POOLING AGREEMENT

Exhibit 10.2

EXECUTION COPY

 

POOLING AGREEMENT

BETWEEN

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION

SELLER

AND

NAVISTAR FINANCIAL 2006-RBC OWNER TRUST

ISSUER

DATED AS OF OCTOBER 20, 2006

 

TABLE OF CONTENTS

 

 

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POOLING AGREEMENT

THIS POOLING AGREEMENT is made as of October 20, 2006 by and between Navistar Financial Retail Receivables Corporation, a Delaware corporation (“NFRRC” and, in its capacity as the Seller hereunder, the “ Seller ”) and Navistar Financial 2006-RBC Owner Trust, a Delaware statutory trust (the “ Issuer ”).

WHEREAS, NFC has sold the Receivables and the Related Security to the Seller pursuant to the Purchase Agreement.

WHEREAS, the Seller desires to sell the Receivables and the Related Security to the Issuer in exchange for the Securities and the receipt of funds drawn under the Notes.

WHEREAS, the Seller and the Issuer wish to set forth the terms pursuant to which the Receivables and the Related Security are to be sold by the Seller to the Issuer.

NOW, THEREFORE, in consideration of the foregoing, the other good and valuable consideration and the mutual terms and covenants contained herein, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

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 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 and the receipt by the Seller of the funds drawn under such Notes on the date hereof, the Seller does hereby enter into this Agreement and agree to fulfill all of its obligations hereunder and hereby sells, transfers, assigns, sets over and otherwise convey to the Issuer, without recourse (except as provided in Section 2.06 ), pursuant to an assignment in the form attached hereto as Exhibit B (the “ PSA Assignment ”), all right, title and interest of the Seller in, to and under:

(a) the Retail Notes identified on the Schedule of Retail Notes to the PSA Assignment delivered to the Issuer and the Related Security with respect to those Retail Notes; and

(b) the rights, but not the obligations, acquired by the Seller under the Purchase Agreement and the PA Assignment pursuant to Section 2.01 of the Purchase Agreement with respect to the Receivables.

It is the intention of the Seller that the transfer and assignment contemplated by this Section 2.01 shall constitute a sale of the Receivables and Related Security by the Seller to the Issuer and the beneficial interest in and title to the assets conveyed pursuant to this Section 2.01 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. The Seller intends 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 Section 2.01 , and the Seller hereby grants such security interest and (ii) the assets conveyed pursuant to this Section 2.01 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 Section 2.01 , 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 Section 2.01 and all other monies payable under the Receivables conveyed pursuant to this Section 2.01 , to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights, powers 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 Section 2.01 . For purposes of such grant, this Agreement shall constitute a security agreement under the UCC. In addition, on the Closing Date, the Seller shall deposit the Reserve Account Initial Deposit into the Reserve Account. 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 assets conveyed pursuant to this Section 2.01 received by the Seller pursuant to Section 5.07 of the Purchase Agreement.

SECTION 2.02 [Reserved]

SECTION 2.03 Custody of Receivable Files . In connection with the sale, transfer and assignment of Receivables and the Related Security to the Seller from NFC pursuant to the Purchase Agreement, the Seller, simultaneously with the execution and delivery of this Agreement, shall enter into the Servicing Agreement with NFC, pursuant to which the Seller shall revocably appoint NFC as the Custodian, and NFC 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 Trust, as of the Closing Date 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;

 

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(c) a copy of 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.

SECTION 2.04 Acceptance by Issuer; Limitation on Transfer of International Purchase Obligations . The Issuer does hereby accept all property (and interests in property) conveyed by the Seller pursuant to Section 2.01 , and declares that the Issuer shall hold such property upon the trust set forth in the Trust Agreement for the benefit of Certificateholders, subject to the terms and conditions of the Trust Agreement, the Indenture, this Agreement and the other Basic Documents; provided, however, that the Issuer acknowledges and agrees that (a) the rights pursuant to the International Purchase Obligations are personal to NFC and only the proceeds of such rights have been assigned to the Issuer by NFRRC hereunder and by NFC to NFRRC under the Purchase Agreement, (b) neither the Issuer nor the Indenture Trustee is or is 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 or the Indenture Trustee. The Issuer hereby agrees and accepts the appointment and authorization of NFC as Servicer pursuant to the Servicing Agreement. The parties agree that this Agreement (including the PSA Assignment), the Servicing Agreement, the Indenture and the Trust Agreement constitute the Further Transfer and Servicing Agreements.

SECTION 2.05 Representations and Warranties as to the Receivables . Pursuant to Section 2.01(b) , 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 is relying 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 2.06 Repurchase of Receivables Upon Breach of Warranty . Upon discovery by the Seller, the Servicer, either Trustee or the Agent of a breach of any of the representations and warranties in Section 3.01 of the Purchase Agreement (and, with respect to Section 3.01(j) of the Purchase Agreement, irrespective of any limitation regarding knowledge of NFC) or in Section 2.05 or Section 3.01 of this Agreement that materially and adversely affects

 

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the interests of the Financial Parties 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 or notice), 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 2.05 or Section 3.01 , the Seller shall repurchase such Receivable from the Issuer on the related Distribution Date. Neither the Owner Trustee nor the Issuer shall have any affirmative duty to conduct any investigation as to the occurrence of any event requiring the repurchase of any Receivable pursuant to this Section 2.06 .

The repurchase price to be paid by any Warranty Purchaser shall be an amount equal to the Warranty Payment and shall be deposited by the Warranty Purchaser into the Collection Account on the Transfer Date for the related Distribution Date. 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.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SELLER

SECTION 3.01 Representations and Warranties of the Seller . The Seller makes the following representations and warranties as to itself on which the Issuer is relying in acquiring the Receivables and issuing the Securities under the other Further Transfer and Servicing Agreements. The following representations and warranties speak 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.

(a) Organization and Good Standing . The Seller 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 to acquire and own the Receivables;

(b) Due Qualification . The Seller 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 requires or shall require such qualification;

(c) Power and Authority . The Seller 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 3.01 , the “applicable Further Transfer and Servicing Agreements”) and to carry out the respective terms of such agreements and 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 the Seller of the applicable Further

 

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Transfer and Servicing Agreements have been duly authorized by the Seller by all necessary corporate action;

(d) Binding Obligations . The applicable Further Transfer and Servicing Agreements have been duly executed and delivered by the Seller and constitute a legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights in general and by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law;

(e) No Violation . The consummation by the Seller of the transactions contemplated by the applicable Further Transfer and Servicing Agreements and the fulfillment of the terms of such agreements by the Seller 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 the Seller, or any indenture, agreement or other instrument to which the Seller 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 the Seller’s knowledge, any order, rule or regulation applicable to the Seller of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Seller or any of its properties;

(f) No Proceedings . There are no proceedings or, to the Seller’s knowledge, investigations pending or, to the Seller’s knowledge, threatened before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over the Seller or its properties (i) asserting the invalidity of any of the applicable Further Transfer and Servicing Agreements, any Securities issued pursuant thereto 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 or the Administration Agreement, or (iii) seeking any determination or ruling that might materially and adversely affect the performance by the Seller of its obligations under, or the validity or enforceability of, such Securities, the applicable Further Transfer and Servicing Agreements or the Administration Agreement;

(g) Good Title . On the date hereof, the Seller has good title to each Receivable free and clear of all Liens (other than Liens that will be released as of such transfer). On the date hereof, good and valid title to each such Receivable will be validly and effectively conveyed to, and vested in, the Issuer, free and clear of all Liens, other than Liens created pursuant to the Basic Documents and the transfer of such Receivable by the Seller to the Issuer has been perfected under the UCC;

(h) 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

 

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Purchased Property (to the extent it constitutes Code Collateral) shall have been made, and the Receivables constitute Code Collateral; and

(i) Valid Sale . This Agreement and the PSA Assignment constitute a valid sale, transfer and assignment of the Purchased Property transferred thereby, enforceable against creditors of and purchasers from the Seller.

SECTION 3.02 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 3.03 Merger or Consolidation of, or Assumption of the Obligations of, Seller; Amendment of Certificate of Incorporation .

(a) Any Person (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 3.03 to the Agent.

(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 Agent or without obtaining the prior written consent of a majority of the Outstanding Amount of the Controlling Class as of the close of the preceding Distribution Date and the prior written consent of the Holders of Certificates evidencing not less than a majority of the ownership interest in the Trust as of the close of the preceding Distribution Date.

SECTION 3.04 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 3.05 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.

 

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ARTICLE IV

TERMINATION

SECTION 4.01 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 Aggregate Starting Receivables Balance, the Servicer shall have the option to purchase the assets of the Owner Trust Estate other than the Designated Accounts and the Certificate Distribution Account. If the Servicer’s long term unsecured debt rating from Moody’s 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 contained in the Owner Trust Estate (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, each Trustee and the Agent. If the Servicer’s long term unsecured debt rating from Moody’s 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 contained in the Owner Trust Estate (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, each Trustee and the Agent; provided, in all events that such amount (when added to any funds then on deposit in the Designated Accounts) must be at least equal to the aggregate Redemption Price of the outstanding Notes to be redeemed with such proceeds for, together with all Other Obligations accrued or to accrue and amounts due the Swap Counterparty through, 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 Owner Trust Estate (other than the Designated Accounts and the Certificate Distribution Account).

SECTION 4.02 Termination .

(a) 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 and the Other Obligations, 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).

(b) After payment to each Trustee, the Swap Counterparty, the Noteholders and the Servicer of all amounts required to be paid under this Agreement, the Interest Rate Swap, the Indenture and the other Basic Documents, 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 deposited into the Certificate Distribution Account for distribution to

 

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the Certificateholders and any other assets remaining in the Owner Trust Estate shall be distributed to the Certificate Distribution Account for distribution to the Certificateholders.

(c) This Agreement shall terminate when (i) the Certificateholders have succeeded to the rights of the Agent and the Noteholders pursuant to Section 4.02(a) and (ii) amounts on deposit in the Reserve Account and the Collection Account have been deposited into the Certificate Distribution Account pursuant to Section 4.02(b) .

ARTICLE V

MISCELLANEOUS PROVISIONS

SECTION 5.01 Amendment .

(a) This Agreement may be amended by the Seller and the Issuer with the consent of the Indenture Trustee, the Certificateholders and the Agent, but without the consent of any of the other Financial Parties.

(b) [Reserved].

(c) Prior to the execution of any such amendment or consent, the Indenture Trustee shall furnish written notification to the Agent of the substance of such amendment or consent as provided to the Indenture Trustee.

(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 of the substance of such amendment or consent as provided to the Indenture Trustee.

(e) [Reserved].

(f) Prior to the execution of any amendment to this Agreement, each Trustee and the Agent shall be entitled to receive and rely upon the Opinion of Counsel referred to in Section 5.02(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) Notwithstanding any other provision of this Agreement, if the consent of the Swap Counterparty is required pursuant to the Swap Counterparty Rights Agreement to amend this Agreement, any such purported amendment shall be null and void ab initio unless the Swap Counterparty consents in writing to such amendment.

SECTION 5.02 Protection of Title to Owner Trust Estate .

(a) The Seller shall prepare and file such financing statements and cause to be prepared and filed such continuation and other statements, all in such manner and in such places

 

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as may be required by law fully to preserve, maintain and protect the interest of the Issuer under this Agreement in the Receivables, the Related Security and other property conveyed hereby (to the extent such property constitutes Code Collateral) and the Indenture Trustee’s security interest in the Receivables, the Related Security and other property conveyed hereby (to the extent such property constitutes Code Collateral) and hereby authorizes the Issuer (and the Indenture Trustee) to file such financing statements or continuation statements relating to all or any part thereof. The Seller shall deliver (or cause to be delivered) to the Owner Trustee, the Indenture Trustee and the Agent file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing.

(b) The Seller shall not 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 9-506 of the UCC, unless it shall have given each Trustee and the Agent at least 60 days prior written notice thereof and shall file such financing statements or amendments as may be necessary to continue the perfection of the Issuer’s security interest in the Receivables, the Related Security and other property conveyed hereby (to the extent such property constitutes Code Collateral).

(c) The Seller shall give each Trustee and the Agent at least 60 days prior written notice of any change in its jurisdiction of formation and shall file such financing statements or amendments as may be necessary to continue the perfection of the Issuer’s security interest in the Designated Receivables and the Related Security and other property conveyed hereunder. The Seller shall at all times maintain its jurisdiction of formation within the United States of America.

(d) The Seller will cause the Servicer to 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 in respect of such Receivable.

(e) The Seller will cause the Servicer to 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 and has been pledged by the Issuer to the Indenture Trustee. 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 shall have been paid in full, repurchased by the Seller, purchased by the Servicer or become a Liquidating Receivable as to which the Servicer has discontinued pursuing remedies with respect to collection in accordance with its customary servicing procedures.

(f) If at any time the Seller proposes to sell, grant a security interest in, or otherwise transfer any interest in truck, truck chassis, bus and trailer receivables to any

 

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prospective purchaser, lender or other transferee, the Seller 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 and has been pledged by the Issuer to the Indenture Trustee unless such Receivable has been paid in full, repurchased by the Seller or purchased by the Servicer.

(g) The Seller will cause the Servicer to 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 Seller will cause the Servicer to furnish to each Trustee at any time upon request a list of all Receivables then held as part of the Owner Trust Estate, together with a reconciliation of such list to the Schedule of Retail Notes and to each of the Servicer’s Certificates furnished before such request indicating removal of Receivables from the Owner Trust Estate. Upon request, the Servicer shall furnish a copy of any such list to the Seller. Each Trustee and the Seller shall hold any such list and the Schedule of Retail Notes for examination by interested parties during normal business hours at their respective offices located at the addresses set forth in Section 5.03 .

(i) The Seller will deliver to each Trustee and the Agent 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 the Issuer and the Indenture 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) Except for the conveyances hereunder and as contemplated by the Further Transfer and Servicing Agreements, the Seller shall not sell, pledge, assign or transfer the Designated Receivables or the Related Security to any other Person, or grant, create, incur, assume or suffer to exist any Lien (except any Permitted Lien) on any interest therein, and the Seller shall defend the right, title and interest of the Trust in, to and under the Designated Receivables and Related Security against all claims of third parties claiming through or under the Seller.

SECTION 5.03 Notices . All demands, notices and communications upon or to the Seller, either Trustee or the Agent under this Agreement shall be delivered as specified in Appendix B hereto.

SECTION 5.04 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

 

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would cause the application of the laws of any jurisdiction other than the State of Illinois; provided , however , that (i) the duties and immunities of the Owner Trustee hereunder shall be governed by the laws of the State of Delaware and (ii) the rights and remedies of the Indenture Trustee shall be governed by the laws of the State of New York.

SECTION 5.05 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 Securities or the rights of the holders thereof.

SECTION 5.06 [ Reserved ].

SECTION 5.07 Assignment; Third-Party Beneficiaries . The Seller may not assign any of its rights or obligations hereunder or any interest herein without the prior written consent of the Agent. The Issuer may not assign any of its rights or obligations hereunder or any interest herein without the prior written consent of NFRRC and the Agent; provided , however , that each of the transactions contemplated in Section 5.10 may be consummated without the further consent of any Person. The Seller and the Issuer agree that the Indenture Trustee is an express third-party beneficiary with respect to this Agreement and, as such, shall have the right to enforce this Agreement and to exercise directly all of the Issuer’s rights and remedies under this Agreement (including, without limitation, the right to give or withhold any consents or approvals of the Issuer to be given or withheld hereunder). The Swap Counterparty shall be a third-party beneficiary to this Agreement only to the extent that it has rights specified herein or rights with respect to this Agreement specified in the Swap Counterparty Rights Agreement. Except as otherwise provided in the Swap Counterparty Rights Agreement or in this Article V, no other Person shall have any right or obligation hereunder.

SECTION 5.08 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 5.09 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 5.10 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 Financial Parties of all right, title and interest of the Issuer in, to and under the Owner Trust Estate and/or the assignment of any or all of the Issuer’s rights and obligations hereunder to the Indenture Trustee and the Financial Parties.

SECTION 5.11 No Petition Covenants; Waiver of Claims . Notwithstanding any prior termination of this Agreement the Seller shall not, prior to the date which is one year and

 

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one day after the final distribution with respect to the Securities, 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 5.12 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 Chase Bank USA, National Association not in its individual capacity but solely in its capacity as Owner Trustee and in no event shall Chase Bank USA, National Association 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 5.13 MUTUAL WAIVER OF JURY TRIAL . BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN OR AMONG ANY OF THE PARTIES HERETO, WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

SECTION 5.14 Survival; Termination . This Agreement shall create and constitute the continuing obligations of the parties hereto and shall remain in full force and effect until terminated in accordance with Section 4.02; provided , however , that this Section 5.14 and the

 

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rights and remedies with respect to Sections 5.11 and 5.12 shall be continuing and shall survive any termination of this Agreement.

SECTION 5.15 Waivers . No failure or delay on the part of the Issuer (or the Indenture Trustee or the Agent) in exercising any power, right or remedy under this Agreement or the PA Assignment shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other or further exercise thereof or the exercise of any other power, right or remedy.

* * * * *

 

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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.

 

 

Acknowledged and Accepted:

 

THE BANK OF NEW YORK, not in its individual capacity but solely as Indenture Trustee
By:		/s/ John Bobko
Name:		John Bobko
Title:		Vice President

 

NAVISTAR FINANCIAL CORPORATION, as Servicer
By:		/s/ John V. Mulvaney, Sr.
Name:		John V. Mulvaney, Sr.
Title:		Vice President and Controller

EXHIBIT A

Locations of Schedule of Retail Notes

The Schedule of Retail Notes 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

 

A-1

EXHIBIT B

Form of PSA Assignment

As of October 20, 2006, for value received, in accordance with the Pooling Agreement, dated as of October 20, 2006 (the “Pooling Agreement”), between Navistar Financial Retail Receivables Corporation, a Delaware corporation (the “Seller”) and Navistar Financial 2006-RBC Owner Trust (the “Issuer”), the Seller does hereby sell, assign, transfer and otherwise convey unto the Issuer, without recourse (except as provided in Section 2.06 of the Pooling Agreement), all right, title and interest of the Seller in, to and under (a) the Retail Notes identified on the Schedule of Retail Notes attached hereto having an aggregate Starting Receivable Balance of $              and the Related Security with respect to those Retail Notes; and (b) the Seller’s rights, but not its obligations, under the Purchase Agreement and the PA Assignment acquired by the Seller pursuant to Section 2.01 of the Purchase Agreement with respect to the Receivables.

The foregoing sale does not constitute and is not intended to result in any assumption by the Issuer of any obligation of the undersigned or NFC 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 PSA Assignment is made pursuant to and upon the representations, warranties and agreements on the part of the undersigned contained in the Pooling Agreement and is to be governed by the Pooling Agreement.

Capitalized terms used herein and not otherwise defined shall have the meaning assigned to them in the Pooling Agreement.

*   *   *   *   *

 

App. B-1

IN WITNESS WHEREOF, the undersigned has caused this PSA Assignment to be duly executed as of the day and year first above written.

 

 

App. B-2

APPENDIX A

PART I - DEFINITIONS

All terms used in this Appendix shall have the defined meanings set forth in this Part I when used in the Basic Documents, unless otherwise defined therein.

Accountants’ Report : As defined in Section 3.02 of the 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, 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 Distribution Date occurring after the date such Receivable is transferred to the Trust, 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 the Closing Date among NFC, as Administrator, the Trust and the Indenture Trustee, as amended, modified 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, (ii) the amount of any reimbursements made pursuant to the last sentence of Section 2.14 of the Servicing Agreement with respect to such Administrative Receivable, (iii) all past due Scheduled Payments with respect to which a Monthly Advance has not been made minus (iv) the Rebate minus (v) any Liquidation Proceeds with respect to such Administrative Receivable to the extent applied on or prior to the Accounting Date that are not reflected in items (i) through (iii).

Administrative Receivable : As defined in Secti