust Agreement.
FDIC: Federal Deposit Insurance Corporation or any
successor agency.
Final Scheduled Distribution Date: With respect to a class
of Securities, the date set forth below opposite such Securities:
Class A-1 Notes: December 22, 1997
Class A-2 Notes: July 20, 2000
Certificates: July 20, 2000
Financed Vehicle: 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.
Full Prepayment: With respect to a Distribution 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.
Further Transfer and Servicing Agreements: The Pooling and
Servicing Agreement, the Trust Agreement and the Indenture.
Grant: To mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and
▇▇▇▇▇ ▇ ▇▇▇▇ upon and a security interest in and right of set-off
against, deposit, set over and confirm pursuant to the Indenture.
A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and
give receipt for principal and interest payments in respect of,
the Collateral and all other moneys payable thereunder, to give
and receive notices and other communications, to make waivers or
other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and
generally to do and receive anything that the Granting party is
or may be entitled to do or receive thereunder or with respect
thereto.
Guaranties: With respect to any Receivable, personal or
commercial guaranties of an Obligor's performance with respect
thereto.
Holder: The Person in whose name a Note or Certificate is
registered on the Note Register or the Certificate Register, as
applicable.
Indemnified Parties: The Persons specified in Section 6.9
of the Trust Agreement.
Indenture: The Indenture, dated as of December 15, 1994
between the Issuer and the Indenture Trustee, as amended and
supplemented from time to time.
Indenture Trustee: The Bank of New York, a New York banking
corporation, not in its individual capacity but solely as trustee
under the Indenture, or any successor trustee under the
Indenture.
Independent: When used with respect to any specified
Person, that the Person (i) is in fact independent of the Issuer,
any other obligor upon the Notes, the Seller and any Affiliate of
any of the foregoing Persons, (ii) does not have any direct
financial interest or any material indirect financial interest in
the Issuer, any such other obligor, the Seller or any Affiliate
of any of the foregoing Persons and (iii) is not connected with
the Issuer, any such other obligor, the Seller or any Affiliate
of any of the foregoing Persons as an officer, employee,
promoter, underwriter, trustee, partner, director or person
performing similar functions.
Independent Certificate: A certificate or opinion to be
delivered to the Indenture Trustee under the circumstances
described in, and otherwise complying with, the applicable
requirements of Section 11.1 of the Indenture, made by an
Independent appraiser or other expert appointed by an Issuer
Order and approved by the Indenture Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that
the signer has read the definition of "Independent" in the
Indenture and that the signer is Independent within the meaning
thereof.
Indirect Participant: A securities broker, dealer, bank,
trust company or other Person that clears through or maintains a
custodial relationship with a Clearing Agency Participant, either
directly or indirectly.
Initial Aggregate Receivables Balance: $315,029,921.60,
which represents the aggregate of the Initial Receivable Balances
under all of the Receivables.
Initial Gross Receivable Balance: 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: 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 a Retail Note and related costs,
less payments received from the Obligor prior to the Cutoff Date
allocable on the basis of the actuarial method to principal.
Insolvency Event: With respect to a specified Person,
(i) the entry of a decree or order by a court, agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver or liquidator for such
Person, in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the
winding-up or liquidation of such Person's affairs, and the
continuance of any such decree or order unstayed and in effect
for a period of 60 consecutive days; (ii) the consent by such
Person to the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating
to such Person or of or relating to substantially all of such
Person's property, or (iii) such Person 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.
Insurance Policy: 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: With respect to any Receivable,
proceeds of any Insurance Policy with respect to such Receivable.
Interest Rate: With respect to the Class A-1 Notes, 7.650%
per annum, and with respect to the Class A-2 Notes, 8.000% per
annum.
Interested Parties: The Issuer and each other party
identified or described in the Purchase Agreement or the Further
Transfer and Servicing Agreements as having an interest as owner,
trustee, secured party or Securityholder with respect to the
Purchased Property.
Investment Earnings: Investment earnings on funds deposited
in the Designated Accounts, net of losses and investment
expenses, during the applicable Monthly Period.
Issuer: The party named as such in the Pooling and
Servicing Agreement and in the Indenture until a successor
replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the
TIA, each other obligor on the Notes.
Issuer Order and Issuer Request: A written order or request
signed in the name of the Issuer by any one of its Authorized
Officers and delivered to the Indenture Trustee.
Lien: 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: 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: 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: 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 NITC Purchase Obligations and proceeds from any
Guaranties, net of amounts that are required to be refunded to
the Obligor on such Receivable.
Monthly Advance: The amount, as of an Accounting Date,
which the Servicer is required to advance on the respective
Receivable pursuant to Section 5.04 of the Pooling and Servicing
Agreement.
Monthly Period: With respect to a Determination Date, a
Record Date and a Distribution Date, the calendar month preceding
the month in which such date occurs. With respect to an
Accounting Date, the calendar month in which such Accounting Date
occurs.
NIC: Navistar International Corporation, a Delaware
corporation, and its successors.
NFC: Navistar Financial Corporation, a Delaware
corporation, and its successors.
NFRRC: Navistar Financial Retail Receivables Corporation, a
Delaware corporation, and its successors.
NITC: Navistar International Transportation Corp., a
Delaware corporation, and its successors.
NITC Purchase Obligations: Certain obligations of NITC,
subject to limitations, to purchase Financed Vehicles securing
Liquidating Receivables pursuant to Article VI, "NFC/NITC Retail
Repossession Purchase and Remarketing Agreement" and other
provisions of the Master Intercompany Agreement by and between
NFC and NITC dated as of April 26, 1993, as such Master
Intercompany Agreement may be amended, supplemented, restated or
otherwise modified.
Noteholders: Holders of record of the Notes pursuant to the
Indenture and, with respect to any class of Notes, holders of
record of such class of Notes pursuant to the Indenture.
Noteholders' Interest Carryover Shortfall: As of the close
of any Distribution Date, the excess of the Aggregate
Noteholders' Interest Distributable Amount for such Distribution
Date over the amount that was actually deposited in the Note
Distribution Account on the day preceding such current
Distribution Date in respect of interest.
Noteholders' Interest Distributable Amount: With respect to
any class of Notes and any Distribution Date, the product of
(i) the outstanding principal balance of such class of Notes on
the preceding Distribution Date after giving effect to all
payments of principal in respect of such class of Notes on such
preceding Distribution Date (or, in the case of the first
Distribution Date, the outstanding principal balance on the
Closing Date) and (ii) the product of the Interest Rate for such
class and a fraction, the numerator of which is 30, and the
denominator of which is 360.
Noteholders' Percentage: 100% for each Distribution Date
occurring before the Distribution Date in June 1995, 96.5%
thereafter until the principal balance of the Class A-2 Notes is
paid in full, and zero thereafter; provided, however, that if the
amount on deposit in the Reserve Account is less than 1.00% of
the Initial Aggregate Receivables Balance on any Distribution
Date, then the Noteholders' Percentage shall mean 100% until all
of the Notes are paid in full or the amount on deposit in the
Reserve Account equals the Specified Reserve Account Balance.
Noteholders' Principal Carryover Shortfall: As of the close
of any Distribution Date, the excess of Aggregate Noteholders'
Principal Distributable Amount for such Distribution Date over
the amount that was actually deposited in the Note Distribution
Account on the day preceding such current Distribution Date in
respect of principal.
Noteholders' Principal Distributable Amount: With respect
to a class of Notes on a Distribution Date, the lesser of (i) the
remainder of (A) the Noteholders' Percentage of the Principal
Distributable Amount minus (B) the Noteholders' Principal
Distributable Amount for each class of Notes then having priority
of payment and (ii) the Note Principal Balance with respect to
such class of Notes (after giving effect to the distribution to
the Noteholders of amounts deposited in the Note Distribution
Account on the previous Distribution Date). In addition, on the
Final Scheduled Distribution Date for any class of Notes, the
Noteholders' Principal Distributable Amount for such Notes shall
include the amount necessary to reduce the Note Principal Balance
for such class of Notes to zero.
Notes: Collectively, the Class A-1 Notes and the Class A-2
Notes.
Note Depository: The depositary from time to time selected
by the Indenture Trustee on behalf of the Trust in whose name the
Notes are registered prior to the issue of Definitive Notes. The
first Note Depository shall be Cede & Co., the nominee of the
initial Clearing Agency.
Note Depository Agreement: The agreement, dated as of the
Closing Date, among the Issuer, the Indenture Trustee and The
Depository Trust Company, as the initial Clearing Agency relating
to the Notes, substantially in the form of Exhibit C to the
Indenture, as the same may be amended and supplemented from time
to time.
Note Distribution Account: The account designated as such,
established and maintained pursuant to Section 5.01(a)(ii) of the
Pooling and Servicing Agreement.
Note Owner: With respect to a Book-Entry Note, the Person
who is the beneficial owner of such Book-Entry Note, as reflected
on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an Indirect Participant, in
each case in accordance with the rules of such Clearing Agency).
Note Pool Factor: With respect to any class of Notes and
any Distribution Date, a seven-digit decimal figure computed by
the Servicer which is equal to the Note Principal Balance for
such class as of the close of such Distribution Date divided by
the initial Note Principal Balance for such class.
Note Principal Balance: With respect to any class of Notes
and any Distribution Date, the initial aggregate principal
balance of such class of Notes, reduced by all previous payments
to the Noteholders of such class in respect of principal of such
Notes.
Note Register: With respect to any class of Notes, the
register of such Notes specified in Section 2.4 of the Indenture.
Note Registrar: The registrar at any time of the Note
Register, appointed pursuant to Section 2.4 of the Indenture.
Obligor: 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.
Officer's Certificate: A certificate signed by any
Authorized Officer of the Issuer, under the circumstances
described in, and otherwise complying with, the applicable
requirements of Section 11.1 of the Indenture, and delivered to
the Indenture Trustee. Unless otherwise specified, any reference
in the Indenture to an officer's certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.
Opinion of Counsel: A written opinion of counsel, who may,
except as otherwise expressly provided, be an employee of the
Seller or the Servicer. In addition, for purposes of the
Indenture: (i) such counsel shall be satisfactory to the
Indenture Trustee; (ii) the opinion shall be addressed to the
Indenture Trustee as Trustee and (iii) the opinion shall comply
with any applicable requirements of Section 11.1 of the Indenture
and shall be in form and substance satisfactory to the Indenture
Trustee.
Optional Purchase Percentage: 10%.
Optional Purchase Proceeds: The amount specified in the
second sentence of subsection 9.01(a) of the Pooling and
Servicing Agreement.
Outstanding: With respect to the Notes, as of the date of
determination, all Notes theretofore authenticated and delivered
under the Indenture except:
(i) Notes theretofore cancelled by the Indenture
Trustee or delivered to the Indenture Trustee for
cancellation;
(ii) Notes or portions thereof the payment for
which money in the necessary amount has been theretofore
deposited with the Indenture Trustee or any Paying Agent in
trust for the Holders of such Notes; provided, however, that
if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to the Indenture or provision
therefor, satisfactory to the Indenture Trustee, has been
made; and
(iii) Notes in exchange for or in lieu of
other Notes which have been authenticated and delivered
pursuant to this Indenture unless proof satisfactory to the
Indenture Trustee is presented that any such Notes are held
by a bona fide purchaser;
provided, however, that in determining whether the Holders of the
requisite Outstanding Amount of the Notes have given any request,
demand, authorization, direction, notice, consent or waiver
hereunder or under any Basic Document, Notes owned by the Issuer,
any other obligor upon the Notes, the Seller or any Affiliate of
any of the foregoing Persons shall be disregarded and deemed not
to be Outstanding, except that, in determining whether the
Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or
waiver, only Notes that the Indenture Trustee knows to be so
owned shall be so disregarded. Notes so owned that have been
pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Indenture Trustee
the pledgor's right so to act with respect to such Notes and that
the pledgee is not the Issuer, any other obligor upon the Notes,
the Seller or any Affiliate of any of the foregoing Persons.
Outstanding Amount: As of any date, the aggregate principal
amount of all Notes, or a class of Notes, as applicable,
Outstanding at such date.
Outstanding Monthly Advances: As of an Accounting Date with
respect to a Receivable, the sum of all Monthly Advances made as
of or prior to such Accounting Date minus all payments or
collections as of or prior to such Accounting Date which are
specified in Section 5.04 of the Pooling and Servicing Agreement
as reducing Outstanding Monthly Advances with respect to such
Receivable.
Overdue Payment: With respect to a Distribution 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.
Owner: For purposes of the Purchase Agreement, the
Custodian Agreement and the Pooling and Servicing Agreement, the
"Owner" of a Receivable shall mean (i) NFRRC until the execution
and delivery of the Further Transfer and Servicing Agreements and
(ii) thereafter, the Issuer; provided, that NFC or NFRRC, as
applicable, shall be the "Owner" of any Receivable from and after
the time that such Person shall acquire such Receivable, whether
pursuant to Section 5.04 of the Purchase Agreement, Section 3.08
of the Pooling and Servicing Agreement, any other provision of
the Further Transfer and Servicing Agreements or otherwise.
Owner Trust Estate: All right, title and interest of the
Trust in and to the property and rights assigned to the Trust
pursuant to Article II of the Pooling and Servicing Agreement,
all funds on deposit from time to time in the Collection Account
and the Certificate Distribution Account and all other property
of the Trust from time to time, including any rights of the Owner
Trustee and the Trust pursuant to the Pooling and Servicing
Agreement and the Administration Agreement.
Owner Trustee: Chemical Bank Delaware, a Delaware banking
corporation, not in its individual capacity but solely as trustee
under the Trust Agreement, or any successor trustee under the
Trust Agreement.
Partial Prepayment: With respect to a Distribution 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.
Party: A Party as defined in Section 6.01 of the Pooling
and Servicing Agreement.
Pass Through Rate: 8.30 % per annum.
Paying Agent: With respect to the Indenture, the Indenture
Trustee or any other Person that meets the eligibility standards
for the Indenture Trustee specified in Section 6.11 of the
Indenture and is authorized by the Issuer to make the payments to
and distributions from the Collection Account and the Note
Distribution Account, including payment of principal of or
interest on the Notes on behalf of the Issuer. With respect to
the Trust Agreement, any paying agent or co-paying agent
appointed pursuant to Section 3.9 of the Trust Agreement that
meets the eligibility standards for the Owner Trustee specified
in Section 6.13 of the Trust Agreement, and initially Chemical
Bank.
Person: Any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock
company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
Physical Property: The property described as such in the
definition of "Delivery."
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of December 15, 1994, among NFC, the Seller
and the Issuer, as amended and supplemented from time to time.
Predecessor Note: With respect to any particular Note,
every previous Note evidencing all or a portion of the same debt
as that evidenced by such particular Note; and, for the purpose
of this definition, any Note authenticated and delivered under
Section 2.5 of the Indenture in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
Prepayment: With respect to a Distribution Date and to a
Receivable, the portion of an Actual Payment in excess of the
Scheduled Payment.
Prepayment Surplus: With respect to any Distribution 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 Distributable Amount: With respect to any
Distribution Date, the sum of: (i) the principal portion of all
Scheduled Payments due with respect to the related Monthly Period
on the Receivables held by the Trust (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).
Proceeding: Any suit in equity, action at law or other
judicial or administrative proceeding.
Program: As defined in subsection 4.02(a) of the Pooling
and Servicing Agreement.
Purchase Agreement: The Purchase Agreement, dated as of
December 15, 1994, between NFC and the Seller, as amended and
supplemented from time to time.
Purchased Property: The property described in Section 2.01
of the Purchase Agreement.
Rating Agencies: As of any date, the nationally recognized
statistical rating organizations requested by the Seller to
provide ratings on the Securities which are rating the Securities
on such date.
Rating Agency Condition: With respect to any action, the
condition that each Rating Agency shall have been given at least
10 days (or such shorter period as is acceptable to each Rating
Agency) prior notice thereof and that each of the Rating Agencies
shall have notified the Seller, the Servicer and the Issuer in
writing that such action shall not result in a downgrade or
withdrawal of the then current rating of the Securities.
Rebate: 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: A Retail Note secured by one or more Financed
Vehicles that is included in the Schedule of Receivables and all
rights and obligations thereunder.
Receivable Balance: With respect to any Receivable, as of
an Accounting Date, the Initial Receivable Balance 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
NITC Purchase Obligations and proceeds from any Guaranties.
Receivable File: The documents listed in Section 2.02 of
the Pooling and Servicing Agreement pertaining to a particular
Receivable.
Receivables Purchase Price: The amount described in Section
2.02 of the Purchase Agreement.
Record Date: (i) with respect to the Notes and with respect
to any Distribution Date, the close of business on the day
immediately preceding such Distribution Date, or if Definitive
Notes are issued, the last day of the preceding Monthly Period;
and (ii) with respect to the Certificates and with respect to any
Distribution Date, the close of business on the day immediately
preceding such Distribution Date, or if Definitive Certificates
are issued, the last day of the preceding Monthly Period.
Redemption Date: The Distribution Date specified by the
Servicer or the Issuer pursuant to Section 10.1(a) or (b) of the
Indenture, as applicable.
Redemption Price: (A) in the case of a redemption of the
Notes pursuant to Section 10.1(a) of the Indenture, an amount
equal to the aggregate of the Outstanding Amount of the Notes,
together with all accrued and unpaid interest thereon as of the
Redemption Date or (B) in the case of a payment made to
Noteholders pursuant to Section 10.1(b) of the Indenture, the
amount on deposit in the Note Distribution Account, but not in
excess of the amount specified in clause (A) above;
Registered Holder: The Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
Remaining Gross Balance: 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.
Repurchase Event: A Repurchase Event described in Section
5.04 of the Purchase Agreement.
Required Deposit Rating: A rating on short-term unsecured
debt obligations of P-1 by ▇▇▇▇▇'▇ Investors Service, Inc. and
A-1+ by Standard & Poor's Ratings Group. Any requirement that
short-term unsecured debt obligations have the "Required Deposit
Rating" shall mean that such short-term unsecured debt
obligations have the foregoing required ratings from each of such
rating agencies.
Reserve Account: The account designated as such,
established and maintained pursuant to Section 4.07(a) of the
Pooling and Servicing Agreement.
Reserve Account Initial Deposit: Cash or Eligible
Investments having a value of at least $18,901,795.30, which
shall be deposited into the Reserve Account on the Closing Date
pursuant to Section 4.07(a) of the Pooling and Servicing
Agreement.
Reserve Account Property: As defined in the Granting Clause
of the Indenture.
Responsible Officer: With respect to the Indenture Trustee
or the Owner Trustee, any officer within the Corporate Trust
Office of such trustee, and, with respect to the Servicer, the
President, any Vice President, Assistant Vice President,
Secretary, Assistant Secretary or any other officer or assistant
officer of such Person customarily performing functions similar
to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge
of and familiarity with the particular subject.
Retail Note: A retail instalment sale contract for, or
retail loan evidenced by a note and secured by, one or more new
or used medium or heavy duty trucks, buses or trailers.
Retained Certificates: The Certificates retained by the
Seller pursuant to Section 3.10 of the Trust Agreement, with an
initial Certificate Balance of $110,921.60.
Schedule of Receivables: The schedule of all Receivables
originally held as part of the Trust, annexed to the Pooling and
Servicing Agreement and on file at the locations listed on
Exhibit B to the Pooling and Servicing Agreement, as it may be
amended from time to time in accordance with the Pooling and
Servicing Agreement.
Scheduled Payment: 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, including 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 Distribution Date, it means the payment which is
due in the related Monthly Period; provided, however, that in the
case of the first Monthly Period, the Scheduled Payment shall
include all such payments due from the Obligor on or after the
Cutoff Date.
Secretary of State: The Secretary of State of the State of
Delaware.
Securities: The Notes and the Certificates.
Securities Act: The Securities Act of 1933, as amended.
Securityholder: Any of the Noteholders or
Certificateholders.
Seller: The Person executing the Pooling and Servicing
Agreement as the Seller, or its successor in interest pursuant to
Section 6.03 of the Pooling and Servicing Agreement.
Servicer: The Person executing the Pooling and Servicing
Agreement as the Servicer, or its successor in interest pursuant
to Section 7.02 of the Pooling and Servicing Agreement.
Servicer Default: An event described in Section 8.01 of the
Pooling and Servicing Agreement.
Servicer's Certificate: A certificate, completed by and
executed on behalf of the Servicer, in accordance with Section
3.10 of the Pooling and Servicing Agreement.
Specified Reserve Account Balance: with respect to any
Distribution Date means the greater of:
(a) 6.0% of the Aggregate Receivables Balance as of the
close of business on the last day of the related Monthly Period,
except that if on any Distribution 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 related to such Distribution Date, minus the sum
of the Liquidation Proceeds for the Monthly Periods which are the
first, second and third Monthly Periods preceding the Monthly
Period related to such Distribution Date, 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
related to such Distribution Date, 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 in this clause (a) shall be equal
to 10%; and
(b) 2.1% of the Initial Aggregate Receivables Balance.
State: Any one of the ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ or the District of Columbia.
Supplemental Servicing Fee: All late fees, prepayment
charges and other administrative fees and expenses or similar
charges allowed by applicable law
with respect to Receivables, collected (from whatever source) on
the Receivables held by the Trust during the applicable Monthly
Period.
Temporary Notes: The Notes specified in Section 2.3 of the
Indenture.
Total Available Amount: With respect to a Distribution
Date, the sum of the Available Amount and the amount of all cash
and other immediately available funds in the Reserve Account
immediately prior to such date.
Total Servicing Fee: The sum of the Basic Servicing Fee and
any unpaid Basic Servicing Fees from all prior Distribution
Dates.
Transfer and Servicing Agreements: The Purchase Agreement,
the Pooling and Servicing Agreement, the Trust Agreement, the
Indenture, the Administration Agreement and the Custodian
Agreement.
Treasury Regulations: The regulations, including proposed
or temporary regulations, promulgated under the Code. References
herein to specific provisions of proposed or temporary
regulations shall include analogous provisions of final Treasury
Regulations or other successor Treasury Regulations.
Trust: Navistar Financial 1994-C Owner Trust, a Delaware
business trust created by the Trust Agreement.
Trust Agreement: The Trust Agreement, dated as of December
15, 1994, between the Seller and the Owner Trustee, as amended
and supplemented from time to time; such agreement being the
Amended and Restated Trust Agreement contemplated by the Trust
Agreement dated December 2, 1994 between the Seller and the Owner
Trustee.
Trust Estate: All money, instruments, rights and other
property that are subject or intended to be subject to the lien
and security interest of the Indenture for the benefit of the
Noteholders (including all property and interests Granted to the
Indenture Trustee), including all proceeds thereof, and the
Reserve Account and the Reserve Account Property pledged to the
Indenture Trustee pursuant to the Indenture.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939
as in force on the date hereof, unless otherwise specifically
provided.
Trustees: The Owner Trustee and the Indenture Trustee.
UCC: The Uniform Commercial Code as in effect in the
relevant jurisdiction.
Undertaking Letter: The Letter referred to in Sections 3.4
and 9.11 of the Trust Agreement.
Underwriting Agreement: The Underwriting Agreement, dated
December 7, 1994, among ▇.▇. ▇▇▇▇▇▇ Securities Inc., Chemical
Securities Inc. and the Seller with respect to the sale of the
Securities.
Voting Interests: As of any date, the aggregate Certificate
Balance of all Certificates outstanding; provided, however, that
Certificates owned by the Issuer, the Seller or any Affiliate of
any of the foregoing Persons shall be disregarded and deemed not
to be outstanding, except that, in determining whether the Owner
Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Certificates that the Owner Trustee knows to be so owned shall be
so disregarded. Certificates so owned that have been pledged in
good faith may be regarded as outstanding if the
pledgee establishes to the satisfaction of the Owner Trustee the
pledgor's right so to act with respect to such Certificates and
that the pledgee is not the Issuer, the Seller or any Affiliate
of any of the foregoing Persons.
Warranty Payment: With respect to a Distribution 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 5.04 of the Pooling and Servicing
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 with respect to such Warranty Receivable.
Warranty Purchaser: Either (i) the Seller pursuant to
Section 2.05 of the Pooling and Servicing Agreement or (ii) NFC
pursuant to Section 5.04 of the Purchase Agreement.
Warranty Receivable: A Receivable which the Warranty
Purchaser has become obligated to repurchase pursuant to Section
2.05 of the Pooling and Servicing Agreement or Section 5.04 of
the Purchase Agreement.
PART II - RULES OF CONSTRUCTION
(a) Accounting Terms. As used in this Appendix or the
Basic Documents, accounting terms which are not defined, and
accounting terms partly defined, herein or therein shall have the
respective meanings given to them under generally accepted
accounting principles. To the extent that the definitions of
accounting terms in this Appendix or the Basic Documents are
inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this
Appendix or the Basic Documents will control.
(b) "Hereof," etc. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this
Appendix or any Basic Document will refer to this Appendix or
such Basic Document as a whole and not to any particular
provision of this Appendix or such Basic Document; and Section,
Schedule and Exhibit references contained in this Appendix or any
Basic Document are references to Sections, Schedules and Exhibits
in or to this Appendix or such Basic Document unless otherwise
specified. The word "or" is not exclusive.
(c) Reference to Distribution Dates. With respect to any
Distribution Date, the "related Monthly Period," and the "related
Record Date," will mean the Monthly Period and Record Date,
respectively, immediately preceding such Distribution Date, and
the relationships among Monthly Periods and Record Dates will be
correlative to the foregoing relationships.
(d) Number and Gender. Each defined term used in this
Appendix or the Basic Documents has a comparable meaning when
used in its plural or singular form. Each gender-specific term
used in this Appendix or the Basic Documents has a comparable
meaning whether used in a masculine, feminine or gender-neutral
form.
(e) Including. Whenever the term "including" (whether or
not that term is followed by the phrase "but not limited to" or
"without limitation" or words of similar effect) is used in this
Appendix or the Basic Documents in connection with a listing of
items within a particular classification, that listing will be
interpreted to be illustrative only and will not be interpreted
as a limitation on, or exclusive listing of, the items within
that classification.
APPENDIX B
Notice Addresses and Procedures
All requests, demands, directions, consents, waivers,
notices, authorizations and communications provided or permitted
under any Basic Document to be made upon, given or furnished to
or filed with the Seller, the Servicer, the Administrator, the
Indenture Trustee, the Issuer, the Owner Trustee or the Rating
Agencies shall be in writing, personally delivered, sent by
facsimile with a copy to follow via first class mail or mailed by
certified mail-return receipt requested, and shall be deemed to
have been duly given upon receipt:
(a) in the case of the Seller, at the following
address:
Navistar Financial Retail Receivables Corporation
c/o Corporation Trust Center
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
Navistar Financial Retail Receivables Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
(b) in the case of the Servicer or the Custodian, at
the following address:
Navistar Financial Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
with a copy to:
Navistar Financial Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
(c) in the case of the Indenture Trustee, at its
Corporate Trust Office
(d) in the case of the Issuer or the Owner Trustee, to
the Owner Trustee at its Corporate Trust Office,
with copies to:
Navistar Financial Retail Receivables Corporation
c/o Corporation Trust Center
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and:
Navistar Financial Retail Receivables Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
The Issuer shall promptly transmit any notice received
by it from the Noteholders to the Indenture Trustee and
the Indenture Trustee shall likewise promptly transmit
any notice received by it from the Noteholders to the
Issuer.
(e) in the case of ▇▇▇▇▇'▇ Investors Service, Inc., to
▇▇▇▇▇'▇ Investors Service, Inc.
ABS Monitoring Department
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and
(f) in the case of Standard & Poor's Ratings Group, to
Standard & Poor's Ratings Group
▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇)
New York, New York 10004
Attention: Asset Backed Surveillance Department
or at such other address as shall be designated by such party in
a written notice to the other parties to this Agreement.
Where any Basic Document provides for notice to
Securityholders of any condition or event, such notice shall be
sufficiently given (unless otherwise herein expressly provided)
if it is in writing and mailed, first-class, postage prepaid to
each Securityholder affected by such condition or event, at such
Person's address as it appears on the Note Register or
Certificate Register, as applicable, not later than the latest
date, and not earlier than the earliest date, prescribed in such
Basic Document for the giving of such notice. If notice to
Securityholders is given by mail, neither the failure to mail
such notice nor any defect in any notice so mailed to any
particular Securityholder shall affect the sufficiency of such
notice with respect to other Securityholders, and any notice that
is mailed in the manner herein provided shall conclusively be
presumed to have been duly given regardless of whether such
notice is in fact actually received.