Exhibit 10.1

EXECUTION COPY

NOTE PURCHASE AGREEMENT

dated as of

February 16, 2007

among

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION,

as Seller

FALCON ASSET SECURITIZATION COMPANY LLC,

and

JUPITER SECURITIZATION COMPANY LLC

collectively, as the Conduit Investor

JPMORGAN CHASE BANK, N.A.,

as Agent for the Investors

and

NAVISTAR FINANCIAL CORPORATION,

Individually and as Servicer

NAVISTAR FINANCIAL 2007-JPM OWNER TRUST,

Series 2007-JPM Floating Rate Asset Backed Notes

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TABLE OF CONTENTS

     Pages

ARTICLE I           Definitions

   1

SECTION 1.01.

    

Defined Terms

   1

SECTION 1.02.

    

Terms Generally

   9

SECTION 1.03.

    

Computation of Time Periods

   10

ARTICLE II         Purchase of the Purchased Note

   10

SECTION 2.01.

    

Purchase of the Purchased Note

   10

SECTION 2.02.

    

The Note; Etc

   10

SECTION 2.03.

    

Calculation of Interest; Etc

   10

SECTION 2.04.

    

Sharing of Payments, Etc

   11

ARTICLE III       Representations and Warranties

   12

SECTION 3.01.

    

Representation and Warranties

   12

ARTICLE IV       Conditions

   16

SECTION 4.01.

    

Conditions Precedent

   16

ARTICLE V         Covenants of the Seller and Servicer

   17

SECTION 5.01.

    

Access

   17

SECTION 5.02.

    

Information from NFC

   17

SECTION 5.03.

    

Security Interests; Further Assurances

   18

SECTION 5.04.

    

Conduct of Business

   18

SECTION 5.05.

    

Compliance with Laws

   18

SECTION 5.06.

    

Replacement of Trustee

   18

SECTION 5.07.

    

Compliance with Opinion Assumptions

   19

SECTION 5.08.

    

Further Covenants

   19

SECTION 5.09.

    

Amendments

   19

ARTICLE VI       Indemnification

   19

SECTION 6.01.

    

Indemnities by the Seller and the Servicer

   19

SECTION 6.02.

    

Increased Cost and Reduced Return

   20

SECTION 6.03.

    

Other Costs and Expenses

   20

ARTICLE VII     The Agent

   21

SECTION 7.01.

    

Authorization and Action

   21

SECTION 7.02.

    

Delegation of Duties

   21

 

-i-

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TABLE OF CONTENTS

(continued)

 

            Page

SECTION 7.03.

    

Liability of Agent

   21

SECTION 7.04.

    

Reliance by Agent

   22

SECTION 7.05.

    

Notice of Event of Default

   22

SECTION 7.06.

    

Credit Decision; Disclosure of Information by the Agent

   22

SECTION 7.07.

    

Indemnification of the Agent

   23

SECTION 7.08.

    

Agent in Individual Capacity

   23

SECTION 7.09.

    

Resignation of Agent

   24

SECTION 7.10.

    

Payments by the Agent

   24

ARTICLE VIII   Miscellaneous

   24

SECTION 8.01.

    

Assignment

   24

SECTION 8.02.

    

Notices

   25

SECTION 8.03.

    

Waivers; Amendments

   26

SECTION 8.04.

    

Survival

   27

SECTION 8.05.

    

Counterparts; Integration; Effectiveness

   27

SECTION 8.06.

    

Severability

   27

SECTION 8.07.

    

Governing Law; Jurisdiction; Consent to Service of Process; Waiver of Jury Trial
Right

   28

SECTION 8.08.

    

No Bankruptcy Petition Against the Conduit Investor

   28

SECTION 8.09.

    

Benefits of Indenture

   28

SECTION 8.10.

    

Headings

   28

SECTION 8.11.

    

No Recourse Against Conduit Investor, Members, Officers or Directors

   28

SECTION 8.12.

    

Waiver of Confidentiality

   29

SECTION 8.13.

    

Confidentiality Agreement

   29

SECTION 8.14.

    

Excess Funds

   29

Exhibits

Exhibit A -    Documents to be Delivered to the Agent on or before the Closing
Date

 

-ii-

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NOTE PURCHASE AGREEMENT dated as of February 16, 2007 (as amended, supplemented
or otherwise modified from time to time, the “Agreement”), among:

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION, a Delaware corporation, as
Seller (the “Seller”);

FALCON ASSET SECURITIZATION COMPANY LLC, a Delaware limited liability company
(“Falcon”);

JUPITER SECURITIZATION COMPANY LLC, a Delaware limited liability company
(“Jupiter”; Falcon and Jupiter, collectively, the initial Conduit Investor (as
defined below);

JPMORGAN CHASE BANK, N.A., a national banking association (“JPMorgan Chase”), as
Agent for the Investors; and

NAVISTAR FINANCIAL CORPORATION, a Delaware corporation, individually (“NFC”) and
as Servicer (together with its successors and assigns, the “Servicer”).

RECITALS

WHEREAS, the Trust and the Indenture Trustee are party to an Indenture dated as
of February 16, 2007 (as amended, restated, supplemented or otherwise modified
from time to time, the “Indenture”), pursuant to which the Seller has authorized
the issuance of the Series 2007-JPM Floating Rate Asset Backed Note (the
“Note”); and

WHEREAS, on the Closing Date, the Seller intends to sell the Purchased Note to
the Agent for the benefit of the Conduit Investor and the other Investors and
the Conduit Investor and the other Investors desire to acquire the Purchased
Note.

Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01.        Defined Terms.    Terms used herein but not otherwise
defined herein have the respective meanings given to such terms in Part I of
Appendix A to the Pooling Agreement. As used in this Agreement, the following
terms have the meanings specified below:

“Agent” means JPMorgan Chase in its capacity as agent for the Investors, and its
successors and assigns appointed pursuant to Section 7.09.

“Agent-Related Person” means the Agent, together with its Affiliates, and the
officers, directors, employees, agents and attorneys-in-fact of such Persons and
their respective Affiliates.

“Agreement” is defined in the preamble.

 

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“Alternate Rate” for any Fixed Period for any Funding Tranche means an interest
rate per annum equal to the sum of (x) Applicable Margin per annum and (y) the
Eurodollar Rate for such Fixed Period; provided, however, that in the case of:

(i)        any Fixed Period existing on or after the first day of which the
Agent shall have been notified by the Conduit Investor or any Program Support
Provider that:

(w)        the introduction of or any change in or in the interpretation of any
law or regulation makes it unlawful, or any central bank or other Governmental
Authority asserts that it is unlawful, for the Conduit Investor or such Program
Support Provider to fund any Funding Tranche (based on the Eurodollar Rate) set
forth above (and the Conduit Investor or such Program Support Provider shall not
have subsequently notified the Agent that such circumstances no longer exist),

(x)        U.S. dollar deposits in the London interbank market in the relevant
amounts and for the relevant portion of such Fixed Period are not available,

(y)        adequate and reasonable means do not exist for ascertaining LIBOR for
such Fixed Period, or

(z)        LIBOR does not accurately reflect the cost to the Conduit Investor or
such Program Support Provider (as conclusively determined by the Conduit
Investor or such Program Support Provider (or by the Agent on its behalf)) of
maintaining the applicable Funding Tranche during such Fixed Period;

(ii)        any Fixed Period of one to (and including) 13 days,

(iii)      any Fixed Period relating to a Funding Tranche which is less than
$1,000,000, or

(iv)      any Fixed Period with respect to which the Alternate Rate, for any
reason, becomes applicable on notice to the Agent of less than three
(3) Business Days,

the “Alternate Rate” for each such Fixed Period shall be an interest rate per
annum equal to the Corporate Base Rate in effect on each day of such Fixed
Period. The “Alternate Rate” for any day on or after the occurrence of an Event
of Default shall be an interest rate equal to 2.0% per annum above the Corporate
Base Rate in effect on such day.

“Applicable Margin” has the meaning specified in the Fee Letter.

“Assignee Rating Criteria” means a short term debt rating of “A-1” or higher
from Standard & Poor’s, “P-1” from Moody’s and, if applicable, “F-1” or higher
from Fitch.

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, 11 U.S.C. §§ 101 et
seq.

“Breakage Payment” is defined in Section 2.03(b).

 

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“Commercial Paper” means short-term promissory notes issued or to be issued by
the Conduit Investor to fund its investments in accounts receivable or other
financial assets.

“Commission” is defined in Section 3.01(c).

“Conduit Assignee” means any commercial paper conduit administered by JPMorgan
Chase or any of its Affiliates and designated by JPMorgan Chase from time to
time to accept an assignment from the Conduit Investor of all or a portion of
its rights and obligations hereunder.

“Conduit Investor” means, initially, Falcon and Jupiter, collectively, together
with their respective successors and assigns, including any of their respective
Conduit Assignees. A “Conduit Investor” may include one or more commercial paper
conduits as long as such commercial paper conduits are either (i) Affiliates of
one another or (ii) administered by the same Person or its Affiliates. If a
“Conduit Investor” consists of more than one commercial paper conduit, each such
commercial paper conduit will have the rights and obligations with respect to
the Note as may be determined between them from time to time.

“Corporate Base Rate” means, for any day a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate for such day, plus 0.50% and (b) the
rate of interest in effect for such day as publicly announced from time to time
by the Agent as its “prime rate”. The “prime rate” is a rate set by the Agent
based upon various factors including the Agent’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in the prime rate announced by the Agent shall take effect at
the opening of business on the day specified in the public announcement of such
change.

“Corporate Services Provider” is defined in Section 8.11.

“CP Rate” for any Fixed Period for any Funding Tranche means, to the extent the
Conduit Investor funds such Funding Tranche for such Fixed Period by issuing
Commercial Paper, the per annum rate equivalent to the “weighted average cost”
(as defined below) related to the issuance of Commercial Paper that are
allocated, in whole or in part, by the Conduit Investor or the Agent to fund or
maintain such Funding Tranche (and which may also be allocated in part to the
funding of other Funding Tranches hereunder or of other assets of the Conduit
Investor); provided, however, that if any component of such rate is a discount
rate, in calculating the “CP Rate” for such Funding Tranche for such Fixed
Period, the Conduit Investor shall for such component use the rate resulting
from converting such discount rate to an interest bearing equivalent rate per
annum. As used in this definition, a Conduit Investor’s “weighted average cost”
shall consist of (w) the actual interest rate (or discount) paid to purchasers
of the Conduit Investor’s Commercial Paper, together with the commissions of
placement agents and dealers in respect of such Commercial Paper, to the extent
such commissions are allocated, in whole or in part, to such Commercial Paper by
the Conduit Investor or the Agent, (x) certain documentation and transaction
costs associated with the issuance of such Commercial Paper, (y) any incremental
carrying costs incurred with respect to Commercial Paper maturing on dates other
than those on which corresponding funds are received by the Conduit Investor,
and (z) other borrowings by the Conduit Investor (other than under any Program
Support Agreement),

 

3

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including borrowings to fund small or odd dollar amounts that are not easily
accommodated in the commercial paper market.

“Day Count Fraction” means, as to any Funding Tranche for any Fixed Period, a
fraction (a) the numerator of which is the number of days in such Fixed Period
and (b) the denominator of which is 360 (or, with respect to any Funding Tranche
which accrues interest by reference to the Corporate Base Rate, the actual
number of days in the related calendar year).

“Distribution Period” means, initially, the period from, and including, the
Closing Date to, but excluding, the first Distribution Date and thereafter the
period from, and including, each Distribution Date to, but excluding, the next
Distribution Date.

“Distribution Date” is defined in the Indenture.

“Eurodollar Rate” means, for any Fixed Period, an interest rate per annum
(rounded upward to the nearest 1/1000th of 1%) determined pursuant to the
following formula:

 

Eurodollar Rate =

 

LIBOR

    1.00 - Eurodollar Reserve Percentage  

Where,

“Eurodollar Reserve Percentage” means, for any Fixed Period, the maximum reserve
percentage (expressed as a decimal, rounded upward to the nearest 1/1000th of
1%) in effect on the date LIBOR for such Fixed Period is determined under
regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as “Eurocurrency liabilities”) having a term
comparable to such Fixed Period; and

“LIBOR” means the rate per annum equal to the applicable British Bankers’
Association Interest Settlement Rate for deposits in U.S. dollars appearing on
Reuters Screen FRBD as of 11:00 a.m. (London time) on the second Business Day
prior to the commencement of such Fixed Period in the approximate amount of the
portion of the Funded Amount associated with such Fixed Period, provided that,
(i) if Reuters Screen FRBD is not available to the Agent for any reason, LIBOR
for such Fixed Period shall instead be the applicable British Bankers’
Association Interest Settlement Rate for deposits in U.S. dollars as reported by
any other generally recognized financial information service as of 11:00 a.m.
(London time) on the second Business Day prior to the commencement of such Fixed
Period in the approximate amount of the portion of the Funded Amount associated
with such Fixed Period, and (ii) if no such British Bankers’ Association
Interest Settlement Rate is available to the Agent, LIBOR for such Fixed period
shall instead be the rate determined by the Agent to be the rate at which the
Agent offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) on the second
Business Day prior to the

 

4

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commencement of such Fixed Period in the approximate amount of the portion of
the Funded Amount associated with such Fixed period.

“Event of Bankruptcy” means, with respect to any Person, (a) that such Person
(i) shall generally not pay its debts as such debts become due or (ii) shall
admit in writing its inability to pay its debts generally or (iii) shall make a
general assignment for the benefit of creditors; (b) any proceeding shall be
instituted by or against such Person seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its
property; or (c) such Person shall take any corporate, partnership or other
similar appropriate action to authorize any of the actions set forth in the
preceding clauses (a) or (b) .

“Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Agent on such
day on such transactions as determined by it.

“Falcon” is defined in the preamble.

“Fee Letter” means the agreement, dated as of the Closing Date, among the
Seller, the Servicer and the Agent.

“Fitch” means Fitch, Inc. and its successors in interest.

“Fixed Period” means, unless otherwise mutually agreed by the Agent and the
Conduit Investor, (a) with respect to any Funding Tranche funded by the issuance
of Commercial Paper, (i) initially the period commencing on (and including) the
date of the initial purchase or funding of such Funding Tranche and ending on
(and including) the last day of the current calendar month, and (ii) thereafter,
each period commencing on (and including) the first day after the last day of
the immediately preceding Fixed Period for such Funding Tranche and ending on
(and including) the last day of the current calendar month and (b) with respect
to any Funding Tranche not funded by the issuance of Commercial Paper,
(i) initially the period commencing on (and including) the date of the initial
purchase or funding of such Funding Tranche and ending on (but excluding) the
next following Distribution Date and (ii) thereafter, each period commencing on
(and including) the first day after the last day of the immediately preceding
Fixed Period for such Funding Tranche and ending on (and excluding) the next
following Distribution Date; provided, that

(i)     any Fixed Period with respect to any Funding Tranche not funded by the
issuance of Commercial Paper which would otherwise end on a day which

 

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is not a Business Day shall be extended to the next succeeding Business Day;
provided , however , if interest in respect of such Fixed Period is computed by
reference to the Eurodollar Rate, and such Fixed Period would otherwise end on a
day which is not a Business Day, and there is no subsequent Business Day in the
same calendar month as such day, such Fixed Period shall end on the next
preceding Business Day;

(ii)     in the case of any Fixed Period for any Funding Tranche which commences
before the Final Scheduled Termination Date and would otherwise end on a date
occurring after the Final Scheduled Termination Date, such Fixed Period shall
end on such Final Scheduled Termination Date and the duration of each Fixed
Period which commences on or after the Final Scheduled Termination Date shall be
of such duration as shall be selected by the Agent; and

(iii)     any Fixed Period in respect of which interest is computed by reference
to the CP Rate may be terminated at the election of, and upon notice thereof to
the Seller by, the Agent any time, in which case the Funding Tranche allocated
to such terminated Fixed Period shall be allocated to a new Fixed Period
commencing on (and including) the date of such termination and ending on (but
excluding) the next following Distribution Date, and shall accrue interest at
the Corporate Base Rate.

“Funded Amount” means on any Business Day, an amount equal to the result of
(a) the Initial Invested Amount minus (b) the aggregate principal amount of
principal payments made to the Noteholder prior to such day; provided, that the
Funded Amount shall be restored or reinstated to the extent any such principal
payment so received and applied is at any time rescinded, returned or refunded
for any reason.

“Funding Rate” means, with respect to any Fixed Period and any Funding Tranche,
(a) to the extent the Conduit Investor is funding such Funding Tranche during
such Fixed Period through the issuance of Commercial Paper, the CP Rate, and
(b) to the extent any Investor is not funding such Funding Tranche through the
issuance of Commercial Paper, a rate per annum (expressed as a percentage and an
interest yield equivalent and calculated on the basis of a 360-day year and the
actual days elapsed) equal to the Alternate Rate.

“Funding Tranche” means, any time, each portion of the Funded Amount allocated
to the same Fixed Period and accruing interest by reference to the same Funding
Rate at such time.

“Governmental Actions” means any and all consents, approvals, permits, orders,
authorizations, waivers, exceptions, variances, exemptions or licenses of, or
registrations, declarations or filings with, any Governmental Authority required
under any Governmental Rules.

“Governmental Authority” means the United States of America, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
and having jurisdiction over the applicable Person.

 

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“Governmental Rules” means any and all laws, statutes, codes, rules,
regulations, ordinances, orders, writs, decrees and injunctions, of any
Governmental Authority and any and all legally binding conditions, standards,
prohibitions, requirements and judgments of any Governmental Authority.

“Indemnified Amounts” has the meaning specified in Section 6.01.

“Indemnified Parties” has the meaning specified in Section 6.01.

“Indenture” is defined in the first paragraph of the recitals.

“Indenture Trustee” is defined in the Indenture.

“Initial Invested Amount” means $431,801,454.48.

“Investors” means the Conduit Investor and/or the Program Support Providers, as
the context may require.

“Issuer” or “Trust” means Navistar Financial 2007-JPM Owner Trust, a Delaware
statutory trust.

“Jupiter” is defined in the preamble.

“Material Adverse Effect” means a material adverse effect on (i) the business,
results of operations or financial condition or the material properties or
assets of NFC or NFRRC, (ii) the ability of NFC or NFRRC to perform its
obligations hereunder or under any other Transaction Document or (iii) the
interests of the Agent or any Investor hereunder.

“Moody’s” means Moody’s Investors Service, Inc., or any successor that is a
nationally recognized statistical rating organization.

“NFC” is defined in the preamble.

“NFRRC” means Navistar Financial Retail Receivables Corporation, a Delaware
corporation, and its successors and permitted assigns.

“Note” is defined in the first paragraph of the recitals.

“Noteholders’ Interest Distributable Amount” means, with respect to any
Distribution Date, the sum of:

(A) the sum of (i) the summation of the amount of interest accrued during the
related Monthly Period on each Funding Tranche funded at the CP Rate, determined
by multiplying (a) the applicable Funding Rate times (b) the Weighted Average
Funded Amount for such Funding Tranche times (c) the applicable Day Count
Fraction for which interest accrued at such rate and (ii) any Noteholders’
Interest Distributable Amount calculated in accordance with clause (A)(i) above
due but not paid with respect to the prior Monthly Period, plus interest on such
unpaid amount calculated as the product of (x) the weighted average Funding Rate
for all

 

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Funding Tranches funded at the CP Rate during the most recent Monthly Period,
times (y) the amount of such unpaid Noteholders’ Interest Distributable Amount,
times (z) the quotient of the number of days in the related Monthly Period
divided by 360,

plus

(B) the sum of (i) the summation of the amount of interest accrued during the
related Distribution Period on each Funding Tranche not funded at the CP Rate,
determined by multiplying (a) the applicable Funding Rate times (b) the Weighted
Average Funded Amount for such Funding Tranche times (c) the applicable Day
Count Fraction for which interest accrued at such rate and (ii) any Noteholders’
Interest Distributable Amount calculated in accordance with clause (B)(i) above
due but not paid with respect to the prior Distribution Period, plus interest on
such unpaid amount calculated as the product of (x) the weighted average Funding
Rate for all Funding Tranches not funded at the CP Rate during the most recent
Distribution Period, times (y) the amount of such unpaid Noteholders’ Interest
Distributable Amount, times (z) for Funding Tranches that do not accrue interest
by reference to the Corporate Base Rate, the quotient of the number of days in
the related Distribution Period divided by 360.

plus

(C) on any Distribution Date on which the Funded Amount is reduced to zero and
on the Final Scheduled Termination Date, any amounts which accrue in clause
(A) above (together with all fees which accrue pursuant to paragraph 1 of the
Fee Letter) from (and excluding) the last day of the related Monthly Period
through (and including) such Distribution Date.

“Note Interest” means, with respect to any Investor at any time, the undivided
interest in the Note owned by such Investor at such time.

“Other Obligations” means the fees under the Fee Letter and any other amounts
payable to the Agent or any Investor under or in connection with this Agreement
or any other Transaction Document (other than principal or interest in respect
of the Notes), including, without limitation, all Breakage Payments and all
amounts payable from time to time pursuant to Article VI.

“Program Support Agreement” means and includes any agreement entered into by any
Program Support Provider providing for the issuance of one or more letters of
credit for the account of the Conduit Investor, the issuance of one or more
surety bonds for which the Conduit Investor is obligated to reimburse the
applicable Program Support Provider for any drawings thereunder, the sale by the
Conduit Investor to any Program Support Provider of the Purchased Notes (or
portions thereof or participations therein) and/or the making of loans and/or
other extensions of credit to the Conduit Investor in connection with the
Conduit Investor’s commercial paper program, together with any letter of credit,
surety bond or other instrument issued thereunder, whether any of the foregoing
is for the purpose of providing credit support or liquidity to the Conduit
Investor.

“Program Support Provider” means and includes any Person now or hereafter
extending credit or having a commitment to extend credit to or for the account
of, or to make purchases from, the Conduit Investor or issuing a letter of
credit, surety bond or other instrument to support

 

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any obligations arising under or in connection with the Conduit Investor’s
commercial paper program.

“Purchased Note” means the Note, in the maximum aggregate principal amount of
$431,801,454.48 to be issued to the Agent (or its nominee) on behalf of the
Investors pursuant to the Indenture and Section 2.01 hereof.

“Recipient” has the meaning specified in Section 2.04.

“Seller” is defined in the preamble.

“Servicer” is defined in the preamble.

“Standard & Poor’s” or “S&P” means Standard & Poor’s, a division of The
McGraw-Hill Companies, Inc., or any successor that is a nationally recognized
statistical rating organization.

“Transaction Documents” means the “Basic Documents” as defined in Part I of
Appendix A to the Pooling Agreement.

“Weighted Average Funded Amount” means, with respect to any Funding Tranche for
any Fixed Period, the quotient of (i) the summation of the portion of the Funded
Amount allocated to such Funding Tranche determined as of each day in such Fixed
Period, divided by (ii) the number of days in such Fixed Period.

SECTION 1.02.         Terms Generally.    All terms defined directly or by
incorporation herein shall have the defined meanings when used in any
certificate or other document delivered pursuant hereto unless otherwise defined
therein. For purposes of this Agreement and all such certificates and other
documents, unless the context otherwise requires: (a) accounting terms not
otherwise defined herein, and accounting terms partly defined herein to the
extent not defined, shall have the respective meanings given to them under, and
shall be construed in accordance with, generally accepted accounting principles
in effect in the United States from time to time; (b) terms used in Article 9 of
the applicable UCC as in effect from time to time, and not specifically defined
herein, are used herein as defined in such Article 9; (c) references to any
amount as on deposit or outstanding on any particular date means such amount at
the close of business on such day; (d) the words “hereof,” “herein” and
“hereunder” and words of similar import refer to this Agreement (or the
certificate or other document in which they are used) as a whole and not to any
particular provision of this Agreement (or such certificate or document);
(e) references to any Article, Section, Schedule or Exhibit are references to
Articles, Sections, Schedules and Exhibits in or to this Agreement (or the
certificate or other document in which the reference is made) and references to
any paragraph, subsection, clause or other subdivision within any Section or
definition refer to such paragraph, subsection, clause or other subdivision of
such Section or definition; (f) the term “including” means “including without
limitation”; (g) references to any law refer to that law as amended from time to
time and include any successor law; (h) references to any agreement refer to
that agreement as from time to time amended or supplemented or as the terms of
such agreement are waived or modified in accordance with its terms;
(i) references to any Person include that Person’s successors and permitted
assigns; and (j) headings are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.

 

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SECTION 1.03.        Computation of Time Periods.    Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word “from” means “from and including”, the words
“to” and “until” each means “to but excluding”, and the word “within” means
“from and excluding a specified date and to and including a later specified
date”.

ARTICLE II

Purchase of the Purchased Note

SECTION 2.01.        Purchase of the Purchased Note.    On the terms and subject
to the conditions set forth in this Agreement, and in reliance on the covenants,
representations, warranties and agreements herein and therein set forth, the
Seller shall cause to be issued, and shall cause the Indenture Trustee to
authenticate and deliver to the Agent and the Agent shall purchase the Purchased
Note, issued on the Closing Date, on behalf of the Investors. The purchase price
payable for the Purchased Note shall be equal to the Initial Invested Amount.
The Agent (or its nominee) shall hold the Purchased Note on behalf of the
Investors pro rata in accordance with their respective outstanding portions (if
any) of the Funded Amount funded by them from time to time. The Purchased Note
so issued shall be dated the Closing Date, registered in the name of the Agent
(or its nominee) and duly authenticated in accordance with the provisions of the
Indenture. Without limiting any other provision of this Agreement, the issuance
of the Purchased Note and the funding of the Funded Amount thereunder on the
Closing Date is subject to the satisfaction of the conditions precedent set
forth in Article IV. Upon such issuance, (i) the Agent shall thereby acquire the
Purchased Note, and (ii) the Agent and the Investors shall become subject to the
terms and conditions set forth herein and the Indenture.

SECTION 2.02.        The Note; Etc.    The funding of the Initial Invested
Amount shall be evidenced by the Purchased Note and shall be governed by and
subject to the Indenture. All payments to be made on the Note shall be made in
accordance with the Indenture and the terms of this Agreement. The sole Holder
of the Purchased Note shall be the Agent, which shall hold such Note for the
benefit of the Investors. Except as otherwise required in the Indenture, all
payments to be made on the Note shall be made by wire transfer of immediately
available funds to the account set forth below the Agent’s signature to this
Agreement (or to such other account as the Agent may specify from time to time
in writing to the Seller and the Indenture Trustee).

SECTION 2.03.        Calculation of Interest; Etc.

(a)     On or before the second Business Day after the end of each Monthly
Period, the Agent shall calculate for the related Distribution Date, the
Noteholders’ Interest Distributable Amount payable on such Distribution Date and
provide such calculation to the Servicer in writing. If any Funding Tranche
begins to accrue interest at a Funding Rate other than the CP Rate after the
date the Agent provides the Noteholders’ Interest Distributable Amount
calculation for any Distribution Date, the Agent shall promptly provide the
Servicer a calculation of the interest that will accrue on such Funding Tranche
and be included in the definition of “Noteholders’ Interest Distributable
Amount” for such Distribution Date. The parties acknowledge that the interest
calculation set forth in clause (C) of the definition of “Noteholders’ Interest
Distributable Amount” shall be an estimate. If the estimated accruals exceed the
actual accruals, the Agent shall reimburse such excess. If the actual accruals

 

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exceed the estimated accruals, the Seller shall reimburse the Agent.

(b)     If (i) any distribution of principal is made with respect to any Funding
Tranche with a Fixed Period and a fixed interest rate other than on a
Distribution Date and (ii) as a consequence of such distribution the interest
paid by an Investor to providers of funds to it to fund that Funding Tranche
exceeds returns earned by such Investor with respect to such Funding Tranche,
factoring in actual returns earned during the Fixed Period and assuming
redeployment of such funds in highly rated short-term money market instruments
from the date of principal distribution through the end of the Fixed Period,
then, upon written notice (including a detailed calculation of such Breakage
Payment) from the Agent to the Servicer, such Investor shall be entitled to
receive additional amounts in the amount of such excess (each, a “Breakage
Payment”) on the date of such distribution, so long as such written notice is
received not later than noon, New York City time, on the first Business Day
immediately preceding such distribution.

(c)     On each date the principal amount of the Purchased Note is reduced, a
duly authorized officer, employee or agent of the Agent (or its nominee) shall
make appropriate notations in its books and records of the applicable rates of
interest and the amount of each such reduction, as applicable. Each of the
Servicer, the Seller and each Investor authorizes each duly authorized officer,
employee and agent of the Agent (or its nominee) to make such notations on the
books and records as aforesaid and such notation made in accordance with the
foregoing authority shall be binding on the Servicer, the Seller and each
Investor absent manifest error.

(d)     Whenever any amount is paid pursuant to the Indenture to the Agent in
connection with the Purchased Note, the Agent shall promptly allocate such
amounts among the applicable Investors and pay, or cause to be paid, out of such
funds received by it, to each applicable Investor, its applicable share of such
amount; provided, that if any such amount paid to the Agent is insufficient to
pay the amount due to each Investor in respect of such amounts, the Agent shall
distribute the amount it has received to each Investor pro rata based on the
amounts owed to each Investor and forthwith report the amount of such deficiency
to the Seller, the Indenture Trustee and the Servicer.

SECTION 2.04.        Sharing of Payments, Etc.    If any Investor (for purposes
of this Section only, being a “Recipient”) shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of any Note Interest owned by it in excess of its ratable
share of payments on account of the applicable Funded Amount obtained by the
Investors entitled thereto, such Recipient shall forthwith purchase from the
Investors entitled to a share of such amount participations in the applicable
Note Interests owned by such Persons as shall be necessary to cause such
Recipient to share the excess payment ratably with each such other Person
entitled thereto; provided, that if all or any portion of such excess payment is
thereafter recovered from such Recipient, such purchase from each such other
Person shall be rescinded and each such other Person shall repay to the
Recipient the purchase price paid by such Recipient for such participation to
the extent of such recovery, together with an amount equal to such other
Person’s ratable share (according to the proportion of (a) the amount of such
other Person’s required payment to (b) the total amount so recovered from the

 

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Recipient) of any interest or other amount paid or payable by the Recipient in
respect of the total amount so recovered.

ARTICLE III

Representations and Warranties

SECTION 3.01.        Representation and Warranties.

(a)     The Seller hereby makes the following representations and warranties to
the Agent and the Investors as of the Closing Date and the Investors and the
Agent shall be deemed to have relied on such representations and warranties in
purchasing the Purchased Note on the Closing Date:

(i)     the Seller repeats and reaffirms that the representations and warranties
of the Seller set forth in Section 3.01 of the Pooling Agreement and represents
and warrants that such representations and warranties are true and correct;

(ii)     each of the Transaction Documents executed by the Seller has been duly
authorized, executed and delivered by the Seller, and is the valid and legally
binding obligation of the Seller, enforceable against the Seller in accordance
with its terms, except that the enforcement thereof may be subject to
(x) bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors’ rights generally and (y) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought;

(iii)     the Purchased Note has been duly and validly authorized, and, when
executed and authenticated in accordance with the terms of the Indenture, and
delivered to and paid for in accordance with this Agreement, will be duly and
validly issued and outstanding and will be entitled to the benefits of the
Indenture, except that the enforcement thereof may be subject to (x) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors’ rights generally and (y) general principles of
equity and the discretion of the court before which any proceeding therefor may
be brought;

(iv)     there is no pending or, to the Seller’s knowledge, threatened action,
suit or proceeding by or against the Seller before any Governmental Authority or
any arbitrator (w) asserting the invalidity of this Agreement, any other
Transaction Document or the Purchased Note, (x) seeking to prevent the issuance
of the Purchased Note or the consummation of any of the transactions
contemplated by this Agreement or any other Transaction Document, (y) that might
materially and adversely affect the performance by the Seller or the Trust of
its obligations under, or the validity or enforceability of, this Agreement, any
other Transaction Document or the Purchased Note or (z) that if determined
adversely as to the Seller or the Trust would have a Material Adverse Effect;

(v)     except for those caused by the failure of NFC and its affiliates to
deliver its financial statements and related financial information for the
fiscal years ended October 31, 2005 and October 31, 2006, or for the fiscal
quarters ended January 31, April 30 and July 31 of 2006, or for the fiscal
quarters ended January 31, April 30 and July 31 of 2007, in each case,

 

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prior to the earliest of (1) October 31, 2007, (2) five (5) Business Days after
the filing thereof with the Commission and (3) the date on which such financial
statements are (or any of them is) required to be delivered pursuant to the
Credit Agreement, the Seller (x) is not in violation of its Certificate of
Incorporation or By-Laws and (y) is not in breach or violation of any of the
terms or provisions of, or with the giving of notice or lapse of time, or both,
would be in default under, any contract, indenture, mortgage, deed of trust,
loan agreement, note, lease, partnership agreement, or other agreement or
instrument to which the Seller is a party or by which it may be bound or to
which any of its properties or assets may be subject, except for such violations
or defaults that would not have a Material Adverse Effect;

(vi)     any taxes, fees and other charges of Governmental Authorities
applicable to the Seller in connection with the execution, delivery and
performance by the Seller of the Transaction Documents or otherwise applicable
to the Seller in connection with the Trust have been paid or will be paid by the
Seller at or prior to the Closing Date to the extent then due, except for any
such failures to pay which, individually and in the aggregate, would not have a
Material Adverse Effect;

(vii)     the Trust has been duly created and is validly existing under the laws
of the State of Delaware and the Seller has authorized the Trust to issue and
sell the Purchased Note;

(viii)     on the date hereof, the Seller is not insolvent or the subject of any
voluntary or involuntary bankruptcy proceeding;

(ix)     no proceeds of a purchase hereunder will be used by the Seller (x) for
a purpose that violates or would be inconsistent with Regulations T, U or X
promulgated by the Board of Governors of the Federal Reserve System from time to
time or (y) to acquire any security in any transaction in violation of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended;

(x)     assuming the accuracy of the representations and warranties of the
Conduit Investor set forth herein, the sale of the Purchased Note pursuant to
the terms of this Agreement and the Indenture will not require registration of
the Purchased Note under the Act;

(xi)     neither the Trust nor the Seller is an “investment company” or is
controlled by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended;

(xii)     no written information furnished or to be furnished by the Seller or
any of its Affiliates, agents or representatives to the Investors or the Agent
for purposes of or in connection with this Agreement, including, without
limitation, any reports delivered pursuant to Section 5.02 and any information
relating to the Receivables and NFC’s retail receivables financing business, is
or shall be inaccurate in any material respect, or contains or shall contain any
material misstatement of fact, or omits or shall omit to state a material fact
or any fact necessary to make the statements contained therein not misleading,
in each case as of the date such information was or shall be stated or certified
and as of the date such information was

 

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delivered by the Seller or any of its Affiliates, agents or representatives to
the Investors or the Agent;

(xiii)     the Indenture is not required to be qualified under the Trust
Indenture Act;

(xiv)     (x) the Seller’s chief executive office and principal place of
business is, and has been at all times during the five years preceding the date
of this Agreement, located in the State of Illinois and (y) the Seller is a
“registered organization” (as defined in Section 9-102 of the UCC) incorporated
in the State of Delaware and, for purposes of Article 9 of the UCC, NFC is, and
has been at all times during the five years preceding the date of this
Agreement, located in the State of Delaware;

(b)     NFC hereby makes the following representations and warranties to the
Investors and the Agent as of the Closing Date and the Investors and the Agent
shall be deemed to have relied on such representations and warranties in
purchasing the Purchased Note on the Closing Date:

(i)     NFC repeats and reaffirms to the Investors and the Agent the
representations, warranties and covenants of the Servicer set forth in
Section 5.01 of the Servicing Agreement and the representations and warranties
of NFC set forth in Section 5.01 of the Purchase Agreement and the
representations and warranties of NFC set forth in Section 3.02 of the Purchase
Agreement and represents and warrants that all such representations and
warranties are true and correct as of such date;

(ii)     no Governmental Action which has not been obtained is required by or
with respect to NFC in connection with any of the Transaction Documents, except
any such failure which would not have a Material Adverse Effect;

(iii)     each of the Transaction Documents has been duly authorized, executed
and delivered by NFC, and is the valid and legally binding obligation of NFC,
enforceable against NFC in accordance with its terms, except that the
enforcement thereof may be subject to (x) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors’ rights generally and (y) general principles of equity and
the discretion of the court before which any proceeding therefor may be brought;

(iv)     the Purchased Note has been duly and validly authorized, and, when
executed and authenticated in accordance with the terms of the Indenture, and
when delivered to and paid for in accordance with this Agreement, will be duly
and validly issued and outstanding and will be entitled to the benefits of the
Indenture, except that the enforcement thereof may be subject to (x) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors’ rights generally and (y) general principles of
equity and the discretion of the court before which any proceeding therefor may
be brought;

(v)     there is no pending or, to NFC’s knowledge, threatened action, suit or
proceeding by or against NFC or the Seller before any Governmental Authority or
any arbitrator (w) asserting the invalidity of this Agreement, any other
Transaction Document or the Purchased Note, (x) seeking to prevent the issuance
of the Purchased Note or the consummation of any of the transactions
contemplated by this Agreement or any other Transaction Document, (y) that

 

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might materially and adversely affect the performance by any of NFC, the Seller
or the Trust of its obligations under, or the validity or enforceability of,
this Agreement, any other Transaction Document or the Purchased Note or (z) that
if determined adversely as to NFC, the Seller or the Trust would have a Material
Adverse Effect;

(vi)     except for those caused by the failure of NFC and its affiliates to
deliver its financial statements and related financial information for the
fiscal years ended October 31, 2005 and October 31, 2006, or for the fiscal
quarters ended January 31, April 30 and July 31 of 2006, or for the fiscal
quarters ended January 31, April 30 and July 31 of 2007, in each case, prior to
the earliest of (1) October 31, 2007, (2) five (5) Business Days after the
filing thereof with the Commission and (3) the date on which such financial
statements are (or any of them is) required to be delivered pursuant to the
Credit Agreement, NFC (x) is not in violation of its Certificate of
Incorporation or By-Laws and (y) is not in breach or violation of any of the
terms or provisions of, or with the giving of notice or lapse of time, or both,
would be in default under, any contract, indenture, mortgage, deed of trust,
loan agreement, note, lease, partnership agreement, or other agreement or
instrument to which NFC is a party or by which it may be bound or to which any
of its properties or assets may be subject, except for such violations or
defaults that would not have a Material Adverse Effect;

(vii)     any taxes, fees and other charges of Governmental Authorities
applicable to NFC in connection with the execution, delivery and performance by
NFC of the Transaction Documents or otherwise applicable to NFC in connection
with the Trust have been paid or will be paid by NFC at or prior to the Closing
Date to the extent then due, except for any such failures to pay which,
individually and in the aggregate, would not have a Material Adverse Effect;

(viii)     the Trust has been duly created and is validly existing under the
laws of the State of Delaware;

(ix)     on the date hereof, NFC is not insolvent or the subject of any
insolvency proceeding;

(x)     no written information furnished or to be furnished by NFC or its
Affiliates, agents or representatives to the Investors or the Agent for purposes
of or in connection with this Agreement, including, without limitation, any
reports delivered pursuant to Section 5.02 and any information relating to the
Receivables and NFC’s retail receivable financing business, is or shall be
inaccurate in any material respect, or contains or shall contain any material
misstatement of fact, or omits or shall omit to state a material fact or any
fact necessary to make the statements contained therein not misleading, in each
case as of the date such information was or shall be stated or certified, and
such information heretofore furnished remains true and correct in all material
respects as of the date such information was delivered by NFC or any of its
Affiliates, agents or representatives to the Investors or the Agent.

(xi)    (x) NFC’s chief executive office and principal place of business is, and
has been at all times during the five (5) years preceding the date of this
Agreement, located in the State of Illinois and (y) NFC is a “registered
organization” (as defined in Section 9-102 of the UCC) incorporated in the State
of Delaware and, for purposes of Article 9 of the UCC, NFC is,

 

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and has been at all times during the five years preceding the date of this
Agreement, located in the State of Delaware.

(c)    The Note purchased by the Agent on behalf of the Investors pursuant to
this Agreement will be acquired for investment only and not with a view to any
public distribution thereof, and no Investor will offer to sell or otherwise
dispose of its interest in the Note so acquired by it (or any interest therein)
in violation of any of the registration requirements of the Act or any
applicable state or other securities laws. The Agent and each Investor
acknowledges that it has no right to require the Seller to register under the
Act or any other securities law the Note to be acquired by the Agent on behalf
of such Investor pursuant to this Agreement.

The Investors and the Agent have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Note and the Investors are able to bear the economic risk of
such investment. The Investors and the Agent have reviewed the Pooling
Agreement, the Servicing Agreement and the Indenture (including the schedule and
exhibits thereto) and have had the opportunity to perform due diligence with
respect thereto and to ask questions of and receive answers from the Seller and
its representatives concerning the Seller, the Trust and the Note. Each of the
Investors and the Agent is an “accredited investor” as defined in Rule 501,
promulgated by the Securities and Exchange Commission (the “Commission”) under
the Securities Act of 1933, as amended.

(d)     None of the Investors or the Agent is required to register as an
“investment company” nor are the Investors or the Agent controlled by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.

ARTICLE IV

Conditions

SECTION 4.01.         Conditions Precedent.

(a)    The obligation of the Agent, for the benefit of the Investors to purchase
the Purchased Note is subject to the conditions precedent that (i) the Agent
shall have received on or before the Closing Date each of the Transactions
Documents, (ii) the Agent shall have received the certificates, opinions, lien
searches and other items listed on Exhibit A hereto, (iii) the Agent shall have
received all fees and expenses required to be paid on such date pursuant to the
terms of this Agreement and the Fee Letter and (iv) all conditions precedent
under the Indenture and the other Transaction Documents shall have been
satisfied.

(b)    The funding of the Initial Invested Amount shall be subject to the
further conditions precedent that:

(i)    the Agent has received copies of all settlement statements and all
reports required to be delivered by the Servicer to the pursuant to Section 2.17
of the Servicing Agreement;

 

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(ii)    each of the representations and warranties of the Seller and the
Servicer made herein and of the Trust made in the Transaction Documents shall be
true and correct in all material respects as of the Closing Date (except to the
extent they expressly relate to an earlier or later time);

(iii)   the Seller, the Trust and the Servicer shall be in compliance in all
material respects with all of their respective covenants contained in the
Transaction Documents;

(iv)    no Event of Default shall have occurred and be continuing and no Event
of Default shall occur as a result of funding the Initial Invested Amount; and

(v)    the Aggregate Starting Receivables Balance shall equal or exceed
$461,819,737.41.

ARTICLE V

Covenants of the Seller and Servicer

SECTION 5.01.         Access.     So long as the Purchased Note remains
outstanding, each of NFC and the Seller will, at any time from time to time
during regular business hours with reasonable notice to the Seller and NFC,
permit the Investors or the Agent, or their agents or representatives to:

(a)    examine all books, records and documents (including computer tapes and
disks) in the possession or under the control of the Seller or NFC relating to
the Receivables, and

(b)    visit the offices and property of the Seller or NFC for the purpose of
examining such materials described in clause (a) above;

it being understood that except as provided in Section 8.12, any information
obtained by an Investor or the Agent pursuant to this Section 5.01 shall be held
in confidence by the Investors and the Agent unless and to the extent such
information (i) has become available to the public, (ii) is required or
requested by any Governmental Authority or in any court proceeding or (iii) is
required by any Governmental Rule. In the case of any disclosure permitted by
clause (ii) or (iii) an Investor and the Agent shall use commercially reasonable
efforts to (x) provide the Seller with advance notice of any such disclosure and
(y) cooperate with the Seller in limiting the extent or effect of any such
disclosure.

SECTION 5.02.         Information from NFC.    So long as the Purchased Note
remains outstanding, NFC will furnish to the Agent:

(a)    a copy of each certificate, opinion, report, statement, notice or other
communication (other than investment instructions) furnished by or on behalf of
NFC or the Seller to the Indenture Trustee under any Transaction Document,
concurrently therewith, and promptly after receipt thereof, a copy of each
notice, demand or other communication received by or on behalf of NFC or the
Seller under any Transaction Document;

 

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(b)    such other information (including financial information), documents,
records or reports respecting the Trust, the Receivables, the Seller or, to the
extent it relates to the origination of Receivables or the servicing of the
Trust, NFC, as the Investors or Agent may from time to time reasonably request;

(c)    (I) except as provided in immediately succeeding clause (II), as soon as
available and in any event within (i) 45 days after the end of each of the first
three fiscal quarters of any fiscal year and (ii) 120 days after the end of the
last fiscal quarter of any fiscal year, copies of the interim or annual, as
applicable, financial statements of NFC, prepared in conformity with generally
accepted accounting principles consistently applied and (II) on or before the
earliest of (1) October 31, 2007, (2) five (5) Business Days after the filing
thereof with the Commission and (3) the date on which such financial statements
are (or any of them is) required to be delivered pursuant to the Credit
Agreement, copies of the interim or annual, as applicable, financial statements
of NFC for the fiscal years ended October 31, 2005 and October 31, 2006, for the
fiscal quarters ended January 31, April 30 and July 31 of 2006, and for the
fiscal quarters ended January 31, April 30 and July 31 of 2007, in each case,
prepared in conformity with generally accepted accounting principles
consistently applied; and

(d)    as soon as possible and in any event within two Business Days after
knowledge thereof by a Responsible Officer of NFC, notice of each Event of
Default or event which with the giving of notice or the passage of time or both
would constitute an Event of Default.

SECTION 5.03.        Security Interests; Further Assurances.    The Seller will
take all action reasonably necessary to maintain the Indenture Trustee’s first
priority perfected security interest in the Receivables and the other Collateral
granted pursuant to the Indenture. The Seller agrees to take any and all acts
and to execute any and all further instruments necessary or reasonably requested
by the Investors or the Agent to more fully effect the purposes of this
Agreement.

SECTION 5.04.        Conduct of Business.    The Seller and the Servicer shall
do all things necessary to remain duly incorporated, validly existing and in
good standing as a domestic corporation (or other business entity) in its
jurisdiction of incorporation (or formation) and the Seller will cause the Trust
to do all things necessary to remain duly organized, validly existing and in
good standing as a statutory trust in the State of Delaware. The Servicer shall
maintain all requisite authority to conduct its business in each jurisdiction in
which its business requires such authority except, in each case, where the
failure to do so does not, and is not reasonably expected to, have a Material
Adverse Effect.

SECTION 5.05.        Compliance with Laws.    The Seller and the Servicer shall
comply in all material respects with all laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it may be subject or
which are applicable to the Collateral except where the failure to so comply
does not, and is not reasonably expected to, have a Material Adverse Effect.

SECTION 5.06.        Replacement of Trustee.    If at any time the identity of
the Owner Trustee and the Indenture Trustee is such that the Trust Indenture Act
would require the

 

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replacement of the Owner Trustee and/or the Indenture Trustee (assuming for this
purpose that the Indenture were required to be qualified thereunder), then the
Seller shall (or shall cause the Issuer to) so replace the Owner Trustee and/or
the Indenture Trustee, as applicable, in each case, within 180 days following
the event which precipitated such replacement, with an Owner Trustee and/or
Indenture Trustee, as applicable, reasonably satisfactory to the Agent.

SECTION 5.07.        Compliance with Opinion Assumptions.    Each of the Seller
and NFC shall at all times (as to itself) conduct its affairs in all material
respects in accordance with the factual assumptions applicable to it set forth
in, and forming the basis of, the bankruptcy opinion(s) of Kirkland & Ellis
delivered pursuant to Section 4.01(a).

SECTION 5.08.        Further Covenants.    Each of the Seller and NFC will duly
observe and perform each of its covenants set forth in the other Transaction
Documents in all material respects.

SECTION 5.09.        Amendments.    Neither the Seller nor NFC will make, or
permit any Person to make, any amendment, modification or change to, or provide
any waiver under any Transaction Document without the prior written consent of
the Agent.

ARTICLE VI

Indemnification

SECTION 6.01.        Indemnities by the Seller and the Servicer.    Without
limiting any other rights that the Agent or any Investor may have hereunder or
under applicable law, (A) the Seller hereby agrees to indemnify (and pay upon
demand to) the Agent and each Investor and their respective assigns, officers,
directors, agents and employees (each an “Indemnified Party”) from and against
any and all damages, losses, claims, taxes, liabilities, costs, expenses and for
all other amounts payable, including reasonable attorneys’ fees (which attorneys
may be employees of the Agent or such Investor) and disbursements (all of the
foregoing being collectively referred to as “Indemnified Amounts”) awarded
against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by an Investor of
the Notes (or any interest therein), and (B) the Servicer hereby agrees to
indemnify (and pay upon demand to) each Indemnified Party for Indemnified
Amounts awarded against or incurred by any of them arising out of the Servicer’s
activities as Servicer excluding, however, in all of the foregoing instances
under the preceding clauses (A) and (B) :

(i)    Indemnified Amounts to the extent such Indemnified Amounts resulted from
gross negligence or willful misconduct on the part of the Indemnified Party
seeking indemnification;

(ii)    Indemnified Amounts to the extent arising from the acts or omissions of
a successor Servicer;

(iii)   Indemnified Amounts to the extent the same includes losses in respect of
Receivables that are uncollectible;

 

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(iv)    taxes imposed by any jurisdiction in which such Indemnified Party is or
would be subject to tax (unless such tax arises solely as a result of the
transactions contemplated by this Agreement) on or measured by the overall net
income of such Indemnified Party to the extent that the computation of such
taxes is consistent with the characterization for income tax purposes of the
acquisition by the Investors of interests in the Purchased Note as a loan or
loans by the Investors to Seller secured by the Receivables; or

(v)    arising from a breach of any representation or warranty with respect to
any Receivable, to the extent such Receivable is repurchased in accordance with
the terms of the Pooling Agreement and the Purchase Agreement;

provided, however, that nothing contained in this sentence shall limit the
liability of the Seller or NFC or limit the recourse of the Agent or the
Investors to the Seller or NFC for amounts otherwise specifically provided to be
paid by the Seller or NFC under the terms of this Agreement or any
otherTransaction Document.

SECTION 6.02.        Increased Cost and Reduced Return.    If after the date
hereof, any Investor shall be charged any fee, expense or increased cost on
account of the adoption of any applicable law, rule or regulation (including any
applicable law, rule or regulation regarding capital adequacy) or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof or any accounting board or authority
(whether or not part of government) which is responsible for the establishment
or interpretation of national or international accounting principles, or
compliance with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency or accounting
board or authority (a “Regulatory Change”): (i) that subjects any Investor to
any charge or withholding on or with respect to this Agreement or any Program
Support Agreement or an Investor’s obligations under this Agreement or a Program
Support Agreement, or on or with respect to the Receivables, or changes the
basis of taxation of payments to any Investor of any amounts payable under this
Agreement or any Program Support Agreement (except for changes in the rate of
tax on the overall net income of an Investor) or taxes excluded by Section 6.01
or (ii) that imposes, modifies or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of an Investor, or credit extended by an
Investor pursuant this Agreement or a Program Support Agreement or (iii) that
imposes any other condition the result of which is to increase the cost to an
Investor of performing its obligations under this Agreement or a Program Support
Agreement, or to reduce the rate of return on an Investor’s capital as a
consequence of its obligations under this Agreement or a Program Support
Agreement, or to reduce the amount of any sum received or receivable by an
Investor under this Agreement or a Program Support Agreement or to require any
payment calculated by reference to the amount of interests or loans held or
interest received by it, then, upon demand by the Agent, Seller shall pay to the
Agent, for the benefit of the relevant Investor, such amounts charged to such
Investor or such amounts to otherwise compensate such Investor for such
increased cost or such reduction.

SECTION 6.03.        Other Costs and Expenses.    Seller shall pay to the Agent
on demand any and all costs and expenses of the Agent and the Investors, if any,
including reasonable counsel fees and expenses in connection with the
enforcement of this Agreement and

 

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the other documents delivered hereunder and in connection with any restructuring
or workout of this Agreement or such documents, or the administration of this
Agreement following an Event of Default.

ARTICLE VII

The Agent

SECTION 7.01.        Authorization and Action.    Each Investor hereby
irrevocably appoints, designates and authorizes the Agent to take such action on
its behalf under the provisions of this Agreement and each other Transaction
Document and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement and any other Transaction
Document, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Transaction Document, the Agent shall not have any
duties or responsibilities, except those expressly set forth in this Agreement,
nor shall the Agent have or be deemed to have any fiduciary relationship with
any Investor, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other
Transaction Document or otherwise exist against the Agent. Without limiting the
generality of the foregoing sentence, the use of the term “agent” in this
Agreement with reference to the Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.

SECTION 7.02.        Delegation of Duties.    The Agent may execute any of its
duties under this Agreement or any other Transaction Document by or through
agents, employees or attorneys-in-fact and shall be entitled to the advice of
counsel concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.

SECTION 7.03.        Liability of Agent.    No Agent-Related Person shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Transaction Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any Investor for any
recital, statement, representation or warranty made by the Seller, the Servicer,
the Indenture Trustee, or any officer thereof, contained in this Agreement or in
any other Transaction Document, or in any certificate, report, statement or
other document referred to or provided for in, or received by the Agent under or
in connection with, this Agreement or any other Transaction Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Transaction Document, or for any failure of the Seller,
the Servicer, the Indenture Trustee, or any other party to any Transaction
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Investor to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Transaction Document, or to inspect
the properties, books or records of the Seller, the Servicer, the Indenture
Trustee, or any of their respective Affiliates.

 

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SECTION 7.04.        Reliance by Agent.    (a) The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by or on behalf of
the proper Person or Persons, and upon advice and statements of legal counsel
(including counsel to the Seller, the Servicer and the Indenture Trustee),
independent accountants and other experts selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action under this
Agreement or any other Transaction Document unless it shall first receive such
advice or concurrence of the Conduit Investor (and, if required by any Program
Support Agreement, the requisite Program Support Providers) as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Investors against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Transaction Document in accordance
with a request or consent of the Conduit Investor (and, if required by any
Program Support Agreement, the requisite Program Support Providers) or, if
required hereunder, all Investors and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Investors.

(a)    For purposes of determining compliance with the conditions specified in
Article IV on the Closing Date, each Investor that has executed this Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter either sent by the Agent to such Investor
for consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to such Investor.

SECTION 7.05.        Notice of Event of Default.    The Agent shall not be
deemed to have knowledge or notice of the occurrence of an Event of Default or
an event which, with the giving of notice or passage of time, or both, would
constitute an Event of Default unless the Agent has received written notice from
an Investor referring to this Agreement, describing such Event of Default or
event which, with the giving of notice or passage of time, or both, would
constitute an Event of Default stating that such notice is a “Notice of Event of
Default”. The Agent will notify the Investors of its receipt of any such notice.
The Agent shall (subject to Section 7.04 ) take such action with respect to such
Event of Default or event which, with the giving of notice or passage of time,
or both, would constitute an Event of Default as may be requested by the Conduit
Investor (and, if required by any Program Support Agreement, the requisite
Program Support Providers), provided , that, unless and until the Agent shall
have received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such Event
of Default or event which, with the giving of notice or passage of time, or
both, would constitute an Event of Default as it shall deem advisable or in the
best interest of the Investors.

SECTION 7.06.        Credit Decision; Disclosure of Information by the
Agent.    Each Investor acknowledges that none of the Agent-Related Persons has
made any representation or warranty to it, and that no act by the Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of the Seller, the Servicer, the Indenture Trustee, or any
of their respective Affiliates, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Investor as to any matter,
including whether the

 

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Agent-Related Persons have disclosed material information in their possession.
Each Investor, including any Investor by assignment, represents to the Agent
that it has, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Seller, the
Servicer or the Indenture Trustee, or their respective Affiliates, and all
applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Seller hereunder. Each Investor also represents that it shall,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Transaction Documents, and
to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Seller, the Servicer or the Indenture Trustee. Except
for notices, reports and other documents expressly herein required to be
furnished to the Investors by the Agent herein, the Agent shall not have any
duty or responsibility to provide any Investor with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of the Seller, the Servicer, the
Indenture Trustee, or their respective Affiliates which may come into the
possession of any of the Agent-Related Persons.

SECTION 7.07.        Indemnification of the Agent.    Whether or not the
transactions contemplated hereby are consummated, the Program Support Providers
shall indemnify upon demand each Agent-Related Person, pro rata, and hold
harmless each Agent-Related Person from and against any and all damages, losses,
claims, liabilities, costs and expenses, including reasonable attorneys’ fees
(which such attorneys may be employees of the Program Support Providers or the
Agent) and disbursements awarded against or incurred by it; provided, that no
Program Support Provider shall be liable for the payment to any Agent-Related
Person of any portion of such amounts resulting from such Person’s gross
negligence or willful misconduct; provided, further, that no action taken in
accordance with the directions of the Conduit Investor (and, if required by any
Program Support Agreement, the requisite Program Support Providers) shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section. Without limitation of the foregoing, each Program Support Provider
shall reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including attorney’s fees) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Transaction Document, or any
document contemplated by or referred to herein. The undertaking in this Section
shall survive payment in full of the Note and the resignation or the replacement
of the Agent.

SECTION 7.08.        Agent in Individual Capacity.    JPMorgan Chase (and any
successor acting as Agent) and its Affiliates may make loans to, issue letters
of credit for the account of, accept deposits from, acquire equity interests in
and generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with any of the Seller, the Servicer, the
Indenture Trustee, or any of their Affiliates as though JPMorgan Chase were not
the Agent hereunder and without notice to or consent of the Investors. The
Investors acknowledge that, pursuant to such activities, JPMorgan Chase or its
Affiliates may receive information

 

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regarding the Seller, the Servicer, the Indenture Trustee, or their respective
Affiliates (including information that may be subject to confidentiality
obligations in favor of such Person) and acknowledge that the Agent shall be
under no obligation to provide such information to them.

SECTION 7.09.        Resignation of Agent.    The Agent may resign as Agent upon
thirty (30) days’ notice to the Investors. If the Agent resigns under this
Agreement, the Investors shall appoint from among the Program Support Providers
a successor agent for the Investors. If no successor agent is appointed prior to
the effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Investors, a successor agent from among the Program Support
Providers. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term “Agent” shall mean such successor agent and the
retiring Agent’s appointment, powers and duties as Agent shall be terminated.
After any retiring Agent’s resignation hereunder as Agent, the provisions of
this Section 7.09 and Sections 7.03 and 7.07 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was the Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the date
which is thirty (30) days following a retiring Agent’s notice of resignation,
the retiring Agent’s resignation shall nevertheless thereupon become effective
and the Program Support Providers shall perform all of the duties of the Agent
hereunder until such time, if any, as the Investors appoint a successor agent as
provided for above; provided that until such time as a successor agent shall
have been appointed, the resigning Agent shall continue to hold the Purchased
Note as “nominee” for the Investors.

SECTION 7.10.        Payments by the Agent.    Unless specifically allocated to
an Investor pursuant to the terms of this Agreement, all amounts received by the
Agent on behalf of the Investors shall be paid by the Agent to the Investors pro
rata in accordance with their respective outstanding funded portions of the
Funded Amount on the Business Day received by the Agent, unless such amounts are
received after 12:00 noon on such Business Day, in which case the Agent shall
use its reasonable efforts to pay such amounts to the Investors on such Business
Day, but, in any event, shall pay such amounts to the Investors not later than
the following Business Day.

ARTICLE VIII

Miscellaneous

SECTION 8.01.        Assignment.    (a) This Agreement shall be binding on the
parties hereto and their respective successors and assigns; provided , that the
Seller may not assign any of its rights or delegate any of its duties hereunder
without the prior written consent of the Agent. The Conduit Investor may only
assign, participate, grant security interests in, or otherwise transfer any
portion of its Note Interest, in each case, as provided in clause (b) below. No
provision of this Agreement shall in any manner restrict the ability of any
Program Support Provider to assign, participate, grant security interests in, or
otherwise transfer any portion of its Note Interest, provided that any such
transfer shall be in accordance with the terms of the Indenture. All costs and
expenses of the Agent incurred in connection with any assignment hereunder shall
be borne by the Seller.

 

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(b)    The Conduit Investor may, from time to time, with prior or concurrent
notice to the Seller and the Indenture Trustee, in one transaction or a series
of transactions, assign, participate, grant security interests in, or otherwise
transfer all or a portion of its Note Interest and its rights and obligations
under this Agreement and any other Transaction Document to which it is a party
(x) without the consent of the Seller or any other Person, (i) to a Conduit
Assignee, (ii) to any Program Support Provider or (iii) to any other commercial
paper conduit which satisfies the Assignee Rating Criteria and (y) with the
consent of the Seller (such consent not to be unreasonably withheld or delayed),
to any Person not described in preceding clause (x); provided, that, the Conduit
Investor may, during the continuance of an Event of Default, assign,
participate, grant security interests in, or otherwise transfer all or a portion
of its Note Interest and its rights and obligations under this Agreement and any
other Transaction Document to which it is a party, in each case, without the
consent of the Seller or any other Person. Subject to the transfer restrictions
set forth in the Indenture, upon and to the extent of such assignment or other
transfer by the Conduit Investor, (i) such assignee shall be the owner of the
assigned or transferred portion of the Note Interest, (ii) if such assignee is a
Conduit Assignee (or another commercial paper conduit), such Conduit Assignee
(or other commercial paper conduit) and its liquidity support provider(s) and
credit support provider(s) and other related parties shall have the benefit of
all the rights and protections provided to a Conduit Investor and its Program
Support Provider(s) herein and in the other Transaction Documents (including any
limitation on recourse against such Conduit Assignee (or other commercial paper
conduit) or related parties, any agreement not to file or join in the filing of
a petition to commence an insolvency proceeding against such Conduit Assignee
(or other commercial paper conduit), and the right to assign or otherwise
transfer to another Conduit Assignee(or commercial paper conduit) as provided in
this paragraph), (iii) such assignee shall assume all (or the assigned or
assumed portion) of the Conduit Investor’s obligations, if any, hereunder or
under any other Transaction Document, and the Conduit Investor shall be released
from such obligations, in each case to the extent of such assignment, and the
obligations of the Conduit Investor and such assignee shall be several and not
joint, (iv) all distributions in respect of its Note Interest shall be made to
the Agent, on behalf of the Conduit Investor and such assignee according to
their respective Note Interests, (v) the defined terms and other terms and
provisions of this Agreement and the other Transaction Documents shall be
interpreted in accordance with the foregoing, and (vi) if requested by the Agent
with respect to the assignee, the parties will execute and deliver such further
agreements and documents and take such other actions as the Agent may reasonably
request to evidence and give effect to the foregoing.

SECTION 8.02.        Notices.    Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service or sent by telecopy or by e-mail
(if the recipient has provided an e-mail address), as follows:

(a)    if to the Seller or the Servicer, at its address or telecopy number set
forth in Appendix B to the Pooling Agreement;

(b)    if to the Conduit Investor:

 

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Falcon Asset Securitization Company LLC

10 S. Dearborn Street

13 Floor, Chase Tower

Chicago, Illinois

Attention: Conduit Securitization Group

Email:     abs.treasury.dept@jpmorgan.com

Phone:    (312) 732-7206

Fax:        (312) 732-1844

Jupiter Securitization Company LLC

10 S. Dearborn Street

13 Floor, Chase Tower

Chicago, Illinois

Attention: Conduit Securitization Group

Email:     abs.treasury.dept@jpmorgan.com

Phone:    (312) 732-7206

Fax:        (312) 732-1844

(c)      if to the Agent:

JPMorgan Chase Bank, N.A.

10 S. Dearborn Street

13 Floor, Chase Tower

Chicago, Illinois

Attention: Conduit Securitization Group

Email:     abs.treasury.dept@jpmorgan.com

Phone:    (312) 732-7206

Fax:        (312) 732-1844

All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt.

SECTION 8.03.         Waivers; Amendments.

(a)    No waiver of any provision of this Agreement or consent to any departure
by the Seller therefrom shall in any event be effective unless the same shall be
permitted by Section 8.03(b), and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. Without
limiting the generality of the foregoing, the Funding of the Purchased Note
shall not be construed as a waiver of any Event of Default, regardless of
whether the Indenture Trustee, the Seller, the Servicer, the Agent or the
Conduit Investor may have had notice or knowledge of such Event of Default at
the time.

(b)    Any provision of the Agreement may be amended or waived by (x) the Seller
or Servicer if, but only if, it is in writing and signed by such Person and
(y) the Agent and the Investors, if, but only if, it is in writing and signed by
the Agent and the Conduit Investor. Any consent or other election or action to
be taken by an Investor pursuant to the Indenture shall

 

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be taken by the Agent as registered Holder of the Purchased Note, in each case
with the consent of the applicable Investors (the Seller shall have no
obligation to inquire as to such consent and may rely on any consent, election
or action taken by the Agent as such Holder).

(c)    No waiver, amendment or modification of the Transaction Documents or any
other agreement referred to herein or therein to which the Seller is a party
(other than this Agreement) shall affect any of the rights or obligations under
this Agreement of any party hereto unless such party has given its written
consent to such waiver, amendment or modification.

(d)    A failure or delay in exercising any right, power or privilege in respect
of this Agreement will not be presumed to operate as a waiver, and a single or
partial exercise of any right, power or privilege will not be presumed to
preclude any subsequent or further exercise, of that right, power or privilege
or the exercise of any other right, power or privilege.

SECTION 8.04.        Survival.    All covenants, agreements, representations and
warranties made by the Seller and the Servicer herein and in the certificates or
other instruments delivered in connection with or pursuant to this Agreement
shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement and the funding of
the Purchased Note, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Indenture Trustee, the Agent or
the Conduit Investor may have had notice or knowledge of any Event of Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the Note or
any amount payable under this Agreement is outstanding and unpaid.

SECTION 8.05.        Counterparts; Integration; Effectiveness.    This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the Indenture
and the other Transaction Documents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective when it shall have been executed
by each of the parties hereto and thereafter this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.

SECTION 8.06.        Severability.    Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

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SECTION 8.07.        Governing Law; Jurisdiction; Consent to Service of Process;
Waiver of Jury Trial Right.

(a)    This Agreement shall be construed in accordance with the laws of the
State of New York, without reference to its conflict of laws provisions (other
than Section 5-1401 of the new York General Obligations Law), and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.

(b)    TO THE EXTENT PERMITTED BY LAW, EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

SECTION 8.08.         No Bankruptcy Petition Against the Conduit
Investor.    Each of the Investors, the Agent, the Seller and the Servicer
hereby covenants and agrees that, prior to the date which is one year and one
day (or the then applicable preference period) after the payment in full of all
outstanding Commercial Paper or other rated indebtedness of the Conduit
Investor, it will not institute against, or join any other Person in instituting
against, the Conduit Investor any proceeding of a type referred to in the
definition of Event of Bankruptcy.

SECTION 8.09.        Benefits of Indenture.    Each of the Seller and the
Servicer hereby acknowledges and confirms that each representation, warranty,
covenant and agreement made pursuant to the Indenture by the Seller and the
Servicer is also made herein, all for the benefit and security of the Investors
and the Agent.

SECTION 8.10.        Headings.    Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 8.11.        No Recourse Against Conduit Investor, Members, Officers or
Directors.    Notwithstanding anything to the contrary contained in this
Agreement, the obligations of each Conduit Investor under this Agreement and all
other Transaction Documents are solely the corporate obligations of such Conduit
Investor and shall be payable solely to the extent of funds received in
accordance herewith or from any party to any Transaction Document in accordance
with the terms thereof in excess of funds necessary to pay matured and maturing
Commercial Paper. No recourse under any obligation, covenant or agreement of the
Conduit Investor contained in this Agreement shall be had against any
stockholder, member, employee, officer, director or incorporator of the Conduit
Investor or any beneficial owner of any of them, as such, by the enforcement of
any assessment or by any legal or equitable proceeding, by virtue of any statute
or otherwise; it being expressly agreed and understood that this Agreement is
solely a corporate obligation of the Conduit Investor, and that no personal
liability whatsoever shall attach to or be incurred by the any stockholder,
member, employee, officer, director or incorporator of the Conduit Investor or
any beneficial owner of any of them, as such, under or by reason of any of the
obligations, covenants or agreements of the Conduit Investor contained in this
Agreement, or implied therefrom, and that any and all personal liability for
breaches by the Conduit Investor of any of such obligations, covenants or
agreements, either at common law or at equity, or by statute or constitution, of
every such stockholder, member, employee, officer, director or incorporator of
the Conduit Investor or any beneficial owner of any of them, as such, is hereby
expressly waived as a condition of and consideration for the execution of this
Agreement; provided, that this Section 8.11 shall not relieve any such
stockholder, member,

 

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employee, officer, director or incorporator of the Conduit Investor or any
beneficial owner of any of them, as such, of any liability it might otherwise
have for its own intentional misrepresentation or willful misconduct.

SECTION 8.12.        Waiver of Confidentiality.    Each of the Seller and the
Servicer hereby consents to the disclosure of any non-public information with
respect to it received by the Agent or any Investor to (i) the Agent, any
nationally recognized statistical rating organization rating the Conduit
Investor’s Commercial Paper, any Program Support Provider or other Person
providing financing to, or any member or other Person holding equity interests
in, the Conduit Investor or any of the foregoing Person’s counsel or accountants
in relation to this Agreement or any other Transaction Document (as long as each
of the foregoing Persons has been advised to keep such information
confidential); and (ii) with the Seller’s and the Servicer’s consent (such
consent not to be unreasonably withheld or delayed), any other Investor or
potential Investor.

SECTION 8.13.        Confidentiality Agreement.    Each of the Seller and the
Servicer hereby agrees that it will not disclose the contents of this Agreement
or any other Transaction Document or any other proprietary or confidential
information of or with respect to any Investor, the Agent or any Program Support
Provider to any other Person except (a) its auditors and attorneys, employees or
financial advisors (other than any commercial bank) and any nationally
recognized statistical rating organization, provided such auditors, attorneys,
employees, financial advisors or rating agencies are informed of the highly
confidential nature of such information, (b) as otherwise required by applicable
law or order of a court of competent jurisdiction, including its regulators,
(c) in connection with any proceeding brought by or against it with respect to
this Agreement or the related transactions contemplated hereby, (d) in any
offering circular prepared for the issuance and sale of the Note, if such
disclosure has been reviewed and agreed to by the Investors and the Agent and
(e) that the Seller and Servicer may file copies of the Transaction Documents
(other than the Fee Letter) with the Commission.

SECTION 8.14.        Excess Funds.    Notwithstanding any provisions contained
in this Agreement to the contrary, the Conduit Investor shall not, and shall not
be obligated to, pay any amount pursuant to this Agreement unless (i) the
Conduit Investor has received funds which may be used to make such payment and
which funds are not required to repay its Commercial Paper when due and
(ii) after giving effect to such payment, either (x) the Conduit Investor could
issue Commercial Paper to refinance all of its outstanding Commercial Paper
(assuming such outstanding Commercial Paper matured at such time) in accordance
with the program documents governing the Conduit Investor’s securitization
program or (y) all of such Conduit Investor’s Commercial Paper is paid in full.
Any amount which the Conduit Investor does not pay pursuant to the operation of
the preceding sentence shall not constitute a claim (as defined in § 101 of the
United States Bankruptcy Code) against or corporate obligation of the Conduit
Investor for any such insufficiency unless and until the Conduit Investor
satisfies the provisions of clauses (i) and (ii) above. This Section shall
survive the termination of this Agreement.

[Signature Pages Follow]

 

29

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

 

CONDUIT INVESTOR:

FALCON ASSET SECURITIZATION COMPANY LLC,

By:

 

JPMorgan Chase Bank, N.A.,

its Attorney-in-Fact

By:

 

/s/ Alan P. English

Name:

 

Alan P. English

Title:

 

Vice President

JUPITER SECURITIZATION COMPANY LLC,

By:

 

JPMorgan Chase Bank, N.A.,

its Attorney-in-Fact

By:

 

/s/ Alan P. English

Name:

 

Alan P. English

Title:

 

Vice President

 

[Signature Page to Jupiter/Falcon Note Purchase Agreement]

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SELLER:

NAVISTAR FINANCIAL RETAIL                

RECEIVABLES CORPORATION, as Seller

By:

 

/s/ John V. Mulvaney, Sr

Name:

 

John V. Mulvaney Sr.

Title:

 

Vice President, Chief Financial Officer and Treasurer

INDIVIDUALLY AND AS SERVICER:

NAVISTAR FINANCIAL CORPORATION, individually and as Servicer

By:

 

/s/ John V. Mulvaney, Sr

Name:

 

John V. Mulvaney Sr.

Title:

 

Vice President, Chief Financial Officer and Treasurer

 

[Signature Page to Jupiter/Falcon Note Purchase Agreement]

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

AGENT:

JPMORGAN CHASE BANK, N.A.

By:

 

/s/ Alan P. English

Name:

 

Alan P. English

Title:

 

Vice President

 

Payment Information:

 

JPMorgan Chase Bank, N.A.

 

ABA: 021000021

 

Account Number: 9008112016

 

Account Name: FMSD Incoming Clearing Account

 

Ref: Navistar Financial 2007-JPM Owner Trust

 

Contact: William Laird (312) 385-7045

 

[Signature Page to Jupiter/Falcon Note Purchase Agreement]

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EXHIBIT A

DOCUMENTS TO BE DELIVERED TO THE AGENT

ON OR PRIOR TO THE CLOSING DATE

 

1.

Copies of the Resolutions of the board of Directors of each of Truck Retail
Instalment Paper Corp., NFC and NFRRC certified by its Secretary authorizing its
execution, delivery and performance of each Transaction Document to which it is
a party.

 

2.

Articles or Certificate of Incorporation or Formation for each of Truck Retail
Instalment Paper Corp., NFC, NFRRC and the Issuer certified by the Secretary of
State of its jurisdiction of incorporation or formation on or within thirty
(30) days prior to the Closing Date.

 

3.

Good Standing Certificates for each of Truck Retail Instalment Paper Corp., NFC,
NFRRC and the Issuer issued by the Secretary of State of Delaware.

 

4.

A certificate of the Secretary of each of Truck Retail Instalment Paper Corp.,
NFC and NFRRC certifying (i) the names and signatures of the officers authorized
on its behalf to execute each Transaction Documents to which it is a party and
(ii) a copy of By-Laws of NFC, NFRRC and Truck Retail Instalment Paper Corp.

 

5.

A favorable opinion of legal counsel for each of Truck Retail Instalment Paper
Corp., NFC, NFRRC and the Issuer (which may include in-house counsel) reasonably
acceptable to the Agent which addresses the following matters and such other
matters as the Agent may reasonably request:

 

 

-

authorization, execution and delivery of the Transaction Documents

 

 

-

enforceability of the Transaction Documents against Truck Retail Instalment
Paper Corp., NFC, NFRRC and the Issuer

 

 

-

perfection and priority of security interests

 

 

-

true sale of the Receivables from Truck Retail Instalment Paper Corp. to NFC and
of the Receivables from NFC to the Seller, and non-consolidation of the Seller
with NFC

 

 

-

treatment of the Note as debt for tax purposes

 

6.(i)

UCC lien search reports (in Delaware) dated a date reasonably near the Closing
Date listing all effective financing statements which name Truck Retail
Instalment Paper Corp., NFC, NFRRC or the Issuer (under its respective present
or previous names), as debtor, together with copies of all such financing
statements and (ii) tax lien search reports (in Delaware and Illinois) dated a
date reasonably near the Closing Date listing all effective federal tax liens
which name Truck Retail Instalment Paper Corp., NFC or NFRRC (under its
respective present or previous names), as debtor.

 

A-1

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7.

UCC-1 financing statements filed in Delaware (i) naming Truck Retail Instalment
Paper Corp., as seller or debtor and NFC, as purchaser or secured party,
identifying the Receivables and Related Security sold by it to NFC as
collateral, (ii) naming NFC, as seller or debtor and NFRRC, as purchaser or
secured party, identifying the Designated Receivables and Related Security as
collateral, (iii) naming NFRRC, as debtor, the Issuer, as assignor secured
party, and the Indenture Trustee, as secured party, identifying the Receivables
and Related Security as collateral and (iv) naming the Issuer, as debtor and the
Indenture Trustee, as secured party, identifying the Collateral as collateral.

 

8.

UCC-3 financing statements for filing in all appropriate jurisdictions to the
extent necessary to terminate or release as a matter of record any security
interest in the Receivables, Related Security and Collections

 

9.

A fully executed Retail Note Bill of Sale and Assignment, dated as of the
Closing Date, duly executed by Truck Retail Instalment Paper Corp., relating to
the Receivables and Related Security sold by it to NFC, together with the
related Release, dated as of the Closing Date, duly executed by The Bank of New
York, as Indenture Trustee under the Indenture, dated as of October 16, 2000,
between Truck Retail Instalment Paper Corp. and The Bank of New York, as
Indenture Trustee.

 

10.

Certificates and opinions with respect to the Indenture Trustee and the Owner
Trustee as are customary in transactions of the type contemplated in the
Transaction Documents, the form and substance of which shall be reasonably
satisfactory to the Agent.

 

A-2