Exhibit 10.5

EXECUTION COPY

SALE TRANSACTION

 

 

NOTE SALE AGREEMENT

BETWEEN

NAVISTAR FINANCIAL ASSET SALES CORP.

AND

NAVISTAR FINANCIAL CORPORATION

DATED AS OF DECEMBER 16, 2009

 

 

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TABLE OF CONTENTS

 

          Page ARTICLE I DEFINITIONS    1

SECTION 1.01

   Definitions    1 ARTICLE II PURCHASE AND SALE OF PORTFOLIO    1

SECTION 2.01

   Purchase and Sale of Portfolio    1

SECTION 2.02

   Purchase Price    2

SECTION 2.03

   The Closing    2 ARTICLE III REPRESENTATIONS AND WARRANTIES    2

SECTION 3.01

   Representations and Warranties as to Portfolio    2

SECTION 3.02

   Additional Representations and Warranties of NFC    6

SECTION 3.03

   Representations and Warranties of NFASC    7 ARTICLE IV CONDITIONS    8

SECTION 4.01

   Conditions to Obligation of NFASC    8

SECTION 4.02

   Conditions To Obligation of NFC    9 ARTICLE V ADDITIONAL AGREEMENTS    9

SECTION 5.01

   Protection of Title.    9

SECTION 5.02

   Other Liens or Interests    10

SECTION 5.03

   Repurchase Upon Breaches    11

SECTION 5.04

   Repurchase of Defaulted Contracts; Determination of Recognized Losses    11

SECTION 5.05

   Further Assignments    12

SECTION 5.06

   Pre-Closing Collections    12

SECTION 5.07

   Limitation on Transfer of Navistar Purchase Obligations    12 ARTICLE VI
MISCELLANEOUS PROVISIONS    12

SECTION 6.01

   Amendment    12

SECTION 6.02

   Survival    12

SECTION 6.03

   Notices    12

SECTION 6.04

   Governing Law    12

SECTION 6.05

   Waivers    13

SECTION 6.06

   Costs and Expenses    13

SECTION 6.07

   Confidential Information    13

SECTION 6.08

   Headings    13

SECTION 6.09

   Counterparts    13

SECTION 6.10

   Severability of Provisions    13

SECTION 6.11

   Further Assurances    13

SECTION 6.12

   Third-Party Beneficiary    14

SECTION 6.13

   Merger and Integration    14

SECTION 6.14

   Assignment    14

SECTION 6.15

   No Petition Covenants    14

 

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SECTION 6.16

   CONSENT TO JURISDICTION    14

SECTION 6.17

   WAIVER OF JURY TRIAL    14

EXHIBITS

Exhibit A - Form of NSA Assignment (includes Exhibit I, Composite Schedule of
Contracts)

Exhibit B - Form of Notice of Assignment

 

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NOTE SALE AGREEMENT

NOTE SALE AGREEMENT, dated as of December 16, 2009, between NAVISTAR FINANCIAL
ASSET SALES CORP., a Delaware corporation (“NFASC”), and NAVISTAR FINANCIAL
CORPORATION, a Delaware corporation (“NFC”).

WHEREAS, NFASC desires to purchase on the date hereof certain Contracts and the
Related Security with respect thereto;

WHEREAS, NFC is willing to sell such Contracts and the Related Security with
respect thereto to NFASC; and

WHEREAS, NFASC shall, concurrent with NFASC’s purchase of the Contracts and
Related Security with respect thereto hereunder, sell such Contracts and the
Related Security with respect thereto to Wells Fargo Equipment Finance, Inc.
(“WFEFI”) pursuant to the Note Purchase Agreement dated as of the date hereof
(the “Note Purchase Agreement”) among NFASC, NFC and WFEFI.

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

ARTICLE I

DEFINITIONS

SECTION 1.01 Definitions. Capitalized terms used but not otherwise defined in
this Agreement shall have the respective meanings assigned them in Part I of
Appendix A to the Note Purchase Agreement. All references herein to “the
Agreement” or “this Agreement” are to this Note Sale Agreement as it may be
amended, supplemented or modified from time to time, the exhibits hereto and the
capitalized terms used herein which are defined in such Appendix A, and all
references herein to Articles, Sections and subsections are to Articles,
Sections or subsections of this Agreement unless otherwise specified. The rules
of construction set forth in Part II of such Appendix A shall be applicable to
the Note Purchase Agreement.

ARTICLE II

PURCHASE AND SALE OF PORTFOLIO

SECTION 2.01 Purchase and Sale of Portfolio. (a) Subject to the satisfaction of
the conditions specified in Article IV, NFC agrees to sell, transfer, assign and
otherwise convey to NFASC, without recourse (except as provided in Article V),
and NFASC agrees to purchase on the Closing Date pursuant to a written
assignment substantially in the form of Exhibit A (the “NSA Assignment”), all
right, title and interest of NFC in, to and under the Contracts (as described in
Exhibit I, the Composite Schedule of Contracts, to the NSA Assignment) and the
Related Security, including the other Portfolio Documents.

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(b) It is the intention of NFC and NFASC that the transfer and assignment
contemplated by this Section 2.01 shall constitute a sale of the Contracts and
Related Security, including the other Portfolio Documents, by NFC to NFASC and
the beneficial interest in and title to the assets conveyed pursuant to this
Section 2.01 shall not be part of NFC’s estate in the event of the filing of a
bankruptcy petition by or against NFC under any bankruptcy law. 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 sale
shall for any reason be ineffective or unenforceable or that such beneficial
interest is a part of NFC’s estate (any of the foregoing, a
“Recharacterization”), then (i) NFC shall be deemed to have granted to NFASC a
first priority perfected security interest in all of NFC’s right title and
interest in, to and under the assets conveyed pursuant to this Section 2.01, and
NFC 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 NFC under any agreement or instrument
included in the assets conveyed pursuant to this Section 2.01, including the
immediate and continuing right to claim for, collect, receive and give receipt
for principal and interest payments in respect of the Contracts included in the
assets conveyed pursuant to this Section 2.01 and all other monies payable under
the Portfolio Documents 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
NFC or otherwise and generally to do and receive anything that NFC is or may be
entitled to do or receive under or with respect to the assets conveyed pursuant
to this Section 2.01. For purposes of such grant, this Agreement shall
constitute a security agreement under the UCC. In the case of any
Recharacterization, each of NFC and NFASC represents and warrants as to itself
that each remittance of collections by NFC to NFASC hereunder or in connection
herewith will have been (i) in payment of a debt incurred by NFC in the ordinary
course of business or financial affairs of NFC and NFASC and (ii) made in the
ordinary course of business or financial affairs of NFC and NFASC.

SECTION 2.02 Purchase Price. In consideration for the purchase of the Portfolio,
NFASC shall, on the Closing Date, pay to NFC an amount equal to the Purchase
Price and NFC shall execute and deliver to NFASC the NSA Assignment. On the
Closing Date $224,892,707.35 of the Purchase Price shall be paid by NFASC to NFC
in immediately available funds, $1,894,809.36 will be recorded as an advance
under the Intercompany Note, and the balance of the Purchase Price shall be
recorded as a contribution of capital from NFC to NFASC.

SECTION 2.03 The Closing. The sale and purchase of the Portfolio shall take
place at 10:00 AM, Chicago, Illinois time, on the Closing Date, at the offices
of Kirkland & Ellis LLP located at 300 N. LaSalle Street, Chicago, Illinois
60654, or at such other place, date and time mutually agreeable to NFC and
NFASC.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

SECTION 3.01 Representations and Warranties as to Portfolio. NFC makes the
following representations and warranties to NFASC and WFEFI as to the Portfolio
on which NFASC and WFEFI rely in accepting the Portfolio. Such representations
and warranties speak

 

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as of the Closing Date and shall survive the subsequent sale, pledge, assignment
or transfer thereof to WFEFI pursuant to the Note Purchase Agreement:

(a) Characteristics of Contracts. Each Contract:

(i) as of the Reporting Date, is an Eligible Contract;

(ii) was originated by NFC to finance a retail purchase or other financing by a
retail customer or Idealease dealer or a refinancing (for reasons other than
credit reasons, unless it is an Eligible Restructured Contract) of a Financed
Vehicle or Financed Vehicles by a retail customer or Idealease dealer;

(iii) has created or shall create a valid, binding and enforceable first
priority security interest in favor of NFC in the related Financed Vehicle(s),
which security interest will be validly assigned by NFC to NFASC and will be
assignable by NFASC to WFEFI;

(iv) contains customary and enforceable provisions such as to render the rights
and remedies of the holder thereof adequate for realization against the
collateral of the benefits of the security;

(v) immediately prior to the transfer and assignment thereof to NFASC by NFC
pursuant to this Agreement, NFC had good title to such Contract, free of any
Lien (except for Permitted Liens and Liens that will be released as of such
transfer), and all right, title and interest in such Contract has been validly
sold by NFC to NFASC pursuant to this Agreement, and NFASC will obtain good
title to such Contract, free of any Lien (except for Permitted Liens), and the
transfer of such Contract to NFASC has been perfected under the UCC; and

(vi) was originated in the ordinary course of business in accordance with NFC’s
underwriting standards.

(b) Composite Schedule of Contracts. The information set forth in the Composite
Schedule of Contracts relating to such Contract is true, correct and complete in
all material respects, and the data contained in the 9MB data file, entitled
2009.Retail.Tape.xlsx sent by NFC to the Purchaser at 12:06 p.m. Chicago time on
December 11, 2009, contained a true, correct and complete description of the
name of each Portfolio Obligor, such Portfolio Obligor’s address and taxpayer
identification number, contract number, remaining number of payments, the amount
of each remaining payment, the due date for payments (whether monthly or
quarterly), the loan type, the vehicle identification number of the Financed
Vehicle that is the subject of the transaction, and whether such Portfolio
Document is an Idealease transaction.

(c) Compliance With Law. All requirements of applicable federal, state and local
laws, and regulations thereunder, including the Equal Credit Opportunity Act,
the Federal Reserve Board’s Regulation “B”, the Servicemembers Civil Relief Act,
the USA Patriot Act, any applicable bulk sales or bulk transfer law, any
applicable requirement of the Office of Foreign Assets Control, and other equal
credit opportunity and disclosure laws, in respect of any of the Contracts, have
been complied with in all material respects, and each such Contract and the sale

 

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of the Financed Vehicle or Financed Vehicles evidenced thereby complied at the
time it was originated or made and now complies in all material respects with
all legal requirements of the jurisdiction in which it was originated or made.

(d) Binding Obligation. Each Contract represents the genuine, legal, valid and
binding payment obligation in writing of the Portfolio Obligor thereon,
enforceable against the Portfolio Obligor by the holder thereof in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting the enforcement
of creditors’ rights in general and by equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.

(e) Security Interest in Financed Vehicle. Immediately prior to the sale,
transfer and assignment thereof pursuant hereto, each Contract was secured by a
validly perfected first priority security interest in the related Financed
Vehicle or, in the event any such Contract was secured by more than one Financed
Vehicle, in each related Financed Vehicle, each in favor of NFC as secured
party, or all necessary and appropriate action had been commenced that will
result in the valid perfection of a first priority security interest in each
related Financed Vehicle in favor of NFC as secured party in each case (except
for first priority security interests which may exist in any accessions not
financed by NFC).

(f) Contracts In Force. No Contract has been satisfied, subordinated or
rescinded, and no Financed Vehicle securing any Contract has been released from
the Lien of the related Contract in whole or in part.

(g) No Waiver. Since the Reporting Date, no provision of any Contract has been
waived, altered or modified in any respect.

(h) No Amendments. Since the Reporting Date, no Contract has been amended or
otherwise modified (other than a Permitted Modification), and prior to the
Cutoff Date, no Contract has been amended or restructured for credit reasons
(unless it is an Eligible Restructured Contract).

(i) No Defenses. No right of rescission, setoff, counterclaim or defense has
been asserted or threatened with respect to any Portfolio Document.

(j) No Liens. There are, to NFC’s knowledge, no Liens or claims that have been
filed for work, labor or materials affecting any Financed Vehicle relating to
any Contract that are or may be prior to, or equal or coordinate with, the
security interest in each Financed Vehicle granted by the Portfolio Obligor
(except for Permitted Liens).

(k) No Default. There has been no default, breach, violation or event permitting
acceleration under the terms of any Contract, and no event has occurred and is
continuing that with notice or the lapse of time would constitute a default,
breach, violation or event permitting acceleration under the terms of any
Contract, and NFC has not waived any of the foregoing, in each case except for
payments on any Contract which are not more than 30 days past due (measured from
the date of any Scheduled Payment) as of the Reporting Date, or with respect to
any Eligible Restructured Contract, no such event has occurred since the date of
its amendment or restructuring.

 

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(l) Insurance. Each Portfolio Obligor on a Contract is required to maintain a
physical damage insurance policy for each Financed Vehicle of the type that NFC
requires in accordance with its customary underwriting standards for the
purchase of a similar Vehicle, unless NFC has in accordance with its customary
procedures permitted a Portfolio Obligor to self-insure such Financed Vehicle.

(m) Lawful Assignment. No Portfolio Document was originated in, or is subject to
the laws of, any jurisdiction the laws of which would make unlawful the sale,
transfer and assignment of such Portfolio Document under this Agreement or the
Note Purchase Agreement.

(n) All Filings Made. All filings necessary under the UCC in any jurisdiction to
give NFASC a first priority perfected security or ownership interest in the
Contracts and the Related Security, including the other Portfolio Documents, to
the extent constituting Code Collateral, shall have been made, and the Contracts
constitute Code Collateral.

(o) One Original. There is only one executed original of each Contract, which is
in NFC’s possession and will remain in NFC’s possession unless transferred
pursuant to the Servicing Agreement.

(p) No Negotiable Document of Title. No Contract, or constituent part thereof,
constitutes a “negotiable document of title” (as such term is defined and used
in the UCC).

(q) Vehicles. Each Financed Vehicle to which a Contract relates was a Vehicle at
the time the related Portfolio Obligor executed the related Contract.

(r) Origin. Each Contract was originated in the United States and is payable in
U.S. Dollars.

(s) No Government Contracts. No Portfolio Obligor under any of the Contracts is
a governmental authority of the United States or any state or political
subdivision thereof.

(t) Material Records. NFC has marked its computer records relating to each
Contract to show that such Contract has been sold to NFASC by NFC hereunder and
has been sold by NFASC to WFEFI pursuant to the Note Purchase Agreement.

(u) No Impairment. NFC has not conveyed any right to any Person that would
result in such Person having a right to payments due under a Contract or
otherwise impaired the rights of NFASC in any Contract or the proceeds thereof.

(v) Servicing. Each Contract has prior to the Closing Date been serviced in all
material respects in conformity with all applicable laws, rules and regulation
and the Servicer’s policies and procedures.

(w) No Consent. No notice or consent from any Portfolio Obligor is necessary to
effect the acquisition of the Portfolio Documents by NFASC pursuant to this
Agreement or WFEFI pursuant to the Note Purchase Agreement.

 

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SECTION 3.02 Additional Representations and Warranties of NFC. NFC hereby
represents and warrants to NFASC and WFEFI as of the Closing Date that:

(a) Organization and Good Standing. NFC 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, own and transfer the Portfolio Documents.

(b) Due Qualification. NFC 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. NFC has the power and authority to execute and deliver
this Agreement and to carry out its terms; and the execution, delivery and
performance of this Agreement have been duly authorized by NFC by all necessary
corporate action.

(d) Valid Sale; Binding Obligation. This Agreement, together with the NSA
Assignment, when duly executed and delivered, shall (upon satisfaction of the
conditions set forth in Section 4.02(b) hereof relating to the Portfolio
Documents) constitute a legal, valid and binding obligation of NFC enforceable
against NFC 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 of the transactions contemplated by this
Agreement and the NSA Assignment and the fulfillment of the terms of this
Agreement and the NSA Assignment 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
NFC, or any indenture, agreement, mortgage, deed of trust or other instrument to
which NFC is a party or by which it is bound, or result in the creation or
imposition of any Lien (other than a Permitted Lien) upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of trust
or other instrument (other than this Agreement, the NSA Assignment or the Note
Purchase Agreement), or violate any law or, to NFC’s knowledge, any order, rule
or regulation applicable to NFC of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over NFC or any of its properties.

(f) No Proceedings. To NFC’s knowledge, there are no proceedings or
investigations pending or threatened before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over NFC or its properties (i) asserting the invalidity of this
Agreement or the NSA Assignment, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or the NSA Assignment, or
(iii) seeking any determination or ruling that would reasonably be expected to
have a Material Adverse Effect with respect to NFC.

 

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(g) No Consent. No permit, consent, approval or authorization of, or declaration
to or filing with, any governmental authority is required in connection with the
execution, delivery and performance by NFC of this Agreement or the NSA
Assignment or the consummation by NFC of the transactions contemplated hereby or
thereby except as expressly contemplated herein or therein.

(h) ERISA. No notice of a Lien arising under Title I or Title IV of ERISA has
been filed under Section 6323 (a) of the Code (or any successor provision)
against, or otherwise affecting the assets NFC.

(i) Solvency. NFC is, and after giving effect to the transactions contemplated
to occur on such date will be, solvent.

(j) Investment Company Act. NFC is not, and is not controlled by, an “investment
company” within the meaning of, and is not required to register as an
“investment company” under, the Investment Company Act.

SECTION 3.03 Representations and Warranties of NFASC. NFASC hereby represents
and warrants to NFC as of the Closing Date:

(a) Organization and Good Standing. NFASC 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, own and transfer the Portfolio Documents.

(b) Due Qualification. NFASC 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 such qualification.

(c) Power and Authority. NFASC has the power and authority to execute and
deliver this Agreement and to carry out its terms, and the execution, delivery
and performance of this Agreement have been duly authorized by NFASC by all
necessary corporate action.

(d) Binding Obligation. This Agreement shall constitute a legal, valid and
binding obligation of NFASC enforceable against NFASC 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 NFASC of the transactions contemplated by
this Agreement and the fulfillment of the terms of this Agreement 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 NFASC, or any indenture, agreement,
mortgage, deed of trust or other instrument to which NFASC 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

 

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the terms of any such indenture, agreement or other instrument (other than this
Agreement, the NSA Assignment or the Note Purchase Agreement), or violate any
law or, to NFASC’s knowledge, any order, rule or regulation applicable to NFASC
of any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over NFASC or any of
its properties.

(f) No Proceedings. To NFASC’s knowledge, there are no proceedings or
investigations pending or threatened before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over NFASC or its properties (i) asserting the invalidity of this
Agreement or the NSA Assignment, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or (iii) seeking any
determination or ruling that would reasonably be expected to have a Material
Adverse Effect with respect to NFASC.

(g) No Consent. No permit, consent, approval or authorization of, or declaration
to or filing with, any governmental authority is required in connection with the
execution, delivery and performance by NFASC of this Agreement or the
consummation by NFASC of the transactions contemplated hereby except as
expressly contemplated herein.

ARTICLE IV

CONDITIONS

SECTION 4.01 Conditions to Obligation of NFASC. The obligation of NFASC to
purchase the Contracts and the Related Security hereunder on the Closing Date is
subject to the satisfaction of the following conditions:

(a) Representations and Warranties True. The representations and warranties of
NFC in Section 3.01 regarding the Portfolio being sold on the Closing Date, and
the representations and warranties of NFC in Sections 3.02, shall be true and
correct in all material respects as of the Closing Date (or if specified as
applying to some other date, as of such date), and NFC shall have performed in
all material respects all obligations to be performed by it hereunder on or
prior to the Closing Date.

(b) Computer Files Marked. NFC shall, at its own expense, on or prior to the
Closing Date, (i) indicate in its computer files created in connection with the
Portfolio Documents that the Contracts have been sold to NFASC pursuant to this
Agreement and the NSA Assignment by NFC and thereafter sold to WFEFI pursuant to
the Note Purchase Agreement and the NPA Assignment by NFASC and (ii) deliver to
NFASC and WFEFI the Composite Schedule of Contracts certified by an officer of
NFC to be true, correct and complete.

(c) Documents to Be Delivered by NFC.

(i) The NSA Assignment. On the Closing Date, NFC shall execute and deliver to
NFASC the NSA Assignment of the Portfolio.

(ii) Evidence of UCC Filing. On or within 10 days after the Closing Date, NFC
shall record and file, at its own expense, a UCC-1 financing statement in each
jurisdiction in which required by applicable law, naming NFC as seller or
debtor, naming

 

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NFASC as purchaser or secured party, naming the Portfolio as collateral, meeting
the requirements of the laws of each such jurisdiction and in such manner as is
necessary to perfect under the UCC the sale, transfer, assignment and conveyance
of the Portfolio to NFASC to the extent constituting Code Collateral. NFC shall
deliver a file-stamped copy, or other evidence satisfactory to NFASC of such
filing, to NFASC promptly after receipt thereof.

(iii) Notice to Portfolio Obligors. On the Closing Date, NFC shall execute and
deliver to WFEFI a Notice of Assignment, in substantially the form attached
hereto as Exhibit B (which WFEFI shall not send to any Portfolio Obligor unless
and until the Servicer Termination Date shall have occurred).

(iv) Other Documents. On the Closing Date, NFC shall provide such other
documents as NFASC and WFEFI may reasonably request.

(d) Other Transactions. The related transactions contemplated by the Note
Purchase Agreement shall be consummated on or prior to the Closing Date to the
extent that such transactions are intended to be substantially contemporaneous
with the transactions hereunder.

SECTION 4.02 Conditions To Obligation of NFC. The obligation of NFC to sell the
Contracts and Related Security to NFASC hereunder on the Closing Date is subject
to the satisfaction of the following conditions:

(a) Representations and Warranties True. The representations and warranties of
NFASC hereunder shall be true and correct in all material respects as of the
Closing Date, and NFASC shall have performed in all material respects all
obligations to be performed by it hereunder on or prior to the Closing Date.

(b) Purchase Price. On the Closing Date, NFASC shall pay to NFC the Purchase
Price payable on such date as provided in Section 2.02 of this Agreement.

ARTICLE V

ADDITIONAL AGREEMENTS

NFC agrees with NFASC as follows:

SECTION 5.01 Protection of Title.

(a) Filings. NFC 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 NFASC under this Agreement and WFEFI under the Note
Purchase Agreement in the Portfolio and in the proceeds thereof to the extent
constituting Code Collateral, and hereby authorizes NFASC and WFEFI to file any
such financing statements or continuation statements relating to all or any part
thereof. NFC shall deliver (or cause to be delivered) to NFASC and WFEFI
file-stamped copies of, or filing receipts for, any document filed as provided
above, promptly after receipt thereof.

 

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(b) Name Change. NFC 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 by NFC in accordance with Section 5.01(a) seriously
misleading within the meaning of Section 9-506 of the UCC, unless it shall have
given NFASC and WFEFI at least 10 days prior written notice thereof and shall
file such financing statements or amendments as may be reasonably required by
NFASC and WFEFI.

(c) Jurisdiction of Formation; Maintenance of Offices. NFC shall give NFASC and
WFEFI at least 10 days prior written notice of any change in its jurisdiction of
formation and shall file such financing statements or amendments as may be
reasonably required by NFASC and WFEFI.

(d) Accounts and Records. NFC will cause the Servicer to maintain accounts and
records as to each Contract accurately and in sufficient detail to permit
(i) the reader thereof to know at any time the status of such Contract,
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 Contract and the amounts from time to time deposited in the
Collection Account in respect of such Contract.

(e) Maintenance of Systems. NFC will cause the Servicer to maintain its computer
systems so that, from and after the time of the sale hereunder, the Servicer’s
master computer records (including any back-up archives) that refer to any
Contract indicate clearly that such Contract has been sold to NFASC and
subsequently sold to WFEFI. Indication of WFEFI’s ownership interest in a
Contract shall be deleted from or modified on the Servicer’s computer systems
when, and only when, such Contract shall have been paid in full, repurchased by
NFC, purchased by the Servicer or the Outstanding Purchased Amount shall have
been reduced to zero.

(f) Other Purchases. If at any time NFC proposes to sell, grant a security
interest in, or otherwise transfer any interest in Vehicle loan to any
prospective purchaser, lender or other transferee, NFC shall give to such
prospective purchaser, lender or other transferee computer tapes, records or
print-outs (including any restored from back-up archives) that, if they refer in
any manner whatsoever to any Contract, indicate clearly that such Contract has
been sold to WFEFI unless such Contract has been paid in full, repurchased by
NFC, purchased by the Servicer or the Outstanding Purchased Amount shall have
been reduced to zero.

(g) Retitling of Financed Vehicles. Unless and until the Servicer Termination
Date has occurred, the Certificates of Title with respect to the Financed
Vehicles shall not be amended or re-issued to reflect the assignment of NFC’s or
NFASC’s interests therein to WFEFI or any assignee thereof.

SECTION 5.02 Other Liens or Interests. Except for the conveyances hereunder and
as contemplated by the Note Purchase Agreement, NFC shall not sell, pledge,
assign or transfer the Contracts or the Related Security to any other Person, or
grant, create, incur, assume or suffer to exist any Lien (except any Permitted
Lien) on any interest therein, and NFC shall

 

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defend the right, title and interest of NFASC and WFEFI in, to and under the
Contracts and Related Security against all claims of third parties claiming
through or under NFC.

SECTION 5.03 Repurchase Upon Breaches. NFC hereby covenants and agrees with
NFASC for the benefit of NFASC and WFEFI, that in the event of (i) a breach of
any of NFC’s representations and warranties contained in Section 3.01 hereof
with respect to any Portfolio Document or (ii) a breach by NFC of Section 5.02
hereof with respect to any Portfolio Document, which in either case has a
Material Adverse Effect unless, such breach shall have been cured in all
material respects as of the second following Accounting Date after NFC discovers
or receives notice of breach (each such event, a “Repurchase Event”), NFC will
repurchase such Contract from WFEFI as of such Accounting Date by a payment into
the Collection Account in an amount equal to the Warranty Payment calculated as
of such Accounting Date, and upon payment of such amount, NFC shall be the owner
of such Contract and the Related Security and shall be entitled to all monies
received from any source with respect to such Contract on or after the first day
of the Monthly Period in which such Accounting Date occurs, including as a
result of remarketing, litigation or any recourse arrangements. It is understood
and agreed that the obligation of NFC to repurchase any Contract under this
Section 5.03 shall, if such obligation is fulfilled, constitute liquidated
damages for such breach; provided, that NFC’s and NFASC’s respective obligations
under Section 6.2(g) and Section 6.2(h) of the Note Purchase Agreement shall
continue with respect to such Contract.

SECTION 5.04 Repurchase of Defaulted Contracts; Determination of Recognized
Losses.

(a) Repurchase of Defaulted Contracts. In addition to its obligations in
Section 5.03, NFC hereby covenants and agrees with WFEFI and NFASC, that in the
event a Contract becomes a Defaulted Contract, unless such Contract ceases to be
a Defaulted Contract as of the Accounting Date following the date on which the
Servicer makes the determination that such Contract is a Defaulted Contract,
subject to the limitations in this Section 5.04, NFC will repurchase the
Defaulted Contract from WFEFI as of such Accounting Date by a payment into the
Collection Account in an amount equal to the Defaulted Contract Payment
calculated as of such Accounting Date, and upon payment of such amount, WFEFI
shall transfer to NFC, without representation, warranty or recourse, such
Contract and the Related Security and, subject to Section 5.04(b) of this
Agreement, NFC shall be entitled to all monies received from any source with
respect to such Contract on or after the first day of the Monthly Period in
which such Accounting Date occurs, including as a result of remarketing,
litigation or any recourse arrangements. Notwithstanding the foregoing, NFC
shall have no obligation to so repurchase any Defaulted Contract if the
aggregate amount of Recognized Losses with respect to Defaulted Contracts
purchased by NFC pursuant to this Section 5.04 equals or exceeds the Defaulted
Contracts Repurchase Limit.

(b) Determination of Recognized Losses. Within ninety (90) days after the
applicable Accounting Date as of which NFC purchased a Defaulted Contract, NFC
shall calculate the Recognized Losses relating to such Defaulted Contract in
accordance with the definition thereof. In the event that, as of any Settlement
Date, the aggregate Recognized Losses (less reimbursements thereof pursuant to
this Section 5.04(b) other than as a result of a withdrawal from the UNL Reserve
Account) exceed the Defaulted Contracts Repurchase Limit (an “Excess

 

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Recognized Loss”), NFC shall be entitled to reimbursement for such excess in
accordance with Section 5.1(b) of the Note Purchase Agreement; provided, that,
NFC shall pay Collections with respect to Defaulted Contracts that NFC has
repurchased pursuant to Section 5.04(a) of this Agreement to the extent of such
reimbursement to the Collection Account for application pursuant to
Section 5.1(c) of the Note Purchase Agreement not to exceed the amount of such
reimbursement. In addition, if on any Settlement Date such aggregate Recognized
Losses exceed the Defaulted Contracts Cash Recourse Limit, NFC shall be entitled
to reimbursement for such excess to the extent of amounts on deposit in the UNL
Reserve Account. The amount deposited into the Collection Account (including any
amounts that were offset against Outstanding Monthly Advances) as a result of a
Turbo Event pursuant to Section 5.7(b) of the Note Purchase Agreement shall be
deemed to be Recognized Losses.

SECTION 5.05 Further Assignments. NFC acknowledges that NFASC shall, pursuant to
the Note Purchase Agreement, sell, transfer and assign the Portfolio to WFEFI,
subject to the terms of the Note Purchase Agreement.

SECTION 5.06 Pre-Closing Collections. Within two Business Days after the Closing
Date, NFC shall transfer to the Collection Account all collections (from
whatever source) received after the Cutoff Date on or with respect to the
Portfolio conveyed by NFC to NFASC and by NFASC to WFEFI on the Closing Date
pursuant to Section 2.01.

SECTION 5.07 Limitation on Transfer of Navistar Purchase Obligations. NFASC
acknowledges and agrees that the rights pursuant to the Navistar Purchase
Obligations are personal to NFC, and neither NFASC nor WFEFI is, and neither is
intended to be a third-party beneficiary of or entitled to such rights and,
accordingly, such rights will not be exercisable by, enforceable by or for the
benefit of, or preserved for the benefit of, NFASC or WFEFI.

ARTICLE VI

MISCELLANEOUS PROVISIONS

SECTION 6.01 Amendment. This Agreement may be amended from time to time by a
written amendment duly executed and delivered by NFC and NFASC, with the prior
written consent of WFEFI.

SECTION 6.02 Survival. The respective representations, warranties, obligations,
liabilities, duties and indemnities of NFC and NFASC contained in this Note Sale
Agreement and each other Basic Document, and the other documents and agreements
relating hereto or thereto shall survive the consummation of the transactions
evidenced hereby, and shall survive any termination to the extent required for
their full observance and performance.

SECTION 6.03 Notices. All demands, notices and communications under this
Agreement shall be delivered as specified in Appendix B to the Note Sale
Agreement.

SECTION 6.04 Governing Law. All questions concerning the construction, validity
and interpretation of this Agreement and the NSA Assignment shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without giving effect to any choice of law or conflict provision or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
New York.

 

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SECTION 6.05 Waivers. No failure or delay on the part of NFASC in exercising any
power, right or remedy under this Agreement or the NSA Assignment shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other or further exercise thereof or the exercise
of any other power, right or remedy.

SECTION 6.06 Costs and Expenses. NFC agrees to pay all reasonable out-of-pocket
costs and expenses of NFASC and WFEFI, including fees and expenses of counsel,
in connection with the perfection as against third parties of NFASC’s and
WFEFI’s right, title and interest in, to and under the Portfolio and the
enforcement of any obligation of NFC hereunder.

SECTION 6.07 Confidential Information. NFASC agrees that it shall neither use
nor disclose to any person the names and addresses of the Portfolio Obligors,
except in connection with the sale of the Portfolio to WFEFI and enforcement of
NFASC’s rights hereunder, under the Portfolio Documents, under the Basic
Documents to which it is a party or as required by law.

SECTION 6.08 Headings. The various headings in this Agreement are for purposes
of reference only and shall not affect the meaning or interpretation of any
provision of this Agreement.

SECTION 6.09 Counterparts. This Agreement may be executed in two or more
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.

SECTION 6.10 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall for any reason
whatsoever be held invalid, then such covenants, agreements, provisions or terms
shall be deemed enforceable to the fullest extent permitted, and if not so
permitted, 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 any Basic
Document or right of any party thereto.

SECTION 6.11 Further Assurances. NFC and NFASC agree to do and perform, from
time to time, any and all acts and to execute any and all further instruments
required or reasonably requested by the other more fully to effect the purposes
of this Agreement, including the preparation of any financing statements or
continuation statements relating to the Portfolio for filing under the
provisions of the UCC of any applicable jurisdiction.

 

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SECTION 6.12 Third-Party Beneficiary. This Agreement shall inure to the benefit
of and be binding upon the parties hereto, and their respective successors and
permitted assigns. WFEFI is an intended third party beneficiary of this
Agreement, as set forth herein. Except as otherwise expressly provided in this
Agreement with respect to the representations, warranties and agreements
benefitting WFEFI, no other Person shall have any right or obligation hereunder.

SECTION 6.13 Merger and Integration. Except as specifically stated otherwise
herein, this Agreement sets forth the entire understanding of the parties
relating to the subject matter hereof, and all prior understandings, written or
oral, are superseded by this Agreement. This Agreement may not be modified,
amended, waived, or supplemented except as provided herein.

SECTION 6.14 Assignment. Except as provided in Section 5.05, this Agreement may
not be assigned by either party without the prior written consent of WFEFI.

SECTION 6.15 No Petition Covenants. Notwithstanding any prior termination of
this Agreement, NFC shall not, prior to the date which is one year and one day
after the payment in full of all outstanding obligations of NFASC under the Note
Purchase Agreement, acquiesce, petition or otherwise invoke or cause any Person
to invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against NFASC under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of NFASC or
any substantial part of its property, or ordering the winding up or liquidation
of the affairs of NFASC.

SECTION 6.16 CONSENT TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO
THE NONEXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE
COURT SITTING IN NEW YORK, NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH PERSON PURSUANT
TO THIS AGREEMENT AND EACH PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM.

SECTION 6.17 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY THE
SELLER PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR
THEREUNDER.

*    *    *    *    *

 

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IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the day and year
first above written.

 

NAVISTAR FINANCIAL CORPORATION By:  

/s/ William V. McMenamin

  Name:   William V. McMenamin   Title:  

Vice President, Chief Financial

Officer and Treasurer

NAVISTAR FINANCIAL ASSET SALES CORP. By:  

/s/ William V. McMenamin

  Name:   William V. McMenamin   Title:  

Vice President, Chief Financial

Officer and Treasurer

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EXHIBIT A

FORM OF NSA ASSIGNMENT

As of December 16, 2009, for value received, in accordance with the Note Sale
Agreement, dated as of December 16, 2009 (the “Note Sale Agreement”), between
NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (“NFC”), and NAVISTAR
FINANCIAL ASSET SALES CORP., a Delaware corporation (“NFASC”), NFC does hereby
sell, assign, transfer and otherwise convey unto NFASC, without recourse (except
as provided in Article V of the Note Sale Agreement), all right, title and
interest of NFC in, to and under the Contracts (as described in Exhibit I, the
Composite Schedule of Contracts, hereto) and the Related Security, including the
other Portfolio Documents.

The foregoing sale does not constitute and is not intended to result in any
assumption by NFASC of any obligation of the undersigned to the Portfolio
Obligors, Dealers, insurers or any other Person in connection with the Portfolio
Documents, the agreements with Dealers, any Insurance Policies or any agreement
or instrument relating to any of them.

It is the intention of NFC and NFASC that the transfers and assignments
contemplated by this NSA Assignment shall constitute a sale from NFC to NFASC of
the property described herein and in Section 2.01 of the Note Sale Agreement and
the beneficial interest in title to such property shall not be part of NFC’s
estate in the event of the filing of a bankruptcy petition by or against NFC
under any bankruptcy law. 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 NFC’s
estate, then NFC shall be deemed to have granted to NFASC a first priority
perfected security interest in all of NFC’s right title and interest in, to and
under the assets conveyed pursuant to this NSA Assignment, and NFC hereby grants
such security interest. For purposes of such grant, this NSA Assignment and the
Note Sale Agreement shall constitute a security agreement under the UCC.

This NSA Assignment is made pursuant to and upon the representations, warranties
and agreements on the part of the undersigned contained in the Note Sale
Agreement and is to be governed by the Note Sale Agreement.

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

*  *  *  *  *

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

 

NAVISTAR FINANCIAL CORPORATION By:  

 

  Name:     Title:  

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EXHIBIT I

COMPOSITE SCHEDULE OF CONTRACTS

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EXHIBIT B

FORM OF NOTICE OF ASSIGNMENT

[to be provided on NFC’s letterhead]

NOTICE OF ASSIGNMENT

Re:                                                       No.
                                                      dated
                                             , 20         (the “Contract”)
between Navistar Financial Corporation (“Navistar”) and
                                         
                                         
                                                   (“Customer”)

Navistar hereby gives notice to Customer that it has assigned to Nasistar
Financial Asset Sales Corp. (“NFASC”) all of Navistar’s right, title and
interest in, to and under the Contract and all payments owing thereunder. NFASC
has further assigned all of NFASC’s right, title and interest in, to and under
the Contract and all payments owing thereunder to Wells Fargo Equipment Finance,
Inc. (“WFEFI”).

Navistar hereby irrevocably directs Customer to make any and all payments
required or permitted to be made under the Contract directly to WFEFI at the
following address:

All such payments should be payable to “Wells Fargo Equipment Finance, Inc.”
This includes all payments invoiced by Navistar and not yet paid by Customer.

If Customer’s Contract is currently set up for ACH payment from Customer’s bank
account, WFEFI will initiate these ACH payments in the future. You do not need
to take any action to re-establish ACH payments with WFEFI.

Navistar agrees that payment to WFEFI according to this letter will relieve
Customer of its obligation to make such payment to Navistar pursuant to the
Contract.

Customer should settle all claims against Navistar arising prior to
                         , 20    , whether arising under the Contract or
otherwise, directly with Navistar. Customer should not, without WFEFI’s prior
written consent: (i) seek to modify or amend the Contract, (ii) assign, encumber
or sublet its rights under the Contract or in the equipment leased under the
Contract, (iii) exercise any of its rights under the Contract which are
exercisable only with the consent of

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Navistar, (iv) return the equipment under the Contract to Navistar, or
(v) settle any insurance claims with respect to the equipment. WFEFI is
irrevocably appointed as Customer’s attorney-in-fact to make claim for, receive
payment of and execute and endorse all documents, checks or drafts received
under any insurance policy in payment for loss or damage to the equipment.

A copy of each notice which Customer is required to give to Navistar under the
terms of the Contract should be sent by Customer to WFEFI (instead of Navistar)
at its address set forth above or at such other address as WFEFI may hereafter
notify Customer.

Navistar has agreed with WFEFI that WFEFI may delivery a copy of this Notice,
including delivery by fax.

 

Navistar Financial Corporation By:  

 

Name:   Title:   Navistar Financial Asset Sales Corp. By:  

 

Name:   Title:   Wells Fargo Equipment Finance, Inc. By:  

 

Name:   Title: