SERVICING AGREEMENT

Exhibit 10.6

EXECUTION COPY

SERVICING AGREEMENT

AMONG

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION,

THE BANK OF NEW YORK MELLON

AS INDENTURE TRUSTEE,

NAVISTAR FINANCIAL 2008-B OWNER TRUST,

AS ISSUER

AND

NAVISTAR FINANCIAL CORPORATION,

AS SERVICER

DATED AS OF JULY 28, 2008

TABLE OF CONTENTS

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SERVICING AGREEMENT

SERVICING AGREEMENT, dated as of July 28, 2008 (as it may be further amended, supplemented or modified, this “ Agreement ”), among Navistar Financial Retail Receivables Corporation, a Delaware corporation (“ NFRRC ”), Navistar Financial 2008-B Owner Trust, a Delaware statutory trust (the “ Issuer ”), Navistar Financial Corporation, a Delaware corporation (hereinafter, together with its successors and assigns, “ NFC ” or, in its capacity as servicer hereunder, the “ Servicer ”), and The Bank of New York Mellon, a New York banking corporation, acting in its capacity as Indenture Trustee pursuant to the Indenture (the “ Indenture Trustee ”).

R E C I T A L S :

WHEREAS, NFRRC and NFC are parties to the Purchase Agreement, pursuant to which NFRRC will purchase from time to time the Designated Receivables and the Related Security with respect thereto from NFC;

WHEREAS, the Issuer will issue Notes pursuant to the Indenture between the Issuer and the Indenture Trustee, and exchange the Notes and the Certificates for the Receivables and the Related Security with respect thereto transferred from time to time by NFRRC pursuant to the Pooling Agreement;

WHEREAS, the Servicer desires to perform the servicing obligations set forth herein relating to the Receivables and the Related Security owned by the Issuer for and in consideration of the fees and other benefits set forth in this Agreement; and

WHEREAS, the parties wish to set forth the terms and conditions upon which the Receivables are to be serviced by the Servicer.

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

ARTICLE I

DEFINITIONS

SECTION 1.01 Certain Defined Terms . Capitalized terms used in the above recitals and in this Agreement shall have the respective meanings assigned them in Part I of Appendix A to the Pooling Agreement dated as of the date hereof between the Issuer and NFRRC (as it may be amended, supplemented or modified from time to time) unless otherwise defined herein. The rules of construction set forth in Part II of Appendix A to the Pooling Agreement shall be applicable to this Agreement.

ARTICLE II

ADMINISTRATION AND SERVICING OF RECEIVABLES

SECTION 2.01 Duties of the Servicer . The Servicer is hereby appointed and authorized to act as a contractor of the Owner and the Indenture Trustee with respect to servicing the

Receivables and in such capacity shall manage, service, administer and make collections on the Receivables with reasonable care, using that degree of skill and attention that the Servicer exercises with respect to comparable medium and heavy duty truck, truck chassis, bus and trailer receivables that it services for itself or others. The Servicer hereby accepts such appointment and authorization and agrees to perform the duties of Servicer with respect to the Receivables set forth herein. The Servicer’s duties with respect to all Receivables shall include collection and posting of all payments, responding to inquiries of Obligors on the Receivables, investigating delinquencies, sending payment coupons to Obligors, reporting tax information to Obligors, policing the collateral securing the Receivables, accounting for collections with respect thereto and performing the other duties specified herein. Subject to the provisions of Section 2.02 , the Servicer shall follow its customary standards, policies and procedures and shall have full power and authority, acting alone, to do any and all things in connection with such managing, servicing, administration and collection that it may deem necessary or desirable.

Without limiting the generality of the foregoing, the Servicer is hereby authorized and empowered by the Owner and the Indenture Trustee pursuant to this Section 2.01 , to execute and deliver any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Receivables and the related Financed Vehicles. The Servicer is hereby authorized to commence in the name of the Owner or, to the extent necessary, in its own name, a legal proceeding to enforce a Liquidating Receivable as contemplated by Section 2.04 , and to commence or participate in any legal proceeding (including a bankruptcy proceeding) relating to or involving a Receivable (including a Liquidating Receivable). If the Servicer commences or participates in any such legal proceeding in its own name, the Owner thereupon shall be deemed to have automatically assigned such Receivable to the Servicer solely for purposes of commencing and participating in any such proceeding as a party or claimant, and the Servicer is hereby authorized and empowered by the Owner, to execute and deliver in the Servicer’s name any notices, demands, claims, complaints, responses, affidavits or other documents or instruments in connection with any such proceeding. If in any proceeding it is held that the Servicer may not enforce a Receivable on the ground that it is not a real party in interest or a holder entitled to enforce the Receivable, the Owner shall, at the Servicer’s expense and written directions, take such reasonable steps as the Servicer reasonably deems necessary to enforce the Receivable, including bringing suit in the name of such Person. The Owner, upon the written request of the Servicer, shall furnish the Servicer with any powers of attorney and other documents and take any other steps which the Servicer may reasonably deem necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties under this Agreement and the other Basic Documents. Except to the extent required by the preceding three sentences, the authority and rights granted to the Servicer in this Section 2.01 shall be nonexclusive and shall not be construed to be in derogation of any equivalent authority and rights of the Owner.

SECTION 2.02 Establishment of Accounts .

(a) (i) The Servicer, for the benefit of the Financial Parties (including the Swap Counterparty), shall establish and maintain in the name of the Indenture Trustee an Eligible Deposit Account known as the Navistar Financial 2008-B Owner Trust Collection Account (the “ Collection Account ”), bearing an additional designation clearly indicating that the funds deposited therein are held for the benefit of the Financial Parties.

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(ii) The Servicer, for the benefit of the Noteholders, shall establish and maintain in the name of the Indenture Trustee an Eligible Deposit Account known as the Navistar Financial 2008-B Owner Trust Note Distribution Account (the “ Note Distribution Account ” ), bearing an additional designation clearly indicating that the funds deposited therein are held for the benefit of the Noteholders.

(iii) Pursuant to the Trust Agreement, the Servicer, for the benefit of the Certificateholders, shall establish and maintain in the name of the Trust an Eligible Deposit Account known as the Navistar Financial 2008-B Owner Trust Certificate Distribution Account (the “ Certificate Distribution Account ”), bearing an additional designation clearly indicating that the funds deposited therein are held for the benefit of the Certificateholders.

(iv) The Servicer, for the benefit of the Financial Parties (including the Swap Counterparty), shall establish and maintain in the name of the Indenture Trustee an Eligible Deposit Account known as the Navistar Financial 2008-B Owner Trust Reserve Account (the “ Reserve Account ”), bearing an additional designation clearly indicating that the funds deposited therein are held for the benefit of such Financial Parties.

(b) (i) Each of the Designated Accounts shall be initially established with the Indenture Trustee and shall be maintained with the Indenture Trustee so long as (A) the short-term unsecured debt obligations of the Indenture Trustee have the Required Deposit Rating or (B) each of the Designated Accounts qualifies as an Eligible Deposit Account. All amounts held in such accounts (including amounts, if any, which the Servicer is required to remit daily to the Collection Account pursuant to Section 2.11 ) shall, to the extent permitted by applicable laws, rules and regulations, be invested, at the written direction of the Servicer, by such bank or trust company in Eligible Investments; provided , that funds in the Collection Account in an amount not in excess of 20% of the Aggregate Receivables Balance as of the preceding Accounting Date may be invested in investments which have a rating from S&P of “A-1” rather than “A-1+,” if such investments otherwise constitute Eligible Investments. Such written direction shall constitute certification by the Servicer that any such investment is authorized by this Section 2.02 . Funds deposited in the Reserve Account shall be invested in Eligible Investments which mature prior to the next Distribution Date; provided , that such investments may mature on a later date if the Agent consents or upon satisfaction of the Rating Agency Condition. Investments in Eligible Investments shall be made in the name of the Indenture Trustee or its nominee, and such investments shall not be sold or disposed of prior to their maturity. Should the short-term unsecured debt obligations of the Indenture Trustee (or any other bank or trust company with which the Designated Accounts are maintained) no longer have the Required Deposit Rating, then the Servicer shall within 10 Business Days (or such longer period, not to exceed 30 calendar days, with consent of the Agent or upon satisfaction of the Rating Agency Condition with respect thereto), with the Indenture Trustee’s assistance as necessary, cause the Designated Accounts (A) to be moved to a bank or trust company, the short-term unsecured debt obligations of which shall have the Required Deposit Rating, or (B) to be moved to an Eligible Deposit Account. Investment Earnings on funds deposited in the Designated Accounts shall be deposited into the Collection Account for distribution in accordance with Section 8.2 of the Indenture. The Indenture Trustee or the other Person holding the Designated Accounts as provided in this Section 2.02(b)(i) shall be the “ Securities Intermediary .” If the Securities Intermediary shall be a Person other than the Indenture Trustee,

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the Servicer shall obtain the express agreement of such Person to the obligations of the Securities Intermediary set forth in this Section 2.02 .

(ii) With respect to the Designated Account Property, the Securities Intermediary agrees, by its acceptance hereof, that:

(A) The Designated Accounts are accounts to which Financial Assets will be credited.

(B) All securities or other property underlying any Financial Assets credited to the Designated Accounts shall be registered in the name of the Securities Intermediary, indorsed to the Securities Intermediary or in blank or credited to another securities account maintained in the name of the Securities Intermediary, and in no case will any Financial Asset credited to any of the Designated Accounts be registered in the name of the Issuer, the Servicer or the Seller, payable to the order of the Issuer, the Servicer or the Seller or specially endorsed to the Issuer, the Servicer or the Seller except to the extent the foregoing have been specially indorsed to the Securities Intermediary or in blank.

(C) All property delivered to the Securities Intermediary pursuant to this Agreement will be promptly credited to the appropriate Designated Account.

(D) Each item of property (whether investment property, Financial Asset, security, instrument or cash) credited to a Designated Account shall be treated as a “financial asset” within the meaning of Section 8-102(a)(9) of the New York UCC.

(E) If at any time the Securities Intermediary shall receive any order from the Indenture Trustee directing transfer or redemption of any Financial Asset relating to the Designated Accounts, the Securities Intermediary shall comply with such entitlement order without further consent by the Issuer, the Servicer, the Seller or any other Person.

(F) The Designated Accounts shall be governed by the laws of the State of New York, regardless of any provision in any other agreement. For purposes of the UCC, New York shall be deemed to be the Securities Intermediary’s jurisdiction and the Designated Accounts (as well as the Securities Entitlements related thereto) shall be governed by the laws of the State of New York.

(G) The Securities Intermediary has not entered into, and until the termination of this Agreement will not enter into, any agreement with any other person relating to the Designated Accounts and/or any Financial Assets credited thereto pursuant to which it has agreed to comply with entitlement orders (as defined in Section 8-102(a)(8) of the New York UCC) of such other person and the Securities Intermediary has not entered into, and until the termination of this Agreement will not enter into, any agreement with the Issuer, the Seller, the

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Servicer, the Indenture Trustee or the Swap Counterparty purporting to limit or condition the obligation of the Securities Intermediary to comply with entitlement orders as set forth in Section 2.02(b)(ii)(E) .

(H) Except for the claims and interest of the Indenture Trustee and of the Issuer in the Designated Accounts, the Securities Intermediary knows of no claim to, or interest in, the Designated Accounts or in any Financial Asset credited thereto. If any other person asserts any lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Designated Accounts or in any Financial Asset carried therein, the Securities Intermediary will promptly notify the Indenture Trustee, the Servicer, the Agent, the Swap Counterparty and the Issuer.

(I) The Securities Intermediary will promptly send copies of all statements, confirmations and other correspondence concerning the Designated Accounts and/or any Designated Account Property simultaneously to each of the Servicer, the Indenture Trustee and the Agent at the addresses set forth in Appendix B to the Pooling Agreement.

(iii) The Servicer shall have the power, revocable by the Indenture Trustee (or by the Issuer with the consent of the Indenture Trustee) to instruct the Indenture Trustee to make withdrawals and payments from the Designated Accounts for the purpose of permitting the Servicer or the Issuer to carry out its respective duties hereunder or permitting the Indenture Trustee to carry out its duties under the Indenture.

(iv) The Indenture Trustee shall possess all right, title and interest in and to all funds on deposit from time to time in the Designated Accounts and in all proceeds thereof. Except as otherwise provided herein or in the Indenture, the Designated Accounts shall be under the sole dominion and control of the Indenture Trustee for the benefit of the Financial Parties (including the Swap Counterparty in the case of the Collection Account and the Reserve Account).

(v) The Servicer shall not direct the Indenture Trustee to make any investment of any funds or to sell any investment held in any of the Designated Accounts unless the security interest granted and perfected in such account shall continue to be perfected in such investment or the proceeds of such sale, in either case without any further action by any Person, and, in connection with any direction to the Indenture Trustee to make any such investment or sale, if requested by the Indenture Trustee, the Servicer shall deliver to the Indenture Trustee an Opinion of Counsel, acceptable to the Indenture Trustee, to such effect.

(c) Pursuant to the Trust Agreement, the Issuer shall possess all right, title and interest in and to all funds on deposit from time to time in the Certificate Distribution Account and in all proceeds thereof. Except as otherwise provided herein or in the Trust Agreement, the Certificate Distribution Account shall be under the sole dominion and control of the Issuer for the benefit of the Certificateholders. If, at any time, the Certificate Distribution Account ceases to be an Eligible Deposit Account, the Servicer shall within 10 Business Days (or such longer period, not to exceed 30 calendar days, as to which the Certificateholders or each Rating Agency

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may consent) establish a new Certificate Distribution Account as an Eligible Deposit Account and shall cause the Issuer to transfer any cash and/or any investments in the old Certificate Distribution Account to such new Certificate Distribution Account.

(d) The Indenture Trustee, the Issuer, the Securities Intermediary and each other Eligible Deposit Institution with whom a Designated Account or the Certificate Distribution Account is maintained waives any right of set-off, counterclaim, security interest or bankers’ lien to which it might otherwise be entitled.

SECTION 2.03 Collection of Receivables Payments . The Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Receivables as and when the same shall become due, and shall follow such collection practices, policies and procedures as it follows with respect to comparable medium and heavy duty truck, truck chassis, bus and trailer receivables that it services for itself or others. Except as provided in Section 2.07(c) , the Servicer is hereby authorized to grant extensions, rebates or adjustments on a Receivable without the prior consent of the Owner of such Receivable and to rewrite, in the ordinary course of its business, a Receivable to reflect the Full Prepayment of a Receivable with respect to any related Financed Vehicle without the prior consent of the Owner of such Receivable. The Servicer is authorized in its discretion to waive any prepayment charge, late payment charge or any other fees that may be collected in the ordinary course of servicing such Receivable. Subject to Section 2.13 of this Agreement, the Servicer shall allocate payments on Receivables between principal and interest in accordance with the customary servicing procedures it follows with respect to all comparable medium and heavy duty truck, truck chassis, bus and trailer receivables that it services for itself or others.

SECTION 2.04 Realization Upon Liquidating Receivables .

(a) The Servicer shall use commercially reasonable efforts, consistent with its customary servicing procedures, to repossess or otherwise comparably convert the ownership or otherwise take possession of each Financed Vehicle that it has reasonably determined should be repossessed or otherwise converted following a default under the Receivable secured by or relating to each such Financed Vehicle. The Servicer is authorized to follow such practices, policies and procedures as it shall deem necessary or advisable and as shall be customary and usual in its servicing of medium and heavy duty truck, truck chassis, bus and trailer receivables that it services for itself or others, which practices, policies and procedures may include reasonable efforts to realize upon or obtain benefits of any proceeds from any Dealer Liability, proceeds from any International Purchase Obligations, proceeds from any Insurance Policies and proceeds from any Guaranties, in each case with respect to the Receivables, selling the related Financed Vehicle or Vehicles at public or private sale or sales and other actions by the Servicer in order to realize upon any Receivable. The foregoing is subject to the provision that, in any case in which the Financed Vehicle shall have suffered damage, the Servicer shall not expend funds in connection with any repair or towards the repossession of such Financed Vehicle unless it shall determine in its discretion that such repair or repossession shall increase the proceeds of liquidation of the related Receivable by an amount greater than or equal to the amount of such expenses. The Servicer shall be entitled to receive Liquidation Expenses with respect to each Liquidating Receivable at such time as the Receivable becomes a Liquidating Receivable in accordance with Section 8.2(b)(i) of the Indenture.

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(b) The Servicer shall pay all costs, expenses and liabilities incurred by it in connection with any action taken in respect of a Financed Vehicle; provided , however , that it shall be entitled to reimbursement of such costs and expenses to the extent they constitute Liquidation Expenses or expenses recoverable under an applicable Insurance Policy.

SECTION 2.05 Maintenance of Insurance Policies . The Servicer shall, in accordance with its customary servicing procedures, require that each Obligor under a Receivable shall have obtained physical damage insurance covering each Financed Vehicle as of the execution of such Receivable, unless the Servicer has in accordance with its customary procedures permitted an Obligor to self-insure the Financed Vehicle or Financed Vehicles securing such Receivable. The Servicer shall, in accordance with its customary servicing procedures, monitor such physical damage insurance with respect to each Financed Vehicle that secures or is related to each Receivable.

SECTION 2.06 Maintenance of Security Interests in Vehicles . The Servicer shall, in accordance with its customary servicing procedures and at its own expense, promptly take such steps as are necessary to maintain perfection of the first priority security interest created by a Receivable in the related Financed Vehicle or Financed Vehicles. The Owner of each Receivable hereby authorizes the Servicer to re-perfect such security interests as necessary because of the relocation of a Financed Vehicle or for any other reason.

SECTION 2.07 Covenants of the Servicer . The Servicer hereby makes the following covenants on which the Issuer is relying in acquiring the Receivables from time to time under the Pooling Agreement and issuing the Securities under the Further Transfer and Servicing Agreements:

(a) except as contemplated by the other Basic Documents, the Servicer shall not release any Financed Vehicle from the security or ownership interest securing the related Receivable;

(b) the Servicer shall do nothing to impair the rights of NFRRC, the Issuer, the Securityholders or the Indenture Trustee in and to such Receivables;

(c) the Servicer shall not amend or otherwise modify any Receivable such that the Starting Receivable Balance, the Annual Percentage Rate or the total number of Scheduled Payments is altered or such that the final scheduled payment on such Receivable will be due any later than September 30, 2015; and

(d) other than solely for the purpose of collecting or enforcing the Receivables for the benefit of the Owner, (i) the Servicer shall not at any time have or in any way attempt to assert any interest in any Receivables or Related Assets or records related to the Collateral and (ii) the entire legal and equitable interest of the Owner of a Receivable in such Receivable and the Related Assets shall at all times be vested in such Owner.

SECTION 2.08 Purchase of Receivables Upon Breach of Covenant .

(a) Upon discovery by the Servicer or any of the Interested Parties of a breach of any of the covenants set forth in Sections 2.06 and 2.07 with respect to any Receivable, the

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party discovering such breach shall give prompt written notice thereof to the others. As of the second Accounting Date (or, at the Servicer’s election, the first Accounting Date) following notice to or discovery by the Servicer of a breach of any covenant of the Servicer that materially and adversely affects any Receivable, unless such breach is cured in all material respects, the Servicer shall, with respect to such Receivable (an “ Administrative Receivable ”) purchase such Administrative Receivable from the Issuer at a price equal to the Administrative Purchase Payment. The Servicer shall pay the Administrative Purchase Payment as described in Section 2.11 .

It is understood and agreed that the obligation of the Servicer to purchase any Receivable with respect to which such a breach has occurred and is continuing shall, if such obligation is fulfilled, constitute the sole remedy against the Servicer for such breach available to any Interested Party for any such uncured breach.

(b) Upon receipt of the Administrative Purchase Payment with respect to a Receivable which is an Administrative Receivable, the applicable Owner shall assign, without recourse, representation or warranty, to the Servicer (and shall take such other actions as the Servicer may reasonably request in writing to perfect or confirm such assignment) all of such Person’s right, title and interest in, to and under (i) such Administrative Receivable and all monies due thereon and (ii) all Related Security with respect to such Administrative Receivable, such assignment being an assignment outright and not for security. Upon the assignment of such Administrative Receivable described in the preceding sentence, the Servicer shall own such Administrative Receivable, and all such Related Security, free of any further obligations to such Person with respect thereto.

SECTION 2.09 Servicing Fee . In consideration for its services hereunder and as compensation for expenses paid as contemplated by Section 2.10 , the Servicer shall be entitled to receive on each Distribution Date a servicing fee (the “ Basic Servicing Fee ”) for the related Monthly Period equal to one-twelfth of 1% (the “ Basic Servicing Fee Rate ”) multiplied by the Aggregate Receivables Balance as of the last day of the preceding Monthly Period. On each Distribution Date, the Servicer will be paid the Basic Servicing Fee and any unpaid Basic Servicing Fees from all prior Distribution Dates (collectively, the “ Total Servicing Fee ”) pursuant to Section 8.2(c) of the Indenture to the extent of funds available therefor. In addition, the Servicer will be entitled to receive any late fees, prepayment charges or certain similar fees and charges collected during a Monthly Period (the “ Supplemental Servicing Fee ”). The Servicer shall retain all Supplemental Servicing Fees and shall not be obligated to deposit them into the Collection Account.

SECTION 2.10 Servicer Expenses . The Servicer shall be required to pay all expenses incurred by it in connection with its activities hereunder, including fees and disbursements of the Issuer, any trustees and independent accountants, taxes imposed on the Servicer and expenses incurred in connection with distributions and reports and all other fees and expenses not expressly stated under this Agreement to be for the account of the Interested Parties, but excluding federal, state and local income taxes, if any, of the Issuer or any Securityholder.

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SECTION 2.11 Deposits to Collection Account . The Servicer shall remit to the Indenture Trustee for deposit to the Collection Account all Collections it receives during each Monthly Period within two Business Days after receipt thereof; provided , however , that if the Servicer receives Collections from an unidentified source, then the Servicer shall remit such Collections within two Business Days after identification thereof. However, Collections received (i) during the period from the Initial Cutoff Date to the Closing Date and (ii) during the period from the Subsequent Cutoff Date to the Subsequent Transfer Date, shall be deposited to the Collection Account within 48 hours after the Closing Date or the Subsequent Transfer Date, as applicable. The Servicer shall remit to the Indenture Trustee for deposit (in immediately available funds) in the Collection Account the aggregate Administrative Purchase Payments with respect to Administrative Receivables to be purchased as of the last day of any Monthly Period on the Business Day immediately preceding the immediately succeeding Distribution Date.

SECTION 2.12 Collections . In the event that:

(a) NFC is the Servicer,

(b) a Servicer Default shall not have occurred and be continuing, and

(c) (i) the Servicer satisfies the requirements for monthly remittances of Collections established by each Rating Agency, and upon satisfaction of such requirements, each Rating Agency reaffirms the rating of the Notes at the level at which they would be rated if Collections were remitted within two Business Days of receipt,

(ii) the short-term unsecured debt of the Servicer is rated at least “A-1” by S&P and “P-1” by Moody’s, or

(iii) a standby letter of credit has been issued by an Eligible Institution which, as of each date during the period that the Servicer is making monthly remittances of Collections, has an undrawn amount at least equal to 150% of all Scheduled Payments due in respect of the Receivables for the latest Monthly Period ended prior to the next succeeding Distribution Date (and the aggregate amount of unremitted Collections does not at any time exceed 90% of the undrawn amount of such letter of credit),

then, the Servicer shall not be required to deposit Collections into the Collection Account until the Business Day preceding the Distribution Date following the Monthly Period during which such Collections were received. Pending deposit into the Collection Account, Collections may be employed by the Servicer at its own risk and for its own benefit and will not be segregated from its own funds.

SECTION 2.13 Application of Collections . For the purposes of this Agreement, all Collections for the related Monthly Period with respect to each Receivable shall be applied by the Servicer as follows:

(a) all payments by or on behalf of the Obligor or other collections on a Receivable (including Warranty Payments and Administrative Purchase Payments but excluding Supplemental Servicing Fees) shall be applied (i)  first, to reduce Outstanding Monthly Advances, if any, with respect to such Receivable, (ii)  second , to the Scheduled Payment on such Receivable for such Monthly Period, and (iii)  third , the remainder shall constitute, with respect to such Receivable, a Full Prepayment or Partial Prepayment; and

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(b) a Partial Prepayment made on a Receivable is applied to reduce the final Scheduled Payment and will thereafter, to the extent the Partial Prepayment exceeds the final Scheduled Payment, reduce Scheduled Payments in reverse chronological order beginning with the penultimate Scheduled Payment. The Rebate related to such Partial Prepayment will reduce the final Scheduled Payment and will thereafter, to the extent the Rebate exceeds the final Scheduled Payment, reduce Scheduled Payments in reverse chronological order beginning with the penultimate Scheduled Payment.

SECTION 2.14 Monthly Advances . Subject to the following sentence, as of each Accounting Date, if the payments received by the Servicer during the related Monthly Period by or on behalf of the Obligor on a Receivable (other than an Administrative Receivable, a Warranty Receivable or a Liquidating Receivable) after application of such payments under Section 2.13(a) shall be less than the Scheduled Payment on such Receivable for such Monthly Period, whether as a result of any extension granted to the Obligor or otherwise, then the Servicer shall advance any such shortfall (such amount, a “ Monthly Advance ”). The Servicer shall be obligated to make a Monthly Advance in respect of a Receivable only to the extent that the Servicer, in its sole discretion, shall determine that such advance shall be recoverable (in accordance with the two immediately following sentences) from subsequent collections or recoveries on such Receivable. Subject to Section 8.2 of the Indenture, the Servicer shall be reimbursed for unreimbursed Outstanding Monthly Advances with respect to a Receivable from the following sources with respect to such Receivable, in each case as set forth in this Agreement; (i) subsequent payments by or on behalf of the Obligor, (ii) Liquidation Proceeds, (iii) the Administrative Purchase Payment, together with the amount of any Monthly Advance released pursuant to the definition thereof, and (iv) the Warranty Payment. At such time as the Servicer shall determine that Outstanding Monthly Advances with respect to any Receivable shall not be recoverable from payments with respect to such Receivable, the Servicer shall be reimbursed from any Collections made on other Receivables.

SECTION 2.15 Additional Deposits . The Servicer shall deposit in the Collection Account the aggregate Monthly Advances pursuant to Section 2.14 . The Servicer and the Warranty Purchaser shall deposit in the Collection Account the aggregate Administrative Purchase Payments and Warranty Payments with respect to Administrative Receivables and Warranty Receivables, respectively. All such deposits with respect to a Monthly Period shall be made in immediately available funds on the Transfer Date with respect to the Distribution Date related to such Monthly Period.

SECTION 2.16 Net Deposits . At any time that (i) NFC shall be the Servicer and (ii) the Servicer shall be permitted by Section 2.12 of this Agreement to remit collections on a basis other than a daily basis, the Indenture Trustee at the written request of the Servicer may make any remittances pursuant to this Article II or Article VIII of the Indenture net of amounts to be distributed by the Indenture Trustee to such remitting party. Nonetheless, each such party shall account for all of the above described remittances and distributions as if the amounts were deposited and/or transferred separately.

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SECTION 2.17 Servicer’s Certificate

(a) Not later than 10:00 a.m. (Chicago, Illinois time) on each Determination Date, the Servicer shall deliver to each Trustee, the Rating Agencies (in the case of S&P, via electronic mail transmitted to servicing_reports@sandp.com), the Swap Counterparty and the Agent a Servicer’s Certificate with respect to the immediately preceding Monthly Period, in substantially the form attached hereto as Exhibit B , executed by the President or any Vice President of the Servicer containing all information necessary to each such party for making the calculations, withdrawals, deposits, transfers and distributions required by Sections 8.2 and 8.10 of the Indenture, and all information required to be provided to the Interested Parties under Section 8.8 of the Indenture. Receivables to be purchased by the Servicer under Section 2.08 of this Agreement, by NFC pursuant to Section 5.04 of the Purchase Agreement or by NFRRC under Section 2.06 of the Pooling Agreement as of the last day of any Monthly Period shall be identified by Receivable number with respect to Retail Notes (in each case, as set forth in the Composite Schedule of Retail Notes). With respect to any Receivables for which the Seller is the Owner, the Servicer shall deliver to the Seller such accountings relating to such Receivables and the actions of the Servicer with respect thereto as the Seller may reasonably request.

(b) On or before each Determination Date, with respect to the preceding Monthly Period and the related Distribution Date, the Servicer shall calculate the Collected Amount, the Total Available Amount, the Total Servicing Fee, the Noteholders’ Interest Distributable Amount (based on information provided by the Agent), the Reserve Account Deposit Amount, the net amount, if any, payable by or to the Trust under the Interest Rate Swap (including the amount of any termination payments and the amount of any payments that are not termination payments), the Principal Distribution Amount and all other amounts required to determine the amounts to be deposited in or paid from each of the Collection Account, the Note Distribution Account, the Certificate Distribution Account and the Reserve Account on the next succeeding Distribution Date (or, in the case of payments due under the Interest Rate Swap, if any, on the Business Day preceding the Distribution Date) and supply such information to the Issuer and the Indenture Trustee.

(c) On the Closing Date (with respect to the remainder of calendar year 2008) and thereafter, within 15 days prior to the end of each calendar year while this Agreement remains in effect (with respect to the next succeeding calendar year), the Servicer shall deliver to either the Indenture Trustee or the Owner Trustee, following receipt of a written request, an Officers’ Certificate specifying the days on which banking institutions in Chicago, Illinois are authorized or obligated by law or executive order to be closed.

ARTICLE III

STATEMENTS AND REPORTS

SECTION 3.01 Annual Statement as to Compliance; Notice of Servicer Default; Tax Reports .

(a) The Servicer shall deliver to the Issuer, the Indenture Trustee, the Agent and the Swap Counterparty, on or before February 1 of each following year, beginning February 1, 2009, an officer’s certificate signed by the Chairman of the Board, Vice Chairman of

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the Board, the President or any Vice President of the Servicer, dated as of the immediately preceding October 31, stating that (i) a review of the activities of the Servicer during the Servicer’s immediately preceding fiscal year (or, with respect to the first such certificate, such period as shall have elapsed from the Closing Date to the last day of the Servicer’s immediately preceding fiscal year) and of its performance under this Agreement has been made under such officer’s supervision, and (ii) to such officer’s knowledge, based on such review, the Servicer has fulfilled all its obligations under this Agreement throughout such period, or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to suc