POOLING AGREEMENT

EXHIBIT 4.1

 

EXECUTION COPY

 

 

POOLING AGREEMENT

 

BETWEEN

 

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION

 

SELLER

 

AND

 

NAVISTAR FINANCIAL 2005-A OWNER TRUST

 

ISSUER

 

DATED AS OF JULY 27, 2005

 

TABLE OF CONTENTS

 

 

i

 

ii

POOLING AGREEMENT

 

THIS POOLING AGREEMENT is made as of July 27, 2005 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 2005-A Owner Trust, a Delaware statutory trust (the “ Issuer ”).

 

WHEREAS, NFC has sold the Initial Receivables, and has agreed to sell Subsequent Receivables, to the Seller pursuant to the Purchase Agreement.

 

WHEREAS, the Seller desires to sell the Initial Receivables and Subsequent Receivables (collectively, the “ Receivables ”), to the Issuer in exchange for the Securities and the payment of funds withdrawn from the Pre-Funding Account pursuant to the terms of this Agreement.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.

 

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 (whether by Subsequent Transfer PSA Assignment or otherwise) 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 Initial 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, set 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 “ Initial 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 Initial PSA Assignment delivered to the Issuer and the Related Retail Note Assets with respect to those Retail Notes;

(b) the Series 2005-A Portfolio Interest, the Series 2005-A Portfolio Certificate and the beneficial interest in the Series 2005-A Portfolio Assets, including the Retail Leases identified on the Schedule of Retail Leases to the Initial PSA Assignment delivered to the Issuer and the Related Titling Trust Assets with respect to those Retail Leases;

 

(c) the rights, but not the obligations, of NFC under the Lease Purchase Agreement and the Initial LPA Assignment with respect to the Retail Leases included in the Initial Receivables; and

 

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

 

In addition, on the Closing Date the Seller shall deposit the Reserve Account Initial Deposit into the Reserve Account, the Pre-Funding Account Initial Deposit into the Pre-Funding Account and the Negative Carry Account Initial Deposit into the Negative Carry Account. It is the intention of the Seller that the transfer and assignment contemplated by this Section 2.01 shall constitute a sale of the Initial Receivables, the Series 2005-A Portfolio Interest and the Series 2005-A Portfolio Certificate from 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. 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. 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 lease payments and principal and interest payments in respect of the Initial Receivables included in the assets conveyed pursuant to this Section 2.01 and all other monies payable under the Initial 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.

 

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SECTION 2.02 Conveyance of Subsequent Receivables . (a) Subject to satisfaction of the conditions set forth in Section 2.02(b) below, in consideration of the Issuer’s delivery on the related Subsequent Transfer Date to or upon the order of the Seller of the amount described in Section 8.11(a) of the Indenture to be delivered to the Seller, the Seller does hereby agree to sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse (except as provided in Section 2.06 , pursuant to an assignment in substantially the form of Exhibit C (a “ Subsequent Transfer PSA Assignment ”), all right, title and interest of the Seller in, to and under:

 

(i) the Retail Notes identified on the Schedule of Retail Notes to such Subsequent Transfer PSA Assignment delivered to the Issuer and the Related Retail Note Assets with respect to those Retail Notes;

 

(ii) the beneficial interest in the Series 2005-A Portfolio Assets, including the Retail Leases identified on the Schedule of Retail Leases to such Subsequent Transfer PSA Assignment delivered to the Issuer and the Related Titling Trust Assets with respect to those Retail Leases;

 

(iii) the rights, but not the obligations, of NFC under the Lease Purchase Agreement and the Subsequent LPA Assignment with respect to the Retail Leases included in those Subsequent Receivables; and

 

(iv) the rights, but not the obligations, of the Seller under the Purchase Agreement and the Subsequent Transfer PA Assignment pursuant to Section 2.01 of the Purchase Agreement with respect to those Subsequent Receivables.

 

It is the intention of the Seller that each transfer and assignment contemplated by this Section 2.02 shall constitute a sale of the related Subsequent Receivables from the Seller to the Issuer and the beneficial interest in and title to the assets conveyed pursuant to the Subsequent Transfer PSA Assignment 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 each Subsequent Transfer 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 the related Subsequent Transfer PSA Assignment received by the Seller pursuant to Section 5.07 of the Purchase Agreement. The Seller intends to treat each 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 any 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 the related Subsequent Transfer PSA Assignment, and the Seller hereby grants such security interest and (ii) the assets conveyed pursuant to such Subsequent Transfer PSA Assignment 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 such Subsequent Transfer PSA Assignment, including the immediate and continuing right to claim for, collect, receive and give receipt for lease payments and principal and interest payments in respect of the Subsequent

 

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Receivables included in the assets conveyed pursuant to such Subsequent Transfer PSA Assignment and all other monies payable under the Subsequent Receivables conveyed pursuant to such Subsequent Transfer PSA Assignment, 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 such Subsequent Transfer PSA Assignment. For purposes of such grant, each such Subsequent Transfer PSA Assignment, together with this Agreement, shall constitute a security agreement under the UCC.

 

(b) The Seller shall transfer to the Issuer Subsequent Receivables and the other property and rights related thereto described in Section 2.02(a) above only upon the satisfaction of each of the following conditions precedent on or prior to the related Subsequent Transfer Date:

 

(i) the Funding Period shall not have terminated;

 

(ii) each of the representations and warranties made by the Seller pursuant to Section 2.05 with respect to such Subsequent Receivables shall be true and correct as of the related Subsequent Transfer Date with the same effect as if then made, and the Seller shall have performed all obligations to be performed by it hereunder on or prior to such Subsequent Transfer Date;

 

(iii) the Seller shall have delivered to the Owner Trustee, the Indenture Trustee and the Rating Agencies a duly executed Subsequent Transfer PSA Assignment, including the Schedule of Retail Notes and the Schedule of Retail Leases included in such Subsequent Receivables (which schedules shall be deemed to supplement the existing Composite Schedule of Receivables in effect at such time);

 

(iv) the applicable Reserve Account Subsequent Transfer Deposit for such Subsequent Transfer Date shall have been deposited in the Reserve Account pursuant to Section 8.10(a) of the Indenture;

 

(v) the Seller shall, at its own expense, on or prior to each Subsequent Transfer Date indicate in its computer files that the Subsequent Receivables conveyed on such date have been sold to the Issuer pursuant to this Agreement and the related Subsequent Transfer PSA Assignment;

 

(vi) the Seller shall have taken any action required to maintain the first priority perfected ownership interest of the Issuer in the Owner Trust Estate and the first priority perfected security interest of the Indenture Trustee in the Collateral;

 

(vii) The Receivables in the Trust (after giving effect to the conveyance of the Subsequent Receivables to the Trust on such Subsequent Transfer Date) shall meet the following criteria: (A) the weighted average Annual Percentage Rate of the Receivables in the Trust shall not be less than 7.33%, (B) the weighted average remaining maturity of the Receivables in the Trust shall not be greater than 58

 

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months, (C) the aggregate Receivable Balance of all Receivables owing from a single Obligor shall not exceed 2.00% of the aggregate Receivables Balance of all Receivables in the Trust, (D) the aggregate Starting Receivables Balance of all Retail Leases in the Trust shall not exceed 10.00% of the Aggregate Starting Receivables Balance, (E) the aggregate Starting Receivables Balance of all Receivables not originated by NFC or one of its Affiliates shall not exceed 3.00% of the Aggregate Starting Receivables Balance, (F) the aggregate Starting Receivables Balance of all Receivables that are Eligible Restructured Receivables shall not exceed 5.00% of the Aggregate Starting Receivables Balance and (G) the aggregate Starting Receivables Balance of all Receivables having a remaining term in excess of 72 months as of the applicable Cutoff Date shall not exceed 10.00% of the Aggregate Starting Receivables Balance;

 

(viii) the Seller shall have delivered to the Indenture Trustee and the Owner Trustee an Officers’ Certificate confirming the satisfaction of the conditions specified in this Section 2.02(b) ;

 

(ix) the Seller shall have delivered to the Trust, the Indenture Trustee and the Rating Agencies an Opinion of Counsel with respect to the transfer of such Subsequent Receivables substantially in the form of the Opinion of Counsel delivered to the Rating Agencies on the Closing Date;

 

(x) the Seller shall have delivered to the Owner Trustee and the Indenture Trustee written confirmation from an independent public accounting firm that, as of the applicable Subsequent Cutoff Date, such Subsequent Receivables satisfied the eligibility criteria described in Sections 3.01(a)(iv), (a)(v), (s), (t), (w), and (x) of the Purchase Agreement; and

 

(xi) Each Retail Lease has been allocated to the Series 2005-A Portfolio Interest in accordance with the terms of the Titling Trust Documents.

 

(c) The Seller covenants to transfer to the Issuer pursuant to Section 2.02(a) before the termination of the Funding Period, Subsequent Receivables with an aggregate Starting Receivable Balance equal to the amount of $365,004,150.91.

 

SECTION 2.03 Custody of Receivable Files . In connection with the sale, transfer and assignment of Receivables 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 Initial Receivable, and as of the related Subsequent Transfer Date with respect to each Subsequent Receivable:

 

(a) the fully executed original of the Retail Note or Retail Lease for such Receivable;

 

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(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) if such Receivable is a Retail Note, 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;

 

(e) if such Receivable is a Retail Lease, the Certificate of Title and such other documents that NFC is required to maintain pursuant to Section 3.6 of the Titling Trust Servicing Agreement; and

 

(f) 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 consideration conveyed by the Seller pursuant to Sections 2.01 and 2.02 , 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, the Indenture and this Agreement; 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 hereunder and, with respect to the Retail Notes and Related Retail Note Assets, by NFC to NFRRC under the Purchase Agreement and from NFRRC to the Issuer hereunder and with respect to Retail Leases and Related Titling Trust Assets, by Harco Leasing to NFC under the Lease Purchase Agreement, from NFC to NFRRC under the Purchase Agreement and from NFRRC to the Issuer hereunder, (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 each 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 Sections 2.01(d) and 2.02(a)(iv) , 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, in the case of the Initial Receivables, and as of the related Subsequent Transfer Date, in the case of Subsequent Receivables. 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, the

 

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Series 2005-A Portfolio Interest and the Series 2005-A Portfolio Certificate in trust and executing and delivering the Securities. The foregoing representation and warranty speaks as of the Closing Date, in the case of the Initial Receivables, and as of the related Subsequent Transfer Date, in the case of Subsequent Receivables, but shall survive the sale, transfer and assignment of the Receivables, the Series 2005-A Portfolio Interest and the Series 2005-A Portfolio Certificate 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 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 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 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. 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, NFC or Harco Leasing 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, the Series 2005-A Portfolio Interest and the Series 2005-A Portfolio Certificate hereunder and issuing the Securities under the other Further Transfer and Servicing Agreements. The following representations and warranties speak as of the Closing Date in the case of the Initial Receivables and as of the applicable Subsequent Transfer Date in the case of the Subsequent Receivables, but in each case shall survive the sale, transfer and assignment of such 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;

 

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(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 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, when duly executed and delivered, shall 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 the applicable Further Transfer and Servicing Agreements, any Securities issued pursuant thereto and 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;

 

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(g) Good Title . On the date hereof, the Seller has good title to the Series 2005-A Portfolio Interest and the Series 2005-A Portfolio Certificate, free and clear of all Liens (other than Permitted Liens). On the date hereof, upon execution and delivery of this Agreement and the related PSA Assignment by the Seller, good and valid title to the Series 2005-A Portfolio Interest and the Series 2005-A Portfolio Certificate will be validly and effectively conveyed to, and vested in, the Issuer, free and clear of all Liens, other than Permitted Liens, and the transfer of the Series 2005-A Portfolio Interest and the Series 2005-A Portfolio Certificate by the Seller to the Issuer has been perfected. On the date hereof, the Seller has good title to each Retail Note free and clear of all Liens (other than Permitted Liens and Liens that will be released as of such transfer). On the date hereof, good and valid title to each such Retail Note will be validly and effectively conveyed to, and vested in, the Issuer, free and clear of all Liens, other than Permitted Liens, and the transfer of such Retail Note 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 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 Initial PSA Assignment constitute, and each Subsequent Transfer PSA Assignment when duly executed and delivered shall 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 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 3.03 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

 

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Incorporation without obtaining the prior written consent of the Rating Agencies 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.

 

ARTICLE IV

TERMINATION

 

SECTION 4.01 Optional Purchase of All Receivables . On the last day of any Monthly Period as of which (i) the Aggregate Receivables Balance is 10% or less of the Aggregate Starting Receivables Balance and (ii) the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes have been paid in full, 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 and each Trustee. 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 and each Trustee; provided, 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

 

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outstanding Notes to be redeemed with such proceeds 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 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, 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 Noteholders and the Servicer of all amounts required to be paid under this Agreement and the Indenture, 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 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.

 

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, but without the consent of any of the Financial Parties, (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 the Certificateholders differently than any other class of Noteholders or the 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 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 Financial Parties.

 

(b) This Agreement may also be amended from time to time by the Seller and the Issuer 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 Controlling Class as of the close of the preceding Distribution Date and the consent of Certificateholders whose Certificates evidence not less than a majority of the ownership interest in the Trust as of the close of the

 

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preceding Distribution Date (which consents, whether given pursuant to this Section 5.01 or pursuant to any other provision of this Agreement, shall be conclusive and binding on such Person and on all future holders of such Notes or Certificates and of any Notes or Certificates issued upon the transfer thereof or in exchange thereof or in lieu thereof whether or not notation of such consent is made upon the Notes or Certificates) 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 Financial Parties; 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 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 5.06 ) 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 Controlling Class as of the preceding Distribution Date or of the Holders of Certificates evidencing greater than a majority of the ownership interest in the Trust as of the preceding Distribution Date, in each case without the consent of the Indenture Trustee and the numbers of Financial Parties described in such Section.

 

(c) Prior to the execution of any such amendment or consent, the Indenture Trustee shall furnish written notification to the Rating Agencies 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) It shall not be necessary for the consent of Financial Parties pursuant to Section 5.01(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 Financial Parties provided for in this Agreement) and of evidencing the authorization of the execution thereof by Financial Parties shall be subject to such reasonable requirements as either Trustee may prescribe, including the establishment of record dates pursuant to paragraph number 3 of the Note Depository Agreement.

 

(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 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.

 

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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 as may be required by law fully to preserve, maintain and protect the interest of the Issuer under this Agreement in the Receivables, the Series 2005-A Portfolio Interest and the Series 2005-A Portfolio Certificate and the Indenture Trustee’s security interest in the Receivables, the Series 2005-A Portfolio Interest and the Portfolio Certificate under the Indenture and hereby authorizes the Issuer to file such financing statements or continuation statements relating to all or any part thereof; provided , however , that, with respect to a Retail Lease, the Seller shall not be obligated to transfer the titles to any Financed Vehicle. The Seller shall deliver (or cause to be delivered) to the Owner Trustee 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 at least 60 days prior written notice thereof.

 

(c) The Seller shall give each Trustee 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. 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.

 

(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 prospective purchaser, lender or other transferee, the Seller shall give to such prospective

 

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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 Composite Schedule of Receivables 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 Composite Schedule of Receivables 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 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, the Series 2005-A Portfolio Interest and the Series 2005-A Portfolio Certificate 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 Notes 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 5.03 Notices . All demands, notices and communications upon or to the Seller either Trustee or the Rating Agencies 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 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.

 

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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 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 Controlling Class as of the close of the preceding Distribution Date and of Holders of Certificates evidencing not less than 66% of the ownership interest in the Trust as of the close of the preceding Distribution Date. The Seller shall provide notice of any such assignment to the Rating Agencies.

 

SECTION 5.07 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 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 Noteholders and (only to the extent expressly provided therein) the Certificateholders 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.

 

SECTION 5.11 No Petition Covenants; Waiver of Claims .

 

(a) Notwithstanding any prior termination of this Agreement 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.

 

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(b) Notwithstanding any prior termination of the Series 2005-A Portfolio Supplement, the Issuer covenants and agrees that it shall not, prior to the date which is one year and a day after which all obligations under each Permitted Financing have been paid in full, acquiesce, petition or otherwise invoke, or join any other Person in acquiescing, petitioning or otherwise invoking, against the Titling Trust or any Special Purpose Entity, any proceeding in court or with any governmental authority for the purpose of (i) commencing or sustaining a case against the Titling Trust or such Special Purpose Entity under any federal or state bankruptcy, insolvency or similar law, or (ii) appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of all or any substantial part of the respective property of the Titling Trust or such Special Purpose Entity, or (iii) ordering the winding up or liquidation of the affairs of the Titling Trust or such Special Purpose Entity.

 

(c) Except as otherwise provided in the Titling Trust Agreement, as may be amended, restated and supplemented from time to time, the Issuer hereby releases all Claims to the Titling Trust Assets allocated to the General Interest and to each Portfolio Interest other than the Series 2005-A Portfolio Interest whether then or thereafter created and, in the event that such release is not given effect, to fully subordinate all Claims it may be deemed to have against the Titling Trust Assets allocated to the General Interest and each Portfolio Interest other than the Series 2005-A Portfolio Interest whether then or thereafter created.

 

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.

 

*    *    *    *    *

 

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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/ Jonathan Farber
Name:		Jonathan Farber
Title:		Assistant Vice President
NAVISTAR FINANCIAL CORPORATION, as Servicer
By:		/s/ Andrew J. Cederoth
Name:		Andrew J. Cederoth
Title:		Vice President and Treasurer

EXHIBIT A

Locations of Composite Schedule of Receivables

 

The Composite 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

 

A-1

EXHIBIT B

 

Form of Initial PSA Assignment

 

For value received, in accordance with the Pooling Agreement, dated as of July 27, 2005 (the “Pooling Agreement”), between Navistar Financial Retail Receivables Corporation, a Delaware corporation (the “Seller”) and Navistar Financial 2005-A 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 (a) the Retail Notes identified on the Schedule of Retail Notes attached hereto having an aggregate Starting Receivable Balance of $364,631,460.80 and the Related Retail Note Assets with respect to those Retail Notes; (b) the Series 2005-A Portfolio Interest, the Series 2005-A Portfolio Certificate and the beneficial interest in the Series 2005-A Portfolio Assets, including the Retail Leases identified on the Schedule of Retail Leases attached hereto having an aggregate Starting Receivable Balance of $20,364,388.29 and the Related Titling Trust Assets with respect to those Retail Leases; (c) the rights, but not the obligations, of NFC under the Lease Purchase Agreement with respect to the Retail Leases included in the Initial Receivables; and (d) the Seller’s rights, but not its obligations, under the Purchase Agreement and the Initial PA Assignment pursuant to Section 2.01 of the Purchase Agreement with respect to the Initial 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 to the Obligors, Dealers, insurers or any other Person in connection with the Initial Receivables, the agreements with Dealers, any Insurance Policies or any agreement or instrument relating to any of them.

 

This Initial 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.

 

*    *    *    *    *

 

B-1

IN WITNESS WHEREOF, the undersigned has caused this Initial PSA Assignment to be duly executed as of July 27, 2005.

 

 

B-2

EXHIBIT C

 

Form of Subsequent Transfer PSA Assignment

 

For value received, in accordance with the Pooling Agreement, dated as of July 27, 2005 (the “Pooling Agreement”), between Navistar Financial Retail Receivables Corporation, a Delaware corporation (the “Seller”), and Navistar Financial 2005-A 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 (a) the Retail Notes identified on the Schedule of Retail Notes attached hereto (which shall supplement the Composite Schedule of Receivables) having an aggregate Starting Receivable Balance of $              and the Related Retail Note Assets with respect to those Retail Notes; (b) the beneficial interest in the Series 2005-A Portfolio Assets, including the Retail Leases identified on the Schedule of Retail Leases attached hereto (which shall supplement the Composite Schedule of Receivables) having an aggregate Starting Receivable Balance of $              and the Related Titling Trust Assets with respect to those Retail Leases; (c) the rights, but not the obligations, of NFC under the Lease Purchase Agreement with respect to the Retail Leases included in those Subsequent Receivables; and (d) the Seller’s rights, but not its obligations, under the Purchase Agreement and the Subsequent Transfer PA Assignment pursuant to Section 2.01 of the Purchase Agreement with respect to those Subsequent 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 to the Obligors, Dealers, insurers or any other Person in connection with the Subsequent Receivables assigned hereby, the agreements with Dealers, any Insurance Policies or any agreement or instrument relating to any of them.

 

This Subsequent Transfer 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 Subsequent Transfer PSA Assignment to be duly executed as of                          , 200    .