Exhibit 10.2

EXECUTION COPY

NAVISTAR FINANCIAL 2010-A OWNER TRUST

 

 

Class A-1

Class A-2

Class A-3

Class B

Class C

 

0.60828% Asset Backed Notes

1.47% Asset Backed Notes

1.99% Asset Backed Notes

4.17% Asset Backed Notes

6.16% Asset Backed Notes

 

 

 

INDENTURE

Dated as of May 27, 2010

 

 

CITIBANK, N.A.,

a national banking association,

Indenture Trustee

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TABLE OF CONTENTS

 

     Page

ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE

   2

Section 1.1 Definitions

   2

ARTICLE II THE NOTES

   2

Section 2.1 Form.

   2

Section 2.2 Execution, Authentication and Delivery.

   3

Section 2.3 Temporary Notes.

   4

Section 2.4 Registration; Registration of Transfer and Exchange of Notes.

   4

Section 2.5 Mutilated, Destroyed, Lost or Stolen Notes.

   5

Section 2.6 Persons Deemed Noteholders

   6

Section 2.7 Payment of Principal and Interest.

   6

Section 2.8 Cancellation of Notes

   8

Section 2.9 [Reserved].

   8

Section 2.10 Book-Entry Notes

   8

Section 2.11 Notices to Clearing Agency

   9

Section 2.12 Definitive Notes

   9

Section 2.13 Seller as Noteholder

   9

Section 2.14 Tax Treatment

   9

Section 2.15 Transfer Restrictions

   10

ARTICLE III COVENANTS

   14

Section 3.1 Payment of Principal and Interest

   14

Section 3.2 Maintenance of Agency Office

   14

Section 3.3 Money for Payments to Be Held in Trust.

   15

Section 3.4 Existence

   16

Section 3.5 Protection of Collateral; Acknowledgment of Pledge

   16

Section 3.6 Opinions as to Collateral.

   17

Section 3.7 Performance of Obligations; Servicing of Receivables.

   18

Section 3.8 Negative Covenants

   19

Section 3.9 Annual Statement as to Compliance

   19

Section 3.10 Consolidation, Merger, etc., of the Issuer; Disposition of Trust
Assets.

   20

Section 3.11 Successor or Transferee.

   22

Section 3.12 No Other Business

   22

Section 3.13 No Borrowing

   22

Section 3.14 Guarantees, Loans, Advances and Other Liabilities

   22

Section 3.15 Servicer’s Obligations

   22

Section 3.16 Capital Expenditures

   22

Section 3.17 Removal of Administrator

   22

Section 3.18 Restricted Payments

   23

Section 3.19 Notice of Events of Default

   23

Section 3.20 Further Instruments and Acts

   23

Section 3.21 Indenture Trustee’s Assignment of Administrative Receivables and
Warranty Receivables

   23

Section 3.22 Representations and Warranties by the Issuer to the Indenture
Trustee

   24

 

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ARTICLE IV SATISFACTION AND DISCHARGE

   24

Section 4.1 Satisfaction and Discharge of Indenture

   24

Section 4.2 Application of Trust Money

   26

Section 4.3 Repayment of Monies Held by Paying Agent

   26

Section 4.4 Duration of Position of Indenture Trustee for Benefit of
Certificateholders

   26

ARTICLE V DEFAULT AND REMEDIES

   26

Section 5.1 Events of Default

   26

Section 5.2 Acceleration of Maturity; Rescission and Annulment.

   27

Section 5.3 Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee.

   28

Section 5.4 Remedies; Priorities.

   30

Section 5.5 Optional Preservation of the Collateral

   31

Section 5.6 Limitation of Suits

   31

Section 5.7 Unconditional Rights of Noteholders To Receive Principal and
Interest

   32

Section 5.8 Restoration of Rights and Remedies

   32

Section 5.9 Rights and Remedies Cumulative

   33

Section 5.10 Delay or Omission Not a Waiver

   33

Section 5.11 Control by Noteholders

   33

Section 5.12 Waiver of Past Defaults.

   34

Section 5.13 Undertaking for Costs

   34

Section 5.14 Waiver of Stay or Extension Laws

   35

Section 5.15 Action on Notes

   35

Section 5.16 Performance and Enforcement of Certain Obligations.

   35 ARTICLE VI THE INDENTURE TRUSTEE    36

Section 6.1 Duties of Indenture Trustee.

   36

Section 6.2 Rights of Indenture Trustee.

   37

Section 6.3 Indenture Trustee May Own Notes

   38

Section 6.4 Indenture Trustee’s Disclaimer

   38

Section 6.5 Notice of Defaults

   38

Section 6.6 Reports by Indenture Trustee to Holders

   38

Section 6.7 Compensation; Indemnity.

   39

Section 6.8 Replacement of Indenture Trustee.

   39

Section 6.9 Merger or Consolidation of Indenture Trustee.

   40

Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee.

   41

Section 6.11 Eligibility; Disqualification.

   42

Section 6.12 [Reserved].

   43

Section 6.13 Representations and Warranties of Indenture Trustee

   43

Section 6.14 Indenture Trustee May Enforce Claims Without Possession of Notes

   44 ARTICLE VII NOTEHOLDERS’ LISTS AND REPORTS    44

Section 7.1 Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders

   44

Section 7.2 Preservation of Information, Communications to Noteholders

   44

ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES

   44

 

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Section 8.1 Collection of Money

   44

Section 8.2 Designated Accounts; Payments.

   45

Section 8.3 General Provisions Regarding Accounts.

   49

Section 8.4 Release of Collateral.

   49

Section 8.5 Opinion of Counsel

   50

Section 8.6 Investment Earnings and Supplemental Servicing Fees

   50

Section 8.7 Net Deposits

   50

Section 8.8 Statements to Securityholders.

   50

Section 8.9 Designated Accounts

   53

Section 8.10 Reserve Account.

   53

ARTICLE IX SUPPLEMENTAL INDENTURES

   53

Section 9.1 Supplemental Indentures Without Consent of Noteholders.

   53

Section 9.2 Supplemental Indentures With Consent of Noteholders.

   54

Section 9.3 Execution of Supplemental Indentures

   55

Section 9.4 Effect of Supplemental Indenture

   56

Section 9.5 [Reserved].

   56

Section 9.6 Reference in Notes to Supplemental Indentures

   56

ARTICLE X REDEMPTION OF NOTES

   56

Section 10.1 Redemption.

   56

Section 10.2 Form of Redemption Notice.

   57

Section 10.3 Notes Payable on Redemption Date or Optional Purchase Date

   57

ARTICLE XI MISCELLANEOUS

   58

Section 11.1 Compliance Certificates and Opinions, etc.

   58

Section 11.2 Form of Documents Delivered to Indenture Trustee.

   59

Section 11.3 Acts of Noteholders.

   60

Section 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating Agencies

   61

Section 11.5 Notices to Noteholders; Waiver.

   61

Section 11.6 Alternate Payment and Notice Provisions

   61

Section 11.7 [Reserved].

   61

Section 11.8 Effect of Headings and Table of Contents

   61

Section 11.9 Successors and Assigns.

   62

Section 11.10 Separability

   62

Section 11.11 Benefits of Indenture

   62

Section 11.12 Legal Holidays

   62

Section 11.13 Governing Law; Submission to Jurisdiction

   62

Section 11.14 Counterparts

   62

Section 11.15 Recording of Indenture

   63

Section 11.16 No Recourse

   63

Section 11.17 No Petition

   63

Section 11.18 Inspection

   64

Section 11.19 Consent to Backup Servicing Agreement

   64

 

EXHIBIT A    Locations of Schedule of Retail Notes

 

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EXHIBIT B    Form of Class A-1 Asset Backed Note EXHIBIT C    Form of Class A-2,
Class A-3, Class B and Class C Asset Backed Note

 

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INDENTURE

INDENTURE, dated as of May 27, 2010, between NAVISTAR FINANCIAL 2010-A OWNER
TRUST, a Delaware statutory trust (the “Issuer”), and Citibank, N.A., a national
banking association, as indenture trustee and not in its individual capacity
(the “Indenture Trustee”).

Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Notes and (only to the extent
expressly provided herein) the Certificateholders:

GRANTING CLAUSE

The Issuer hereby grants to the Indenture Trustee on the Closing Date, as
trustee for the benefit of the Financial Parties, including the
Certificateholder (except with respect to the Note Distribution Account and the
Reserve Account Property), all of the Issuer’s right, title and interest,
whether now existing or hereafter arising or acquired, in, to and under (a) the
Receivables listed on the Schedule of Retail Notes which is on file at the
locations listed on Exhibit A hereto and all Related Security; (b) the
Collection Account and the Note Distribution Account and all amounts,
investments and investment property held from time to time in the Collection
Account and the Note Distribution Account (whether in the form of deposit
accounts, Physical Property, book-entry securities, uncertificated securities or
otherwise) and all proceeds of the foregoing; (c) the Reserve Account and all
amounts, investments and investment property held from time to time in the
Reserve Account (whether in the form of deposit accounts, Physical Property,
book-entry securities, uncertificated securities or otherwise) and all proceeds
of the foregoing (other than the Investment Earnings thereon); (d) the Reserve
Account Initial Deposit with respect to the Closing Date, and all proceeds of
the foregoing (other than the Investment Earnings thereon) ((c) and (d),
collectively, the “Reserve Account Property”); (e) the Pooling Agreement and the
PSA Assignment (including all rights of NFRRC under the Purchase Agreement and
the PA Assignment assigned to the Issuer pursuant to the Pooling Agreement);
(f) the Servicing Agreement; (g) all Collections; and (h) all present and future
claims, demands, causes and choses in action in respect of any or all of the
foregoing and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all proceeds of
the conversion, voluntary or involuntary, into cash or other liquid property,
all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of obligations
and receivables, instruments and other property which at any time constitute all
or part of or are included in the proceeds of any of the foregoing
(collectively, the “Collateral”).

The foregoing Grant is made in trust to secure (a) first, the payment of
principal of and interest on, and any other amounts owing in respect of, the
Class A Notes, equally and ratably without prejudice, priority or distinction,
subject to the priority set forth in Section 8.2(d) of this Indenture,
(b) second, the payment of principal of and interest on, and any other amounts
owing in respect of, the Class B Notes, equally and ratably without prejudice,
priority or distinction, subject to the priority set forth in Section 8.2(d) of
this Indenture, and (c) third, the payment of principal of and interest on, and
any other amounts owing in respect of, the Class C

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Notes, equally and ratably without prejudice, priority or distinction, subject
to the priority set forth in Section 8.2(d) of this Indenture, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture. This Indenture constitutes a security agreement under the UCC.

The foregoing Grant includes all rights, powers and options (but none of the
obligations, if any) of the Issuer under any agreement or instrument included in
the Collateral, including the immediate and continuing right to claim for,
collect, receive and give receipt for principal, interest and other Scheduled
Payments in respect of the Receivables included in the Collateral and all other
monies payable under the Collateral, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Issuer or otherwise and
generally to do and receive anything that the Issuer is or may be entitled to do
or receive under or with respect to the Collateral.

The Indenture Trustee, as trustee on behalf of the Financial Parties,
acknowledges such Grant and accepts the trusts under this Indenture in
accordance with the provisions of this Indenture.

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.1 Definitions. Certain capitalized terms used in this Indenture shall
have the respective meanings assigned them in Part I of Appendix A to the
Pooling Agreement of even date herewith between the Issuer and NFRRC (as it may
be amended, supplemented or modified from time to time, the “Pooling
Agreement”). All references herein to “the Indenture” or “this Indenture” are to
this Indenture 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. All references herein to Articles, Sections, subsections and
exhibits are to Articles, Sections, subsections and exhibits contained in or
attached to this Indenture unless otherwise specified. All terms defined in this
Indenture shall have the defined meanings when used in any certificate, notice,
Note or other document made or delivered pursuant hereto unless otherwise
defined therein. The rules of construction set forth in Part II of such
Appendix A shall be applicable to this Indenture.

ARTICLE II

THE NOTES

Section 2.1 Form.

(a) The Class A-1 Notes, with the Indenture Trustee’s certificate of
authentication, shall be substantially in the form set forth in Exhibit B and
each of the Class A-2 Notes, Class A-3 Notes, Class B Notes and Class C Notes,
each with the Indenture Trustee’s certificate of authentication, shall be
substantially in the form set forth in Exhibit C, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and each class of Notes may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may, consistently herewith, be

 

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determined by the officers executing such Notes, as evidenced by their execution
of the Notes. Any portion of the text of any Note may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the Note.

(b) The Definitive Notes, if any, shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.

(c) Each Note shall be dated the date of its authentication. The terms of each
class of Notes as provided for in Exhibit B and Exhibit C hereto are part of the
terms of this Indenture.

(d) The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the
Class B Notes shall be Book-Entry Notes and shall be delivered as registered
Notes. The Class C Notes shall be Definitive Notes and shall be registered in
the Note Register in the name of the Seller.

Section 2.2 Execution, Authentication and Delivery.

(a) Each Note shall be dated the date of its authentication, and shall be
issuable as a registered Note in the minimum denomination of $50,000 and in
integral multiples of $1,000 (except, if applicable, for one Note representing a
residual portion of each class of Notes which may be issued in a different
denomination).

(b) The Notes shall be executed on behalf of the Issuer by any of its Authorized
Officers. The signature of any such Authorized Officer on the Notes may be
manual or facsimile.

(c) Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
office prior to the authentication and delivery of such Notes or did not hold
such office at the date of such Notes.

(d) The Indenture Trustee shall upon Issuer Order authenticate and deliver to or
upon the order of the Issuer, the Notes for original issue in aggregate
principal amount of $919,200,000, comprised of (i) Class A-1 Notes in the
aggregate principal amount of $326,000,000, (ii) Class A-2 Notes in the
aggregate principal amount of $262,000,000, (iii) Class A-3 Notes in the
aggregate principal amount of $217,900,000, (iv) Class B Notes in the aggregate
principal amount of $75,200,000, and (v) Class C Notes in the aggregate
principal amount of $38,100,000. The aggregate principal amount of all Notes
outstanding at any time may not exceed $919,200,000 except as provided in
Section 2.5.

(e) No Notes shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form set forth, in the case of the
Class A-1 Notes, in Exhibit B, and in the case of the Class A-2 Notes, the
Class A-3 Notes, the Class B Notes and the Class C Notes, in Exhibit C, executed
by the Indenture Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.

 

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Section 2.3 Temporary Notes.

(a) Pending the preparation of Definitive Notes, if any, the Issuer may execute,
and upon receipt of an Issuer Order the Indenture Trustee shall authenticate and
deliver, such Temporary Notes which are printed, lithographed, typewritten,
mimeographed or otherwise produced, of the tenor of the Definitive Notes in lieu
of which they are issued and with such variations as are consistent with the
terms of this Indenture as the officers executing such Notes may determine, as
evidenced by their execution of such Notes.

(b) If Temporary Notes are issued, the Issuer shall cause Definitive Notes to be
prepared without unreasonable delay. After the preparation of Definitive Notes,
the Temporary Notes shall be exchangeable for Definitive Notes upon surrender of
the Temporary Notes at the Agency Office of the Issuer to be maintained as
provided in Section 3.2, without charge to the Noteholder. Upon surrender for
cancellation of any one or more Temporary Notes, the Issuer shall execute and
the Indenture Trustee shall authenticate and deliver in exchange therefor a like
principal amount of Definitive Notes of authorized denominations. Until so
delivered in exchange, the Temporary Notes shall in all respects be entitled to
the same benefits under this Indenture as Definitive Notes.

Section 2.4 Registration; Registration of Transfer and Exchange of Notes.

(a) The Issuer shall cause to be kept the Note Register, comprising separate
registers for each class of Notes, in which, subject to such reasonable
regulations as the Issuer may prescribe, the Issuer shall provide for the
registration of the Notes and the registration of transfers and exchanges of the
Notes. The Indenture Trustee shall initially be the Note Registrar for the
purpose of registering the Notes and transfers of the Notes as herein provided.
Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a
successor Note Registrar or, if it elects not to make such an appointment,
assume the duties of the Note Registrar.

(b) If a Person other than the Indenture Trustee is appointed by the Issuer as
Note Registrar, the Issuer will give the Indenture Trustee prompt written notice
of the appointment of such Note Registrar and of the location, and any change in
the location, of the Note Register. The Indenture Trustee shall have the right
to inspect the Note Register at all reasonable times and to obtain copies
thereof. The Indenture Trustee shall have the right to rely upon a certificate
executed on behalf of the Note Registrar by an Executive Officer thereof as to
the names and addresses of the Noteholders and the principal amounts and number
of such Notes.

(c) Upon surrender for registration of transfer of any Note at the Corporate
Trust Office of the Indenture Trustee or the Agency Office of the Issuer (and
following the delivery, in the former case, of such Notes to the Issuer by the
Indenture Trustee), the Issuer shall execute, the Indenture Trustee shall
authenticate and the Noteholder shall obtain from the Indenture Trustee, in the
name of the designated transferee or transferees, one or more new Notes in any
authorized denominations, of a like aggregate principal amount.

 

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(d) At the option of the Noteholder, Notes may be exchanged for other Notes of
the same class in any authorized denominations, of a like aggregate principal
amount. Upon surrender of the Notes to be exchanged at the Corporate Trust
Office of the Indenture Trustee or the Agency Office of the Issuer (and
following the delivery, in the former case, of such Notes to the Issuer by the
Indenture Trustee), the Issuer shall execute, and the Indenture Trustee shall
authenticate and the Noteholder shall obtain from the Indenture Trustee, the
Notes which the Noteholder making the exchange is entitled to receive.

(e) All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.

(f) Every Note presented or surrendered for registration of transfer or exchange
shall be duly endorsed by, or be accompanied by a written instrument of transfer
in form satisfactory to the Indenture Trustee and the Note Registrar, duly
executed by the Holder thereof or such Holder’s attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in the City of New York or the city
in which the Corporate Trust Office of the Indenture Trustee is located, or by a
member firm of a national securities exchange, and such other documents as the
Indenture Trustee may require.

(g) No service charge shall be made to a Holder for any registration of transfer
or exchange of Notes, but the Issuer or Indenture Trustee may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes,
other than exchanges pursuant to Section 2.3 or Section 9.6 not involving any
transfer.

(h) The preceding provisions of this Section 2.4 notwithstanding, the Issuer
shall not be required to transfer or make exchanges, and the Note Registrar need
not register transfers or exchanges, of Notes that: (i) have been selected for
redemption pursuant to Article X, if applicable or (ii) are due for repayment in
full within 15 days of surrender to the Corporate Trust Office or the Agency
Office.

Section 2.5 Mutilated, Destroyed, Lost or Stolen Notes.

(a) If (i) any mutilated Note is surrendered to the Indenture Trustee, or the
Indenture Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, and (ii) there is delivered to the Indenture Trustee such
security or indemnity as may be required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Note Registrar or the Indenture Trustee that such Note has been acquired by a
protected purchaser, the Issuer shall execute and upon the Issuer’s request the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Note, a replacement Note of a like
class and aggregate principal amount; provided, however, that if any such
destroyed, lost or stolen Note, but not a mutilated Note, shall have become or
within seven days shall be due and payable in full, or shall have been called
for redemption, instead of issuing a replacement Note, the Issuer may make
payment to the Holder of such destroyed, lost or stolen Note when so due or
payable or upon the Redemption Date (if applicable) or Optional Purchase Date
(if applicable) without surrender thereof.

 

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(b) If, after the delivery of a replacement Note or payment in respect of a
destroyed, lost or stolen Note pursuant to Section 2.5(a), any protected
purchaser of the original Note in lieu of which such replacement Note was issued
presents for payment such original Note, the Issuer and the Indenture Trustee
shall be entitled to recover such replacement Note (or such payment) from
(i) any Person to whom it was delivered, (ii) the Person taking such replacement
Note from the Person to whom such replacement Note was delivered, or (iii) any
assignee of such Person, except any protected purchaser, and the Issuer and the
Indenture Trustee shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.

(c) In connection with the issuance of any replacement Note under this
Section 2.5, the Issuer may require the payment by the Holder of such Note of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including all fees and
expenses of the Indenture Trustee) connected therewith.

(d) Any duplicate Note issued pursuant to this Section 2.5 in replacement for
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be found at any time or be enforced by any
Person, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

(e) The provisions of this Section 2.5 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.

Section 2.6 Persons Deemed Noteholders. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
of their agents may treat the Person in whose name any Note is registered (as of
the day of determination) as the Noteholder for the purpose of receiving
payments of principal of and interest on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and neither the Issuer, the
Indenture Trustee nor any agent of the Issuer or the Indenture Trustee shall be
affected by notice to the contrary.

Section 2.7 Payment of Principal and Interest.

(a) Interest on the Class A-1 Notes shall accrue in the manner set forth in
Exhibit B at the applicable Interest Rate for such class, and such interest
shall be payable on each Distribution Date, in accordance with the priorities
set forth in Section 8.2(c) and Section 8.2(d), as specified in the form of Note
set forth in Exhibit B. Interest on the Class A-2 Notes, the Class A-3 Notes,
the Class B Notes and the Class C Notes shall accrue in the manner set forth in
Exhibit C at the applicable Interest Rate for such class, and shall be payable
on each Distribution Date, in accordance with the priorities set forth in
Section 8.2(c) and Section 8.2(d), as specified in the form of Note set forth in
Exhibit C. Any installment of interest payable on any Note shall

 

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be punctually paid or duly provided for by a deposit by or at the direction of
the Issuer or the Servicer into the Note Distribution Account before each
Distribution Date for payment to Noteholders on the related Distribution Date
and shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the applicable Record Date, by check mailed
first-class, postage prepaid to such Person’s address as it appears on the Note
Register on such Record Date; provided, however, that, unless and until
Definitive Notes have been issued pursuant to Section 2.12, with respect to
Notes registered on the applicable Record Date in the name of the Note
Depository (initially, Cede & Co.) or the Seller, payment shall be made by wire
transfer in immediately available funds to the account designated by the Note
Depository or the Seller, as applicable.

(b) Prior to the occurrence of an Event of Default and a declaration in
accordance with Section 5.2(a) that the Notes have become immediately due and
payable, the principal of each class of Notes shall be payable in full on the
Final Scheduled Distribution Date for such class and, to the extent of funds
available therefor, in installments on the Distribution Dates (if any) preceding
the Final Scheduled Distribution Date for such class, in the amounts and in
accordance with the priorities set forth in Section 8.2(c) and
Section 8.2(d)(ii). All principal payments on each class of Notes shall be made
pro rata to the Noteholders of such class entitled thereto. Any installment of
principal payable on any Note shall be punctually paid or duly provided for by a
deposit by the Indenture Trustee in accordance with the provisions of
Section 8.2 into the Note Distribution Account prior to the applicable
Distribution Date and shall be paid to the Person in whose name such Note (or
one or more Predecessor Notes) is registered on the applicable Record Date, by
check mailed first-class, postage prepaid to such Person’s address as it appears
on the Note Register on such Record Date; provided, however, that, unless and
until Definitive Notes have been issued pursuant to Section 2.12, with respect
to Notes registered on the Record Date in the name of the Note Depository or the
Seller, payment shall be made by wire transfer in immediately available funds to
the account designated by the Note Depository or the Seller, as appicable,
except for: (i) the final installment of principal on any Note and (ii) the
Redemption Price for the Notes redeemed pursuant to Section 10.1, which, in each
case, shall be payable as provided herein. The funds represented by any such
checks in respect of interest or principal returned undelivered shall be held in
accordance with Section 3.3.

(c) [Reserved].

(d) From and after the occurrence of an Event of Default and a declaration in
accordance with Section 5.2(a) that the Notes have become immediately due and
payable, principal on the Notes shall be payable as provided in
Section 8.2(d)(iii) or 8.2(d)(iv), as applicable.

(e) With respect to any Distribution Date on which the final installment of
principal and interest on a class of Notes is to be paid, the Indenture Trustee
shall notify each Noteholder of record of such class as of the Record Date for
such Distribution Date of the fact that the final installment of principal of
and interest on such Note is to be paid on such Distribution Date. Such notice
shall be sent (i) on such Record Date by facsimile, if Book-Entry Notes are
outstanding, or (ii) not later than three Business Days after such Record Date
in accordance with Section 11.5(a), if Definitive Notes are outstanding, and
shall specify that such final installment shall be payable only upon
presentation and surrender of such Note and shall

 

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specify the place where such Note may be presented and surrendered for payment
of such installment and the manner in which such payment shall be made. Notices
in connection with redemptions of Notes shall be mailed to Noteholders as
provided in Section 10.2. Within 60 days of the surrender pursuant to this
Section 2.7(e) or cancellation pursuant to Section 2.8 of all of the Notes of a
particular class, the Indenture Trustee shall provide each of the Rating
Agencies with written notice stating that all Notes of such class have been
surrendered or canceled.

Section 2.8 Cancellation of Notes. All Notes surrendered for payment,
redemption, exchange or registration of transfer shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly canceled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly canceled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes canceled as provided in this Section 2.8, except as expressly
permitted by this Indenture. All canceled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Order that they be returned to it; provided, however, that such Issuer Order is
timely and the Notes have not been previously disposed of by the Indenture
Trustee. The Indenture Trustee shall certify to the Issuer that surrendered
Notes have been duly canceled and retained or destroyed, as the case may be.

Section 2.9 [Reserved].

Section 2.10 Book-Entry Notes. Except as provided in Section 2.12, the Notes,
upon original issuance, shall be issued in the form of a typewritten Note or
Notes representing the Book-Entry Notes, to be delivered to The Depository Trust
Company, the initial Clearing Agency by or on behalf of the Issuer. Such Note or
Notes shall be registered on the Note Register in the name of the Note
Depository (initially, Cede & Co.), and no Note Owner shall receive a Definitive
Note representing such Note Owner’s interest in such Note, except as provided in
Section 2.12. Unless and until Definitive Notes have been issued to the Note
Owners pursuant to Section 2.12:

(a) the provisions of this Section 2.10 shall be in full force and effect;

(b) the Note Registrar and the Indenture Trustee shall be entitled to deal with
the Clearing Agency for all purposes of this Indenture (including the payment of
principal of and interest on the Notes and the giving of instructions or
directions hereunder) as the sole holder of the Notes and shall have no
obligation to the Note Owners;

(c) to the extent that the provisions of this Section 2.10 conflict with any
other provisions of this Indenture, the provisions of this Section 2.10 shall
control;

(d) the rights of the Note Owners shall be exercised only through the Clearing
Agency and shall be limited to those established by law and agreements between
such Note Owners and the Clearing Agency and/or the Clearing Agency Participants
and unless and until Definitive Notes are issued pursuant to Section 2.12, the
initial Clearing Agency shall make

 

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book-entry transfers between the Clearing Agency Participants and receive and
transmit payments of principal of and interest on the Notes to such Clearing
Agency Participants, pursuant to the Note Depository Agreement; and

(e) whenever this Indenture requires or permits actions to be taken based upon
instructions or directions of Holders of Notes evidencing a specified percentage
of the Outstanding Amount of the Controlling Class, the Clearing Agency shall be
deemed to represent such percentage only to the extent that it has (i) received
written instructions to such effect from Note Owners and/or Clearing Agency
Participants owning or representing, respectively, such required percentage of
the beneficial interest in the Notes of such class and (ii) has delivered such
instructions to the Indenture Trustee.

Section 2.11 Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to
Section 2.12, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Noteholders to the Clearing
Agency and shall have no other obligation to the Note Owners.

Section 2.12 Definitive Notes. The Class C Notes, upon issuance, will be in the
form of Definitive Notes, but, at the request of the holder thereof (other than
any Affiliate of (x) the Issuer or (y) the Seller which is not, in each case, a
United States person within the meaning of Section 7701(a)(30) of the Code) and
after such holder delivers the opinion described in Section 2.15(c), may be
exchanged for Book-Entry Notes. If (a) the Administrator advises the Indenture
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities with respect to the Notes and the Issuer
is unable to locate a qualified successor, (b) the Administrator, at its option,
advises the Indenture Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency, or (c) after the occurrence of an
Event of Default or a Servicer Default, Note Owners representing beneficial
interests aggregating at least a majority of the Outstanding Amount of the
Controlling Class advise the Clearing Agency in writing that the continuation of
a book-entry system through the Clearing Agency is no longer in the best
interests of the Note Owners, then the Clearing Agency shall notify all Note
Owners and the Indenture Trustee of the occurrence of any such event and of the
availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Indenture Trustee of the typewritten Note or Notes representing
the Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.

Section 2.13 Seller as Noteholder. The Seller in its individual or any other
capacity may become the owner or pledgee of Notes and may otherwise deal with
the Issuer or its affiliates with the same rights it would have if it were not
the Seller.

Section 2.14 Tax Treatment. The Issuer in entering into this Indenture, and the
Noteholders and the Note Owners (other than the Seller), by acquiring any Note
or interest

 

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therein, (a) express their intention that the Notes qualify under applicable tax
law as indebtedness secured by the Collateral and (b) unless otherwise required
by appropriate taxing authorities, agree to treat the Notes as indebtedness
secured by the Collateral for the purpose of federal income taxes, state and
local income and franchise taxes, and any other taxes imposed upon, measured by
or based upon gross or net income.

Section 2.15 Transfer Restrictions.

(a) The Notes have not been registered and will not be registered under the
Securities Act, or any state securities laws, and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. Persons
(as such terms are defined under the Securities Act), except pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and applicable state securities laws.

(b) Except for the Seller, each Noteholder and Note Owner, by acquiring any Note
or interest therein, will be deemed to represent and agree (in addition to any
representation made under Section 2.14) that:

(i) Such Person (i) is a Qualified Institutional Buyer, (ii) is aware that the
sale to it is being made in reliance on the exemption from registration provided
by Rule 144A under the Securities Act and, if it is acquiring any such Notes or
any interest or participation therein for the account of any other Qualified
Institutional Buyer, such other Qualified Institutional Buyer is aware that the
sale is being made in reliance on Rule 144A, and (iii) is acquiring the Notes or
any interest or participation therein for its own account or for one or more
accounts, each of which is a Qualified Institutional Buyer, and as to each of
which such Person exercises sole investment discretion, and in a principal
amount of not less than the minimum denomination of such Notes for such Person
and for each such account.

(ii) Such Person and any transferee understand that the Notes are being offered
only in a transaction not involving any public offering in the United States
within the meaning of the Securities Act, the Notes have not been and will not
be registered under the Securities Act or any state or other applicable
securities laws, and, if in the future such Person or any transferee decides to
offer, resell, pledge or otherwise transfer the Notes, such Notes may be
offered, resold, pledged or otherwise transferred only in accordance with the
Indenture and only (i) so long as such Notes are eligible for resale pursuant to
Rule 144A, to a person whom the seller reasonably believes is a Qualified
Institutional Buyer acquiring the Notes for its own account or as a fiduciary or
agent for others (which others must also be Qualified Institutional Buyers) to
whom notice is given that the resale or other transfer is being made in reliance
on Rule 144A, (ii) pursuant to an effective registration statement under the
Securities Act (however, there is no undertaking to register the Notes under any
United States federal or state securities laws, any “Blue Sky” laws or any
securities laws of any other jurisdiction on any future date), or (iii) if the
Notes are not eligible for resale pursuant to Rule 144A, pursuant to an
exemption from registration under the Securities Act other than Rule 144A, and,
in each case, in accordance with applicable United States federal or state
securities laws, and “Blue Sky” laws or any securities laws of any other
applicable jurisdiction. Such Person and any

 

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transferee acknowledges that no representation is made by the Issuer or the
Initial Purchasers, as the case may be, as to the availability of any exemption
under the Securities Act, any “Blue Sky” laws or any applicable state securities
laws for resale of the Notes.

(iii) Unless the relevant legend set out below has been removed from the
relevant Notes, such Person shall notify each transferee of the Notes that
(i) such Notes have not been registered under the Securities Act, (ii) the
holder of such Notes is subject to the restrictions on the resale or other
transfer thereof described in Section 2.15(b)(ii) above, and (iii) such
transferee shall be deemed to have represented (A) either (1) if the Notes are
eligible for resale pursuant to Rule 144 A, such transferee is a Qualified
Institutional Buyer acquiring the Notes for its own account or as a fiduciary
for others (which are Qualified Institutional Buyers), or (2) if the Notes are
not eligible for resale pursuant to Rule 144 A, that such transferee is
acquiring such Notes in reliance on an exemption under the Securities Act other
than Rule 144A, and (B) that such transferee shall notify its subsequent
transferees as to the foregoing.

(iv) Such Person and any transferee understand that an investment in the Notes
involves certain risks, including the risk of loss of all or a substantial part
of its investment. Such Person and any transferee have had access to such
financial and other information concerning the Issuer and the Notes as it deemed
necessary or appropriate in order to make an informed investment decision with
respect to its purchase of the Notes, including an opportunity to ask questions
of and request information from the Servicer and the Issuer. Such Person and any
transferee have such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of its investment in the
Notes, and such Person and any transferee and any accounts for which it is
acting are each able to bear the economic risk of its investment for an
indefinite period of time.

(v) In connection with the purchase of the Notes (i) none of the Issuer, the
Initial Purchasers, the Servicer, NFC, the Seller, the Owner Trustee or the
Indenture Trustee is acting as a fiduciary or financial or investment adviser
for such Person or any transferee; (ii) such Person or any transferee is not
relying (for purposes of making any investment decision or otherwise) upon any
advice, counsel or representations (whether written or oral) of the Issuer, the
Initial Purchasers, the Servicer, NFC, the Seller, the Owner Trustee or the
Indenture Trustee other than in a current confidential offering memorandum
supplement or the confidential offering memorandum for such Notes and any
representations expressly set forth in a written agreement with such party;
(iii) none of the Issuer, the Initial Purchasers, the Servicer, NFC, the Seller,
the Owner Trustee or the Indenture Trustee has given to such Person or any
transferee (directly or indirectly through any other person) any assurance,
guarantee, or representation whatsoever as to the expected or projected success,
profitability, return, performance, result, effect, consequence or benefit
(including legal, regulatory, tax, financial, accounting, or otherwise) of its
purchase or the documentation for the Notes, (iv) such Person or any transferee
has consulted with its own legal, regulatory, tax, business, investment,
financial and accounting advisers to the extent it has deemed necessary, and it
has made its own investment decisions (including decisions regarding the
suitability of any

 

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transaction pursuant to this Indenture) based upon its own judgment and upon any
advice from such advisers as it has deemed necessary and not upon any view
expressed by the Issuer, the Initial Purchasers, the Servicer, NFC, the Seller
or the Indenture Trustee, (v) such Person or any transferee has determined that
the rates, prices or amounts and other terms of the purchase and sale of the
Notes reflect those in the relevant market for similar transactions, (vi) such
Person or any transferee is purchasing the Notes with a full understanding of
all of the terms, conditions and risks thereof (economic and otherwise), and is
capable of assuming and willing to assume (financially and otherwise) these
risks, and (vii) such Person or any transferee is a sophisticated investor
familiar with transactions similar to its investment in the Notes.

(vi) Such Person and each transferee acknowledge that each Note will bear a
legend to the following effect unless determined otherwise by the Issuer:

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) ANY “BLUE SKY” LAWS OR
THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THIS NOTE MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT (A) (1) TO A PERSON THAT
THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT (A “QUALIFIED INSTITUTIONAL
BUYER”) WHO IS EITHER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER, IN A PRINCIPAL AMOUNT OF NOT LESS THAN $50,000
AND IN INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF, FOR THE PURCHASER AND FOR
EACH SUCH ACCOUNT, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO
LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, SUBJECT TO THE
SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE INDENTURE, (2) IF THIS NOTE
IS NOT ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OTHER THAN RULE 144A IN A PRINCIPAL AMOUNT
OF NOT LESS THAN $50,000 AND IN INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF,
SUBJECT TO THE SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE INDENTURE, OR
(3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
(HOWEVER, THERE IS NO UNDERTAKING TO REGISTER THIS NOTE UNDER ANY UNITED STATES
FEDERAL OR STATE SECURITIES LAWS OR ANY SECURITIES LAWS OF ANY OTHER
JURISDICTION ON ANY FUTURE DATE), AND (B) IN ACCORDANCE WITH THE SECURITIES ACT,
ANY “BLUE SKY” LAWS AND ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION. EACH PURCHASER AND
TRANSFEREE WILL BE DEEMED TO HAVE MADE CERTAIN REPRESENTATIONS AND AGREEMENTS
SET FORTH IN THE INDENTURE. ANY TRANSFER IN VIOLATION OF THE

 

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FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT
OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY
INSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE INDENTURE TRUSTEE OR ANY
INTERMEDIARY.

EACH HOLDER OF A NOTE WILL BE DEEMED TO REPRESENT AND WARRANT THAT EITHER (i) IT
IS NOT ACQUIRING THE NOTE WITH THE ASSETS OF (A) AN “EMPLOYEE BENEFIT PLAN” AS
DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED (“ERISA”), THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA,
(B) A “PLAN” SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE “CODE”), (C) AN ENTITY WHOSE UNDERLYING ASSETS ARE TREATED UNDER
REGULATIONS ISSUED BY THE U.S. DEPARTMENT OF LABOR, AS MODIFIED BY SECTION 3(42)
OF ERISA, TO INCLUDE PLAN ASSETS BY REASON OF INVESTMENT BY AN EMPLOYEE BENEFIT
PLAN OR PLAN IN SUCH ENTITY OR (D) ANY OTHER PLAN THAT IS SUBJECT TO ANY LAW
THAT IS SUBSTANTIALLY SIMILAR TO ERISA OR SECTION 4975 OF THE CODE OR (ii) THE
ACQUISITION AND HOLDING OF THE NOTE WILL NOT GIVE RISE TO A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR
A VIOLATION OF ANY SUBSTANTIALLY SIMILAR APPLICABLE LAW.

(vii) Such Person and any transferee is either (i) not a Benefit Plan or any
other plan subject to federal, state, local or non-U.S. laws or regulations that
are substantially similar to Section 406 of ERISA or Section 4975 of the Code or
(ii) its acquisition, holding and disposition of the Note will not result in a
non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code or a violation of any substantially similar law.

(viii) Such Person and any transferee are not purchasing the Notes with a view
to the resale, distribution or other disposition thereof in violation of the
Securities Act.

(ix) Such Person and any transferee will provide notice to each Person to whom
it proposes to transfer any interest in the Notes of the transfer restrictions
and representations set forth in this Indenture, including the exhibits hereto.

(x) Such Person or any transferee acknowledges that the Notes do not represent
deposits with or other liabilities of the Indenture Trustee, the Owner Trustee,
the Initial Purchasers, the Servicer, NFC, the Seller or any entity related to
any of them. Unless otherwise expressly provided in this Indenture, each of the
Indenture Trustee, the Owner Trustee, the Initial Purchasers, the Servicer, NFC,
the Seller or any entity related to any of them shall not, in any way, be
responsible for or stand behind the capital value or the performance of the
Notes or the assets held by the Issuer.

 

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(xi) Such Person acknowledges that the Indenture Trustee, the Issuer, the
Initial Purchasers, the Servicer, NFC, the Seller and others will rely upon the
truth and accuracy of the foregoing acknowledgments, representations and
agreements and agrees that, if any of the acknowledgments, representations or
agreements deemed to have been made by it by virtue of its purchase of a Note
(or a beneficial interest therein) is no longer accurate, then it shall promptly
so notify the sponsor and the Seller in writing.

(c) (i) A sale, transfer, assignment, exchange, participation, pledge,
hypothecation, rehypothecation, or other grant of a security interest in or
disposition of (each a “Transfer”) any interest in Class C Notes may only be
made to a Person who is a United States person (within the meaning of
Section 7701(a)(30) of the Code); (ii) a Person other than the Seller acquiring
Class C Notes or an interest therein shall be deemed to have made the
representations set forth in Section 2.14; and (iii) no Transfer of any interest
in Class C Notes shall be made (A) to any one Person in an amount less than 100%
of the Note Principal Balance of the Class C Notes or (B) to a grantor trust,
S corporation, or partnership where more than 50% of the value of a beneficial
owner’s interest in such pass through entity is attributable to the pass-through
entity’s interest in the Class C Notes together with other direct or indirect
interests in the Issuer, in each case, unless (x) an opinion of counsel
satisfactory to the Indenture Trustee and the Seller that such Transfer shall
not cause the Issuer to be treated as an association (or publicly traded
partnership) taxable as a corporation for federal income tax purposes shall have
been delivered to the Indenture Trustee and the Seller and (y) the Seller shall
have provided prior written approval; provided, however, that the restrictions
in Section 2.15(c)(i) and 2.15(c)(iii) shall not continue to apply to any
Class C Notes to the extent counsel, satisfactory to the Indenture Trustee and
the Seller, has rendered an opinion, with respect to the initial Transfer by the
Seller, to the effect that such Class C Notes transferred will be characterized
as indebtedness for federal income tax purposes. Any attempted transfer in
contravention of this Section 2.15(c) will be void ab initio and the purported
transferor will continue to be treated as the owner of the Class C Notes.

ARTICLE III

COVENANTS

Section 3.1 Payment of Principal and Interest. The Issuer shall duly and
punctually pay the principal of and interest on the Notes in accordance with the
terms of the Notes and this Indenture. On each Distribution Date and on the
Redemption Date (if applicable) or Optional Purchase Date (if applicable), the
Indenture Trustee shall distribute amounts on deposit in the Note Distribution
Account to the Noteholders in accordance with Sections 2.7 and 8.2, less amounts
properly withheld under the Code by any Person from a payment to any Noteholder
of interest and/or principal. Any amounts so withheld shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.

Section 3.2 Maintenance of Agency Office. As long as any of the Notes remains
outstanding, the Issuer shall maintain in the Borough of Manhattan, the City of
New York, an office (the “Agency Office”), being an office or agency where Notes
may be surrendered to the Issuer for registration of transfer or exchange, and
where notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially

 

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appoints the Indenture Trustee to serve as its agent for the foregoing purposes.
The Issuer shall give prompt written notice to the Indenture Trustee of the
location, and of any change in the location, of the Agency Office. If at any
time the Issuer shall fail to maintain any such office or agency or shall fail
to furnish the Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Indenture Trustee, and the Issuer hereby appoints the Indenture Trustee as its
agent to receive all such surrenders, notices and demands.

Section 3.3 Money for Payments to Be Held in Trust.

(a) As provided in Section 8.2, all payments of amounts due and payable with
respect to any Notes that are to be made from amounts withdrawn from the Note
Distribution Account pursuant to Section 8.2(d) shall be made on behalf of the
Issuer by the Indenture Trustee or by another Paying Agent, and no amounts so
withdrawn from the Note Distribution Account for payments of Notes shall be paid
over to the Issuer except as provided in this Section 3.3.

(b) On or before each Transfer Date and/or the Redemption Date (if applicable)
or Optional Purchase Date (if applicable), the Indenture Trustee shall deposit
in the Note Distribution Account an aggregate sum sufficient to pay the amounts
then becoming due with respect to the Notes, such sum to be held in trust for
the benefit of the Persons entitled thereto.

(c) The Issuer shall cause each Paying Agent other than the Indenture Trustee to
execute and deliver to the Indenture Trustee an instrument in which such Paying
Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts
as Paying Agent, it hereby so agrees), subject to the provisions of this
Section 3.3, that such Paying Agent shall:

(i) hold all sums held by it for the payment of amounts due with respect to the
Notes in trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
pay such sums to such Persons as herein provided;

(ii) give the Indenture Trustee notice of any default by the Issuer (or any
other obligor upon the Notes) of which it has actual knowledge in the making of
any payment required to be made with respect to the Notes;

(iii) at any time during the continuance of any such default, upon the written
request of the Indenture Trustee, forthwith pay to the Indenture Trustee all
sums so held in trust by such Paying Agent;

(iv) immediately resign as a Paying Agent and forthwith pay to the Indenture
Trustee all sums held by it in trust for the payment of Notes if at any time it
ceases to meet the standards required to be met by a Paying Agent in effect at
the time of determination; and

(v) comply with all requirements of the Code with respect to the withholding
from any payments made by it on any Notes of any applicable withholding taxes
imposed thereon and with respect to any applicable reporting requirements in
connection therewith.

 

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(d) The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order direct
any Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which the sums were held by such Paying Agent, and, upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such money.

(e) Subject to applicable laws with respect to escheat of funds, any money held
by the Indenture Trustee or any Paying Agent in trust for the payment of any
amount due with respect to any Note and remaining unclaimed for one year after
such amount has become due and payable shall be discharged from such trust and
be paid by the Indenture Trustee to the Issuer on Issuer Request; and the Holder
of such Note shall thereafter, as an unsecured general creditor, look only to
the Issuer for payment thereof (but only to the extent of the amounts so paid to
the Issuer), and all liability of the Indenture Trustee or such Paying Agent
with respect to such trust money shall thereupon cease; provided, however, that
the Indenture Trustee or such Paying Agent, before being required to make any
such payment, may at the expense of the Issuer cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in the City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining shall be paid to the Issuer. The Indenture
Trustee may also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such payment (including, but not limited to,
mailing notice of such payment to Holders whose Notes have been called but have
not been surrendered for redemption or whose right to or interest in monies due
and payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).

Section 3.4 Existence. The Issuer shall keep in full effect its existence,
rights and franchises as a statutory trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Issuer shall keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and shall obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Owner Trust Estate. The Issuer shall
maintain all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of its property or the conduct of its business requires or
shall require such licenses and approvals.

Section 3.5 Protection of Collateral; Acknowledgment of Pledge. The Issuer shall
from time to time execute and deliver all such supplements and amendments hereto
and all such financing statements, amendments thereto, continuation statements,
assignments, certificates, instruments of further assurance and other
instruments, and shall take such other action as may be determined to be
necessary or advisable in an Opinion of Counsel to either the Owner Trustee or
the Indenture Trustee to:

(a) maintain or preserve the lien and security interest (and the priority
thereof) of this Indenture or carry out more effectively the purposes hereof
including by making the necessary filings of financing statements or amendments
thereto within sixty days after the occurrence of any of the following: (i) any
change in the name of the Issuer (or its successor), (ii) any change in the
jurisdiction of formation of the Issuer (or its successor), and (iii) any merger
or consolidation or other change in the identity or organizational structure of
the Issuer and by promptly notifying the Indenture Trustee of any such filings;

 

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(b) perfect, publish notice of or protect the validity of any Grant made or to
be made by this Indenture;

(c) enforce the rights of the Indenture Trustee and the Noteholders in any of
the Collateral; or

(d) preserve and defend title to the Collateral and the rights of the Indenture
Trustee and the Noteholders in such Collateral against the claims of all Persons
and parties, and the Issuer hereby authorizes the Indenture Trustee to execute
and file any financing statement, continuation statement or other instrument
required by the Indenture Trustee pursuant to this Section 3.5.

Section 3.6 Opinions as to Collateral.

(a) On the Closing Date, the Issuer shall furnish to the Indenture Trustee an
Opinion of Counsel either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording and filing of this
Indenture, any indentures supplemental hereto and any other requisite documents,
and with respect to the execution and filing of any financing statements and
continuation statements as are necessary to perfect and make effective the lien
and security interest of this Indenture and reciting the details of such action,
or stating that, in the opinion of such counsel, no such action is necessary to
make such lien and security interest effective.

(b) On or before April 15 in each calendar year, beginning April 15, 2011, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any financing statements and continuation
statements as is necessary to maintain the lien and security interest created by
this Indenture and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain the lien and
security interest created by this Indenture. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until April 15 in the following calendar
year.

 

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Section 3.7 Performance of Obligations; Servicing of Receivables.

(a) The Issuer shall not take any action and shall use its reasonable efforts
not to permit any action to be taken by others that would release any Person
from any of such Person’s material covenants or obligations under any instrument
or agreement included in the Collateral or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
otherwise expressly provided in this Indenture, the Pooling Agreement, the
Servicing Agreement, the Purchase Agreement, the Administration Agreement or
such other instrument or agreement.

(b) The Issuer may contract with other Persons to assist it in performing its
duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in the Basic Documents or an Officers’
Certificate of the Issuer shall be deemed to be action taken by the Issuer.
Initially, the Issuer has contracted with the Servicer and the Administrator to
assist the Issuer in performing its duties under this Indenture.

(c) The Issuer shall punctually perform and observe all of its obligations and
agreements contained in this Indenture, the Basic Documents and in the
instruments and agreements included in the Collateral, including but not limited
to filing or causing to be filed all UCC financing statements and continuation
statements required to be filed under the terms of this Indenture, the Pooling
Agreement and the Purchase Agreement in accordance with and within the time
periods provided for herein and therein.

(d) If the Issuer shall have knowledge of the occurrence of a Servicer Default
under the Servicing Agreement, the Issuer shall promptly notify the Indenture
Trustee and the Rating Agencies thereof, and shall specify in such notice the
response or action, if any, the Issuer has taken or is taking with respect to
such default. If a Servicer Default shall arise from the failure of the Servicer
to perform any of its duties or obligations under the Servicing Agreement with
respect to the Receivables, the Issuer and the Indenture Trustee shall take all
reasonable steps available to them pursuant to the Servicing Agreement to remedy
such failure.

(e) Without derogating from the absolute nature of the assignment granted to the
Indenture Trustee under this Indenture or the rights of the Indenture Trustee
hereunder, the Issuer agrees that it shall not consent so as to permit NFRRC or
NFC to, without the prior written consent of the Indenture Trustee or the
Holders of at least a majority in Outstanding Amount of the Controlling Class,
as required in accordance with the terms thereof, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Collateral or
any of the Basic Documents, or waive timely performance or observance by the
Seller under the Pooling Agreement or the Purchase Agreement, the Servicer under
the Servicing Agreement, the Administrator under the Administration Agreement or
NFC under the Purchase Agreement, except as specifically permitted under the
Basic Documents; provided, however, that, notwithstanding the foregoing, no
action specified in the proviso to Section 9.2(a) shall be taken except in
compliance with Section 9.2. If any such amendment, modification, supplement or
waiver shall be so consented to by the Indenture Trustee or such Holders, as
applicable, the Issuer agrees, promptly following a request by the Indenture
Trustee to do so, to execute and deliver, in its own name and at its own
expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may deem necessary or appropriate in the circumstances.

 

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Section 3.8 Negative Covenants. So long as any Notes are Outstanding, the Issuer
shall not:

(a) sell, transfer, exchange or otherwise dispose of any of the properties or
assets of the Issuer, except the Issuer may (i) collect and, subject in all
respects to Section 3.10(b), liquidate, sell or otherwise dispose of Receivables
(including Warranty Receivables, Administrative Receivables and Liquidating
Receivables), (ii) make cash payments out of the Designated Accounts and the
Certificate Distribution Account as contemplated by the Basic Documents, and
(iii) take other actions, in each case as contemplated by the Basic Documents;

(b) claim any credit on, or make any deduction from the principal or interest
payable in respect of the Notes (other than amounts properly withheld from such
payments under the Code or applicable state law) or assert any claim against any
present or former Noteholder by reason of the payment of the taxes levied or
assessed upon any part of the Collateral;

(c) voluntarily commence any insolvency, readjustment of debt, marshaling of
assets and liabilities or other proceeding, or apply for an order by a court or
agency or supervisory authority for the winding-up or liquidation of its affairs
or any other event specified in Section 5.1(f); or

(d) either (i) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released from
any covenants or obligations with respect to the Notes under this Indenture
except as may be expressly permitted hereby, (ii) permit any lien, charge,
excise, claim, security interest, mortgage or other encumbrance (other than the
lien of this Indenture) to be created on or extend to or otherwise arise upon or
burden the Collateral or any part thereof or any interest therein or the
proceeds thereof (other than, with respect to a Financed Vehicle, Permitted
Liens), or (iii) permit the lien of this Indenture not to constitute a valid
first priority perfected security interest in the Collateral (to the extent the
Collateral constitutes Code Collateral) (other than with respect to any such
tax, mechanics’ or other lien or as a result of such cross-collateralization to
the extent so subordinated).

Section 3.9 Annual Statement as to Compliance. The Issuer shall deliver to the
Indenture Trustee, with a copy to each of the Rating Agencies, on or before
March 1 of each year, beginning March 1, 2011, an Officer’s Certificate signed
by an Authorized Officer, dated as of the immediately preceding October 31,
stating that:

(a) a review of the activities of the Issuer during such fiscal year and of
performance by the Issuer under this Indenture has been made under such
Authorized Officer’s supervision; and

(b) to the best of such Authorized Officer’s knowledge, based on such review,
the Issuer has fulfilled in all material respects all of its obligations under
this Indenture throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
Authorized Officer and the nature and status thereof.

 

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A copy of such Officer’s Certificate may be obtained by any Noteholder by a
request in writing to the Issuer addressed to the Corporate Trust Office of the
Indenture Trustee.

Section 3.10 Consolidation, Merger, etc., of the Issuer; Disposition of Trust
Assets.

(a) The Issuer shall not consolidate or merge with or into any other Person,
unless:

(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the laws
of the United States of America or any State and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Indenture Trustee,
in form satisfactory to the Indenture Trustee, the due and timely payment of the
principal of and interest on all Notes and the performance or observance of
every agreement and covenant of this Indenture and the other Basic Documents on
the part of the Issuer to be performed or observed, all as provided herein;

(ii) immediately after giving effect to such merger or consolidation, no Default
shall have occurred and be continuing;

(iii) the Rating Agency Condition shall have been satisfied with respect to such
transaction and such Person for each then outstanding class of Notes;

(iv) any action as is necessary to maintain the lien and security interest
created by this Indenture shall have been completed; and

(v) the Issuer shall have delivered to the Indenture Trustee an Officers’
Certificate and an Opinion of Counsel addressed to the Issuer, each stating:

(A) that such consolidation or merger and such supplemental indenture comply
with this Section 3.10(a);

(B) that such consolidation or merger and such supplemental indenture shall have
no material adverse tax consequence to the Issuer or any Securityholder; and

(C) that all conditions precedent herein provided for in this Section 3.10(a)
have been complied with.

 

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(b) Except as otherwise expressly permitted by this Indenture or the other Basic
Documents, the Issuer shall not sell, convey, exchange, transfer or otherwise
dispose of any of its properties or assets, including those included in the
Collateral, to any Person, unless:

(i) the Person that acquires such properties or assets of the Issuer (x) shall
be a United States citizen or a Person organized and existing under the laws of
the United States of America or any State and (y) by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee:

(A) expressly assumes the due and punctual payment of the principal of and
interest on all Notes and the performance or observance of every agreement and
covenant of this Indenture and the other Basic Documents on the part of the
Issuer to be performed or observed, all as provided herein or therein,

(B) expressly agrees that all right, title and interest so sold, conveyed,
exchanged, transferred or otherwise disposed of shall be subject and subordinate
to the rights of Noteholders,

(C) unless otherwise provided in such supplemental indenture, expressly agrees
to indemnify, defend and hold harmless the Issuer against and from any loss,
liability or expense arising under or related to this Indenture and the Notes,
and

(D) expressly agrees that such Person (or if a group of Persons, then one
specified Person) shall make all filings with the Commission (and any other
appropriate Person) required by the Exchange Act in connection with the Notes;

(ii) immediately after giving effect to such transaction, no Default shall have
occurred and be continuing;

(iii) the Rating Agency Condition shall have been satisfied with respect to such
transaction and such Person for each then outstanding class of Notes;

(iv) any action as is necessary to maintain the lien and security interest
created by this Indenture shall have been taken; and

(v) the Issuer shall have delivered to the Indenture Trustee an Officers’
Certificate and an Opinion of Counsel addressed to the Issuer, each stating
that:

(A) such sale, conveyance, exchange, transfer or disposition and such
supplemental indenture comply with this Section 3.10(b),

(B) such sale, conveyance, exchange, transfer or disposition and such
supplemental indenture have no material adverse tax consequence to the Issuer or
to any Noteholders or Certificateholders, and

(C) that all conditions precedent herein provided for in this Section 3.10(b)
have been complied with.

 

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Section 3.11 Successor or Transferee.

(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.

(b) Upon a conveyance or transfer of all the assets and properties of the Issuer
pursuant to Section 3.10(b), the Issuer shall be released from every covenant
and agreement of this Indenture to be observed or performed on the part of the
Issuer with respect to the Securityholders immediately upon the delivery of
written notice to the Indenture Trustee from the Person acquiring such assets
and properties stating that the Issuer is to be so released.

Section 3.12 No Other Business. The Issuer has not engaged, and shall not
engage, in any business or activity other than acquiring, holding and managing
the Collateral and the proceeds therefrom in the manner contemplated by the
Basic Documents, issuing the Securities, making payments on the Securities and
such other activities that are necessary, suitable, desirable or convenient to
accomplish the foregoing or are incidental thereto, as set forth in Section 2.3
of the Trust Agreement. After the Closing Date, the Issuer shall not fund the
purchase of any new Receivables.

Section 3.13 No Borrowing. The Issuer shall not issue, incur, assume, guarantee
or otherwise become liable, directly or indirectly, for any indebtedness for
money borrowed other than indebtedness for money borrowed in respect of the
Notes or otherwise in accordance with the Basic Documents.

Section 3.14 Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by this Indenture or the other Basic Documents, the Issuer shall
not make any loan or advance or credit to, or guarantee (directly or indirectly
or by an instrument having the effect of assuring another’s payment or
performance on any obligation or capability of so doing or otherwise), endorse
or otherwise become contingently liable, directly or indirectly, in connection
with the obligations, stocks or dividends of, or own, purchase, repurchase or
acquire (or agree contingently to do so) any stock, obligations, assets or
securities of, or any other interest in, or make any capital contribution to,
any other Person.

Section 3.15 Servicer’s Obligations. The Issuer shall use its best efforts to
cause the Servicer to comply with its obligations under Sections 2.17, 3.01 and
3.02 of the Servicing Agreement.

Section 3.16 Capital Expenditures. The Issuer shall not make any expenditure
(whether by long-term or operating lease or otherwise) for capital assets
(either real, personal or intangible property) other than the purchase of the
Receivables and other property and rights from the Seller pursuant to the
Pooling Agreement.

Section 3.17 Removal of Administrator. So long as any Notes are Outstanding, the
Issuer shall not remove the Administrator without cause unless the Rating Agency
Condition for each class of Notes then outstanding shall have been satisfied in
connection with such removal.

 

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Section 3.18 Restricted Payments. Except for payments of principal or interest
on or redemption of the Notes, so long as any Notes are Outstanding, the Issuer
shall not, directly or indirectly:

(a) pay any dividend or make any distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof, to
the Owner Trustee or any owner of a beneficial interest in the Issuer or
otherwise, in each case with respect to any ownership or equity interest or
similar security in or of the Issuer;

(b) redeem, purchase, retire or otherwise acquire for value any such ownership
or equity interest or similar security; or

(c) set aside or otherwise segregate any amounts for any such purpose;

provided, however, that the Issuer may make, or cause to be made, distributions
to the Servicer, the Seller, the Indenture Trustee, the Owner Trustee and the
Certificateholders as permitted by, and to the extent funds are available for
such purpose hereunder or under, the Pooling Agreement, the Servicing Agreement,
the Trust Agreement or the other Basic Documents. The Issuer shall not, directly
or indirectly, make payments to or distributions from the Collection Account
except in accordance with the Basic Documents.

Section 3.19 Notice of Events of Default. The Issuer agrees to give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder, each Servicer Default under the Servicing Agreement, each
default on the part of the Seller of its obligations under the Pooling Agreement
and each default on the part of NFC of its obligations under the Purchase
Agreement.

Section 3.20 Further Instruments and Acts. Upon request of the Indenture
Trustee, the Issuer shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture and the other Basic Documents to which
the Issuer is a party.

Section 3.21 Indenture Trustee’s Assignment of Administrative Receivables and
Warranty Receivables. Upon receipt of the Administrative Purchase Payment or the
Warranty Payment with respect to an Administrative Receivable or a Warranty
Receivable, as the case may be, the Indenture Trustee shall release to the
Servicer or the Warranty Purchaser, as applicable, all of the Indenture
Trustee’s right, title and interest in and to such repurchased Receivable and
the Related Security with respect thereto and any documents relating thereto,
and the Servicer or the Warranty Purchaser, as applicable, shall thereupon own
such Receivable and the Related Security with respect thereto free of any
further obligation to the Indenture Trustee or the Noteholders with respect
thereto. If in any enforcement suit or legal 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 such Receivable, the Indenture
Trustee shall, at the Servicer’s expense, take such steps as the Servicer deems
necessary to enforce the Receivable, including bringing suit in the Indenture
Trustee’s name or the names of the Securityholders.

 

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Section 3.22 Representations and Warranties by the Issuer to the Indenture
Trustee. The Issuer hereby represents and warrants to the Indenture Trustee (for
the benefit of the Financial Parties) as follows:

(a) Good Title. No Receivable has been sold, transferred, assigned or pledged by
the Issuer to any Person other than the Indenture Trustee. Immediately prior to
the grant of a security interest in each Receivable pursuant to this Indenture,
the Issuer had good and marketable title thereto, free of any Lien (except Liens
created by the Basic Documents). Upon execution and delivery of this Indenture
by the Issuer, the Indenture Trustee shall have all of the right, title and
interest of the Issuer in, to and under the Collateral, free of any Lien
(except, in the case of Financed Vehicles, for Permitted Liens);

(b) All Filings Made. All filings necessary under the UCC in any jurisdiction to
give the Indenture Trustee a first priority perfected security interest in the
Receivables and, to the extent constituting Code Collateral, the other
Collateral shall have been made. The Receivables constitute Code Collateral;

(c) [Reserved]; and

(d) Lien of Indenture. This Indenture constitutes a valid and continuing Lien on
the Collateral in favor of the Indenture Trustee on behalf of the Financial
Parties, which Lien will be prior to all other Liens (other than Permitted
Liens), will be enforceable as such as against creditors of and purchasers from
the Issuer in accordance with its terms, except as such 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, and all action necessary to perfect such prior
security interest has been duly taken.

ARTICLE IV

SATISFACTION AND DISCHARGE

Section 4.1 Satisfaction and Discharge of Indenture. This Indenture shall cease
to be of further effect with respect to the Notes except as to: (a) rights of
registration of transfer and exchange; (b) substitution of mutilated, destroyed,
lost or stolen Notes; (c) rights of Noteholders to receive payments of principal
thereof and interest thereon; (d) Sections 3.2, 3.3, 3.4, 3.5, 3.8, 3.10, 3.11,
3.12, 3.13, 3.14, 3.16, 3.17, 3.19 and 3.21; (e) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.7 and the obligations of the Indenture Trustee
under Sections 4.2 and 4.4); and (f) the rights of Noteholders as beneficiaries
hereof with respect to the property so deposited with the Indenture Trustee
payable to all or any of them, and the Indenture Trustee, on demand of and at
the expense of the Issuer shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to the Notes, if:

(a) either:

(i) all Notes theretofore authenticated and delivered (other than (A) Notes that
have been destroyed, lost or stolen and that have been replaced or paid as
provided in Section 2.5 and (B) Notes for whose payment money has theretofore
been

 

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deposited in trust or segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, as provided in Section 3.3)
have been delivered to the Indenture Trustee for cancellation; or

(ii) all Notes not theretofore delivered to the Indenture Trustee for
cancellation:

(A) have become due and payable,

(B) will be due and payable on their respective Final Scheduled Distribution
Dates within one year, or

(C) are to be called for redemption within one year under arrangements
satisfactory to the Indenture Trustee for the giving of notice of redemption by
the Indenture Trustee in the name, and at the expense, of the Issuer.

and the Issuer, in the case of clauses (A), (B) or (C) of Section 4.1(a)(ii)
above, has irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such amounts are
payable), in trust for such purpose, in an amount sufficient to pay and
discharge the entire unpaid principal and accrued interest on such Notes not
theretofore delivered to the Indenture Trustee for cancellation when due on the
Final Scheduled Distribution Date for such Notes or the Redemption Date or
Optional Purchase Date for such Notes (if such Notes are to be called for
redemption pursuant to Section 10.1(a)), as the case may be;

(b) the Issuer has paid or caused to be paid all other sums payable hereunder by
the Issuer; and

(c) the Issuer has delivered to the Indenture Trustee an Officer’s Certificate
of the Issuer, an Opinion of Counsel and (if required by the Indenture Trustee)
an Independent Certificate from a firm of certified public accountants, each
meeting the applicable requirements of Section 11.1(a) and each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.

Section 4.2 Application of Trust Money. All monies deposited with the Indenture
Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent, as the Indenture Trustee may
determine, to the Holders of the particular Notes for the payment or redemption
of which such monies have been deposited with the Indenture Trustee, of all sums
due and to become due thereon or with respect thereto, including for principal
and interest; provided, however, such monies need not be segregated from other
funds except to the extent required herein or in the Servicing Agreement or by
applicable law.

Section 4.3 Repayment of Monies Held by Paying Agent. In connection with the
satisfaction and discharge of this Indenture, all monies then held by any Paying
Agent other than the Indenture Trustee under the provisions of this Indenture
with respect to the Notes shall, upon demand of the Issuer, be paid to the
Indenture Trustee to be held and applied according to Section 3.3 and thereupon
such Paying Agent shall be released from all further liability with respect to
such monies.

 

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Section 4.4 Duration of Position of Indenture Trustee for Benefit of
Certificateholders. Notwithstanding (a) the earlier payment in full of all
principal and interest due to the Noteholders under the terms of Notes of each
class, (b) the cancellation of such Notes pursuant to Section 2.8, and (c) the
discharge of the Indenture Trustee’s duties hereunder with respect to such
Notes, the Indenture Trustee shall continue to act in the capacity as Indenture
Trustee hereunder for the benefit of the Certificateholders and the Indenture
Trustee, for the benefit of the Certificateholders, shall comply with its
obligations under Sections 2.02, 7.02 and 7.03 of the Servicing Agreement, as
appropriate, until such time as all distributions in respect of the Certificates
have been paid in full.

ARTICLE V

DEFAULT AND REMEDIES

Section 5.1 Events of Default. For the purposes of this Indenture, “Event of
Default” wherever used herein or in any other Basic Document, means any one of
the following events:

(a) failure to pay any interest on any Note as and when the same becomes due and
payable, and such default shall continue unremedied for a period of five
(5) days; or

(b) except as set forth in Section 5.1(c), failure to pay any installment of the
principal of any class of Note as and when the same becomes due and payable
(other than on the related Final Scheduled Distribution Date), and such default
shall continue unremedied for a period of 30 days after there shall have been
given to the Issuer and the Seller (or the Servicer, as applicable) by the
Indenture Trustee or to the Issuer and the Seller (or the Servicer, as
applicable) and the Indenture Trustee by the Holders of at least 25% of the
Outstanding Amount of the Controlling Class, a written notice specifying such
default, demanding that it be remedied and stating that such notice is a “Notice
of Default” hereunder; or

(c) failure to pay in full the outstanding principal balance of any class of
Notes by the Final Scheduled Distribution Date for such class; or

(d) default in the observance or performance of any covenant or agreement of the
Issuer made in this Indenture (other than a covenant or agreement, a default in
the observance or performance of which is specifically dealt with elsewhere in
this Section 5.1) which failure materially and adversely affects the rights of
the Noteholders, and such default shall continue or not be cured for a period of
30 days after there shall have been given to the Issuer and the Seller (or the
Servicer, as applicable) by the Indenture Trustee or to the Issuer and the
Seller (or the Servicer, as applicable) and the Indenture Trustee by the Holders
of at least 25% of the Outstanding Amount of the Controlling Class, a written
notice specifying such default, demanding that it be remedied and stating that
such notice is a “Notice of Default” hereunder; or

(e) the filing of a decree or order for relief by a court having jurisdiction in
the premises in respect of the Issuer or any substantial part of the Owner Trust
Estate in an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar

 

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law now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer (other than
as Owner Trustee) or for any substantial part of the Collateral, or ordering the
winding-up or liquidation of the Issuer’s affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or

(f) the commencement by the Issuer of a voluntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or hereafter in
effect, or the consent by the Issuer to the entry of an order for relief in an
involuntary case under any such law, or the consent by the Issuer to the
appointment or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Issuer or for any substantial
part of the Owner Trust Estate, or the making by the Issuer of any general
assignment for the benefit of creditors, or the failure by the Issuer generally
to pay its debts as such debts become due, or the taking of action by the Issuer
in furtherance of any of the foregoing; or

(g) any representation or warranty of the Issuer made in this Indenture proving
to have been incorrect as of the time which such representation or warranty has
been made, which breach materially and adversely affects the rights of the
Noteholders, and which breach continues unremedied for a period of 30 days after
there shall have been given to the Issuer and the Seller (or the Servicer, as
applicable) by the Indenture Trustee or to the Issuer and the Seller (or the
Servicer, as applicable) and the Indenture Trustee by the Holders of at least
25% of the Outstanding Amount of the Controlling Class, a written notice
specifying such breach, demanding that it be remedied and stating that such
notice is a “Notice of Default” hereunder.

The Issuer shall deliver to the Indenture Trustee, within five Business Days
after learning of the occurrence thereof, written notice in the form of an
Officer’s Certificate of any Default under Sections 5.1(a), 5.1(b), 5.1(d) and
5.1(g), its status and what action the Issuer is taking or proposes to take with
respect thereto.

Section 5.2 Acceleration of Maturity; Rescission and Annulment.

(a) If an Event of Default should occur and be continuing, then and in every
such case, unless the principal amount of the Notes shall have already become
due and payable, either the Indenture Trustee or the Holders of Notes
representing not less than a majority of the Outstanding Amount of the
Controlling Class may declare all the Notes to be immediately due and payable,
by a notice in writing to the Issuer (and to the Indenture Trustee if given by
the Noteholders) and NFC setting forth the Event or Events of Default, and upon
any such declaration the unpaid principal amount of the Notes together with
accrued and unpaid interest thereon through the date of acceleration, shall
become immediately due and payable.

(b) At any time after such declaration of acceleration of maturity of the Notes
has been made and before a judgment or decree for payment of the money due
thereunder has been obtained by the Indenture Trustee as hereinafter provided in
this Article V, the Holders of Notes representing not less than a majority of
the Outstanding Amount of the Controlling Class, by written notice to the
Issuer, NFC and the Indenture Trustee, may rescind and annul such declaration
and its consequences with respect to the Notes; provided, that no such
rescission and annulment shall extend to or affect any subsequent or other
Default or impair any right

 

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consequent thereto; provided, further, that if the Indenture Trustee shall have
proceeded to enforce any right under this Indenture and such proceedings shall
have been discontinued or abandoned because of such rescission and annulment or
for any other reason, or such proceedings shall have been determined adversely
to the Indenture Trustee, then and in every such case, the Indenture Trustee,
the Issuer and the Noteholders, as the case may be, shall be restored to their
respective former positions and rights hereunder, and all rights, remedies and
powers of the Indenture Trustee, the Issuer and the Noteholders, as the case may
be, shall continue as though no such proceedings had been commenced.

Section 5.3 Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee.

(a) The Issuer covenants that if there shall occur an Event of Default under
Section 5.1(a), 5.1(b) or 5.1(c), the Issuer shall, upon demand of the Indenture
Trustee, pay to the Indenture Trustee, for the benefit of the Noteholders in
accordance with their respective outstanding principal amounts, the entire
amount then due and payable on the Notes for principal and interest, with
interest through the date of such payment on the overdue principal amount of
each class of Notes, at the rate applicable to such class of Notes, and in
addition thereto such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and counsel.

(b) If the Issuer shall fail forthwith to pay such amounts upon such demand, the
Indenture Trustee, in its own name and as trustee of an express trust, may
institute a Proceeding for the collection of the sums so due and unpaid, and may
prosecute such Proceeding to judgment or final decree, and may enforce the same
against the Issuer or other obligor upon such Notes and collect in the manner
provided by law out of the property of the Issuer or other obligor upon the
Notes, wherever situated, the monies adjudged or decreed to be payable.

(c) If an Event of Default occurs and is continuing, the Indenture Trustee may
(as more particularly provided in Section 5.4), subject to the provisions of
Section 6.1, in its discretion, proceed to protect and enforce its rights and
the rights of the Noteholders, by such appropriate Proceedings as the Indenture
Trustee, being advised by counsel, shall deem most effective to protect and
enforce any of the rights of the Indenture Trustee or the Noteholders, whether
for the specific enforcement of any covenant or agreement in this Indenture or
in aid of the exercise of any power granted herein, or to enforce any other
proper remedy or legal or equitable right vested in the Indenture Trustee by
this Indenture or by applicable law.

(d) If there shall be pending, relative to the Issuer or any other obligor upon
the Notes or any Person having or claiming an ownership interest in the
Collateral, Proceedings under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or other similar law, or if a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Issuer or its property or such other obligor or Person, or in
case of any other comparable judicial Proceedings relative to the Issuer or
other obligor upon the Notes, or to the creditors or property of the Issuer or
such other obligor, the Indenture Trustee, irrespective of whether the principal
of any Notes shall then be due and payable as therein expressed or by

 

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declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section 5.3, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:

(i) to file and prove a claim or claims for the entire amount of the unpaid
principal and interest owing in respect of the Notes and to file such other
papers or documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee (including any claim for reasonable compensation to the
Indenture Trustee and each predecessor trustee, and their respective agents,
attorneys and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor
trustee, except as a result of negligence or bad faith) and of the Noteholders
allowed in such Proceedings;

(ii) unless prohibited by applicable law and regulations, to vote on behalf of
the Holders of Notes in any election of a trustee, a standby trustee or Person
performing similar functions in any such Proceedings;

(iii) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute all amounts received with respect to the
claims of the Noteholders and of the Indenture Trustee on their behalf; and

(iv) to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture Trustee or
the Holders of Notes allowed in any judicial proceedings relative to the Issuer,
its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, if the Indenture Trustee shall consent
to the making of payments directly to such Noteholders, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Indenture Trustee, each predecessor trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor trustee, except as
a result of negligence or bad faith.

(e) Nothing herein contained shall be deemed to authorize the Indenture Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to authorize the
Indenture Trustee to vote in respect of the claim of any Noteholder in any such
proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar Person.

(f) All rights of action and of asserting claims under this Indenture, or under
any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such Proceedings instituted by the
Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
trustee and their respective agents and attorneys, shall be applied in
accordance with Section 5.4(b).

 

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(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.

Section 5.4 Remedies; Priorities.

(a) If an Event of Default shall have occurred and be continuing and the Notes
have been accelerated under Section 5.2(a), the Indenture Trustee may do one or
more of the following (subject to Section 5.5):

(i) institute Proceedings in its own name and as trustee of an express trust for
the collection of all amounts then due and payable on the Notes or under this
Indenture or the other Basic Documents with respect thereto, whether by
declaration of acceleration or otherwise, enforce any judgment obtained, and
collect from the Issuer and any other obligor upon such Notes monies adjudged
due;

(ii) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Collateral;

(iii) subject to Section 5.4(a)(iv) below, exercise any remedies of a secured
party under the UCC and take any other appropriate action to protect and enforce
the rights and remedies of the Indenture Trustee and the Noteholders; and

(iv) sell the Collateral or any portion thereof or rights or interest therein,
at one or more public or private sales called and conducted in any manner
permitted by law or elect to have the Issuer maintain possession of the
Collateral, including the Receivables included therein and continue to apply
collections on such Receivables as if there had been no declaration of
acceleration; provided, however, that the Indenture Trustee may not sell or
otherwise liquidate the Collateral following an Event of Default and
acceleration of the Notes, unless (A) the Holders of the Outstanding Amount of
all of the Notes consent thereto, (B) the proceeds of such sale or liquidation
distributable to the Noteholders are sufficient to discharge in full the
principal of and the accrued interest on the Notes, in each case as of the date
of such sale or liquidation or (C) (1) the Indenture Trustee determines that the
Collateral will not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as and when they would have become due if
the Notes had not been declared due and payable and (2) the Indenture Trustee
obtains the consent of Holders of a majority of the aggregate Outstanding Amount
of the Controlling Class. In determining such sufficiency or insufficiency with
respect to clauses (B) and (C) of this Section 5.4(a)(iv), the Indenture Trustee
may, but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Collateral for such purpose.

 

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(b) If the Indenture Trustee collects any money or property pursuant to this
Article V, it shall pay out or deposit such money or property in the following
order:

FIRST: to the extent not paid by the Servicer as contemplated by Section 6.7
hereof or in Section 6.05 of the Servicing Agreement, to the Indenture Trustee
for amounts due under Section 6.7 hereof and to the Owner Trustee for amounts
due under Section 6.9 of the Trust Agreement;

SECOND: to the Collection Account, for distribution pursuant to, first,
Section 8.2(b) hereof and, second (to the extent that funds are available),
pursuant to Sections 8.2(c) and 8.2(d) hereof; and

THIRD: from the Collection Account to the Certificate Distribution Account, for
distribution pursuant to Section 4.02 of the Pooling Agreement.

Section 5.5 Optional Preservation of the Collateral. If the Notes have been
declared to be due and payable under Section 5.2(a) following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled in accordance with Section 5.2(b), the Indenture Trustee may, but need
not, elect to take and maintain possession of the Collateral. It is the desire
of the parties hereto and the Noteholders that there be at all times sufficient
funds for the payment of principal of and interest on the Notes, and the
Indenture Trustee shall take such desire into account when determining whether
or not to take and maintain possession of the Collateral. In determining whether
to take and maintain possession of the Collateral, the Indenture Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Collateral for such purpose.

Section 5.6 Limitation of Suits. No Holder of any Note shall have any right to
institute any Proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:

(a) such Holder has previously given written notice to the Indenture Trustee of
a continuing Event of Default;

(b) the Holders of not less than 25% of the Outstanding Amount of the
Controlling Class have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;

(c) such Holder or Holders have offered to the Indenture Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
complying with such request;

(d) the Indenture Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute such Proceedings; and

(e) no direction inconsistent with such written request has been given to the
Indenture Trustee during such 60-day period by the Holders of a majority of the
Outstanding Amount of the Controlling Class;

 

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it being understood and intended that no Holder or Holders of Notes shall have
any right in any manner whatsoever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or preference
over any other Holders of Notes or to enforce any right under this Indenture,
except in the manner herein provided and for the equal, ratable (on the basis of
the respective aggregate amount of principal and interest, respectively, due and
unpaid on the Notes held by each Noteholder) and common benefit of all
Noteholders. For the protection and enforcement of the provisions of this
Section 5.6, each and every Noteholder shall be entitled to such relief as can
be given either at law or in equity.

If the Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Holders of Notes, each representing less
than a majority of the Outstanding Amount of the Controlling Class, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.

Section 5.7 Unconditional Rights of Noteholders To Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest on such Note in accordance with
Section 8.2 hereof on or after the respective due dates thereof expressed in
such Note or in this Indenture (or, in the case of redemption, if applicable, on
or after the Redemption Date or Optional Purchase Date, as applicable) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.

Section 5.8 Restoration of Rights and Remedies. If the Indenture Trustee or any
Noteholder has instituted any Proceeding to enforce any right or remedy under
this Indenture and such Proceeding has been discontinued or abandoned for any
reason or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Issuer, the Indenture Trustee and
the Noteholders shall, subject to any determination in such Proceeding, be
restored severally to their respective former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Noteholders
shall continue as though no such Proceeding had been instituted.

Section 5.9 Rights and Remedies Cumulative. No right or remedy herein conferred
upon or reserved to the Indenture Trustee or to the Noteholders is intended to
be exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

Section 5.10 Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Default shall impair any such right or remedy or constitute a
waiver of any such Default or an acquiescence therein. Every right and remedy
given by this Article V or by law to the Indenture Trustee or to the Noteholders
may be exercised from time to time, and as often as may be deemed expedient, by
the Indenture Trustee or by the Noteholders, as the case may be.

 

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Section 5.11 Control by Noteholders. The Holders of a majority of the
Outstanding Amount of the Controlling Class shall, subject to provision being
made for indemnification against costs, expenses and liabilities in a form
satisfactory to the Indenture Trustee, have the right to direct the time, method
and place of conducting any Proceeding for any remedy available to the Indenture
Trustee with respect to the Notes or exercising any trust or power conferred on
the Indenture Trustee pursuant to this Indenture, any other Basic Document to
which the Indenture Trustee is a party or otherwise; provided, however, that:

(a) such direction shall not be in conflict with any rule of law or with any
other express provision of this Indenture;

(b) subject to the express terms of Section 5.4, any direction to the Indenture
Trustee to sell or liquidate the Collateral shall be by the Holders of Notes
representing 100% of the Outstanding Amount of the Notes;

(c) if the conditions set forth in Section 5.5 have been satisfied, and if the
Indenture Trustee elects to retain the Collateral pursuant to Section 5.5, then
any direction to the Indenture Trustee by Holders of Notes representing less
than 100% of the Outstanding Amount of the Notes to sell or liquidate the
Collateral shall be of no force and effect;

(d) subject to Section 6.1, the Indenture Trustee shall have the right to
decline to follow any such direction if the Indenture Trustee, being advised by
counsel, determines that the action so directed may not lawfully be taken or if
the Indenture Trustee shall in good faith, by a Responsible Officer, determine
that the proceedings so directed would be illegal or subject the Indenture
Trustee to personal liability or be unduly prejudicial to the rights of
Noteholders not parties to such direction; and

(e) the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee that is not inconsistent with such direction;

provided, however, that, subject to Section 6.1, the Indenture Trustee need not
take any action that it determines might cause it to incur any liability
(x) with respect to which the Indenture Trustee shall have reasonable grounds to
believe that adequate indemnity against such liability in not assured to it and
(y) which might materially adversely affect the rights of any Noteholders not
consenting to such action; provided, further, that nothing in this Indenture
shall impair the right of the Indenture Trustee to take any action deemed proper
by the Indenture Trustee which is not inconsistent with such direction by the
Noteholders.

Section 5.12 Waiver of Past Defaults.

(a) Prior to the declaration of the acceleration of the maturity of the Notes as
provided in Section 5.2(a), the Holders of not less than a majority of the
Outstanding Amount of the Controlling Class may waive any past Default and its
consequences except a Default (i) in the payment of principal of or interest on
any of the Notes or (ii) in respect of a covenant or provision hereof which
cannot be modified or amended without the consent of the Holder of

 

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each Note. In the case of any such waiver, the Issuer, the Indenture Trustee and
the Noteholders shall be restored to their respective former positions and
rights hereunder; provided, however, no such waiver shall extend to or affect
any subsequent or other Default or impair any right consequent thereto.

(b) Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; provided, however, no such waiver shall extend to or
affect any subsequent or other Default or impair any right consequent thereto.

Section 5.13 Undertaking for Costs. All parties to this Indenture agree, and
each Holder of any Note by such Holder’s acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any Proceeding for
the enforcement of any right or remedy under this Indenture, or in any
Proceeding against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
Proceeding of an undertaking to pay the costs of such Proceeding, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in such Proceeding, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 5.13 shall not apply to:

(a) any Proceeding instituted by the Indenture Trustee;

(b) any Proceeding instituted by any Noteholder, or group of Noteholders, in
each case holding in the aggregate more than 10% of the Outstanding Amount of
the Controlling Class; or

(c) any Proceeding instituted by any Noteholder for the enforcement of the
payment of principal of or interest on any Note on or after the respective due
dates expressed in such Note and in this Indenture (or, in the case of
redemption, if applicable, on or after the Redemption Date or Optional Purchase
Date, as applicable).

Section 5.14 Waiver of Stay or Extension Laws. The Issuer, covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon, or
plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may adversely affect the covenants or the performance of this
Indenture. The Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.

Section 5.15 Action on Notes. The Indenture Trustee’s right to seek and recover
judgment on the Notes or under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies of
the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Collateral or upon any of
the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.4(b).

 

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Section 5.16 Performance and Enforcement of Certain Obligations.

(a) Promptly following a request from the Indenture Trustee to do so and at the
Administrator’s expense, the Issuer agrees to take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and observance
by the Seller of its obligations to the Issuer under or in connection with the
Pooling Agreement and the Purchase Agreement, by the Servicer of its obligations
to the Issuer under or in connection with the Servicing Agreement or by NFC of
its obligations under or in connection with the Purchase Agreement, and to
exercise any and all rights, remedies, powers and privileges lawfully available
to the Issuer under or in connection with the Pooling Agreement, the Servicing
Agreement and the Purchase Agreement to the extent and in the manner directed by
the Indenture Trustee, including the transmission of notices of default on the
part of the Seller, the Servicer or NFC thereunder and the institution of legal
or administrative actions or proceedings to compel or secure performance by the
Seller, the Servicer or NFC of each of their respective obligations under the
Pooling Agreement, the Servicing Agreement and the Purchase Agreement.

(b) If an Event of Default has occurred and is continuing, the Indenture Trustee
may, and at the direction (which direction shall be in writing) of the Holders
of 66-2/3% of the Outstanding Amount of the Controlling Class shall, exercise
all rights, remedies, powers, privileges and claims of the Issuer against the
Seller under or in connection with the Pooling Agreement and the Purchase
Agreement, the Servicer under or in connection with the Servicing Agreement or
NFC under or in connection with the Purchase Agreement, including the right or
power to take any action to compel or secure performance or observance by the
Seller, the Servicer or NFC of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Pooling Agreement, the Servicing Agreement and the
Purchase Agreement, and any right of the Issuer to take such action shall be
suspended.

ARTICLE VI

THE INDENTURE TRUSTEE

Section 6.1 Duties of Indenture Trustee.

(a) If an Event of Default has occurred and is continuing, the Indenture Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person’s own
affairs.

(b) Except during the continuance of an Event of Default:

(i) the Indenture Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, the Servicing Agreement and any
other Basic Document to which it is a party and no implied covenants or
obligations shall be read into this Indenture, the Servicing Agreement or any
other Basic Document against the Indenture Trustee; and

 

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(ii) in the absence of bad faith on its part, the Indenture Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Indenture Trustee and conforming to the requirements of this Indenture;
provided, however, that the Indenture Trustee shall examine the certificates and
opinions to determine whether or not they conform to any applicable requirements
of this Indenture.

(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:

(i) this Section 6.1(c) does not limit the effect of Section 6.1(b);

(ii) the Indenture Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer unless it is proved that the Indenture
Trustee was negligent in ascertaining the pertinent facts; and

(iii) the Indenture Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 5.11.

(d) The Indenture Trustee shall not be liable for interest on any money received
by it except as the Indenture Trustee may agree in writing with the Issuer.

(e) Money held in trust by the Indenture Trustee need not be segregated from
other funds except to the extent required by law or the terms of this Indenture
or the Servicing Agreement.

(f) No provision of this Indenture shall require the Indenture Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayments of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.

(g) The Indenture Trustee shall reimburse the Seller and any director, officer,
employee or agent of the Seller for any contractual damages, liability or
expense incurred by reason of the Indenture Trustee’s willful misfeasance, bad
faith or gross negligence (except errors in judgment) in the performance of its
duties under any of the Further Transfer and Servicing Agreements, or by reason
of reckless disregard of its obligations and duties under any of the Further
Transfer and Servicing Agreements.

(h) Every provision of this Indenture relating to the Indenture Trustee shall be
subject to the provisions of this Section 6.1.

Section 6.2 Rights of Indenture Trustee.

(a) The Indenture Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Indenture Trustee
need not investigate any fact or matter stated in the document.

 

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(b) Before the Indenture Trustee acts or refrains from acting, it may require an
Officer’s Certificate or an Opinion of Counsel that such action or omission is
required or permissible hereunder. The Indenture Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such Officer’s
Certificate or Opinion of Counsel.

(c) The Indenture Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Indenture Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.

(d) The Indenture Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Indenture Trustee’s conduct does not
constitute willful misconduct, negligence or bad faith.

(e) The Indenture Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Notes
shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.

(f) The Indenture Trustee shall not be required to take notice or be deemed to
have notice or knowledge of any default or Event of Default unless a Responsible
Officer of the Indenture Trustee shall have received written notice or obtained
actual knowledge thereof. In the absence of receipt of such notice or actual
knowledge, the Indenture Trustee may conclusively assume that there is no
default or Event of Default.

(g) The right of the Indenture Trustee to perform any discretionary act
enumerated in this Indenture shall not be construed as a duty, and the Indenture
Trustee shall not be answerable for other than its negligence, willful
misconduct or bad faith in the performance of such act.

(h) The Indenture Trustee shall not be required to give any bond or surety in
respect of the execution of the trust created hereby or the powers granted
hereunder.

(i) Anything in this Indenture to the contrary notwithstanding, in no event
shall the Indenture Trustee be liable for special, indirect, or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Indenture Trustee has been advised of the likelihood of
such loss or damage and regardless of the form of action.

(j) The rights, privileges, protections, immunities and benefits given to the
Indenture Trustee, including, without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Indenture Trustee in each of
its capacities hereunder and under any Basic Document to which the Indenture
Trustee is a party.

(k) The Indenture Trustee shall not be responsible for delays or failures in
performance resulting from acts beyond its control so long as the Indenture
Trustee continues to undertake actions reasonable under the applicable
circumstances. Such acts include but are not limited to acts of God, strikes,
lockouts, riots and acts of war.

 

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Section 6.3 Indenture Trustee May Own Notes. The Indenture Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuer, the Servicer or any of their respective
Affiliates with the same rights it would have if it were not Indenture Trustee;
provided, however, that the Indenture Trustee shall comply with Sections 6.10
and 6.11. Any Paying Agent, Note Registrar, co-registrar or co-paying agent may
do the same with like rights.

Section 6.4 Indenture Trustee’s Disclaimer. The Indenture Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Issuer’s use of
the proceeds from the Notes, and it shall not be responsible for any statement
of the Issuer in the Indenture or in any document issued in connection with the
sale of the Notes or in the Notes other than the Indenture Trustee’s certificate
of authentication.

Section 6.5 Notice of Defaults. If a Default occurs and is continuing and if it
is known to a Responsible Officer of the Indenture Trustee, the Indenture
Trustee shall mail to each Noteholder notice of the Default within 30 days after
such Responsible Officer obtained knowledge of such Default. Except in the case
of a Default in payment of principal of or interest on any Note, the Indenture
Trustee may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of Noteholders.

Section 6.6 Reports by Indenture Trustee to Holders. The Indenture Trustee shall
make available to each Noteholder in accordance with Section 8.8(d) the
information and documents set forth in Section 8.8 (including all such
information described in Section 8.8(b) to enable such Holder to prepare its
federal and state income tax returns), and, in addition and upon a Noteholder’s
request, the Indenture Trustee shall mail all such information with respect to
the Notes as may be required, as specified by the Servicer, to enable such
Holder to prepare its federal and state income tax returns.

Section 6.7 Compensation; Indemnity.

(a) The Issuer shall cause the Servicer pursuant to the Servicing Agreement to
pay to the Indenture Trustee from time to time such compensation for its
services as shall be agreed upon in writing. The Indenture Trustee’s
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuer shall cause the Servicer pursuant to the Servicing
Agreement to reimburse the Indenture Trustee for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, in addition to
the compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Indenture Trustee’s
agents, counsel, accountants and experts. The Issuer shall cause the Servicer
pursuant to the Servicing Agreement to indemnify the Indenture Trustee in
accordance with Section 6.05 of the Servicing Agreement. The Issuer shall have
no obligation to pay, reimburse or indemnify the Indenture Trustee, except as
specifically provided herein.

 

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(b) The Issuer’s obligations to the Indenture Trustee pursuant to this
Section 6.7 shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in
Section 5.1(e) or 5.1(f), the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or similar law.

Section 6.8 Replacement of Indenture Trustee.

(a) The Indenture Trustee may at any time give notice of its intent to resign by
so notifying the Issuer; provided, however, that no such resignation shall
become effective and the Indenture Trustee shall not resign prior to the time
set forth in Section 6.8(c) (or, if applicable, the time of appointment and
designation of a successor Indenture Trustee in accordance with Section 6.8(d)).
The Holders of a majority in Outstanding Amount of the Controlling Class may
remove the Indenture Trustee by so notifying the Indenture Trustee and may
appoint a successor Indenture Trustee. Such resignation or removal shall become
effective in accordance with Section 6.8(c) (or upon appointment and designation
of a successor Indenture Trustee in accordance with Section 6.8(d)). The Issuer
shall remove the Indenture Trustee if:

(i) the Indenture Trustee fails to comply with Section 6.11;

(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;

(iii) a receiver or other public officer takes charge of the Indenture Trustee
or its property; or

(iv) the Indenture Trustee otherwise becomes incapable of acting.

(b) If the Indenture Trustee gives notice of its intent to resign or is removed
or if a vacancy exists in the office of the Indenture Trustee for any reason
(the Indenture Trustee in such event being referred to herein as the retiring
Indenture Trustee), the Issuer shall promptly appoint and designate a successor
Indenture Trustee that complies with Section 6.11.

(c) A successor Indenture Trustee shall deliver a written acceptance of its
appointment and designation to the retiring Indenture Trustee and to the Issuer.
Thereupon the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders and to
each of the Rating Agencies. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor Indenture
Trustee.

(d) If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee gives notice of its intent to resign or is
removed, the retiring Indenture Trustee, the Issuer or the Holders of a majority
of the Outstanding Amount of the Controlling Class may petition any court of
competent jurisdiction for the appointment and designation of a successor
Indenture Trustee that complies with Section 6.11.

 

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(e) If the Indenture Trustee fails to comply with Section 6.11, any Noteholder
may petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee that
complies with Section 6.11.

(f) Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section 6.8, the Issuer’s obligations under Section 6.7 and the Servicer’s
corresponding obligations under the Servicing Agreement shall continue for the
benefit of the retiring Indenture Trustee.

Section 6.9 Merger or Consolidation of Indenture Trustee.

(a) Any Person into which the Indenture Trustee may be merged or with which it
may be consolidated, or any Person resulting from any merger or consolidation to
which the Indenture Trustee shall be a party, or any corporation succeeding to
the corporate trust business of the Indenture Trustee, shall be the successor of
the Indenture Trustee under this Indenture; provided, however, that such Person
shall be eligible under the provisions of Section 6.11, without the execution or
filing of any instrument or any further act on the part of any of the parties to
this Indenture, anything in this Indenture to the contrary notwithstanding.
Following such merger or consolidation, the successor Indenture Trustee shall
mail a notice of such merger or consolidation to each of the Rating Agencies.

(b) If at the time such successor or successors by merger or consolidation to
the Indenture Trustee shall succeed to the trusts created by this Indenture, any
of the Notes shall have been authenticated but not delivered, any such successor
to the Indenture Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Indenture Trustee may authenticate such Notes either in the name of any
predecessor hereunder or in the name of the successor to the Indenture Trustee.
In all such cases such certificate of authentication shall have the same full
force as is provided anywhere in the Notes or herein with respect to the
certificate of authentication of the Indenture Trustee.

Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee.

(a) Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Collateral or any Financed Vehicle may at the time be located, the
Indenture Trustee shall have the power and may execute and deliver all
instruments to appoint one or more Persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of the
Collateral, and to vest in such Person or Persons, in such capacity and for the
benefit of the Noteholders and (only to the extent expressly provided herein)
the Certificateholders, such title to the Collateral, or any part hereof, and,
subject to the other provisions of this Section 6.10, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider necessary
or desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 6.11 and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.8.

 

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(b) Every separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:

(i) all rights, powers, duties and obligations conferred or imposed upon the
Indenture Trustee shall be conferred or imposed upon and exercised or performed
by the Indenture Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized to
act separately without the Indenture Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Collateral or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Indenture Trustee;

(ii) no trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder; and

(iii) the Indenture Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.

(c) Any notice, request or other writing given to the Indenture Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and the conditions
of this Article VI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Indenture Trustee or
separately, as may be provided therein, subject to all the provisions of this
Indenture, specifically including every provision of this Indenture relating to
the conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.

(d) Any separate trustee or co-trustee may at any time constitute the Indenture
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Indenture Trustee, to the extent permitted by law, without the appointment of a
new or successor trustee.

Section 6.11 Eligibility; Disqualification.

(a) The Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of condition
and (unless waived by Moody’s) it shall have a long term unsecured debt rating
of “Baa3” or better by Moody’s and a rating of at least “BBB (low)” by DBRS, if
rated by DBRS.

 

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(b) If a Default occurs and is continuing, and the Indenture Trustee is deemed
to have a conflicting interest as a result of acting as trustee for the Class A
Notes, the Class B Notes and the Class C Notes, the Issuer shall appoint a
successor Indenture Trustee for one, two or all of such classes, so that there
will be separate Indenture Trustees for the Class A Notes, the Class B Notes and
the Class C Notes. No such event shall alter the voting rights of the Class A
Noteholders, the Class B Noteholders or the Class C Noteholders under this
Indenture or any other Basic Document. However, so long as any amounts remain
unpaid with respect to the Class A Notes, only the Indenture Trustee for the
Class A Noteholders will have the right to exercise remedies under this
Indenture (but subject to the express provisions of Section 5.4 and to the right
of the Class B Noteholders and the Class C Noteholders to receive their
respective shares of any proceeds of enforcement, subject to the subordination
of the Class B Notes to the Class A Notes and to the subordination of the
Class C Notes to the Class A Notes and the Class B Notes as described herein),
to make deposits to and withdrawals from the Designated Accounts, to hold
Designated Account Property and to make distributions to Noteholders from the
Note Distribution Account. Upon repayment of the Class A Notes in full, all
rights to exercise remedies under the Indenture will transfer to the Indenture
Trustee for the Class B Notes and for so long as any amounts remain unpaid with
respect to the Class B Notes, only the Indenture Trustee for the Class B
Noteholders will have the right to exercise remedies under this Indenture (but
subject to the express provisions of Section 5.4 and to the right of the Class C
Noteholders to receive their share of any proceeds of enforcement, subject to
the subordination of the Class C Notes to the Class B Notes as described
herein), to make deposits to and withdrawals from the Designated Accounts, to
hold Designated Account Property and to make distributions to Noteholders from
the Note Distribution Account. Upon repayment of the Class B Notes in full, all
rights to exercise remedies under the Indenture will transfer to the Indenture
Trustee for the Class C Notes.

(c) In the case of the appointment hereunder of a successor Indenture Trustee
with respect to any class of Notes, the Issuer, the retiring Indenture Trustee
and the successor Indenture Trustee with respect to such class of Notes shall
execute and deliver an indenture supplemental hereto wherein the successor
Indenture Trustee shall accept such appointment and which (i) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, the successor Indenture Trustee all the rights, powers, trusts and
duties of the retiring Indenture Trustee with respect to the Notes of the class
to which the appointment of such successor Indenture Trustee relates, (ii) if
the retiring Indenture Trustee is not retiring with respect to all classes of
Notes, shall contain such provisions as shall be deemed necessary or desirable
to confirm that all the rights, powers, trusts and duties of the retiring
Indenture Trustee with respect to the Notes of each class as to which the
retiring Indenture Trustee is not retiring shall continue to be vested in the
retiring Indenture Trustee, and (iii) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Indenture Trustee,
it being understood that nothing herein or in such supplemental indenture shall
constitute such Indenture Trustees co-trustees of the same trust and that each
such Indenture Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such
Indenture Trustee. Upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Indenture Trustee shall
become effective to the extent provided therein.

 

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Section 6.12 [Reserved].

Section 6.13 Representations and Warranties of Indenture Trustee. The Indenture
Trustee represents and warrants as of the Closing Date that:

(a) the Indenture Trustee is a national banking association duly organized,
validly existing and in good standing under the laws of the United States and
the eligibility requirements set forth in Section 6.11 are satisfied with
respect to the Indenture Trustee;

(b) the Indenture Trustee has full power, authority and legal right to execute,
deliver and perform this Indenture, and has taken all necessary action to
authorize the execution, delivery and performance by it of this Indenture;

(c) the execution, delivery and performance by the Indenture Trustee of this
Indenture (i) shall not violate any provision of any law or regulation governing
the banking and trust powers of the Indenture Trustee or any order, writ,
judgment or decree of any court, arbitrator, or governmental authority
applicable to the Indenture Trustee or any of its assets, (ii) shall not violate
any provision of the corporate charter or by-laws of the Indenture Trustee, or
(iii) shall not violate any provision of, or constitute, with or without notice
or lapse of time, a default under, or result in the creation or imposition of
any lien on any properties included in the Collateral pursuant to the provisions
of any mortgage, indenture, contract, agreement or other undertaking to which it
is a party, which violation, default or lien could reasonably be expected to
have a materially adverse effect on the Indenture Trustee’s performance or
ability to perform its duties under this Indenture or on the transactions
contemplated in this Indenture;

(d) the execution, delivery and performance by the Indenture Trustee of this
Indenture shall not require the authorization, consent or approval of, the
giving of notice to, the filing or registration with, or the taking of any other
action in respect of, any governmental authority or agency regulating the
banking and corporate trust activities of the Indenture Trustee; and

(e) this Indenture has been duly executed and delivered by the Indenture Trustee
and constitutes the legal, valid and binding agreement of the Indenture Trustee,
enforceable in accordance with its terms.

Section 6.14 Indenture Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Indenture Trustee without the possession of any
of the Notes or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Indenture Trustee shall be brought in its
own name as Indenture Trustee. Any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee, its agents and counsel, be for the ratable
benefit of the Noteholders and (only to the extent expressly provided herein)
the Certificateholders in respect of which such judgment has been obtained.

 

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ARTICLE VII

NOTEHOLDERS’ LISTS AND REPORTS

Section 7.1 Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer shall furnish or cause to be furnished by the Servicer
to the Indenture Trustee (a) not more than five days before each Distribution
Date, a list, in such form as the Indenture Trustee may reasonably require, of
the names and addresses of the Holders of Notes as of the close of business on
the Record Date and (b) at such other times as the Indenture Trustee may request
in writing, within 14 days after receipt by the Issuer of any such request, a
list of similar form and content as of a date not more than 10 days prior to the
time such list is furnished; provided, however, that so long as the Indenture
Trustee is the Note Registrar, no such list shall be required to be furnished.

Section 7.2 Preservation of Information, Communications to Noteholders. The
Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.1
and the names and addresses of Holders of Notes received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.1 upon receipt of a new list
so furnished.

ARTICLE VIII

ACCOUNTS, DISBURSEMENTS AND RELEASES

Section 8.1 Collection of Money. Except as otherwise expressly provided herein
or in the other Basic Documents, the Indenture Trustee may demand payment or
delivery of, and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to this
Indenture. The Indenture Trustee shall apply all such money received by it as
provided in this Indenture and the Servicing Agreement. Except as otherwise
expressly provided in this Indenture or in Article II of the Servicing
Agreement, if any default occurs in the making of any payment or performance
under any agreement or instrument that is part of the Collateral, the Indenture
Trustee may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim an
Event of Default under this Indenture and any right to proceed thereafter as
provided in Article V.

Section 8.2 Designated Accounts; Payments.

(a) On or before each Determination Date, with respect to the preceding Monthly
Period and the related Distribution Date, the Servicer shall calculate the
Available Amount, the Total Available Amount, the Total Servicing Fee, the
Backup Servicing Fee, the Aggregate Class A Noteholders’ Interest Distributable
Amount, the Class B Noteholders’ Interest Distributable Amount, the Class C
Noteholders’ Interest Distributable Amount, the Priority Principal Distribution
Amount, the Regular Principal Distribution Amount, the Principal Distributable
Amount, the Reserve Account Deposit 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 Transfer Date or Distribution Date,
as applicable, and supply such information to the Issuer and the Indenture
Trustee.

 

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(b) On or before each Transfer Date, the Indenture Trustee shall cause to be
made the following withdrawals, deposits, transfers and distributions in the
amounts set forth in the Servicer’s Certificate delivered to the Indenture
Trustee pursuant to Section 2.17 of the Servicing Agreement:

(i) from the Collection Account to the Servicer, in immediately available funds,
reimbursement of Outstanding Monthly Advances pursuant to Section 2.14 of the
Servicing Agreement, payments of Liquidation Expenses with respect to
Receivables which became Liquidating Receivables during the related Monthly
Period pursuant to Section 2.04 of the Servicing Agreement and any unpaid
Liquidation Expenses from prior periods; and

(ii) from the Reserve Account to the Collection Account (A) if the related
Distribution Date is not a date on or after which the Notes have been
accelerated (unless such acceleration has been rescinded or annulled as provided
herein), the lesser of (1) the amount of cash or other immediately available
funds therein on such Transfer Date and (2) the amount, if any, by which (y) the
amount required to be paid pursuant to Section 8.2(c)(i) through
Section 8.2(c)(v) exceeds (z) the Total Available Amount (excluding funds from
the Reserve Account) for the related Distribution Date, or (B) if the related
Distribution Date is a date on or after which the Notes have been accelerated
(unless such acceleration has been rescinded or annulled as provided herein),
the amount of cash or other immediately available funds therein on such Transfer
Date.

(c) Before 12:00 noon, New York City time, on each Transfer Date, the Indenture
Trustee (based solely on the information contained in the Servicer’s Certificate
delivered to the Indenture Trustee pursuant to Section 2.17 of the Servicing
Agreement) shall make the following distributions from the Collection Account
(after the withdrawals, deposits and transfers specified in Section 8.2(b) have
been made) in the following order of priority:

(i) first, pro rata, to the Servicer, to the extent of the Total Available
Amount, the Total Servicing Fee and to the Backup Servicer, to the extent of the
Total Available Amount, the Backup Servicing Fee;

(ii) second, to the Note Distribution Account, to the extent of the Total
Available Amount (as such amount has been reduced by the distributions described
in Section 8.2(c)(i) above), the Aggregate Class A Noteholders’ Interest
Distributable Amount;

(iii) third, to the Note Distribution Account, to the extent of the Total
Available Amount (as such amount has been reduced by the distributions described
in Section 8.2(c)(i) and Section 8.2(c)(ii) above), the Class B Noteholders’
Interest Distributable Amount;

(iv) fourth, to the Note Distribution Account, to the extent of the Total
Available Amount (as such amount has been reduced by the distributions described
in Section 8.2(c)(i) through Section 8.2(c)(iii) above), the Class C
Noteholders’ Interest Distributable Amount;

 

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(v) fifth, to the Note Distribution Account, to the extent of the Total
Available Amount (as such amount has been reduced by the distributions described
in Section 8.2(c)(i) through Section 8.2(c)(iv) above) the Priority Principal
Distribution Amount;

(vi) sixth, if the related Distribution Date is not a date on or after which the
Notes have been accelerated (unless such acceleration has been rescinded or
annulled as provided herein) to the Reserve Account, to the extent of the Total
Available Amount (as such amount has been reduced by the distributions described
in Section 8.2(c)(i) through Section 8.2(c)(v) above), the amount by which the
Specified Reserve Account Balance for the next succeeding Distribution Date
exceeds the amount on deposit in the Reserve Account on such Transfer Date;

(vii) seventh, to the Note Distribution Account, to the extent of the Total
Available Amount (as such amount has been reduced by the distributions described
in Section 8.2(c)(i) through Section 8.2(c)(vi) above), the Regular Principal
Distribution Amount, which shall be reduced by the amounts distributed in
accordance with Sections 8.2(c)(v) above);

(viii) eighth, to the Backup Servicer or, if NFC is no longer the Servicer, to
the successor Servicer, to the extent of the Total Available Amount (as such
amount has been reduced by the distributions described in Section 8.2(c)(i)
through Section 8.2(c)(vii) above), the Backup Servicing Expenses or the
Successor Servicer Expenses, as applicable; and

(ix) ninth, to the Certificate Distribution Account, any portion of the Total
Available Amount remaining after the distributions described in
Section 8.2(c)(i) through Section 8.2(c)(viii) above.

(d) On each Distribution Date, the Indenture Trustee shall distribute all
amounts on deposit in the Note Distribution Account, subject to the
Certificateholder’s rights under Section 8.6 to Investment Earnings, to the
Noteholders to the extent of amounts due and unpaid on the Notes for principal
and interest, in the following amounts, and in the following order of priority:

(i) (A) first, to accrued and unpaid interest on the Class A Notes; provided,
however, that if there are not sufficient funds in the Note Distribution Account
to pay the entire amount of accrued and unpaid interest then due on the Class A
Notes, the amount in the Note Distribution Account shall be applied to the
payment of such interest on each Note of each class of the Class A Notes pro
rata on the basis of the respective aggregate amount of interest due on each
such class of Class A Notes; (B) second, unless otherwise provided in
Section 8.2(d)(iii) below, to accrued and unpaid interest on the Class B Notes;
provided, however, that if there are not sufficient funds in the Note
Distribution Account (after the payment of all accrued and unpaid interest on
the

 

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Class A Notes) to pay the entire amount of accrued and unpaid interest then due
on the Class B Notes, the amount in the Note Distribution Account shall be
applied to the payment of such interest on each of the Class B Notes pro rata on
the basis of the aggregate amount of interest due on each such Class B Note; and
(C) third, unless otherwise provide in Section 8.2(d)(iii) below, to accrued and
unpaid interest on the Class C Notes; provided, however, that if there are not
sufficient funds in the Note Distribution Account (after the payment of all
accrued and unpaid interest on the Class A Notes and the Class B Notes) to pay
the entire amount of accrued and unpaid interest then due on the Class C Notes,
the amount in the Note Distribution Account shall be applied to the payment of
such interest on each of the Class C Notes pro rata on the basis of the
aggregate amount of interest due on each such Class C Note;

(ii) unless otherwise provided in Section 8.2(d)(iii) or 8.2(d)(iv) below, the
Principal Payment Amount shall be applied on each Distribution Date, as follows:

(A) to the Class A-1 Notes until the Class A-1 Notes are paid in full; then

(B) to the Class A-2 Notes until the Class A-2 Notes are paid in full; then

(C) to the Class A-3 Notes until the Class A-3 Notes are paid in full; then

(D) to the Class B Notes until the Class B Notes are paid in full; and then

(E) to the Class C Notes until the Class C Notes are paid in full.

(iii) if the Notes have been declared immediately due and payable as provided in
Section 5.2(a) following the occurrence of an Event of Default specified in
Section 5.1(a), 5.1(b) or 5.1(c), any and all amounts remaining in the Note
Distribution Account after the application described in Section 8.2(d)(i)(A)
shall be applied in the following priority: (A) to the repayment of principal of
each of the Class A-1 Notes pro rata on the basis of the respective unpaid
principal amount of each such Class A-1 Note until the Class A-1 Notes are paid
in full; (B) to the repayment of principal of each of the Class A-2 Notes and
the Class A-3 Notes pro rata on the basis of the respective unpaid principal
amount of each such Class A Note until the Class A-2 Notes and the Class A-3
Notes are paid in full; (C) to the repayment of accrued and unpaid interest on
each of the Class B Notes pro rata on the basis of the amount of interest due
and unpaid on each such Class B Note; (D) to the repayment of principal on each
of the Class B Notes pro rata on the basis of the respective unpaid principal
amount of each such Class B Note until the Class B Notes are paid in full;
(E) to the repayment of accrued and unpaid interest on each of the Class C Notes
pro rata on the basis of the amount of interest due and unpaid on each such
Class C Note; and (F) to the repayment of principal on each of the Class C Notes
pro rata on the basis of the respective unpaid principal amount of each such
Class C Note until the Class C Notes are paid in full; and

 

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(iv) if the Notes have been declared immediately due and payable as provided in
Section 5.2(a) following the occurrence of an Event of Default specified in
Section 5.1(d), 5.1(e), 5.1(f) or 5.1(g), any and all amounts remaining in the
Note Distribution Account after the application described in Section 8.2(d)(i)
shall be applied in the following order of priority: (A) to the repayment of
principal of each of the Class A-1 Notes pro rata on the basis of the respective
unpaid principal amount of each such Class A-1 Notes until the Class A-1 Notes
are paid in full; (B) to the repayment of principal of each of the Class A-2
Notes and Class A-3 Notes pro rata on the basis of the respective unpaid
principal amount of each such Class A Note until the Class A-2 Notes and
Class A-3 Notes are paid in full; (C) to the repayment of principal of each of
the Class B Notes pro rata on the basis of the respective accrued and unpaid
principal amount of each such Class B Note until the Class B Notes are paid in
full; and (D) to the repayment of principal of each of the Class C Notes pro
rata on the basis of the respective accrued and unpaid principal amount of each
such Class C Note until the Class C Notes are paid in full;

(e) Pursuant to Section 5.2(a) of the Trust Agreement, on each Distribution
Date, the Paying Agent under the Trust Agreement shall distribute all amounts on
deposit in the Certificate Distribution Account to the Certificateholders.

(f) Notwithstanding the foregoing, in the event that the Servicer has not
delivered the Servicer’s Certificate containing instructions to the Indenture
Trustee (required to be delivered pursuant to Section 2.17 of the Servicing
Agreement) on or before 10:00 a.m. (Chicago, Illinois time) on any Determination
Date so as to enable the Indenture Trustee to make payments pursuant to and in
accordance with the priorities set forth in this Article VIII on such
Distribution Date, the Indenture Trustee shall, to the extent such funds are
available, withdraw amounts (i) first, from the Collection Account (other than
amounts described in Section 8.2(b)(i)) and (ii) second, from the Reserve
Account (based upon the information set forth in the last Servicer’s Certificate
that the Indenture Trustee received from the Servicer for the immediately
preceding Distribution Date) and therefrom make required payments of interest
and principal on the Notes on such Distribution Date, in each case, in
accordance with the priorities set forth in this Section 8.2. In the event that
any Servicer’s Certificate is delivered after 10:00 a.m. (Chicago, Illinois
time) on any Determination Date, the Indenture Trustee will rely on the
information contained in such certificate to make distributions in accordance
with this Section 8.2 for the Distribution Date that relates to the next
succeeding Determination Date.

Section 8.3 General Provisions Regarding Accounts.

(a) Subject to Section 6.1(c), the Indenture Trustee shall not in any way be
held liable by reason of any insufficiency in any of the Designated Accounts or
the Certificate Distribution Account resulting from any loss on any Eligible
Investment included therein except for losses attributable to the Indenture
Trustee’s failure to make payments on such Eligible Investments issued by the
Indenture Trustee, in its commercial capacity as principal obligor and not as
trustee, in accordance with their terms.

 

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(b) If (i) the Servicer shall have failed to give investment directions for any
funds on deposit in the Designated Accounts and Certificate Distribution Account
to the Indenture Trustee by 11:00 a.m., New York City time (or such other time
as may be agreed by the Servicer and the Indenture Trustee) on any Business Day,
and (ii) a Default shall have occurred and be continuing with respect to the
Notes but (A) the Notes shall not have been declared due and payable pursuant to
Section 5.2(a), or (B) such Notes shall have been declared due and payable
following an Event of Default but amounts collected or receivable from the
Collateral are being applied in accordance with Section 5.4(b) as if there had
not been such a declaration; then the Indenture Trustee shall, to the fullest
extent practicable, invest and reinvest funds in the Designated Accounts and
Certificate Distribution Account in one or more Eligible Investments selected by
the Indenture Trustee.

(c) In making or disposing of any investment permitted by this Indenture, the
Indenture Trustee is authorized to deal with itself (in its individual capacity)
or with any one or more of its Affiliates, in each case on an arm’s-length basis
and on standard market terms, whether it or such Affiliate is acting as a
sub-agent of the Indenture Trustee or for any third Person or dealing as
principal for its own account.

Section 8.4 Release of Collateral.

(a) Subject to the payment of its fees and expenses pursuant to Section 6.7, the
Indenture Trustee may, and when required by the provisions of this Indenture
shall, execute instruments to release property in the Collateral from the lien
of this Indenture, or convey the Indenture Trustee’s interest in the same, in a
manner and under circumstances that are consistent with the provisions of this
Indenture. No party relying upon an instrument executed by the Indenture Trustee
as provided in this Article VIII shall be bound to ascertain the Indenture
Trustee’s authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.

(b) The Indenture Trustee shall, at such time as there are no Notes Outstanding
and all sums due to the Indenture Trustee pursuant to Section 6.7 have been
paid, notify the Issuer thereof in writing and upon receipt of an Issuer
Request, release any remaining portion of the Collateral that secured the Notes
from the lien of this Indenture and release to the Issuer or any other Person
entitled thereto any funds then on deposit in the Note Distribution Account. The
Indenture Trustee shall (i) release any remaining portion of the Collateral that
secured the Certificates from the lien of this Indenture and (ii) deposit in the
Certificate Distribution Account any funds then on deposit in the Reserve
Account or the Collection Account only at such time as (A) there are no Notes
Outstanding and (B) all sums due to the Indenture Trustee pursuant to
Section 6.7 have been paid.

Section 8.5 Opinion of Counsel. The Indenture Trustee shall receive at least
seven days’ notice when requested by the Issuer to take any action pursuant to
Section 8.4(a), accompanied by copies of any instruments involved, and the
Indenture Trustee shall also require as a condition to such action, an Opinion
of Counsel, in form and substance satisfactory to the Indenture Trustee, stating
the legal effect of any such action, outlining the steps required to complete
the same, and concluding that all conditions precedent to the taking of such
action have been complied with and such action shall not materially and
adversely impair the security for the

 

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Notes or the rights of the Noteholders in contravention of the provisions of
this Indenture; provided, however, that such Opinion of Counsel shall not be
required to express an opinion as to the fair value of the Collateral. Counsel
rendering any such opinion may rely, without independent investigation, on the
accuracy and validity of any certificate or other instrument delivered to the
Indenture Trustee in connection with any such action.

Section 8.6 Investment Earnings and Supplemental Servicing Fees. The Servicer
shall be entitled to retain all Supplemental Servicing Fees. Except as otherwise
provided in Section 2.02(b)(i) of the Servicing Agreement, the
Certificateholders (via the Certificate Distribution Account or such other
account as shall be designated in writing by the Certificateholders to the
Servicer) shall be entitled to receive all Investment Earnings, when and as
paid. The Servicer will not have any obligation to deposit any such amount in
any account established hereunder. To the extent that any such amount shall be
held in any account (other than, with respect to amounts to be distributed to
the Certificateholders, the Certificate Distribution Account) held by either
Trustee, or otherwise established hereunder, such amount will be withdrawn
therefrom and paid to the Servicer or deposited in the Certificate Distribution
Account for distribution to the Certificateholders, as applicable, upon
presentation of a certificate signed by a Responsible Officer of such Person
setting forth, in reasonable detail, the amount of such Supplemental Servicing
Fees or such Investment Earnings, respectively.

Section 8.7 Net Deposits. At any time that (a) NFC shall be the Servicer and
(b) the Servicer shall be permitted by Section 2.12 of the Servicing 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 VIII net of amounts to be distributed by the Indenture Trustee to such
remitting party. Nonetheless, the Indenture Trustee shall account for all of the
above described remittances and distributions as if the amounts were deposited
and/or transferred separately.

Section 8.8 Statements to Securityholders.

(a) On each Distribution Date, the Issuer shall include with each distribution
to each Certificateholder, and the Indenture Trustee shall, in accordance with
Section 8.8(d), make available to each Noteholder and the Rating Agencies a
statement based on (subject to the last sentence of this Section 8.8(a))
information in the Servicer’s Certificate furnished pursuant to Section 2.17 of
the Servicing Agreement. Each such statement shall set forth the following
information as to the Notes and the Receivables with respect to such
Distribution Date or the preceding Monthly Period, as applicable:

(i) the amount of the distribution allocable to interest on or with respect to
each class of Notes;

(ii) the Aggregate Receivables Balance as of the close of business on the last
day of the related Monthly Period;

(iii) the amount of Outstanding Monthly Advances with respect to all Receivables
on such Distribution Date;

 

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(iv) the amount of the Total Servicing Fee paid or payable to the Servicer with
respect to the related Monthly Period;

(v) the amount of Aggregate Losses for the related Monthly Period;

(vi) the Delinquency Percentage for the related Monthly Period;

(vii) the sum of all Administrative Purchase Payments and all Warranty Payments
made for the related Monthly Period;

(viii) the amount of the distribution allocable to principal of each class of
Notes;

(ix) the Note Principal Balance and the Note Pool Factor for each class of
Notes, each after giving effect to all payments reported under
Section 8.8(a)(viii) above on such date;

(x) the amounts, if any, paid to the Servicer or distributed to Noteholders from
amounts on deposit in the Reserve Account (expressed as a dollar amount per
$1,000 of the face amount of the Notes);

(xi) the amount of the Class A Noteholders’ Interest Carryover Shortfall, if
any, the Class B Noteholders’ Interest Carryover Shortfall, if any, the Class C
Noteholders’ Interest Carryover Shortfall, if any, and the change in such
amounts from the preceding Distribution Date; and

(xii) the balance (if any) of the Reserve Account and the Specified Reserve
Account Balance on such date, after giving effect to distributions, withdrawals,
transfers and deposits made on such date, and the change in such balance from
that of the prior Distribution Date.

Each amount set forth pursuant to Section 8.8(a)(i), Section 8.8(a)(iv),
Section 8.8(a)(viii), Section 8.8(a)(x) and Section 8.8(a)(xi) above shall be
expressed as a dollar amount per $1,000 of initial Note Principal Balance. In
lieu of preparing and making available a separate statement to Securityholders
pursuant to this Section 8.8(a), a Trustee may make available in accordance with
Section 8.8(d) a copy of the Servicer’s Certificate furnished pursuant to
Section 2.17 of the Servicing Agreement.

(b) Within the prescribed period of time for tax reporting purposes after the
end of each calendar year during the term of this Agreement, the Servicer shall
prepare and execute and the Owner Trustee shall mail to each Person who at any
time during such calendar year shall have been a holder of Certificates and
received any payments thereon, a statement prepared and supplied by the Servicer
containing the amounts set forth in each of Sections 8.8(a)(i), 8.8(a)(iv),
8.8(a)(viii), 8.8(a)(x) and 8.8(a)(xi) above, for such calendar year or, if such
Person shall have been a Securityholder during a portion of such calendar year
and received any payments thereon, for the applicable portion of such year, for
the purposes of such Securityholder’s preparation of federal income tax returns.
Within the prescribed period of time for tax reporting purposes after the end of
each calendar year during the term of this Agreement,

 

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the Servicer shall prepare and execute and the Indenture Trustee shall make
available in accordance with Section 8.8(d) (without request of a Noteholder) to
each Person who at any time during such calendar year shall have been a holder
of Notes and received any payments thereon, a statement prepared and supplied by
the Servicer containing the amounts set forth in each of Sections 8.8(a)(i),
8.8(a)(iv), 8.8(a)(viii), 8.8(a)(x) and 8.8(a)(xi) above, for such calendar year
or, if such Person shall have been a Securityholder during a portion of such
calendar year and received any payments thereon, for the applicable portion of
such year, for the purposes of such Securityholder’s preparation of federal
income tax returns.

(c) Subject to Section 8.2(f), for purposes of this Section 8.8, the Indenture
Trustee’s duties are limited to the extent that the Indenture Trustee receives
the Servicer’s Certificate as required by Section 2.17 of the Servicing
Agreement. The Indenture Trustee may conclusively rely upon but shall not be
responsible for the content or accuracy of the Servicer’s Certificate and shall
have no obligation to verify, confirm or recalculate any information provided
therein.

(d) If the Indenture Trustee is required to make available information or
documentation pursuant to any Section of this Indenture, the Trust Agreement or
the Servicing Agreement, or (with the Administrator’s prior consent) if any
information or documentation is requested by a Noteholder, the Indenture Trustee
will make such information or documentation available via the Indenture
Trustee’s internet website which will initially be located at
www.sf.citidirect.com or at such address as the Indenture Trustee notifies the
Noteholders of in the manner described below. In connection with providing
access to the Indenture Trustee’s internet website, the Indenture Trustee may
require registration and the acceptance of a disclaimer. Assistance in using the
website can be obtained by calling the Indenture Trustee’s customer service desk
at 866-846-4526. Noteholders that are unable to use the above distribution
option are entitled to have a paper copy mailed to them via first class mail by
delivering written notice to the Indenture Trustee and requesting such. The
Indenture Trustee shall have the right to change the way such statements are
distributed in order to make such distribution more convenient and/or more
accessible to the above parties and the Indenture Trustee shall provide timely
and adequate notification to the above parties regarding any such changes.

Section 8.9 Designated Accounts. On or prior to the Closing Date, the Issuer
shall cause the Servicer to establish and maintain, in the name of the Indenture
Trustee, for the benefit of the Financial Parties, the Designated Accounts as
provided in Section 2.02 of the Servicing Agreement.

Section 8.10 Reserve Account.

(a) On the Closing Date, the Seller shall cause the Reserve Account Initial
Deposit to be deposited into the Reserve Account. The Reserve Account shall be
the property of the Issuer, subject to the rights of the Indenture Trustee in
the Reserve Account Property.

(b) Amounts shall be withdrawn from the Reserve Account and deposited in the
Collection Account from time to time as provided in Section 8.2. If the amount
on deposit in the Reserve Account on any Distribution Date (after giving effect
to all deposits therein or

 

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withdrawals therefrom on such Distribution Date) exceeds the Specified Reserve
Account Balance for such Distribution Date, and if the Notes have not been
declared due and payable following an Event of Default, the Indenture Trustee
shall, upon receipt of instruction from the Servicer, deposit into the
Certificate Distribution Account an amount equal to any such excess for
distribution to the Certificateholders or upon the order of the
Certificateholders in an account designated in writing by the Certificateholders
to the Servicer. If there are any amounts on deposit in the Reserve Account on
the Final Scheduled Distribution Date for the Class C Notes, after giving effect
to any withdrawals required to be made on such date, the Indenture Trustee shall
deposit such excess into the Certificate Distribution Account for distribution
to the Certificateholders.

ARTICLE IX

SUPPLEMENTAL INDENTURES

Section 9.1 Supplemental Indentures Without Consent of Noteholders.

(a) Without the consent of the Holders of any Notes, but with prior notice to
the Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Indenture Trustee,
for any of the following purposes:

(i) to correct or amplify the description of any property at any time subject to
the lien of this Indenture, or better to assure, convey and confirm unto the
Indenture Trustee any property subject or required to be subjected to the lien
of this Indenture, or to subject additional property to the lien of this
Indenture;

(ii) to evidence the succession, in compliance with Section 3.11 and the
applicable provisions hereof, of another Person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer contained herein
and in the Notes;

(iii) to add to the covenants of the Issuer for the benefit of the
Securityholders, or to surrender any right or power herein conferred upon the
Issuer;

(iv) to convey, transfer, assign, mortgage or pledge any property to or with the
Indenture Trustee;

(v) to cure any ambiguity or to correct or supplement any provision herein or in
any supplemental indenture which may be inconsistent with any other provision
herein, in any supplemental indenture or in any other Basic Document; or

(vi) to evidence and provide for the acceptance of the appointment hereunder by
a successor or additional Indenture Trustee with respect to the Notes or any
class thereof and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts hereunder by
more than one trustee, pursuant to the requirements of Article VI.

(b) The Issuer and the Indenture Trustee, when authorized by an Issuer Order,
may, also without the consent of any of the Noteholders but with prior notice to
the Rating

 

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Agencies, at any time and from time to time enter into one or more indentures
supplemental hereto for the purpose of adding any provisions to, changing in any
manner, or eliminating any of the provisions of, this Indenture or modifying in
any manner the rights of the Noteholders under this Indenture; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Noteholder.

Section 9.2 Supplemental Indentures With Consent of Noteholders.

(a) The Issuer and the Indenture Trustee, when authorized by an Issuer Order,
also may, with prior notice to the Rating Agencies and with the consent of the
Holders of not less than a majority of the Outstanding Amount of the Controlling
Class, by Act of such Holders delivered to the Issuer and the Indenture Trustee,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, changing in any manner, or eliminating any of the
provisions of, this Indenture or modifying in any manner the rights of the
Noteholders under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Note
affected thereby:

(i) change the due date of any installment of principal of or interest on any
Note, or reduce the principal amount thereof, the interest rate applicable
thereto, or the Redemption Price with respect thereto, change any place of
payment where, or the coin or currency in which, any Note or any interest
thereon is payable, or impair the right to institute suit for the enforcement of
the provisions of this Indenture requiring the application of funds available
therefor, as provided in Article V, to the payment of any such amount due on the
Notes on or after the respective due dates thereof (or, in the case of
redemption, if applicable, on or after the Redemption Date or Optional Purchase
Date, as applicable);

(ii) reduce the percentage of the Outstanding Amount of the Controlling Class,
the consent of the Holders of which is required for (A) any such supplemental
indenture, (B) any waiver of compliance with certain provisions of this
Indenture, certain defaults hereunder and their consequences as provided for in
this Indenture, or (C) any action described in Sections 2.12, 3.7(e), 5.2, 5.6,
5.11, 5.12(a), 6.8, or 6.16;

(iii) modify or alter the provisions of the proviso to the definition of the
term “Outstanding”;

(iv) reduce the percentage of the Outstanding Amount of the Notes required to
direct the Indenture Trustee to sell or liquidate the Collateral pursuant to
Section 5.4 if the proceeds of such sale would be insufficient to pay the
principal amount of and accrued but unpaid interest on the Outstanding Notes;

(v) modify any provision of this Section 9.2 to decrease the required minimum
percentage necessary to approve any amendments to any provisions of this
Indenture or any of the Basic Documents;

(vi) modify any of the provisions of this Indenture in such manner as to affect
the calculation of the amount of any payment of interest or principal due on any

 

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Note on any Distribution Date (including the calculation of any of the
individual components of such calculation), or modify or alter the provisions of
the Indenture regarding the voting of Notes held by the Issuer, the Seller or
any Affiliate of either of them; or

(vii) permit the creation of any Lien (other than Permitted Liens) ranking prior
to or on a parity with the lien of this Indenture with respect to any part of
the Collateral or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject to the
lien of this Indenture or deprive the Holder of any Note of the security
afforded by the lien of this Indenture.

(b) The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected (such that the consent of each Noteholder would be
required) by any supplemental indenture proposed pursuant to this Section 9.2
and any such determination shall be conclusive and binding upon all of the
Noteholders, whether authenticated and delivered thereunder before or after the
date upon which such supplemental indenture becomes effective. The Indenture
Trustee shall not be liable for any such determination made in good faith.

(c) It shall be sufficient if an Act of Noteholders approves the substance, but
not the form, of any proposed supplemental indenture.

(d) Promptly after the execution by the Issuer and the Indenture Trustee of any
supplemental indenture pursuant to this Section 9.2, the Indenture Trustee shall
make available to the Noteholders to which such amendment or supplemental
indenture relates, in accordance with Section 8.8(d), a notice setting forth in
general terms the substance of such supplemental indenture. Any failure of the
Indenture Trustee to make available such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such supplemental
indenture.

Section 9.3 Execution of Supplemental Indentures. In executing, or permitting
the additional trusts created by, any supplemental indenture permitted by this
Article IX or the modifications thereby of the trusts created by this Indenture,
the Indenture Trustee shall be entitled to receive, and subject to Sections 6.1
and 6.2, shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture and that all conditions precedent to such execution have been
satisfied. The Indenture Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Indenture Trustee’s own rights,
duties, liabilities or immunities under this Indenture or otherwise.

Section 9.4 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith with respect
to the Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Indenture Trustee, the Issuer and the Noteholders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.

 

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Section 9.5 [Reserved].

Section 9.6 Reference in Notes to Supplemental Indentures. Notes authenticated
and delivered after the execution of any supplemental indenture pursuant to this
Article IX may, and if required by the Indenture Trustee shall, bear a notation
in form approved by the Indenture Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Indenture Trustee shall so
determine, new Notes so modified as to conform, in the opinion of the Indenture
Trustee and the Issuer, to any such supplemental indenture may be prepared and
executed by the Issuer and authenticated and delivered by the Indenture Trustee
in exchange for Outstanding Notes of the same class.

ARTICLE X

REDEMPTION OF NOTES

Section 10.1 Redemption.

(a) The Notes shall be redeemed in whole and not in part, upon the exercise by
(i) the Servicer of its option to purchase the Receivables pursuant to
Section 4.01 of the Pooling Agreement or (ii) the Seller of its option to
purchase the Receivables pursuant to Section 4.03 of the Pooling Agreement. Such
redemption shall occur on the same Distribution Date as the Distribution Date on
which the Servicer exercises its option to purchase the Receivables pursuant to
Section 4.01 of the Pooling Agreement or the Distribution Date on which the
Seller exercises its option to purchase the Receivables pursuant to Section 4.03
of the Pooling Agreement, as applicable. The redemption price for the Notes to
be redeemed shall be equal to the Redemption Price. The Issuer shall furnish the
Rating Agencies notice of such redemption. If the Notes are to be redeemed
pursuant to this Section 10.1(a), the Issuer shall furnish notice thereof to the
Indenture Trustee not later than 25 days prior to the Redemption Date or the
Optional Purchase Date, as applicable, and the Issuer shall deposit into the
Note Distribution Account, on or before the Redemption Date or on the Optional
Purchase Date, as applicable, the aggregate Redemption Price of the Notes,
whereupon all of the Notes shall be due and payable on the Redemption Date or
the Optional Purchase Date, as applicable.

(b) [Reserved].

(c) Within 60 days after the redemption in full pursuant to this Section 10.1 of
the Notes, the Indenture Trustee shall provide each of the Rating Agencies with
written notice stating that all of the Notes have been redeemed.

Section 10.2 Form of Redemption Notice.

(a) Notice of redemption of the Notes under Section 10.1(a) shall be given by
the Indenture Trustee by first-class mail, postage prepaid, mailed not less than
five days prior to the Redemption Date or Optional Repurchase Date, as
applicable, to each Holder of the Notes of record, respectively, at such
Noteholder’s address appearing in the Note Register.

(b) All notices of redemption shall state:

(i) the Redemption Date or Optional Purchase Date, as applicable;

 

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(ii) the Redemption Price;

(iii) the place where Notes are to be surrendered for payment of the Redemption
Price (which shall be the Agency Office to be maintained as provided in
Section 3.2); and

(iv) the CUSIP numbers for all of the Notes.

(c) Notice of redemption of the Notes shall be given by the Indenture Trustee in
the name and at the expense of the Issuer. Failure to give notice of redemption,
or any defect therein, to any Holder of any Note to be redeemed shall not impair
or affect the validity of the redemption of any other Note to be redeemed.

(d) [Reserved.]

Section 10.3 Notes Payable on Redemption Date or Optional Purchase Date. All of
the Notes shall, following notice of redemption as required by Section 10.2, on
the Redemption Date or Optional Purchase Date, as applicable, cease to be
Outstanding for purposes of this Indenture and shall thereafter represent only
the right to receive the applicable Redemption Price and (unless the Issuer
shall default in the payment of such Redemption Price) no interest shall accrue
on such Redemption Price for any period after the date to which accrued interest
is calculated for purposes of calculating such Redemption Price.

ARTICLE XI

MISCELLANEOUS

Section 11.1 Compliance Certificates and Opinions, etc.

(a) Upon any application or request by the Issuer to the Indenture Trustee to
take any action under any provision of this Indenture, the Issuer shall furnish
to the Indenture Trustee: (i) an Officer’s Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and (ii) an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that, in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture, no additional certificate or opinion need be
furnished. Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

(i) a statement that each signatory of such certificate or opinion has read or
has caused to be read such covenant or condition and the definitions herein
relating thereto;

(ii) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;

(iii) a statement that, in the judgment of each such signatory, such signatory
has made such examination or investigation as is necessary to enable such
signatory to express an informed opinion as to whether or not such covenant or
condition has been complied with; and

 

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(iv) a statement as to whether, in the opinion of each such signatory, such
condition or covenant has been complied with.

(b) (i) Prior to the deposit with the Indenture Trustee of any Collateral or
other property or securities that is to be made the basis for the release of any
property or securities subject to the lien of this Indenture, the Issuer shall,
in addition to any obligation imposed in Section 11.1(a) or elsewhere in this
Indenture, furnish to the Indenture Trustee an Officer’s Certificate certifying
or stating the opinion of each Person signing such certificate as to the fair
value (within 60 days of such deposit) to the Issuer of the Collateral or other
property or securities to be so deposited.

(ii) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer’s Certificate certifying or stating the opinion of any signer thereof as
to the matters described in Section 11.1(b)(i) above, the Issuer shall also
deliver to the Indenture Trustee an Independent Certificate as to the same
matters, if the fair value to the Issuer of the securities to be so deposited
and of all other such securities made on the basis of any such withdrawal or
release since the commencement of the then current fiscal year of the Issuer, as
set forth in the certificates delivered pursuant to Section 11.1(b)(i) above and
this Section 11.1(b)(ii), is 10% or more of the Outstanding Amount of the Notes,
but such a certificate need not be furnished with respect to any securities so
deposited if the fair value thereof to the Issuer as set forth in the related
Officer’s Certificate is less than $25,000 or less than one percent of the
Outstanding Amount of the Notes.

(iii) Other than with respect to the release of any Warranty Receivables,
Administrative Receivables or Liquidating Receivables, whenever any property or
securities are to be released from the lien of this Indenture, the Issuer shall
also furnish to the Indenture Trustee an Officer’s Certificate certifying or
stating the opinion of each Person signing such certificate as to the fair value
(within 60 days of such release) of the property or securities proposed to be
released and stating that in the opinion of such Person the proposed release
will not impair the security under this Indenture in contravention of the
provisions hereof.

(iv) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer’s Certificate certifying or stating the opinion of any signatory thereof
as to the matters described in Section 11.1(b)(iii) above, the Issuer shall also
furnish to the Indenture Trustee an Independent Certificate as to the same
matters if the fair value of the property or securities and of all other
property, other than Warranty Receivables, Administrative Receivables and
Liquidating Receivables, or securities released from the lien of this Indenture
since the commencement of the then current calendar year, as set forth in the
certificates required by Section 11.1(b)(iii) above and this clause
Section 11.1(b)(iv), equals 10% or more of the Outstanding Amount of the Notes,
but such certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the related
Officer’s Certificate is less than $25,000 or less than one percent of the then
Outstanding Amount of the Notes.

 

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(v) Notwithstanding any other provision of this Section 11.1, the Issuer may
(A) collect, liquidate, sell or otherwise dispose of Receivables as and to the
extent permitted or required by the Basic Documents and (B) make cash payments
out of the Designated Accounts and the Certificate Distribution Account as and
to the extent permitted or required by the Basic Documents.

Section 11.2 Form of Documents Delivered to Indenture Trustee.

(a) In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

(b) Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Servicer, the
Seller, the Issuer or the Administrator, stating that the information with
respect to such factual matters is in the possession of the Servicer, the
Seller, the Issuer or the Administrator, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.

(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

(d) Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer’s compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee’s right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.

 

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Section 11.3 Acts of Noteholders.

(a) Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by Noteholders or a
class of Noteholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the “Act” of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.1) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section 11.3.

(b) The fact and date of the execution by any Person of any such instrument or
writing may be proved in any manner that the Indenture Trustee deems sufficient.

(c) The ownership of Notes shall be proved by the Note Register.

(d) Any request, demand, authorization, direction, notice, consent, waiver or
other action by the Holder of any Notes (or any one or more predecessor Notes)
shall bind the Holder of every Note issued upon the registration thereof or in
exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Indenture Trustee or the Issuer in reliance thereon,
whether or not notation of such action is made upon such Note.

Section 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating Agencies.
Any request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders or other documents required or permitted by this Indenture to be
made upon, given or furnished to or filed with the Indenture Trustee, the Issuer
or the Rating Agencies under this Indenture shall be made upon, given or
furnished to or filed with such party as specified in Appendix B to the Pooling
Agreement.

Section 11.5 Notices to Noteholders; Waiver.

(a) Where this Indenture provides for notice to Noteholders of any condition or
event, such notice shall be given as specified in Appendix B to the Pooling
Agreement.

(b) Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.

(c) In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.

 

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(d) Where this Indenture provides for notice to the Rating Agencies, failure to
give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute an Event of Default.

Section 11.6 Alternate Payment and Notice Provisions. Notwithstanding any
provision of this Indenture or any of the Notes to the contrary, the Issuer may
enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee or any Paying Agent to such Holder,
that is different from the methods provided for in this Indenture for such
payments or notices. The Issuer shall furnish to the Indenture Trustee a copy of
each such agreement and the Indenture Trustee shall cause payments to be made
and notices to be given in accordance with such agreements.

Section 11.7 [Reserved].

Section 11.8 Effect of Headings and Table of Contents. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.

Section 11.9 Successors and Assigns.

(a) All covenants and agreements in this Indenture and the Notes by the Issuer
shall bind its successors and assigns, whether so expressed or not.

(b) All covenants and agreements of the Indenture Trustee in this Indenture
shall bind its successors and assigns, whether so expressed or not.

Section 11.10 Separability. In case any provision in this Indenture or in the
Notes shall be invalid, illegal or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

Section 11.11 Benefits of Indenture. Nothing in this Indenture or in the Notes,
express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder, the Noteholders and the Note Owners and (only to the
extent expressly provided herein) the Certificateholders, any other party
secured hereunder and any other Person with an ownership interest in any part of
the Collateral, any benefit or any legal or equitable right, remedy or claim
under this Indenture.

Section 11.12 Legal Holidays. If the date on which any payment is due shall not
be a Business Day, then (notwithstanding any other provision of the Notes or
this Indenture) payment need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if made on the
date on which nominally due, and no interest shall accrue for the period from
and after any such nominal date.

Section 11.13 Governing Law; Submission to Jurisdiction.

(a) This Indenture shall be construed in accordance with the laws of the State
of Illinois, without reference to its conflict of law provisions, except that
the obligations, rights and remedies of the Indenture Trustee hereunder shall be
determined in accordance with the internal laws of the State of New York,
without reference to its conflict of law provisions.

 

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(b) EACH OF THE PARTIES HERETO OTHER THAN THE INDENTURE TRUSTEE HEREBY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS AND OF ANY ILLINOIS STATE COURT SITTING IN THE
CITY OF CHICAGO FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO
SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE
OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
NOTHING IN THIS SECTION 11.13 SHALL AFFECT THE RIGHT OF ANY PARTY TO BRING ANY
ACTION OR PROCEEDING AGAINST ANY OTHER PARTY OR ITS RESPECTIVE PROPERTIES IN THE
COURTS OF OTHER JURISDICTIONS.

Section 11.14 Counterparts. This Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.

Section 11.15 Recording of Indenture. If this Indenture is subject to recording
in any appropriate public recording offices, such recording is to be effected by
the Issuer and at its expense accompanied by an Opinion of Counsel (which may be
counsel to the Indenture Trustee or any other counsel reasonably acceptable to
the Indenture Trustee) to the effect that such recording is necessary either for
the protection of the Noteholders or any other Person secured hereunder or for
the enforcement of any right or remedy granted to the Indenture Trustee under
this Indenture.

Section 11.16 No Recourse. No recourse may be taken, directly or indirectly,
with respect to the obligations of the Issuer, the Owner Trustee or the
Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against:

(a) the Indenture Trustee or the Owner Trustee in its individual capacity;

(b) any owner of a beneficial interest in the Issuer; or

(c) any partner, owner, beneficiary, agent, officer, director, employee or agent
of the Indenture Trustee or the Owner Trustee in their individual capacities,
any holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in their individual capacities (or any of their successors or
assigns), except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacities) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, 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 Articles VI, VII and VIII of the Trust
Agreement.

 

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Section 11.17 No Petition.

(a) The Indenture Trustee, by entering into this Indenture, and each Noteholder
and Note Owner, by accepting a Note (or interest therein) issued hereunder,
hereby covenant and agree that they shall not, prior to the date which is one
year and one day after the termination of this Indenture with respect to the
Issuer pursuant to Section 4.1, acquiesce, petition or otherwise invoke or cause
the Seller or the Issuer to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Seller
or 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 Seller or the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Seller, or the Issuer.

(b) Notwithstanding any prior termination of this Indenture, the Indenture
Trustee, by entering into this Indenture, and each Noteholder and Note Owner, by
accepting a Note (or interest therein) issued hereunder, hereby covenant and
agree that they shall not, prior to the date which is one year and one day after
which the last maturing indebtedness for borrowed money, whether evidenced by
notes, certificates or otherwise, of the Seller and its subsidiaries (including
any statutory trust) have been paid in full, acquiesce, petition or otherwise
invoke or cause the Seller or any of its subsidiaries to invoke the process of
any court or government authority for the purpose of commencing or sustaining a
case against the Seller or any of its subsidiaries 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
Seller or any of its subsidiaries or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Seller or any of
its subsidiaries.

Section 11.18 Inspection. The Issuer agrees that, on reasonable prior notice, it
shall permit any representative of the Indenture Trustee, during the Issuer’s
normal business hours, to examine all the books of account, records, reports and
other papers of the Issuer to make copies and extracts therefrom, to cause such
books to be audited by Independent certified public accountants, and to discuss
the Issuer’s affairs, finances and accounts with the Issuer’s officers,
employees and Independent certified public accountants, all at such reasonable
times and as often as may be reasonably requested. The Indenture Trustee shall
and shall cause its representatives to hold in confidence all such information
except to the extent disclosure may be required by law (and all reasonable
applications for confidential treatment are unavailing) and except to the extent
that the Indenture Trustee may reasonably determine that such disclosure is
consistent with its obligations hereunder.

Section 11.19 Consent to Backup Servicing Agreement. By its purchase and
acceptance of a Note, each purchaser thereof shall be deemed to have consented
to the terms, provisions and limitations specified in Exhibit C to the Backup
Servicing Agreement which will be applicable upon the appointment of the Backup
Servicer as Successor Servicer under the Servicing Agreement. The Indenture
Trustee will make available to any Note Owner a copy of the Backup Servicing
Agreement (including Exhibit C thereto) upon written request by such Note Owner.

*    *    *    *

 

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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.

 

NAVISTAR FINANCIAL 2010-A OWNER TRUST By:   DEUTSCHE BANK TRUST COMPANY
DELAWARE, not in its individual capacity, but solely as Owner Trustee By:  

/s/ Michele HY Voon

Name:   Michele HY Voon Title:   Attorney-in-fact By:  

/s/ Mark DiGiacomo

Name:   Mark DiGiacomo Title:   Attorney-in-fact CITIBANK, N.A., as Indenture
Trustee By:  

/s/ Jacqueline Suarez

Name:   Jacqueline Suarez Title:   Vice President

 

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STATE OF NEW JERSEY    )       )    ss. COUNTY OF UNION    )   

BEFORE ME, the undersigned authority, a Notary Public in and for said county and
state, on this day personally appeared Michele HY Voon and Mark DiGiacomo, known
to me to be the persons and officers whose names are subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the Navistar
Financial 2010-A Owner Trust and that such persons executed the same as the act
of said statutory trust for the purpose and consideration therein expressed, and
in the capacities therein stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 24 day of May, 2010.

Notary Public in and for the State of New Jersey.

My commission expires:

                                                         

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STATE OF NEW YORK    )       )    ss. COUNTY OF NEW YORK    )   

BEFORE ME, the undersigned authority, a Notary Public in and for said county and
state, on this day personally appeared Jacqueline Suarez, known to me to be the
person and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of the said Citibank, N.A., a
national banking association, and that such person executed the same as the act
of said national banking association for the purpose and consideration therein
stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 24th day of May, 2010.

Notary Public in and for the State of New York.

My commission expires:

                                                         

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EXHIBIT A

LOCATIONS OF SCHEDULE OF RETAIL NOTES

The Schedule of Retail Notes is on file at the offices of:

 

1. The Indenture Trustee

 

2. The Owner Trustee

 

3. Navistar Financial Corporation

 

4. Navistar Financial Retail Receivables Corporation

 

Ex. A-1

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EXHIBIT B

FORM OF CLASS A-1 ASSET BACKED NOTE

 

REGISTERED    $                              1 No. R-                     CUSIP
NO.                    

SEE REVERSE FOR CERTAIN DEFINITIONS

Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the Issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY “BLUE SKY” LAWS
OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THIS NOTE MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT (A) (1) TO A PERSON THAT
THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT (A “QUALIFIED INSTITUTIONAL
BUYER”) WHO IS EITHER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER, IN A PRINCIPAL AMOUNT OF NOT LESS THAN $50,000
AND IN INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF, FOR THE PURCHASER AND FOR
EACH SUCH ACCOUNT, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO
LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, SUBJECT TO THE
SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE INDENTURE, (2) IF THIS NOTE
IS NOT ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OTHER THAN RULE 144A IN A PRINCIPAL AMOUNT
OF NOT LESS THAN $50,000 AND IN INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF,
SUBJECT TO THE SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE INDENTURE, OR
(3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
(HOWEVER, THERE IS NO UNDERTAKING TO REGISTER THIS

 

1 A principal amount of not less than $50,000 and in integral multiples of
$1,000 in excess thereof.

 

Ex. B-1

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NOTE UNDER ANY UNITED STATES FEDERAL OR STATE SECURITIES LAWS OR ANY SECURITIES
LAWS OF ANY OTHER JURISDICTION ON ANY FUTURE DATE), AND (B) IN ACCORDANCE WITH
THE SECURITIES ACT, ANY “BLUE SKY” LAWS AND ALL APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION. EACH
PURCHASER AND TRANSFEREE WILL BE DEEMED TO HAVE MADE CERTAIN REPRESENTATIONS AND
AGREEMENTS SET FORTH IN THE INDENTURE. ANY TRANSFER IN VIOLATION OF THE
FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT
OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY
INSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE INDENTURE TRUSTEE OR ANY
INTERMEDIARY.

EACH HOLDER OF A NOTE WILL BE DEEMED TO REPRESENT AND WARRANT THAT EITHER (i) IT
IS NOT ACQUIRING THE NOTE WITH THE ASSETS OF (A) AN “EMPLOYEE BENEFIT PLAN” AS
DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED (“ERISA”), THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA,
(B) A “PLAN” SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE “CODE”), (C) AN ENTITY WHOSE UNDERLYING ASSETS ARE TREATED UNDER
REGULATIONS ISSUED BY THE U.S. DEPARTMENT OF LABOR, AS MODIFIED BY SECTION 3(42)
OF ERISA, TO INCLUDE PLAN ASSETS BY REASON OF INVESTMENT BY AN EMPLOYEE BENEFIT
PLAN OR PLAN IN SUCH ENTITY OR (D) ANY OTHER PLAN THAT IS SUBJECT TO ANY LAW
THAT IS SUBSTANTIALLY SIMILAR TO SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE OR (ii) THE ACQUISITION AND HOLDING OF THE NOTE WILL NOT GIVE RISE TO A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE OR A VIOLATION OF ANY SUBSTANTIALLY SIMILAR APPLICABLE LAW.

THIS NOTE (AND INTERESTS THEREIN) IS ALSO SUBJECT TO THE RESTRICTIONS SET FORTH
IN THE INDENTURE.

THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.

NAVISTAR FINANCIAL 2010-A OWNER TRUST

CLASS A-1 0.60828% ASSET BACKED NOTES

 

Ex. B-2

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NAVISTAR FINANCIAL 2010-A OWNER TRUST, a statutory trust organized and existing
under the laws of the State of Delaware (herein referred to as the “Issuer”),
for value received, hereby promises to pay to Cede & Co., or registered assigns,
the principal sum of                          DOLLARS
($                ) payable in accordance with the Indenture, prior to the
occurrence of an Event of Default and a declaration that the Notes are due and
payable, on each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction, the numerator of which is the initial principal
amount hereof and the denominator of which is $                         by
(ii) the aggregate amount, if any, payable from the Note Distribution Account in
respect of principal on such class of the Notes pursuant to Sections 2.7, 3.1
and 8.2 of the Indenture; provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the earlier of the Distribution
Date in June 2011 (the “Final Scheduled Distribution Date”) and the Redemption
Date or Optional Purchase Date, if any, pursuant to Section 10.1(a) of the
Indenture. The Issuer shall pay interest on this Note at the rate per annum
shown above on each Distribution Date until the principal of this Note is paid
or made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date). Interest on this Note will
accrue for each Distribution Date from and including the most recent
Distribution Date on which interest has been paid to but excluding the then
current Distribution Date or, if no interest has yet been paid, from and
including the Closing Date. Interest on this Note will be calculated on the
basis of the actual number of days elapsed since (and including) the preceding
Distribution Date divided by 360 (or, in the case of the initial Distribution
Date, since (and including) the Closing Date, divided by 360). Such principal of
and interest on this Note shall be paid in the manner specified on the reverse
hereof.

The principal of and interest on this Note are payable in such coin or currency
of the United States of America which, at the time of payment, is legal tender
for payment of public and private debts. All payments made by the Issuer with
respect to this Note shall be applied first to interest due and payable on this
Note as provided above and then to the unpaid principal of this Note.

Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.

Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof or be valid or obligatory for any purpose.

 

Ex. B-3

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IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually
or in facsimile, by its Authorized Officer.

 

Date:                                         

 

NAVISTAR FINANCIAL 2010-A OWNER TRUST

 

By:

 

DEUTSCHE BANK TRUST COMPANY DELAWARE not in its individual capacity, but solely
as Owner Trustee under the Trust Agreement

    By:  

 

    Name:       Title:  

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

 

 

CITIBANK, N.A.,

not in its individual capacity, but solely as Indenture Trustee

    By:  

 

    Name:       Title:  

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REVERSE OF NOTE

This Note is one of a duly authorized issue of Notes of the Issuer designated as
its Class A-1         % Asset Backed Notes (herein called the “Class A-1
Notes”), all issued under an Indenture, dated as of                     , 2010
(the “Closing Date” and such Indenture, as supplemented or amended, is herein
called the “Indenture”), between the Issuer and Citibank, N.A., a national
banking association, as trustee (the “Indenture Trustee”, which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Noteholders. The Notes are governed by and subject to all terms
of the Indenture (which terms are incorporated herein and made a part hereof),
to which Indenture the holder of this Note by virtue of acceptance hereof
assents and by which such holder is bound. All capitalized terms used and not
otherwise defined in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture.

The Indenture secures (a) first, the payment of principal and interest on, and
any other amounts owing in respect of the Class A Notes, equally and ratably
without prejudice, priority or distinction, (b) second, the payment of principal
of and interest on, and any other amounts owing in respect of the Class B Notes,
equally and ratably without prejudice, priority or distinction, and (c) third,
the payment of principal of and interest on, and any other amounts owing in
respect of the Class C Notes, equally and ratably without prejudice, priority or
distinction, and to secure compliance with the provisions of the Indenture, as
provided therein.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, covenants and agrees that no recourse
may be taken, directly or indirectly, with respect to the obligations of the
Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Owner Trustee in their individual
capacities, (ii) any owner of a beneficial interest in the Issuer, or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the
Indenture Trustee or the Owner Trustee in their individual capacities, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in their individual capacities, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their individual capacities) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, covenants and agrees that by accepting
the benefits of the Indenture such Noteholder will not, prior to the date which
is one year and one day after the termination of this Indenture with respect to
the Issuer, 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.

 

Ex. B-4

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Notwithstanding any prior termination of this Indenture, each Noteholder or Note
Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial
interest in a Note, covenants and agrees that by accepting the benefits of the
Indenture such Noteholder will not, prior to the date which is one year and one
day after the last maturing indebtedness for borrowed money, whether evidenced
by notes, certificates or otherwise, of the Seller and its subsidiaries
(including any statutory trusts) have been paid in full, acquiesce, petition or
otherwise invoke or cause the Seller or any of its subsidiaries to invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Seller or any of its subsidiaries 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 Seller or any of its subsidiaries or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the Seller
or any of its subsidiaries.

Each Noteholder, by acceptance of a Note or, in the case of a Note Owner, a
beneficial interest in a Note, unless otherwise required by appropriate taxing
authorities, agrees to treat the Notes as indebtedness secured by the
Receivables for the purpose of federal income taxes, state and local income and
franchise taxes, and any other taxes imposed upon, measured by or based upon
gross or net income.

Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
Outstanding Amount of the Controlling Class. The Indenture also contains
provisions permitting the Holders of Notes representing specified percentages of
the Outstanding Amount of the Controlling Class, on behalf of the Holders of all
the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of the Noteholders.

The term “Issuer” as used in this Note includes any successor to the Issuer
under the Indenture.

 

Ex. B-5

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The Issuer is permitted by the Indenture, under certain circumstances, to merge
or consolidate, subject to the rights of the Indenture Trustee and the Holders
of Notes under the Indenture.

The Notes are issuable only in registered form in denominations as provided in
the Indenture, subject to certain limitations therein set forth.

This Note and the Indenture shall be construed in accordance with the laws of
the State of Illinois, without reference to its conflict of law provisions, and
the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws, except that the obligations,
rights and remedies of the Indenture Trustee hereunder shall be determined in
accordance with the internal laws of the State of New York.

No reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Issuer, which is absolute
and unconditional, to pay the principal of and interest on this Note at the
times, place and rate, and in the coin or currency herein prescribed.

Anything herein to the contrary notwithstanding, except as expressly provided in
the Basic Documents, neither the Seller, the Servicer, the Initial Purchasers,
the Indenture Trustee nor the Owner Trustee in their respective individual
capacities, any owner of a beneficial interest in the Issuer, nor any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns, shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on, or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Issuer. The Holder of this Note by the acceptance hereof agrees that,
except as expressly provided in the Basic Documents, in the case of an Event of
Default under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.

 

Ex. B-6

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ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

                                                                   
                                               

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                                                         

 

 

(name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints                                                      , as attorney,
to transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.

 

Dated:  

 

     

  2

        Signature Guaranteed:

 

     

 

 

2 NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.

 

Ex. B-7

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EXHIBIT C

FORM OF CLASS A-2, CLASS A-3,

CLASS B AND CLASS C ASSET BACKED NOTE

 

REGISTERED    $                             3 No. R-                     CUSIP
NO.                    

SEE REVERSE FOR CERTAIN DEFINITIONS

[Insert (for Class A-2 Notes, Class A-3 Notes and Class B Notes): Unless this
Note is presented by an authorized representative of The Depository Trust
Company, a New York corporation (“DTC”), to the Issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY “BLUE SKY” LAWS
OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THIS NOTE MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT (A) (1) TO A PERSON THAT
THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT (A “QUALIFIED INSTITUTIONAL
BUYER”) WHO IS EITHER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER, IN A PRINCIPAL AMOUNT OF NOT LESS THAN $50,000
AND IN INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF, FOR THE PURCHASER AND FOR
EACH SUCH ACCOUNT, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO
LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, SUBJECT TO THE
SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE INDENTURE, (2) [Insert (for
Class A-2 Notes, Class A-3 Notes and Class B Notes): IF THIS NOTE IS NOT
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A,] PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OTHER THAN RULE 144A IN A PRINCIPAL AMOUNT
OF NOT LESS THAN $50,000 AND IN INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF,
SUBJECT TO THE SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE INDENTURE, OR
(3) PURSUANT TO AN EFFECTIVE

 

3 A principal amount of not less than $50,000 and in integral multiples of
$1,000 in excess thereof.

 

Ex. C-1

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REGISTRATION STATEMENT UNDER THE SECURITIES ACT (HOWEVER, THERE IS NO
UNDERTAKING TO REGISTER THIS NOTE UNDER ANY UNITED STATES FEDERAL OR STATE
SECURITIES LAWS OR ANY SECURITIES LAWS OF ANY OTHER JURISDICTION ON ANY FUTURE
DATE), AND (B) IN ACCORDANCE WITH THE SECURITIES ACT, ANY “BLUE SKY” LAWS AND
ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ANY OTHER
APPLICABLE JURISDICTION. EACH PURCHASER AND TRANSFEREE WILL BE DEEMED TO HAVE
MADE CERTAIN REPRESENTATIONS AND AGREEMENTS SET FORTH IN THE INDENTURE. ANY
TRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE
VOID AB INITIO, AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE,
NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE INDENTURE
TRUSTEE OR ANY INTERMEDIARY.

EACH HOLDER OF A NOTE WILL BE DEEMED TO REPRESENT AND WARRANT THAT EITHER (i) IT
IS NOT ACQUIRING THE NOTE WITH THE ASSETS OF (A) AN “EMPLOYEE BENEFIT PLAN” AS
DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED (“ERISA”), THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA,
(B) A “PLAN” SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE “CODE”), (C) AN ENTITY WHOSE UNDERLYING ASSETS ARE TREATED UNDER
REGULATIONS ISSUED BY THE U.S. DEPARTMENT OF LABOR, AS MODIFIED BY SECTION 3(42)
OF ERISA, TO INCLUDE PLAN ASSETS BY REASON OF INVESTMENT BY AN EMPLOYEE BENEFIT
PLAN OR PLAN IN SUCH ENTITY OR (D) ANY OTHER PLAN THAT IS SUBJECT TO ANY LAW
THAT IS SUBSTANTIALLY SIMILAR TO SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE OR (ii) THE ACQUISITION AND HOLDING OF THE NOTE WILL NOT GIVE RISE TO A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE OR A VIOLATION OF ANY SUBSTANTIALLY SIMILAR APPLICABLE LAW.

[Insert (for Class C Notes): (A) A SALE, TRANSFER, ASSIGNMENT, EXCHANGE,
PARTICIPATION, PLEDGE, HYPOTHECATION, REHYPOTHECATION, OR OTHER GRANT OF A
SECURITY INTEREST IN OR DISPOSITION OF (EACH A “TRANSFER”) ANY INTEREST IN CLASS
C NOTES MAY ONLY BE MADE TO A PERSON WHO IS A UNITED STATES PERSON (WITHIN THE
MEANING OF SECTION 7701(A)(30) OF THE CODE); (B) A PERSON OTHER THAN NAVISTAR
FINANCIAL RETAIL RECEIVABLES CORPORATION (THE “SELLER”) ACQUIRING CLASS C NOTES
OR AN INTEREST THEREIN SHALL BE DEEMED TO HAVE MADE THE REPRESENTATIONS SET
FORTH IN SECTION 2.14 OF THE INDENTURE; AND (C) NO TRANSFER OF ANY INTEREST IN
CLASS

 

Ex. C-2

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C NOTES SHALL BE MADE (I) TO ANY ONE PERSON IN AN AMOUNT LESS THAN 100% OF THE
NOTE PRINCIPAL BALANCE OF THE CLASS C NOTES OR (II) TO A GRANTOR TRUST,
S CORPORATION, OR PARTNERSHIP WHERE MORE THAN 50% OF THE VALUE OF A BENEFICIAL
OWNER’S INTEREST IN SUCH PASS THROUGH ENTITY IS ATTRIBUTABLE TO THE PASS-THROUGH
ENTITY’S INTEREST IN THE CLASS C NOTES TOGETHER WITH OTHER DIRECT OR INDIRECT
INTERESTS IN THE ISSUER, IN EACH CASE, UNLESS (X) AN OPINION OF COUNSEL
SATISFACTORY TO THE INDENTURE TRUSTEE AND THE SELLER THAT SUCH TRANSFER SHALL
NOT CAUSE THE ISSUER TO BE TREATED AS AN ASSOCIATION (OR PUBLICLY TRADED
PARTNERSHIP) TAXABLE AS A CORPORATION FOR FEDERAL INCOME TAX PURPOSES SHALL HAVE
BEEN DELIVERED TO THE INDENTURE TRUSTEE AND THE SELLER AND (Y) THE SELLER SHALL
HAVE PROVIDED PRIOR WRITTEN APPROVAL; PROVIDED, HOWEVER, THAT THE RESTRICTIONS
IN PARTS (A) AND (C) OF THIS PARAGRAPH SHALL NOT CONTINUE TO APPLY TO ANY
CLASS C NOTES TO THE EXTENT COUNSEL, SATISFACTORY TO THE INDENTURE TRUSTEE AND
THE SELLER, HAS RENDERED AN OPINION, WITH RESPECT TO THE INITIAL TRANSFER BY THE
SELLER, TO THE EFFECT THAT SUCH CLASS C NOTES TRANSFERRED WILL BE CHARACTERIZED
AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES. ANY ATTEMPTED TRANSFER IN
CONTRAVENTION OF THIS PROVISION WILL BE VOID AB INITIO AND THE PURPORTED
TRANSFEROR WILL CONTINUE TO BE TREATED AS THE OWNER OF THE CLASS C NOTES.]

THIS NOTE (AND INTERESTS THEREIN) IS ALSO SUBJECT TO THE RESTRICTIONS SET FORTH
IN THE INDENTURE.

THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.

NAVISTAR FINANCIAL 2010-A OWNER TRUST

CLASS                  % ASSET BACKED NOTES

NAVISTAR FINANCIAL 2010-A OWNER TRUST, a statutory trust organized and existing
under the laws of the State of Delaware (herein referred to as the “Issuer”),
for value received, hereby promises to pay to [INSERT (for Class A-2 Notes,
Class A-3 Notes and Class B Notes): Cede & Co.][INSERT (for Class C Notes):
Navistar Financial Retail Receivables Corporation], or registered assigns, the
principal sum of                              DOLLARS
($                ) payable in accordance with the Indenture, [INSERT (for
Class A-2 Notes and Class A-3 Notes): (a)] prior to the occurrence of an Event
of Default and a declaration that the Notes are due and payable, on each
Distribution Date in an amount equal to the result obtained by multiplying (i) a
fraction, the numerator of which is the initial principal

 

Ex. C-3

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amount hereof and the denominator of which is [INSERT the aggregate initial
principal amount for the class] by (ii) the aggregate amount, if any, payable
from the Note Distribution Account in respect of principal on such class of the
Notes pursuant to Sections 2.7, 3.1 and 8.2 of the Indenture [INSERT (for
Class A-2 Notes and Class A-3 Notes): or (b) from and after the occurrence of an
Event of Default and a declaration that the Notes are due and payable, on each
Distribution Date in an amount equal to the result determined by multiplying
(i) a fraction, the numerator of which is the initial principal amount hereof
and the denominator of which is [INSERT the aggregate initial principal amount
for the Class A-2 Notes and Class A-3 Notes] by (ii) the aggregate amount, if
any, payable from the Note Distribution Account in respect of the principal on
such classes of the Notes pursuant to Sections 2.7, 3.1 and 8.2 of the
Indenture]; provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the earlier of                             
(the “Final Scheduled Distribution Date”) and the Redemption Date or Optional
Purchase Date, if any, pursuant to Section 10.1(a) of the Indenture. The Issuer
shall pay interest on this Note at the rate per annum shown above on each
Distribution Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date). Interest on this Note will accrue for each
Distribution Date from and including the most recent Distribution Date on which
interest has been paid to but excluding the then current Distribution Date or,
if no interest has yet been paid, from and including the Closing Date. Interest
on this Note will be computed on the basis of a 360-day year of twelve 30-day
months (or, in the case of the initial Distribution Date, 21 divided by 360).
[INSERT (for Class B Notes and Class C Notes): Prior to the occurrence of an
Event of Default specified in Section 5.01(a), 5.01(b) or 5.01(c) of the
Indenture and a declaration that the Notes are due and payable, the payment of
interest on this Note will be subordinated to payment in full of interest on the
Class A Notes] [INSERT (for Class C Notes): and the Class B Notes]. Following
the occurrence of an Event of Default specified in Section 5.01(a), 5.01(b) or
5.01(c) of the Indenture and a declaration that the Notes are due and payable,
the payment of interest on this Note will be subordinated to payment in full of
the aggregate principal amount of the Class A Notes [INSERT (for Class C Notes):
and the Class B Notes]. Such principal of and interest on this Note shall be
paid in the manner specified on the reverse hereof.

The principal of and interest on this Note are payable in such coin or currency
of the United States of America which, at the time of payment, is legal tender
for payment of public and private debts. All payments made by the Issuer with
respect to this Note shall be applied first to interest due and payable on this
Note as provided above and then to the unpaid principal of this Note.

Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.

Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof or be valid or obligatory for any purpose.

 

Ex. C-4

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IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually
or in facsimile, by its Authorized Officer.

 

Date:                                         

 

NAVISTAR FINANCIAL 2010-A OWNER TRUST

 

By:

 

DEUTSCHE BANK TRUST COMPANY DELAWARE not in its individual capacity, but solely
as Owner Trustee under the Trust Agreement

    By:  

 

    Name:       Title:  

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

 

 

CITIBANK, N.A.,

not in its individual capacity, but solely as Indenture Trustee

    By:  

 

    Name:       Title:  

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REVERSE OF NOTE

This Note is one of a duly authorized issue of Notes of the Issuer designated as
its Class                  % Asset Backed Notes (herein called the
“Class Notes”), all issued under an Indenture, dated as of
                                , 2010 (the “Closing Date” and such Indenture,
as supplemented or amended, is herein called the “Indenture”), between the
Issuer and Citibank, N.A., a national banking association, as trustee (the
“Indenture Trustee”, which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Noteholders. The Notes
are governed by and subject to all terms of the Indenture (which terms are
incorporated herein and made a part hereof), to which Indenture the holder of
this Note by virtue of acceptance hereof assents and by which such holder is
bound. All capitalized terms used and not otherwise defined in this Note that
are defined in the Indenture, as supplemented or amended, shall have the
meanings assigned to them in or pursuant to the Indenture.

The Indenture secures (a) first, the payment of principal and interest on, and
any other amounts owing in respect of the Class A Notes, equally and ratably
without prejudice, priority or distinction, (b) second, the payment of principal
of and interest on, and any other amounts owing in respect of the Class B Notes,
equally and ratably without prejudice, priority or distinction and (c) third,
the payment of principal of and interest on, and any other amounts owing in
respect of the Class C Notes, equally and ratably without prejudice, priority or
distinction, and to secure compliance with the provisions of the Indenture, as
provided therein.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, covenants and agrees that no recourse
may be taken, directly or indirectly, with respect to the obligations of the
Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Owner Trustee in their individual
capacities, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the
Indenture Trustee or the Owner Trustee in their individual capacities, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in their individual capacities, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their individual capacities) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, covenants and agrees that by accepting
the benefits of the Indenture such Noteholder will not, prior to the date which
is one year and one day after the termination of this Indenture with respect to
the Issuer, 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
Seller or the Issuer or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of the Issuer.

 

Ex. C-6

--------------------------------------------------------------------------------

Notwithstanding any prior termination of this Indenture, each Noteholder or Note
Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial
interest in a Note, covenants and agrees that by accepting the benefits of the
Indenture such Noteholder will not, prior to the date which is one year and one
day after the last maturing indebtedness for borrowed money, whether evidenced
by notes, certificates or otherwise, of the Seller and its subsidiaries
(including any statutory trusts) have been paid in full, acquiesce, petition or
otherwise invoke or cause the Seller or any of its subsidiaries to invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Seller or any of its subsidiaries 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 Seller or any of its subsidiaries or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the Seller
or any of its subsidiaries.

Each Noteholder, [INSERT (for Class C Notes): other than Navistar Financial
Retail Receivables Corporation,] by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, unless otherwise required by
appropriate taxing authorities, agrees to treat the Notes as indebtedness
secured by the Receivables for the purpose of federal income taxes, state and
local income and franchise taxes, and any other taxes imposed upon, measured by
or based upon gross or net income.

Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
Outstanding Amount of the Controlling Class. The Indenture also contains
provisions permitting the Holders of Notes representing specified percentages of
the Outstanding Amount of the Controlling Class, on behalf of the Holders of all
the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of the Noteholders.

The term “Issuer” as used in this Note includes any successor to the Issuer
under the Indenture.

 

Ex. C-7

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The Issuer is permitted by the Indenture, under certain circumstances, to merge
or consolidate, subject to the rights of the Indenture Trustee and the Holders
of Notes under the Indenture.

The Notes are issuable only in registered form in denominations as provided in
the Indenture, subject to certain limitations therein set forth.

This Note and the Indenture shall be construed in accordance with the laws of
the State of Illinois, without reference to its conflict of law provisions, and
the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws, except that the obligations,
rights and remedies of the Indenture Trustee hereunder shall be determined in
accordance with the internal laws of the State of New York.

No reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Issuer, which is absolute
and unconditional, to pay the principal of and interest on this Note at the
times, place and rate, and in the coin or currency herein prescribed.

Anything herein to the contrary notwithstanding, except as expressly provided in
the Basic Documents, neither the Seller, the Servicer, the Initial Purchasers,
the Indenture Trustee nor the Owner Trustee in their respective individual
capacities, any owner of a beneficial interest in the Issuer, nor any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns, shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on, or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Issuer. The Holder of this Note by the acceptance hereof agrees that,
except as expressly provided in the Basic Documents, in the case of an Event of
Default under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.

 

Ex. C-8

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ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

                                                                   
                                               

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                                                         

 

 

(name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints                                                      , as attorney,
to transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.

 

Dated:  

 

     

  4

        Signature Guaranteed:

 

     

 

 

4 NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.

 

Ex. C-9