Exhibit 10.8

Execution Version

LOAN AND SECURITY AGREEMENT

by and between

WELLS FARGO EQUIPMENT FINANCE, INC.

and

NAVISTAR FINANCIAL CORPORATION

dated as of

December 16, 2009

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TABLE OF CONTENTS

 

1.

   Defined Terms    1

2.

   Advance of Loan    1   

2.1        Loan

   1   

2.2        Promissory Note

   1

3.

   Payments and Security    2   

3.1        Interest

   2   

3.2        Payments

   2   

3.3        Prepayments

   2   

3.4        Other Payment Terms

   3   

3.5        Change in Circumstances

   4   

3.6        Taxes on Payments

   4   

3.7        Collateral; Custodian and Collateral Agent

   5

4.

   Conditions Precedent    6   

4.1        Closing

   6   

4.2        Additional Conditions

   8

5.

   Representations and Warranties    8   

5.1        Status of Borrower

   8   

5.2        Power and Authority

   8   

5.3        Enforceability

   9   

5.4        No Violation.

   9   

5.5        Litigation

   9   

5.6        Consents

   9   

5.7        Conflicts

   9   

5.8        Portfolio Documents

   10   

5.9        Title and Liens

   14   

5.10      The Financed Vehicles

   15   

5.11      USA Patriot Act

   16   

5.12      Solvency

   16   

5.13      No Misstatement; Omission

   16

6.

   Covenants of Borrower    16   

6.1        Existence

   16   

6.2        Notice of Default

   17   

6.3        Payment of Taxes

   17   

6.4        Compliance with Laws Generally

   17   

6.5        Liens

   17   

6.6        Further Assurances

   18   

6.7        Portfolio Undertakings

   18   

6.8        Indemnity

   20   

6.9        USA Patriot Act

   21   

6.10      Environmental Covenants

   21   

6.11      Monthly and Quarterly Reports

   21

7.

   Default    23   

7.1        Events of Default

   23

8.

   Remedies    24

 

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8.1        Acceleration

   24   

8.2        Additional Rights and Remedies

   25   

8.3        Additional Remedy Provisions

   26   

8.4        Lender’s Right to Perform

   27   

8.5        Power of Attorney

   27

9.

   Governing Law; Jurisdiction; Jury Trial Waiver    28   

9.1        Governing Law

   28   

9.2        Jurisdiction

   28   

9.3        Jury Trial Waiver

   28

10.

   Miscellaneous    29   

10.1      Entire Agreement

   29   

10.2      Survival

   29   

10.3      Severability; Construction

   29   

10.4      Notices

   30   

10.5      Successors and Assigns

   30   

10.6      Counterparts

   30   

10.7      Expenses

   31   

10.8      Usury

   31   

10.9      Brokers

   31   

10.10    Waiver

   32

Schedule A – Description Of Portfolio

 

Annex A   –   Definitions Annex B   –   Amortization Schedule Annex C   –  
Lender’s and Borrower’s Wire Transfer Instructions Annex D   –   Form of
Compliance Certificate Annex E   –   Form of Portfolio Documents Annex F   –  
Notice of Assignment

 

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LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) is made as of December 16,
2009, by and between WELLS FARGO EQUIPMENT FINANCE, INC., a Minnesota
corporation, its successors and assigns (“Lender”), and NAVISTAR FINANCIAL
CORPORATION, a Delaware corporation, its successors and permitted assigns
(“Borrower”).

WHEREAS,

Borrower has entered into those certain Retail Notes (as defined herein)
transactions and has become the beneficial owner of the right, title and
interest of Navistar Leasing Company in and to those certain Retail Leases (as
defined herein) transactions, including, without limitation, all rights to
receive payments and all collateral therefor, described in Schedule 1 attached
hereto.

Upon the terms and conditions set forth herein, Borrower now desires to borrow,
and Lender is willing to make to Borrower, the Loan secured by a first priority
security interest in and lien on the Portfolio (as defined herein) of Retail
Notes and Retail Leases described in Schedule 1 attached hereto and certain
other collateral described herein.

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

1. Defined Terms. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in Annex A attached hereto and made a part hereof. Any
term used in the UCC and not defined in this Agreement has the meaning given to
the term in the UCC, as now or hereafter adopted.

2. Advance of Loan.

2.1 Loan. On the terms and conditions hereinafter set forth, the parties agree
that Lender shall make a loan to Borrower in the principal amount set forth in
Annex B attached hereto (the “Loan”); and Borrower hereby authorizes and directs
Lender to pay the amount of the Loan to the Borrower at Borrower’s account
specified on Annex C attached hereto.

2.2 Promissory Note. The obligation of Borrower to repay the Loan shall be
evidenced by a Promissory Note payable by Borrower to the order of Lender in the
original principal amount of the Loan (as amended, restated, supplemented,
renewed and extended from time to time, the “Note”). The Loan shall bear
interest, be payable and mature as set forth in the Note.

 

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3. Payments and Security.

3.1 Interest.

(a) Interest Rate. Borrower shall pay interest on the unpaid principal amount of
the Loan from the date on which the Loan proceeds are disbursed until paid in
full, at the Interest Rate, payable on each Repayment Date as specified on Annex
B attached hereto and made a part hereof and on the Maturity Date. Upon
acceleration of the Loan pursuant to Section 8.1 of this Agreement, Borrower
shall pay on demand interest on the unpaid principal amount of the Loan and
other amounts then due and payable to Lender under the Transaction Documents at
the Default Rate, from the date of the applicable Event of Default until the
earlier of (x) the date such Event of Default no longer exists or (y) the Loan
is repaid in full.

(b) Calculating Interest. Interest for any period under this Agreement or the
other Transaction Documents shall (1) include the first day of such period and
exclude the last day of such period, and (2) be calculated on the basis of a
360-day year consisting of 12 months of 30 days; provided, that interest from
the Closing Date until the first Repayment Date shall be paid on January 19,
2010.

3.2 Payments.

(a) Principal and Interest. Until the Loan shall be repaid, prepaid or
discharged in full under the provisions of this Agreement, Borrower shall repay
the Loan (1) in installments consisting of principal and accrued interest on the
unpaid principal amount of the Loan payable on each Repayment Date as specified
on Annex B attached hereto and made a part hereof, and (2) a final installment
on the Maturity Date in the amount of all unpaid principal, and all interest
then outstanding, together with any and all other fees, expenses, and costs due
Lender under this Agreement, the Note, and the Transaction Documents. All
interest that is not paid when due shall be due on demand.

(b) Application of Loan Payments. All amounts from time to time received by
Lender under this Agreement and the Note shall be applied: first, to any unpaid
out-of-pocket costs or expenses of Lender incurred in connection with or arising
out of (i) any request by the Borrower to amend, confirm or consent to any
matter with regard to, or to otherwise take any action with respect to, the
Transaction Documents, the Portfolio Documents, the Financed Vehicles or any
other Collateral, (ii) any action taken by Lender that it is expressly
authorized to take under any Transaction Document, or any Portfolio Document
(either directly or as assignee thereof), and (iii) the failure of the Borrower
to comply with Section 6.8 hereof; second, to unpaid late charges payable
pursuant to the Note; third, to any interest then due and payable on the Note;
fourth, to principal in accordance with the Note; and fifth, to any other
Obligations then due and payable.

3.3 Prepayments.

(a) Mandatory Prepayments. Borrower shall prepay the Loan at the times and in
the amounts required pursuant to Section 6.11(b)(x) of this Agreement.

(b) Optional Prepayments. Except (i) as expressly provided in this
Section 3.3(b) and Section 3.6, and (ii) with funds on deposit in the Cash
Collateral

 

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Account, Borrower may not prepay the Loan during the first eighteen (18) months
of the Loan. Thereafter, the Borrower may prepay the then outstanding principal
amount of the Loan in full, but not in part, together with all accrued and
unpaid interest thereon and any other amounts then due and owing under this
Agreement (it being understood that no Make Whole Amount shall be payable in
connection with a prepayment pursuant to this sentence or with respect to the
application of funds on deposit in the Cash Collateral Account). Prior to the
eighteenth (18th) month of the term of the Loan, upon either (x) an Event of
Default shall have occurred and the Lender shall be exercising remedies or (y) a
Servicer Default shall have occurred and the Lender has delivered to Servicer a
Termination Notice, the Borrower may prepay the then outstanding principal
amount of the Loan in full, but not in part, together with the Make Whole
Amount, all accrued and unpaid interest thereon, and any other amounts then due
and owing under this Agreement.

3.4 Other Payment Terms.

(a) Reinstatement. To the extent Borrower makes a payment or Lender receives any
payment or Proceeds of the Collateral for Borrower’s benefit that is
subsequently invalidated, set aside or required to be repaid to Borrower or any
other Person, then, to such extent, the Obligations intended to be satisfied
shall be revived and continue as if such payment or Proceeds had not been
received by Lender. Lender’s records as to the outstanding principal balance at
any time, including any restored principal pursuant to this Section 3.4(a),
shall be deemed correct absent manifest error.

(b) Place and Manner.

(1) All payments required to be made to Lender hereunder, under the Note, or
under any other Transaction Document shall be made on or before the date due in
Dollars by wire transfer in good, immediately available funds to the applicable
account designated by Lender on Annex C attached hereto and made a part hereof
(or to such other account as Lender shall have specified in writing to Borrower
not less than three (3) Business Days prior to any payment).

(2) All payments by Borrower under this Agreement, the Note, or under any other
Transaction Document shall be made without deduction by reason of any defense,
setoff, recoupment, or counterclaim of any kind, nature, or description
whatever; provided, however, that in the event that on any Repayment Date
Borrower has paid an amount greater than what was due and payable by Borrower on
such Repayment Date, unless Lender returns the portion of such payment in excess
of the amount due and payable on such Repayment Date, Borrower may reduce the
next payment due and owing by Borrower in an amount equal to such excess.

 

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(c) Non-Business Days. All payments falling due on a non-Business Day shall be
paid on the next succeeding Business Day and, if such payment is made on such
next succeeding Business Day, no interest shall accrue on the amount of such
payment during such extension (but for the avoidance of doubt, interest shall
continue to accrue on all other amounts outstanding under the Transaction
Documents during such extension).

(d) Overdue Payments. Should Borrower fail to pay any amount on the due date for
payment thereof, whether by acceleration, prepayment or otherwise, then in
addition to any other amount or fees which may become payable hereunder, under
the Note, or under any other Transaction Document, Borrower shall pay, without
duplication of the interest owed pursuant to Section 3.1, interest on such sum
from the due date up to and including the date of actual payment at an annual
interest rate equal to the Default Rate.

(e) Prohibition on Reborrowing. Once repaid or prepaid, as the case may be,
principal amounts cannot be reborrowed.

3.5 Change in Circumstances.

(a) Beyond Control. Lender shall not be held responsible for any loss or damage
resulting from a legal enactment or any measure of a public authority, or war,
or strike, or boycott, or blockade or any other cause beyond its control.

(b) Increased Costs. Notwithstanding anything to the contrary herein contained,
but without prejudice to all other rights and obligations hereunder, if at any
time an event should occur or circumstances arise or a state of affairs exist to
which the provisions of any of Sections 3.5(a) or 3.6 hereof apply, then each
party hereby undertakes to the other to consult and cooperate in good faith with
that other party and use all reasonable endeavors to undertake such measures
(including, without limitation, the transfer of the Loan to an affiliate or
subsidiary of Lender located in another jurisdiction) as may be lawful and
reasonably practicable (at no cost to Lender and provided always that Lender’s
interests hereunder are not thereby materially prejudiced) to avoid or mitigate
the effects of such event, circumstances or state of affairs.

3.6 Taxes on Payments.

All payments under this Agreement shall be made free and clear of and without
deduction for, any taxes (other than those based on or measured by Lender’s net
income or receipts, franchise taxes and taxes on doing business, taxes in the
nature of a minimum or alternative minimum tax or a tax on or measured by items
of tax preference) now or hereafter imposed by or within any Governmental
Authority or pursuant to any governmental rule or regulation or any
administrative subdivision or taxing authority thereof or herein, respectively,
unless Borrower is compelled by law to deduct or withhold such taxes, in which
event Borrower shall pay to Lender such additional

 

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amounts as shall result in the effective receipt by Lender of the gross amount
of all sums due Lender hereunder and under the Note had no such deduction or
withholding been made; provided, however, that Borrower shall have no obligation
to pay any additional amount with respect to United States withholding taxes
imposed as a result of any transfer, assignment or grant of a participation in
Lender’s rights hereunder to a foreign party; and, provided, further, that in
the event that Borrower is required to make a payment of a material amount to
Lender pursuant to this Section 3.6, Borrower may exercise its prepayment rights
under Section 3.3(b).

3.7 Collateral; Custodian and Collateral Agent.

As security for the payment as and when due of the Obligations, Borrower hereby
collaterally assigns, transfers, and conveys to Lender, and grants a security
interest to Lender in, all of Borrower’s rights, title and interest in, to and
under the following, whether now owned or hereafter acquired (collectively, the
“Collateral”): (a) the Retail Notes set forth in the Composite Schedule of
Contracts and the Related Retail Note Assets associated with such Retail Notes;
(b) the Series 2009-WFEFI Portfolio Interest and the beneficial interest in the
Series 2009-WFEFI Portfolio Assets, including the Retail Leases set forth in the
Composite Schedule of Contracts, the Related Titling Trust Assets associated
with such Retail Leases and the Series 2009-WFEFI Portfolio Certificate; (c) any
and all payments due under the Retail Notes and Retail Leases after the Cutoff
Date; (d) all of Borrower’s right, title and interest in and to the Collection
Account and the Cash Collateral Account and any amounts from time to time in
such accounts; (e) the Portfolio Documents, including, among other things, the
right to receive notices and financial information, to give or withhold consents
or waivers, to declare or waive any default and/or exercise all remedies
thereunder and to take any and all other actions associated with the Portfolio
Documents or the Financed Vehicles; and (f) all Proceeds of the foregoing.
Notwithstanding the foregoing, provided that no Event of Default has occurred
and is continuing, Borrower shall be entitled to exercise the rights of
Borrower, as lessor and lender, pursuant to the Portfolio Documents, and,
provided that no Event of Default has occurred and is continuing, Borrower may
retain any amounts it receives by exercising such rights. Until all Obligations
have been indefeasibly paid in full or the Servicer Termination Date, Lender
appoints Borrower, and Borrower agrees to act, as Lender’s custodian and
collateral agent with respect to the Collateral for all purposes of this
Agreement and shall not take any action in connection with the servicing of the
Collateral. Lender acknowledges and agrees that the Navistar Purchase
Obligations are personal to Borrower and only the proceeds of such rights have
been pledged to Lender, and that Lender is not and is not intended to be a
third-party beneficiary of such rights, and accordingly, such rights will not be
exercisable by, enforceable by or for the benefit of, or preserved for the
benefit of Lender.

 

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4. Conditions Precedent.

The obligation of Lender to make the Loan is expressly conditioned upon
fulfillment, to the reasonable satisfaction of Lender and its counsel, of the
following conditions precedent:

4.1 Closing.

On or prior to the date on which Lender is to make the Loan hereunder (the
“Closing Date”), Borrower shall cause to be done or provided to Lender, as the
case may be, the following:

(a) Transaction Documents. This Agreement, the Note, the Account Control
Agreement, and the Notice of Assignment duly executed on behalf of Borrower.

(b) Computer Files Marked; Portfolio Information. Borrower shall, at its own
cost and expense, on or prior to the Closing Date, (i) indicate in its computer
files created in connection with the Portfolio that Borrower has granted a
security interest in the applicable Collateral to Lender pursuant to this
Agreement and (ii) certify to Lender that the data contained in the email
referenced in Schedule A attached hereto contains a true, correct and complete
description of the name of each Portfolio Obligor, such Portfolio Obligor’s
address and taxpayer identification number, contract number, remaining number of
payments, the amount of each remaining payment, the due date for payments
(whether monthly or quarterly), the loan type, the vehicle identification number
of the Financed Vehicle that is the subject of the transaction, and whether such
Portfolio Document is an Idealease Transaction.

(c) Portfolio Documents. Borrower shall confirm in writing to Lender that
(1) Borrower (including in its capacity as servicer or custodian) has in its
possession chattel paper original of the Retail Notes and Retail Leases
contained in the Portfolio Documents; and (2) Borrower has delivered a data tape
to the Lender and Backup Servicer containing detailed information with respect
to the Portfolio. Borrower shall deliver to Lender the Series 2009-WFEFI
Portfolio Certificate and copies of all other Form Portfolio Agreements
certified by the Borrower as true and correct copies thereof.

(d) Acquisition of Leased Vehicles. Evidence satisfactory to Lender as to the
Titling Trust’s title to the Leased Vehicles and the Borrower’s acquisition of
beneficial ownership of the Retail Leases (to the extent not already originated
or owned by the Borrower prior to the Closing Date).

(e) Good Standing Certificate. A good standing certificate with respect to the
Borrower from the Secretary of State of the State of Delaware.

(f) Officer’s Certificate. A certificate for Borrower executed by its Secretary
or other authorized representative certifying: (i) that the execution, delivery
and performance of this Agreement and the other Transaction Documents, and the
entry by Borrower into the transactions contemplated hereby and thereby, have
been duly authorized; (ii) the name(s) of the Person(s) authorized to execute
and deliver such documents on behalf of Borrower, together with specimen
signature(s) of such Person(s); and (iii) Borrower’s organizational documents.

(g) Opinions. A favorable opinion dated the Closing Date and addressed to
Lender, covering customary matters in respect of Borrower, including (but not
limited to) valid existence, good standing, due authorization, execution and
delivery,

 

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no violation of law, validity and enforceability of the Transaction Documents,
and as to the validity and (to the extent it can be perfected by the filing of a
financing statement in the State of Delaware pursuant to the UCC (“Code
Collateral”)) perfection of a security interest in favor of Lender in the
Collateral, in form and substance reasonably satisfactory to Lender, of counsel
to Borrower reasonably satisfactory to Lender (which counsel may be in-house
counsel).

(h) UCC Filing. On or prior to the Closing Date, Borrower shall record and file,
at its own cost and expense, a UCC-1 financing statement in each jurisdiction in
which required by applicable law, naming Borrower as debtor, naming Lender as
secured party, naming the Collateral as collateral, meeting the requirements of
the laws of each such jurisdiction and in such manner as is necessary to perfect
under the UCC the security interest in the Code Collateral granted by Borrower
to Lender. Borrower shall deliver to Lender a copy, or other evidence
satisfactory to Lender of such filings, to Lender on or prior to the Closing
Date.

(i) UCC Searches; UCC Amendments; Terminations and Disclaimers. Lender shall
have received UCC search results from the appropriate office in the State of
Delaware, as well as federal and Delaware tax liens and judgments, showing no
other lien on the Collateral or any such tax lien.

(j) Revolver. Borrower shall furnish to Lender a true and correct copy of the
Credit Agreement, which Credit Agreement shall be (or will concurrent with the
advance of the Loan be) (x) in full force and effect, (y) in a maximum principal
amount available thereunder of not less than $815,000,000 and with a scheduled
maturity no sooner than December 15, 2012, and (z) substantially similar to the
prior documentation between the parties to the Credit Agreement.

(k) Sale Facility. Borrower, Lender and Navistar Financial Asset Sales Corp.
shall have each executed and delivered the Note Purchase Agreement, and the sale
transaction contemplated by such agreement shall be (or will concurrent with the
advance of the Loan be) completed.

(l) Intercreditor Agreement. Lender shall have received the Intercreditor
Agreement, dated as of the Closing Date, among Lender, Borrower, Deutsche Bank
Trust Company Americas, as Trustee, and JPMorgan Chase Bank, N.A., as
Administrative Agent under the Credit Agreement, duly executed and delivered by
each party thereto.

(m) Letter Agreement. Lender shall have received the Letter Agreement, dated as
of the Closing Date, between Borrower and Lender, duly executed and delivered by
each party thereto.

(n) Additional Documents. Such other documents, agreements, instruments,
certificates, opinions and assurances as Lender reasonably may require.

 

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4.2 Additional Conditions.

On or prior to the Closing Date, the following conditions must be satisfied:

(a) No Material Adverse Change. There shall have occurred no material adverse
change in the business, operations or financial condition of Borrower since the
financial statements of Borrower for the quarter ended July 31, 2009.

(b) Event of Default. No default hereunder or under any other Transaction
Document shall have occurred and be continuing.

(c) Title; No Liens or Encumbrances. Borrower shall own the Collateral; and the
Collateral shall be free and clear of all Liens except for Permitted Liens, and
Lender shall have received such lien searches, consents, waivers, releases, or
the like as it shall deem necessary or desirable to establish the same.

(d) Representations and Warranties. All of the representations and warranties of
Borrower in this Agreement, or in any of the other Transaction Documents, shall
have been true and correct, in all material respects, when made, and shall
remain true and correct, in all material respects, on the date of the Loan.

5. Representations and Warranties.

Borrower hereby represents and warrants to Lender that:

5.1 Status of Borrower.

Borrower is a corporation, duly formed and validly existing in good standing
under the laws of the State of Delaware and is qualified to do business and in
good standing in each state in which the nature of its business and/or the
performance of its obligations under the Transaction Documents may require.
Borrower’s address of its chief executive office, jurisdiction of incorporation
and organizational number are specified under its signature hereto, and its
exact legal name is as set forth in the preamble to this Agreement.

5.2 Power and Authority.

Borrower has the requisite power and authority to own its properties, to conduct
its business as such properties are presently owned and such business is
presently conducted, and had at all relevant times, and now has, power,
authority and legal right to acquire and own the Collateral and to enter into
and carry out the transactions contemplated by, and to execute, deliver and
perform its obligations under, this Agreement and the other Transaction
Documents. The execution, delivery and performance of the Portfolio Documents,
this Agreement and the other Transaction Documents have been duly authorized by
all necessary action on the part of Borrower. Borrower has the power and
authority to own, lease and mortgage the Collateral.

 

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5.3 Enforceability.

This Agreement and the other Transaction Documents constitute the legal, valid
and binding obligations of Borrower, enforceable against Borrower in accordance
with the terms hereof and thereof, except to the extent that the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws generally affecting creditors’ rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).

5.4 No Violation.

The consummation of the transactions contemplated by this Agreement, and the
fulfillment of the terms of this Agreement shall not conflict with, result in
any breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under, the certificate of incorporation or
by-laws of Borrower, or any indenture, agreement, mortgage, deed of trust or
other instrument to which Borrower is a party or by which it is bound, or result
in the creation or imposition of any Lien other than Permitted Liens upon any of
its properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument (other than this Agreement), or violate any
law or, to the knowledge of Borrower, any order, rule or regulation applicable
to Borrower of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over Borrower or any of its properties.

5.5 Litigation.

There is no action, suit or proceeding pending or, to the knowledge of Borrower,
threatened against or affecting Borrower or its property at law or in equity,
before or by any court, regulatory body, administrative agency or other
Governmental Authority that brings into question the validity of, or is
reasonably likely to have a Material Adverse Effect on, the execution, delivery
or performance by Borrower of this Agreement, the Note or any of the other
Transaction Documents.

5.6 Consents.

No permit, consent, approval or authorization of, or declaration to or filing
with, giving notice to, registration with, or taking any other action in respect
of any Governmental Authority is required for the execution, delivery or
performance by Borrower of any of the Transaction Documents, other than the
making of a UCC filing with the appropriate UCC filing office at the Secretary
or State of the State of Delaware.

5.7 Conflicts.

The execution, delivery and performance by Borrower of the Transaction Documents
and the consummation of the transactions contemplated hereby and thereby (i) do
not contravene in any material respect any provision of Applicable Law, any
order of any court or other Governmental Authority or any of the organizational
documents of Borrower, and (ii) do not materially conflict and are not
materially inconsistent with, and will not result (with or without the giving of
notice or passage of time or both) in the material breach of or constitute a
default or require any consent under, or result in the

 

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creation of any Lien (other than a Permitted Lien) upon the Collateral under any
credit agreement, indenture, mortgage, purchase agreement, deed of trust,
security agreement, lease, guaranty or other instrument to which Borrower is a
party, by which Borrower may be bound, or to which Borrower or its property
(including, without limitation, the Collateral) may be subject.

5.8 Portfolio Documents.

(a) Each of the Portfolio Documents to which Borrower is party has been duly
authorized and executed on behalf of Borrower and, to the best knowledge of
Borrower, the other parties thereto, and constitutes the genuine, legal, valid
and binding obligation of Borrower and, to the best knowledge of Borrower, the
other parties thereto, and is enforceable in accordance with the terms thereof,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors’ rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).

(b) No right of rescission, setoff, counterclaim or defense has been asserted or
to the best knowledge of Borrower threatened with respect to any Portfolio
Document. Each Portfolio Document is free from all defenses, set-offs and
counterclaims.

(c) There are no agreements or understandings respecting any of the Portfolio
Documents or the Financed Vehicles, oral or written, between Borrower and the
Portfolio Obligors other than those expressed in the Portfolio Documents. There
has been no Material Modification of any Portfolio Document except as disclosed
in writing to Lender. Each Portfolio Document is substantially in the form of
one of the Form Portfolio Agreements. No Portfolio Obligor is as of the
Reporting Date the subject of a bankruptcy or insolvency proceeding. As of the
Reporting Date, no Portfolio Obligor is greater than 120 days past due under the
applicable Portfolio Document(s) (measured from the date of any Scheduled
Payment). Each Retail Note and Retail Lease is an Eligible Contract.

(d) The Borrower has not heretofore alienated, assigned, granted a Lien in, or
otherwise disposed of any interest in the Collateral or conveyed any right to
any Person which has not been terminated or released that would result in such
Person having a right to payments due under a Portfolio Document or otherwise
impaired the rights of Lender in any item of the Portfolio or the proceeds
thereof, or the other Collateral, other than (i) the applicable Portfolio
Obligor’s rights and interests under the respective Retail Leases and Retail
Notes, (ii) the rights and interests of lessees under the Idealease Chattel
Paper with respect to Idealease Transactions, (iii) Lender’s Liens under the
Transaction Documents, and (iv) Permitted Liens.

(e) (1) To the Borrower’s knowledge all signatures, names, addresses, amounts,
and other material statements and facts contained in the Portfolio Documents are
true, accurate and complete, (2) (i) except as reflected on the November
Portfolio Tape or disclosed to the Lender in writing, no rent or other monies
due under the

 

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Portfolio Documents have been prepaid, and (ii) no deposits have been made by
any Portfolio Obligor under any Portfolio Document, (3) no payment due and owing
by any Portfolio Obligor is subject to any defense, claim, counterclaim or
offset, including without limitation any claim for breach of warranty, (4) each
Portfolio Document was originated in the United States and is payable in U.S.
Dollars, (5) no Portfolio Obligor under any of the Portfolio Documents is a
governmental authority of the United States or any state or political
subdivision thereof, (6) each Portfolio Obligor is a commercial entity and not a
“consumer obligor” (as defined in the UCC), and (7) each Retail Lease and Retail
Note represents a commercial transaction and not a “consumer transaction” (as
defined in the UCC).

(f) All requirements of applicable federal, state and local laws, and
regulations thereunder, including without limitation the Equal Credit
Opportunity Act, the Federal Reserve Board’s Regulation “B”, the Servicemembers
Civil Relief Act, and any applicable bulk sales or bulk transfer law and other
equal credit opportunity and disclosure laws, in respect of any of the Portfolio
Documents, have been complied with in all material respects, and each such
Portfolio Document and the sale or lease of the Financed Vehicle or Financed
Vehicles evidenced thereby complied at the time it was originated or made and
now complies in all material respects with all applicable laws and regulations
and all legal requirements of the jurisdiction in which it was originated or
made. No Portfolio Document was originated in, or is subject to the laws of, any
jurisdiction the laws of which would make unlawful the security interest in such
Portfolio Document granted by Borrower to Lender under this Agreement.

(g) To the Borrower’s knowledge, none of the Financed Vehicles has suffered a
casualty or other Event of Loss. As of the Reporting Date, none of the Portfolio
Obligor’s obligations under the applicable Portfolio Documents has been
satisfied in full, subordinated or rescinded. In the case of the Retail Notes,
no Financed Vehicle securing any Retail Note has been released from the Lien of
the related Portfolio Document in whole or in part.

(h) All taxes collected by Borrower from the Portfolio Obligors with respect to
the Portfolio Documents have been, or when collected in good and indefeasible
funds will be, paid by Borrower to the appropriate tax authorities in a timely
fashion. The Titling Trust has filed or caused to be filed all tax returns which
are required to be filed by the Titling Trust (with respect to itself) and has
paid all taxes shown to be due and payable on said returns or on any assessments
made against it or any of its property by any Governmental Authority (other than
any amount the validity of which is being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with GAAP have been
provided on the books of the Titling Trust). No notice of any Lien in respect of
unpaid taxes or assessments (other than a Permitted Lien) has been filed by any
taxing authority against, or otherwise affecting the assets of, the Titling
Trust and remains in effect. The Titling Trust has paid all fees and expenses
required to be paid by it in connection with the conduct of its business, the
maintenance of its existence and its qualification as a foreign business trust.

 

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(i) The Borrower is not in material breach of any of Borrower’s obligations
under any Portfolio Document.

(j) All sales, use, property and other taxes that were required to be paid or
obtained in connection with the Financed Vehicles have been paid in full.

(k) Each Portfolio Obligor was at the time of origination of the applicable
Portfolio Documents in compliance with the insurance requirements of such
Portfolio Documents. Under the Servicing Agreement, the Servicer monitors
compliance with applicable insurance requirements of the relevant Portfolio
Documents in accordance with its customary policies and procedures and the
Conflict Standard. The Collateral Agent is named as loss payee and the Titling
Trust is named as an additional insured with respect to the insurance policies
maintained by each Portfolio Obligor under a Retail Lease. Each Portfolio
Obligor on a Portfolio Document is required to maintain a physical damage
insurance policy for each Financed Vehicle of the type that Borrower requires in
accordance with its customary underwriting standards for the purchase or lease
of a Vehicle, unless Borrower has in accordance with its customary procedures
permitted a Portfolio Obligor to self insure such Financed Vehicle.

(l) There is only one original executed copy of each Portfolio Document
constituting chattel paper. Borrower (including in its capacity as servicer or
custodian) has sole possession of all chattel paper of each lease and/or lease
schedule in the Portfolio Documents (other than any Idealease Chattel Paper).
Borrower has marked its computer records relating to each item of the Portfolio
to show that a security interest in such item of the Portfolio has been granted
to Lender by Borrower hereunder. No Portfolio Document, or constituent part
thereof, constitutes a “negotiable instrument” or “negotiable document of title”
(as such terms are used in the UCC).

(m) To the extent there are or were at any time multiple Portfolio Obligors with
respect to any item of the Portfolio, other than in the ordinary course of
Borrower’s business or as disclosed to Lender in writing, Borrower has not
released any such Portfolio Obligor.

(n) Each Portfolio Document has been serviced in conformity with all applicable
laws, rules and regulation and in conformity with Borrower’s policies and
procedures, in each case, in all material respects and subject to the Conflict
Standard.

(o) No notice or consent from any Portfolio Obligor is necessary to effect the
security interest in the Portfolio and other Collateral granted by Borrower to
Lender pursuant to this Agreement.

(p) Each Retail Lease and Retail Note:

(1) (A) in the case of a Retail Note transaction, was originated or acquired by
Borrower in substantially the form of one of the Form Portfolio Agreements to
finance a retail purchase by a retail customer or a refinancing of Financed
Vehicles by a retail customer and (B) in the case

 

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of a Retail Lease transaction, was originated or acquired by the Titling Trust
or one or more of its Affiliates for the retail lease of one or more Financed
Vehicles, and in each case, (A) and (B), was fully and properly executed by the
parties thereto;

(2) in the case of a Retail Note transaction, has created or shall create a
valid, binding and enforceable first priority security interest in favor of
Borrower in each of the Financed Vehicles related thereto, which security
interest will be validly assigned by Borrower to Lender hereunder;

(3) in the case of an Idealease Transaction, has created or shall create a
valid, binding and enforceable first priority security interest in favor of
Borrower in each item of collateral related thereto (including, without
limitation, the applicable Financed Vehicle and Idealease Chattel Paper), by the
filing of a UCC financing statement in the applicable jurisdiction of the
applicable Portfolio Obligor, noting the Borrower’s lien on the title to such
Financed Vehicle, and marking such of the Idealease Chattel Paper as the
Borrower’s credit policies as of the applicable originate date require, all of
which security interests will be validly assigned by Borrower to Lender
hereunder;

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

(5) in the case of a Retail Lease, is a Finance Lease or a TRAC Lease in
substantially the form of one of the Form Portfolio Agreements;

(6) in the case of a Retail Note, shall yield interest at the Annual Percentage
Rate and comes from one of the following categories, which differ in their
provisions for the payment of principal and interest: Equal Payment Fully
Amortizing Receivables, Equal Payment Skip Receivables, Equal Payment Balloon
Receivables, Level Principal Fully Amortizing Receivables, Level Principal Skip
Receivables, Level Principal Balloon Receivables, or Other Receivables. “Equal
Payment Fully Amortizing Receivables” are Receivables that provide for equal
monthly payments that fully amortize the amount financed over its original term
to maturity. “Equal Payment Skip Receivables” are Receivables that provide for
equal monthly payments in

 

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eleven or fewer months of each twelve-month period that fully amortize the
amount financed over its original term to maturity. “Equal Payment Balloon
Receivables” are Receivables that provide for equal monthly payments except that
a larger payment becomes due on the final maturity date for such Receivables.
“Level Principal Fully Amortizing Receivables” are Receivables that provide for
monthly payments consisting of level principal amounts together with accrued and
unpaid interest on the unpaid Receivables Balances. “Level Principal Skip
Receivables” are Receivables that provide for monthly payments in eleven or
fewer months of each twelve-month period consisting of level principal amounts
together with accrued and unpaid interest on the unpaid Receivables Balances.
“Level Principal Balloon Receivables” are Receivables that provide for monthly
payments consisting of level principal amounts together with accrued and unpaid
interest on the unpaid Receivables Balances, except that a larger principal
payment becomes due on the final maturity date for such Receivables. “Other
Receivables” are Receivables not described above, including Receivables that
provide for level monthly payments in eleven or fewer months of each
twelve-month period that amortize a portion of the amount financed over its
original term to maturity with a larger payment that becomes due on the final
maturity date for such Receivables;

(7) such Retail Lease or Retail Note was originated or acquired in the ordinary
course of business in accordance with Borrower’s underwriting standards; and

(q) The information contained in the data sent in the email referenced in
Schedule A relating to the Portfolio is true, correct and complete in all
material respects, and Borrowers agrees that Borrower will include a compact
disc containing the electronic files referenced in such email in the sets of
closing documents Borrower will prepare and send to Lender after the Closing
Date.

5.9 Title and Liens.

(a) In the case of a Retail Note, Borrower has good and marketable title to the
Portfolio Documents constituting such Retail Note and the other Collateral
related thereto, free and clear of all Liens except for the Liens of Lender
created hereunder, the respective rights of the Portfolio Obligors under the
applicable Portfolio Documents and such other Liens as are permitted to exist
under such Portfolio Documents and any other Permitted Liens. In the case of
each Retail Note, such Retail Note is secured by a validly perfected first
priority security interest in the related Financed Vehicle or, in the event any
such Retail Note is secured by more than one

 

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Financed Vehicle, in each related Financed Vehicle, each in favor of Borrower as
secured party, or all necessary and appropriate action had been commenced that
will result, in the valid perfection of a first priority security interest in
each related Financed Vehicle in favor of Borrower as secured party in each case
(except for Permitted Liens).

(b) In the case of a Retail Lease, (A) each such Leased Vehicle is owned of
record by the Titling Trust, (B) the Series 2009-WFEFI Portfolio Certificate has
been duly executed and delivered by the General Interest Trustee in accordance
with the Titling Trust Agreement, has been duly issued in accordance with the
Titling Trust Agreement and is entitled to the benefits afforded by the Titling
Trust Agreement, and (C) Borrower has good and marketable title to the Series
2009-WFEFI Portfolio Interest and the Series 2009-WFEFI Portfolio Certificate,
free and clear of all Liens (other than Permitted Liens).

(c) In the case of a Retail Lease, each Financed Vehicle related thereto is
owned by the Titling Trust (or its nominee) as record owner and any certificate
of title or other evidence of ownership of such Financed Vehicle issued by a
registrar of titles in the respective jurisdiction in which such Financed
Vehicle is registered, relating to each such vehicle is registered in the name
of the Titling Trust (or its nominee) (or a properly completed application for
such title has been or will be submitted to the appropriate titling authority)
with a notation of Lien thereon in favor of the Collateral Agent.

(d) Upon filing of UCC financing statements (including, without limitation,
UCC-1 financing statements as contemplated by this Agreement) with the
appropriate office in the State of Delaware describing the Collateral, all
filings, recordings or other actions necessary or desirable in order to
establish a duly recorded first priority lien over the Financed Vehicles and the
Portfolio Documents and the Collateral, to the extent a lien on the Collateral
can be perfected by the filing of a financing statement in the State of Delaware
pursuant to the UCC. Borrower has the power to grant the security assignment,
security interest and other interests constituting Lender’s Lien in the
Collateral.

(e) There are, to the Borrower’s knowledge, no Liens or claims that have been
filed for work, labor or materials affecting any Collateral that are or may be
prior to, or equal or coordinate with, the security interest granted hereby to
the Lender in the Collateral (except for Permitted Liens).

5.10 The Financed Vehicles.

Each Financed Vehicle has been delivered to the applicable Portfolio Obligor,
and unconditionally, irrevocably and fully accepted by such Portfolio Obligor
under the applicable Portfolio Documents. Each Financed Vehicle to which a
Portfolio Document relates was a Vehicle at the time the related Portfolio
Obligor executed the related Portfolio Documents.

 

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5.11 USA Patriot Act.

(a) All of the written information that Borrower has provided in connection with
the Loan was true, correct and complete in all material respects at the time it
was given;

(b) Borrower is entering into this Agreement, the other Transaction Documents
and the transaction contemplated hereby and thereby solely for its own account,
risk and beneficial interest and not for the account or beneficial interest of
any third party;

(c) Borrower is not an individual, entity or organization identified on (i) any
Office of Foreign Assets Control (“OFAC”) “watch list”, including, without
limitation, OFAC’s list of Specially Designated Nationals and Blocked Persons,
or (ii) any Federal Bureau of Investigation “watch list” or Bureau of Industry
and Security list of unverified persons or denied persons, and it is not an
affiliate of any kind with such an individual, entity or organization;

(d) Borrower does not have a shell bank or offshore bank; and

(e) Borrower is not a Person resident in, or whose funds are transferred from or
through, or has operations in, a jurisdiction identified as non-cooperative by
the Financial Action Task Force or sanctioned by OFAC.

5.12 Solvency.

Borrower is solvent and, upon the execution and delivery of the Transaction
Documents and the consummation of the transactions contemplated thereby, will be
solvent.

5.13 No Misstatement; Omission.

In furtherance and not in limitation of Sections 5.7 and 5.8 of this Agreement,
the written information given by Borrower in relation to this Agreement or any
other Transaction Document taken as a whole does not contain any material
misstatement of fact or knowingly omits to state a material fact which would be
materially adverse to the rights and interests of Lender hereunder, or which
would be necessary to make any material statement, representation or warranty
contained herein or therein not materially misleading.

6. Covenants of Borrower.

So long as any Obligations remain outstanding, Borrower covenants and agrees as
follows:

6.1 Existence.

Borrower shall maintain its existence, good standing and qualification to do
business where required for the conduct of its business except when a failure to
maintain such qualification would not have a Material Adverse Effect. Borrower
covenants and

 

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agrees that it shall not without the prior written consent of Lender, which
shall not be unreasonably withheld, conditioned or delayed, enter into any
merger (other than a merger in which either (x) the Borrower is the surviving
entity or (y) no Change in Control results therefrom) or consolidation with, or
sell or transfer all or substantially all of its assets to any entity without
Lender’s prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed, provided that the successor entity assumes all
of Borrower’s obligations hereunder by operation of law, or if not by operation
of law, then pursuant to an agreement in form and substance reasonably
acceptable to Lender, and immediately after such merger the successor entity is
no less creditworthy (as reasonably determined by the Lender) than Borrower was
immediately prior to such merger. Borrower shall not change its name, identity,
corporate structure or state of incorporation and shall not change its state of
location for purposes of Section 9-307 of the UCC, in each case without giving
Lender at least ten (10) Business Days’ prior written notice thereof and shall
within the time period required file such financing statements or amendments as
may be necessary to continue the perfection of Lender’s security interest in the
Collateral.

6.2 Notice of Default.

Borrower shall notify Lender promptly in writing of the occurrence of an Event
of Default or of any event or condition which, with notice or the passage of
time, or both, would constitute an Event of Default, of which it has knowledge,
and of the action that Borrower is taking or proposes to take with respect
thereto.

6.3 Payment of Taxes.

Borrower shall pay and discharge, or cause to be paid and discharged, all taxes,
assessments and governmental charges or levies imposed on it or the Collateral
or on its income or profits or on any of its property prior to the date on which
penalties attach thereto, except that it will not be required to pay any such
tax, assessment, charge or levy if payment thereof is being contested in good
faith and by appropriate proceedings, adequate book reserves have been set
aside, and the failure to make payment pending such contest could not reasonably
be expected to result in a Material Adverse Effect.

6.4 Compliance with Laws Generally.

Borrower shall comply with the requirements of all Applicable Laws, rules,
regulations, including, without limitation, all requirements and orders of any
court, governmental body or regulatory agency having jurisdiction over it or its
property, a breach of which is reasonably likely to have a Material Adverse
Effect.

6.5 Liens.

Borrower shall not create, incur, assume or suffer to exist any Lien (including
the assignment or sale of the right to receive any income) upon any of the
Collateral, except for Permitted Liens. Borrower shall not sell, transfer or
assign any of the Collateral, or agree to any sale, transfer or assignment of
any of the Collateral, to any

 

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Person other than Lender (except as expressly permitted by the provisions of
this Agreement or the Portfolio Documents, including Permitted Liens). Lender’s
Lien, including Lender’s security assignment of, and grant of security interest
in, against and with respect to, Borrower’s interest in the Financed Vehicles,
Portfolio Documents, Proceeds and, as and to the extent applicable, all of the
other Collateral, shall have been, and at all times thereafter will remain, a
first priority over any other Liens pursuant to all Applicable Laws, except
Permitted Liens. Without limiting the foregoing, (w) there are no other Liens
registered with respect to any of such Collateral other than Permitted Liens,
(x) Borrower will neither suffer nor permit any Liens to be registered with
respect to any of such Collateral, except Permitted Liens and any Liens required
or expressly permitted by the Transaction Documents, (y) Borrower shall have
paid all required fees and taken all actions necessary to enable Lender to
register Lender’s Liens with respect to the Collateral that is Code Collateral,
and (z) Borrower shall have taken any and all actions necessary for Borrower’s
representations and warranties in the Transaction Documents to be and remain
true and correct in all material respects and to be and remain in compliance
with all of the Obligations.

6.6 Further Assurances.

Borrower shall promptly and duly execute and deliver to Lender such further
documents, instruments and assurances and take such further action as Lender may
from time to time reasonably request, at Borrower’s sole cost and expense, in
order to carry out the intent and purpose of this Agreement and to establish and
protect the rights and remedies created or intended to be created in favor of
Lender hereunder; including, without limitation, the execution and delivery of
any UCC filing describing the Collateral, or other document reasonably required
by Lender; and Borrower authorizes Lender to file any and all such filings, as
well as any other filings required by Lender (without Borrower executing or
otherwise authenticating the same, if and to the extent permitted by Applicable
Law), or otherwise reasonably deemed appropriate by Lender, in connection
herewith, it being understood that Borrower shall not have any obligations to
re-title any Financed Vehicles to reflect Lender’s Lien thereon. Upon Lender’s
request after the occurrence and during the continuance of a Material Default,
Borrower shall deliver possession to Lender, or cause it to have and maintain
control with respect to, any and all Collateral with respect to which such
possession or control is necessary or advisable to perfect and give first
priority to Lender’s security interest therein.

6.7 Portfolio Undertakings.

(a) Unless Borrower has been replaced as Servicer pursuant to the Servicing
Agreement, Borrower shall diligently perform all obligations of the Servicer
with respect to the Portfolio Documents pursuant to the terms and conditions of
the Servicing Agreement.

(b) Borrower shall prepare and file such financing statements and cause to be
prepared and filed such continuation and other statements, all in such manner
and in such places as may be required by law fully to preserve, maintain and
protect the interest of Lender under this Agreement in the Code Collateral and
in the proceeds

 

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thereof and hereby authorizes Lender to file any such financing statements or
continuation statements relating to all or any part thereof. Borrower shall
deliver (or cause to be delivered) to Lender copies of, or filing receipts for,
any document filed as provided above, promptly following such filing.

(c) Except for the conveyances hereunder and for Permitted Liens, Borrower shall
not sell, pledge, assign or transfer the Collateral to any other Person, or
grant, create, incur, assume or suffer to exist any Lien (except any Permitted
Lien) on any interest therein, and Borrower shall defend the right, title and
interest of Lender in, to and under the Collateral against all claims of third
parties.

(d) Notwithstanding any prior termination of the Series 2009-WFEFI Portfolio
Supplement, Borrower covenants and agrees that it shall not, prior to the date
which is one year and a day after which all obligations under each Portfolio
Document have been paid in full, acquiesce, petition or otherwise invoke, or
join any other Person in acquiescing, petitioning or otherwise invoking, against
the Titling Trust or any Special Purpose Entity, any proceeding in court or with
any governmental authority for the purpose of (i) commencing or sustaining a
case against the Titling Trust or such Special Purpose Entity under any federal
or state bankruptcy, insolvency or similar law, or (ii) appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of all or any substantial part of the respective property of the Titling Trust
or such Special Purpose Entity, or (iii) ordering the winding up or liquidation
of the affairs of the Titling Trust or such Special Purpose Entity.

(e) The Borrower shall instruct each Portfolio Obligor to make all payments
under the applicable Portfolio Documents to a lockbox or similar account
maintained by the Borrower. The Borrower shall remit to the Account Bank for
deposit to the Collection Account all Collections it receives within two
Business Days after receipt and identification thereof. The Borrower shall not,
without prior written notice to Lender, change the location of or add any
lockbox or similar account to which the Borrower directs Portfolio Obligor
payments; provided, that any such changes to any lockbox or similar account
shall not be subject to any Lien other than the Liens existing on the Closing
Date with respect to the then existing lockbox and similar accounts.

(f) Borrower shall, within thirty (30) days after the Closing Date, enter into a
written agreement with the Backup Servicer, in form and substance reasonably
acceptable to Lender, for provision by the Borrower to the Backup Servicer of a
monthly data tape or other electronic data file containing data for the related
Monthly Period relating to the Portfolio. Borrower shall provide a copy of such
agreement to the Lender. Lender shall be an express third party beneficiary of
such written agreement. Borrower and Backup Servicer shall acknowledge and agree
in writing that no amendment, waiver or other modification of such agreement
shall be made or effective unless Lender is a party to such amendment, waiver or
modification. Upon execution, Borrower agrees to keep the agreement with the
Backup Servicer or a replacement approved by the Lender in full force and effect
at all times so long as any Obligations are outstanding. Upon the Lender’s
request after either (x) a Servicer Default or (y) Borrower is not in compliance
with the financial covenants in Sections 8.01(a) or (b) of the Credit Agreement
(such

 

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provisions and related definitions all as in effect as of the Closing Date,
without regard to any amendment, waiver, modification, deletion or other
revision from time to time in the Credit Agreement after the Closing Date, none
of which shall have any force or effect on such sections for purposes of this
Agreement), Lender and Borrower shall each reasonably cooperate to enter into an
amendment to the Backup Servicing Agreement within thirty (30) days after such
event, to expand the Backup Servicer’s role on terms and conditions reasonably
acceptable to Lender, Borrower and Backup Servicer; provided, that Borrower’s
maximum responsibility for costs and expenses of the Backup Servicer in
connection with such backup servicing arrangements shall not exceed $2,000 per
month in the aggregate with respect to both this Agreement and the transactions
contemplated by the Note Purchase Agreement; and, provided, further, that
Borrower’s obligations to provide data or other information to the Backup
Servicer pursuant to a revised Backup Servicing Agreement shall not create an
undue burden on Borrower.

6.8 Indemnity.

Borrower shall indemnify, protect, save, defend and keep harmless Lender,
Lender’s affiliates and all of Lender’s and such affiliate’s respective
directors, shareholders, officers, employees, agents, predecessors,
attorneys-in-fact, lawyers, successors and assigns (each an “Indemnitee”) on a
net after-tax basis, from and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, judgments, suits, demands, costs,
expenses and disbursements (including, without limitation, legal fees and
expenses) of any kind and nature whatsoever (collectively, “Claims”) that may be
imposed on, incurred by or asserted against any Indemnitee, whether or not such
Indemnitee shall also be indemnified as to any such Claim by any other Person,
in any way relating to, arising out of or in connection with (1) this Agreement
or any of the other Transaction Documents, including, without limitation, the
execution, delivery, or breach (including any default or Event of Default),
enforcement, performance or administration of this Agreement or any of the other
Transaction Documents, (2) any of the Portfolio Documents, including, without
limitation, any claim made by any Portfolio Obligor under any Portfolio Document
and any Portfolio Default or Portfolio Event of Default and the enforcement,
performance or administration of this Agreement or any of the other Transaction
Documents, (3) the Collateral, including, without limitation, the perfection,
maintenance, protection or realization upon the Financed Vehicles, the Portfolio
Documents and the other Collateral, (4) without limiting the provisions of
clause (3) above, the Financed Vehicles, including the manufacture, inspection,
construction, purchase, acceptance, rejection, ownership, management, pooling,
interchange, leasing, titling or re-titling, delivery, charter, subleasing,
possession, use, operation, maintenance, condition, registration or
re-registration, sale, removal, repossession, storage or other disposition of
the Financed Vehicles or any part thereof or any accident in connection
therewith (including Claims involving or alleging environmental damage, criminal
acts, hijacking, acts of terrorism or similar acts, product liability or strict
or absolute liability in tort, breach of warranty, latent and other defects
(whether or not discoverable), for patent, trademark or copyright infringement),
or (5) the occurrence of an Event of Default. Notwithstanding the foregoing,
Borrower shall not be required to indemnify an Indemnitee under this Section for
any Claim to the extent arising out of the gross negligence or willful
misconduct of or attributable to such Indemnitee or to the extent

 

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arising out of the material breach by or attributable to such Indemnitee of any
of its express obligations under the Transaction Documents (unless such breach
is a result of a breach or default by Borrower under any of the Transaction
Documents or any Applicable Law). Although Borrower’s obligation under this
Section 6.8 to indemnify Indemnitee (subject to the exceptions stated above) is
that of a primary obligor, if and when Indemnitee recovers from a third party
any indemnity payment, damages, or other compensation for a Claim for which
Borrower has previously made payment to such Indemnitee as required by this
Section 6.8, so long as no Event of Default shall have occurred and then be
continuing, such Indemnitee shall pay to Borrower an amount equal to the excess
of the aggregate amount received by such Indemnitee from Borrower and such third
party over the amount of such Indemnitee’s Claim. Upon indefeasible payment in
full by Borrower of an indemnity by Borrower hereunder, and provided no Event of
Default shall have occurred and then be continuing, Borrower shall be subrogated
to the rights of Indemnitee in respect of the matter for which Borrower has
indemnified Indemnitee.

6.9 USA Patriot Act.

Lender hereby notifies Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the
“Act”) and Lender’s policies and practices, Lender is required to obtain, verify
and record certain information and documentation that identifies Borrower, which
will allow Lender to identify Borrower in accordance with the Act. Borrower
shall (a) ensure that no Person who owns a controlling interest in or otherwise
controls Borrower or any subsidiary of Borrower is or shall be listed on the
Specially Designated Nationals and Blocked Person List or other similar lists
maintained by OFAC, the Department of the Treasury or included in any Executive
Orders, (b) not use or permit the use of the Proceeds of the Loan to violate any
of the foreign asset control regulations of OFAC or any enabling statute or
Executive Order relating thereto, (c) comply, and cause any of its subsidiaries
to comply, with all applicable Bank Secrecy Act laws and regulations, as
amended; (d) agrees to provide from time to time any information reasonably
deemed necessary by Lender to comply with the Act, including, without
limitation, the name and address of the Borrower and other information that will
allow Lender to identify the Borrower in accordance with the Act, and warrants
that all such information provided will be true, correct and complete in all
material respects at the time provided.

6.10 Environmental Covenants.

Borrower has conducted, and will continue to conduct its business operations,
and so long as any Obligations remains outstanding will use the Collateral (to
the extent the Collateral is used by Borrower), so as to comply with all
Environmental Laws in all material respects.

6.11 Monthly and Quarterly Reports.

(a) Servicer Reports. For so long as Borrower is the Servicer, Borrower in its
capacity as Servicer will provide to Lender the reports required by Section 2.15
of the Servicing Agreement and, provided such request does not place an undue
burden on the Servicer, such other information as Lender may reasonably request.

 

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(b) Compliance Certificate. Not later than the Determination Date in February,
March, June, September and December of each year, commencing with the March 2010
Determination Date, Borrower shall provide to Lender a Compliance Certificate in
substantially the form of Annex D attached hereto (duly completed as to the
relevant amounts at such time). If the calculations contained in any Compliance
Certificate reflect a Deficiency, Borrower shall by the end of the calendar
month in which such Compliance Certificate was delivered either (x) remit to
Lender an amount equal to the Deficiency as set forth in such Compliance
Certificate, such amount to be applied by Lender according to the Agreement,
(y) subject to the prior written consent from the Lender, which consent Lender
may grant or withhold in its sole discretion, pledge sufficient additional
Portfolio Documents as Collateral to bring the Advance Rate into compliance or
(z) deposit cash or Eligible Investments in the Cash Collateral Account in an
amount equal to such Deficiency. If Lender consents to the pledge of additional
Portfolio Documents, Borrower agrees to execute and deliver such supplements,
amendments, UCC financing statements and other instruments, certificates,
documents and agreements as Lender may require to perfect the Lender’s security
interest in such additional Portfolio Documents and otherwise realize the
benefits of the Agreement with respect to such additional Portfolio Documents.
So long as no Default or Event of Default then exists, Lender shall apply any
payment of Deficiency and, at the Borrower’s election, Cash Collateral, to the
principal amount of the Loan then outstanding in inverse order of maturity. For
so long as Borrower’s quarterly and annual financial statements are publically
available, Borrower shall not be required to furnish such financial statements
together with the Compliance Certificate. Annex A to Schedule 4 of each
Compliance Certificate shall set forth the Contracts that are no longer
Performing Contracts as of the Statement Date with respect to which such
Compliance Certificate is delivered that were not previously identified as no
longer being Performing Contracts. The Lender agrees that upon Borrower’s
delivery of a Compliance Certificate, so long as no Event of Default then
exists, (x) without any further act, Lender’s Lien shall be deemed released with
respect to any Portfolio Documents and the Related Security that are no longer
Performing Contracts as set forth in such Compliance Certificate, and (y) Lender
shall execute and deliver to Borrower the Release attached to such Compliance
Certificate as Schedule 4, which Release shall attach thereto Annex A thereto
listing the Contracts that are no longer Performing Contracts. If as of any
Statement Date with respect to which a Compliance Certificate is delivered,
there are funds on deposit in the Cash Collateral Account and the Advance Rate
as calculated in such Compliance Certificate is less than the Maximum Advance
Rate, at the written request of Borrower, funds shall be released from the Cash
Collateral Account to Borrower such that the Advance Rate after giving pro forma
effect to such release would not exceed the Maximum Advance Rate.

 

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7. Default.

7.1 Events of Default.

The occurrence of any one or more of the following events shall be an “Event of
Default” under this Agreement:

(a) Borrower shall fail to make any payment of principal of, or interest on the
Note or any payment of any of the other Obligations, in each case as and when
due, and such failure continues unremedied for five (5) Business Days after the
same shall have become due (whether at the stated maturity, by acceleration or
otherwise);

(b) A “Servicer Default” (as defined in the Servicing Agreement) has occurred
under the Servicing Agreement and the Lender has delivered a Termination Notice
in connection with such Servicer Default;

(c) the Borrower shall fail to perform or observe in timely fashion any of the
provisions of Sections 6.5 and 6.7 hereof and such failure shall be reasonably
likely to have a Material Adverse Effect;

(d) the Borrower shall fail to perform or otherwise observe and comply in timely
fashion any other covenant, condition or agreement to be performed or observed
by it hereunder or under any of the other Transaction Documents to which it is a
party, and such failure continues unremedied for thirty (30) days after the
earlier of (x) written notice thereof by Lender to Borrower and (y) Borrower’s
knowledge of such failure, and which if left uncured is reasonably likely to
have a Material Adverse Effect; provided, however, if such failure cannot
reasonably be remedied within 30 days and if Borrower promptly commences the
remedy and diligently pursues the remedy and in the reasonable opinion of Lender
there is no material risk to the Collateral, then it shall not be deemed an
Event of Default if such remedy requires in excess of 30 but not more than 120
days;

(e) any representation, warranty, certification or statement made herein or in
any other Transaction Document by the Borrower shall prove to have been false or
misleading in any material respect when made or omits to state a material fact
necessary to make any such representation, warranty, certification or statement
not misleading in light of the circumstances under which it was furnished, which
(if curable) remains unremedied for a period of thirty (30) days after the
earlier of (x) written notice thereof by Lender to Borrower and (y) Borrower’s
knowledge of such failure, and which if left uncured is reasonably likely to
have a Material Adverse Effect;

(f) the Borrower shall (i) generally fail to pay its debts as they became due,
admit its inability to pay its debts or obligations generally as they fall due,
or shall file a voluntary petition in bankruptcy or a voluntary petition or an
answer seeking reorganization in a proceeding under any bankruptcy laws or other
insolvency laws, as now or hereafter in effect, or an answer admitting the
material allegations of such a petition filed against the Borrower in any such
proceeding; or (ii) by voluntary petition, answer or consent, seek relief under
the provisions of any other bankruptcy or other insolvency or similar law
providing for the reorganization or liquidation of corporations, or providing
for an assignment for the benefit of creditors, or providing for an agreement,
composition, extension or adjustment with its creditors;

 

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(g) a petition against the Borrower in a proceeding under applicable bankruptcy
laws or other insolvency laws, as now or hereafter in effect, shall be filed and
shall not be withdrawn or dismissed within ninety (90) days thereafter, or if,
under the provisions of any law providing for reorganization or liquidation that
may apply to the Borrower, any court of competent jurisdiction shall assume
jurisdiction, custody or control of the Borrower or of any substantial part of
its property and such jurisdiction, custody or control shall remain in force
unrelinquished, unstayed or unterminated for a period of ninety (90) days;

(h) Lender shall cease to have a first priority perfected security interest in a
material portion of the Code Collateral, subject only to Permitted Liens, which
remains uncured for a period of ten (10) days after the earlier of (x) written
notice thereof by Lender to Borrower and (y) Borrower’s knowledge of such
failure;

(i) the Servicer Termination Date shall have occurred;

(j) the Borrower shall fail to make a payment (whether of principal or interest
and regardless of amount) in respect of any Material Indebtedness, when and as
the same shall become due and payable and such failure shall continue beyond the
period of grace, if any, provided in the instrument or agreement under which
such Material Indebtedness was created;

(k) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity; provided that this paragraph
(k) shall not apply to secured Material Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets securing such
Material Indebtedness; or

(l) a Change of Control shall occur.

8. Remedies.

8.1 Acceleration.

Upon the occurrence of an Event of Default specified in Sections 7.1(f) or
7.1(g) of this Agreement (whether or not declared to be such by Lender), the
Obligations shall immediately become due and payable without further action of
any kind and without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived by Borrower, anything contained herein or in
any of the other Transaction Documents to the contrary notwithstanding. Upon the
occurrence of any other Event of Default (whether or not declared to be such by
Lender), and in every such event and at any time thereafter so long as such
Event of Default shall continue uncured, Lender may declare the Obligations
immediately due and payable, whereupon the same shall forthwith become due and
payable by Borrower to Lender, without presentment, demand, protest, or any
notice of any kind, all of which are hereby expressly waived by Borrower,
anything contained herein or in any of the other Transaction Documents to the
contrary notwithstanding. The remedy provided in this Section 8.1 shall be the
sole and exclusive remedy for the default specified in Section 7.1(b) of this
Agreement.

 

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8.2 Additional Rights and Remedies.

Upon the occurrence of an Event of Default (whether or not declared to be such
by Lender), and in every such event and at any time thereafter, other than an
Event of Default specified in Section 7.1(b) of this Agreement, Lender may (but
shall not be obligated to), upon such terms and under such conditions as Lender
may determine in its sole discretion and at Borrower’s sole cost and expense, in
addition to all other rights and remedies provided hereunder or under the other
Transaction Documents or as shall exist at law or in equity from time to time,
without notice or judicial hearing of any kind, all of which are hereby
expressly waived by Borrower, anything contained herein or in any of the other
Transaction Documents to the contrary notwithstanding, do any one or more of the
following, all of which are hereby authorized by Borrower:

(a) exercise any and all rights and remedies of a secured party under Applicable
Law or the UCC or of a creditor, including a security assignee, including
without limitation, applying any amount in the Cash Collateral Account to the
Obligations, and the right to proceed against, and recover, the Financed
Vehicles or any of the Collateral; provided, however, Borrower and Lender each
acknowledges and agrees that Lender’s right to repossess and/or dispose of the
Financed Vehicles shall be subject to the rights of the applicable Portfolio
Obligor under the applicable Portfolio Documents or otherwise available under
Applicable Law;

(b) subject to the rights of the applicable Portfolio Obligor under the
applicable Portfolio Documents or otherwise available under Applicable Law,
sell, lease or otherwise dispose of any or all of the Collateral in a
commercially reasonable manner at public or private sale, with or without notice
to Borrower (except as required by Applicable Law and, in furtherance thereof,
Lender agrees that it shall give Borrower no less than ten (10) days’ prior
written notice of any proposed sale or lease of the Financed Vehicles or any
Collateral, which Borrower acknowledges as constituting adequate notice of such
sale for purposes of the UCC), at such price as it may deem best, for cash,
credit, or otherwise, with the right of Lender to purchase and apply the
Proceeds: first, to the payment of all Enforcement Expenses; second, to the
payment of the Obligations; and third, to the payment of any surplus thereafter
remaining to Borrower or to whosoever may be entitled thereto (including any
Portfolio Obligor or any third party claiming to have a Lien or any subrogation
or other rights with respect thereto), with Borrower remaining liable for any
deficiency to the extent provided herein; and

(c) at its sole discretion, may, subject to the applicable provisions of the
Portfolio Documents and the rights of the applicable Portfolio Obligor:
(1) enter upon the premises where any such Collateral is located (without
obligation for rent) and take immediate possession of and remove (or disable in
place) such Collateral (and/or any unattached parts) by self-help, summary
proceedings or other lawful procedure; provided, however, in no event shall
Lender be entitled to any freight loaded on the Collateral at the time Lender
exercises its remedies hereunder; and/or (2) notify the Portfolio Obligors in
writing that all payments under the applicable Portfolio Documents are to be
thereafter made to and as directed by Lender; and/or (3) require any Portfolio
Obligor to assemble and return each Financed Vehicle to Lender in compliance
with the applicable Portfolio

 

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Documents subject to the rights of the applicable Portfolio Obligor; and/or
(4) deliver to any Portfolio Obligor a copy of the Notice of Assignment; and/or
(5) require Borrower to execute and deliver to Lender such documents as Lender
deems advisable to enable Lender to obtain possession (subject to the rights of
the Portfolio Obligors) of the Financed Vehicles (including, without limitation,
any notices to Portfolio Obligors). Subject to the applicable provisions of the
Portfolio Documents and the rights of the applicable Portfolio Obligor, upon
reasonable notice to Borrower, Lender or its representative(s), or
representatives of potential purchaser(s)/lessee(s) of such Financed Vehicle,
shall have the right to inspect the Financed Vehicles from time to time. Without
limiting any other terms or conditions of this Agreement, the provisions of this
Section are of the essence of this Agreement, and upon application to any court
of equity having jurisdiction, Lender shall be entitled to a decree against
Borrower requiring Borrower’s specific performance of its agreements in this
Section; and

(d) exercise any other right or remedy available to it under this Agreement
(including, without limitation, as collateral assignee of all of Borrower’s
rights and remedies under the Portfolio Documents and with respect to the other
Collateral), the Note, or the other Transaction Documents or Applicable Law
(including, without limitation, the UCC), or proceed by appropriate court action
to enforce the terms hereof or to recover damages for the breach hereof.

8.3 Additional Remedy Provisions.

Borrower shall be liable for all Enforcement Expenses. No remedy referred to in
this Section is intended to be exclusive, but each shall be cumulative, and
shall be in addition to any other remedy referred to above or otherwise
available at law or in equity, and may be exercised concurrently or separately
from time to time. The failure of Lender to exercise, or delay in the exercise
of, the rights granted hereunder upon any Default or Event of Default shall not
constitute a waiver of any such right upon the continuation or recurrence of any
such Default or Event of Default. During the continuance of a Default or Event
of Default, Lender may (a) take or release other security; (b) release any party
primarily or secondarily liable for the Obligations; (c) grant extensions,
renewals or indulgences with respect to the Obligations; and (d) apply any other
security therefor held by it to the satisfaction of the Obligations without
prejudice to any of its rights hereunder. With respect to any exercise by Lender
of its right to recover and/or dispose of the Financed Vehicles or other
Collateral, Borrower acknowledges and agrees as follows: (i) Lender shall have
no obligation, subject to the requirements of commercial reasonableness, to
clean-up or otherwise prepare the Financed Vehicles or any other Collateral for
disposition, and (ii) Lender shall comply with any applicable state or Federal
law requirements in connection with any disposition of the Financed Vehicles or
other Collateral, and any actions taken in connection therewith shall not be
deemed to have adversely affected the commercial reasonableness of any
disposition of such Financed Vehicles and/or other Collateral. Borrower
acknowledges that if and to the extent Lender conveys the Financed Vehicles or
other Collateral, it will be conveyed on an “AS IS, WHERE IS” basis, and without
limiting the generality of the foregoing, Lender may specifically disclaim any
and all warranties, including any warranty of title or the like with respect to
the disposition of the Financed Vehicles or other Collateral.

 

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Borrower acknowledges that if Lender purchases the Financed Vehicles or other
Collateral conveyed at a public or private sale pursuant hereto, Lender may pay
for the same by crediting some or all of the Obligations.

Lender acknowledges and agrees that so long as Borrower is the Servicer under
the Servicing Agreement and the Servicer Termination Date has not occurred, in
exercising any of the remedies provided for in this Article 8 with respect to
the Collateral, Lender will not exercise such remedies in conflict with the
obligations of the Servicer under the Servicing Agreement; provided, that upon
the occurrence and during the continuance of an Event of Default nothing in this
Section 8.3 shall prevent the Lender from declaring a Servicer Default under the
Servicing Agreement and exercising such remedies as it has under the Servicing
Agreement.

8.4 Lender’s Right to Perform.

If the Borrower fails to perform or comply with any of its agreements contained
herein or under the other Transaction Documents, Lender shall have the right,
but shall not be obligated, to effect such performance or compliance, and the
amount of any out-of-pocket expenses and other reasonable expenses of Lender
thereby incurred, together with interest thereon at the Default Rate, shall be
due and payable by Borrower upon demand.

8.5 Power of Attorney.

In the event that: (1) the Borrower fails to take an action required pursuant to
Section 6.6 of this Agreement within fifteen (15) Business Days of Lender’s
request to do so; or (2) upon the occurrence and continuation of a Borrower
Event of Default; Borrower hereby irrevocably constitutes and appoints (which
appointment is coupled with an interest, is irrevocable and shall terminate only
upon indefeasible payment and performance in full of all of the Obligations)
Lender and any employee, officer or agent thereof, with full power of
substitution, as its true and lawful attorney in fact with full power and
authority in the place and stead of Borrower and in the name of Borrower or in
Lender’s own name, from time to time in Lender’s sole discretion, for the
purpose of carrying out the terms of Section 8 of this Agreement. In the event
that (a) the Borrower fails to take an action required pursuant to Section 6.6
of this Agreement within fifteen (15) Business Days of Lender’s request to do
so; or (b) upon the occurrence and continuation of an Event of Default; Borrower
hereby further irrevocably authorizes Lender and any employee, officer or agent
thereof to (x) deliver notice to the Portfolio Obligors that they are to make
all future payments under the Portfolio Documents to and at the Lender’s
direction and (y) take any and all appropriate action and to make, execute,
deliver, file and/or record any and all instruments or documents (including,
without limitation, UCC financing statements or amendments or any control
agreements) that may be necessary to more fully perfect its interest in the
Collateral. This appointment is coupled with an interest, is irrevocable and
shall terminate only upon payment and performance in full of all of the
Obligations. Without limiting the generality of the foregoing, Borrower hereby
further (i) irrevocably ratifies the foregoing appointment and authorization and
all that Lender or any employee, officer or agent thereof shall lawfully

 

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do or cause to be done by virtue of the foregoing, including, without
limitation, with regard to the execution, delivery, filing and/or recording of
any instruments or documents (including, without limitation, any UCC financing
statements or amendments) and/or the taking of any action as Lender deems
necessary or appropriate to carry out the remedies in Section 8 of this
Agreement, (ii) agrees that Lender shall have authority, during the existence of
an Event of Default, to endorse Borrower’s name on any checks, notes, drafts or
any other payments or instrument relating to the Collateral that come into
Lender’s possession or control and to settle, adjust, receive payment and make
claim or proof of loss, (iii) agrees that Borrower shall not file or record any
corrective or termination statements with respect to any UCC financing
statements, amendments or assignments or control agreements filed or recorded by
or for the benefit of Lender with respect to any of the Collateral without
Lender’s prior written consent, and (iv) agrees that any signature, execution
and delivery of any document or instrument may be satisfied, in Lender’s sole
discretion and to the extent permitted by the UCC, by authentication of such
document or instrument as a record within the meaning of Article 9 of the UCC.
The powers conferred on Lender hereunder are solely to protect its interest in
the Collateral and shall not impose any duty upon it to exercise any such
powers. Lender shall be accountable only for amounts that it actually receives
as a result of the exercise of such powers, and neither it nor any of its
officers, directors, employees or agents shall be responsible to the Borrower
for any act or failure to act, other than any act or failure to act that
constitutes gross negligence or willful misconduct by the Lender.

9. Governing Law; Jurisdiction; Jury Trial Waiver.

9.1 Governing Law.

This Agreement and all other related instruments and documents and the rights
and obligations of the parties hereunder and thereunder shall, in all respects,
be governed by, and construed in accordance with, the internal laws of the State
of New York (without regard to the conflict of laws principles of such state
(other than Sections 5-1401 and 5-1402 of the General Obligations Law)),
including all matters of construction, validity and performance regardless of
the location of the Collateral.

9.2 Jurisdiction.

The parties agree that any action or proceeding arising out of or relating to
this Agreement may be commenced in any state or Federal court of competent
jurisdiction in the Borough of Manhattan in the State of New York, and each
party submits to the jurisdiction of such court and agrees that a summons and
complaint commencing an action or proceeding in any such court shall be properly
served and shall confer personal jurisdiction if served personally or by
certified mail to it at its address designated pursuant hereto, or as otherwise
provided under the laws of the State of New York.

9.3 Jury Trial Waiver.

EACH OF THE PARTIES HERETO HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH SUCH PARTY MAY BE A PARTY,

 

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ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS AGREEMENT OR THE OTHER
TRANSACTION DOCUMENTS. IT IS HEREBY AGREED AND UNDERSTOOD THAT THIS WAIVER
CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST PARTIES TO SUCH
ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO
THIS AGREEMENT. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY EACH
PARTY, AND EACH PARTY HEREBY ACKNOWLEDGES THAT NO REPRESENTATIONS OF FACT OR
OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY
OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. EACH PARTY FURTHER ACKNOWLEDGES
THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL.

10. Miscellaneous.

10.1 Entire Agreement.

This Agreement and the other Transaction Documents constitute the entire
understanding and agreement of the parties hereto with respect to the matters
contained herein and shall completely and fully supersede all other prior
agreements (including any proposal letter, commitment letter, and/or term
sheet), both written and oral, between Lender and the Borrower relating to the
Obligations. Neither Lender nor the Borrower shall hereafter have any rights
under such prior agreements but shall look solely to this Agreement and the
other Transaction Documents for the definition and determination of all of their
respective rights, liabilities and responsibilities relating to the Obligations.
Neither this Agreement, nor any terms hereof, may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of a change, waiver, discharge or termination is
sought.

10.2 Survival.

All representations, warranties, and covenants of the parties contained herein
or made pursuant hereto shall survive closing and continue until the Obligations
are indefeasibly satisfied in full, except that any indemnifications provided
herein also shall survive such full satisfaction.

10.3 Severability; Construction.

Any provision of this Agreement or of any instrument or document executed
pursuant hereto that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
thereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
The captions in this Agreement are for convenience of reference only and shall
not define or limit any of the terms or provisions hereof.

 

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10.4 Notices.

All notices and other communications hereunder shall be in writing, personally
delivered, sent by overnight courier service, sent by facsimile transmission or
electronic mail (e-mail) (with a copy sent by another delivery method specified
in this Section 10.4) or sent by certified mail, return receipt requested,
addressed to the other party at its respective address stated below the
signature hereto of such parties or at such other addresses as such parties
shall from time to time designate in writing to the other parties; and shall be
effective from the date of receipt.

10.5 Successors and Assigns.

This Agreement shall inure to the benefit of and be binding upon Lender and
Borrower and their respective successors and permitted assigns; provided,
however, this Agreement may not be assigned by the Borrower other than in
connection with a transaction permitted by Section 6.1 hereof. Lender reserves
the right to sell, assign, transfer, negotiate or grant participations in all or
any part of, or any interest in, Lender’s rights and obligations hereunder, in
the Note, in the Collateral and/or the Obligations held by it to others at any
time and from time to time (provided, however, that so long as no Event of
Default under Section 7.1(a) of this Agreement has occurred and is continuing,
Lender shall not either (x) assign more than 49% of the Loan or (y) assign this
Agreement or any portion of the Loan to any Person competing with the Borrower
or any of it subsidiaries in the business of leasing or financing equipment
similar to the Financed Vehicles or to any lender that is a party to the Credit
Agreement or to any entity that Borrower is prohibited from dealing with under
Applicable Law); and Lender may disclose to any such purchaser, assignee,
transferee or participant (the “Participant”), or potential Participant, this
Agreement and all information, reports, financial statements and documents
executed or obtained in connection with this Agreement which Lender now or
hereafter may have relating to the Loan, Borrower, or the business of Borrower.
Borrower hereby grants to any Participant all Liens, rights and remedies of
Lender under the provisions of this Agreement or any other documents relating
hereto or under Applicable Laws. Borrower agrees that any Participant may
enforce such Liens and exercise such rights and remedies in the same manner as
if such Participant were Lender and a direct creditor of Borrower.

10.6 Counterparts.

This Agreement may be executed by the parties hereto on any number of separate
counterparts, each of which when so executed and delivered should be an
original, but all such counterparts shall together constitute but one and the
same instrument.

 

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10.7 Expenses.

Borrower will, upon demand by Lender and receipt of invoices, pay to or
reimburse Lender for (a) all documented legal fees and disbursements of Ober,
Kaler, Grimes & Shriver, counsel to Lender, incurred in connection with the
drafting and preparing of this Agreement, the other Transaction Documents, and
any related documents, agreements, or instruments (provided, that the Borrower’s
obligations pursuant to this clause 10.7(a) shall be limited to a maximum
reimbursement of $50,000), (b) all documented costs and expenses of Lender
incurred in connection with the filing or recording of any and all financing
statements, instruments, assignments and other documents described in
Section 4.1 hereof, and (c) all documented out-of-pocket costs and expenses of
Lender (including, but not limited to, all legal fees and disbursements of
counsel to Lender) incurred in connection with any preservation and/or
enforcement of any rights granted to Lender hereunder or under any other
Transaction Document.

10.8 Usury.

Notwithstanding any provision to the contrary herein contained, Lender shall not
collect a rate of interest on any Obligation owing by Borrower to Lender in
excess of the maximum rate of interest permitted by Applicable Law. Borrower
understand and believe that the lending transaction which is the subject of this
Agreement complies with all applicable usury laws; however, if any interest or
other charges in connection with such lending transaction is ever determined to
exceed the maximum amount permitted by Applicable Law, then Borrower agrees that
(a) the amount of interest or charges payable pursuant to this Agreement and the
Note shall be reduced to the maximum amount permitted by Applicable Law, and
(b) any excess amount previously collected from Borrower in connection with this
Agreement or the Note that exceeds the maximum amount permitted by Applicable
Law shall be credited against the principal amount of the Loan then outstanding.
If the outstanding principal balance of the Loan has been paid in full, the
excess amount paid shall be refunded to Borrower. The “contracted for rate of
interest” of the Loan includes, without limitation, the following: (i) the
Interest Rate, calculated and applied to the principal balance of the Loan in
accordance with the provisions of this Agreement and the Note; (ii) the Default
Rate; (iii) the fees payable pursuant to Section 10.7 hereof, and (iv) all fees,
charges, goods, things in action or any sum or things of value (“Additional
Sums”) paid or payable by Borrower whether pursuant to this Agreement or any
other Transaction Document. If any such Additional Sums may, under Applicable
Law, be deemed to be interest with respect to the lending transactions which are
the subject of this Agreement, then, for the purpose of any Applicable Law that
may limit the maximum amount of interest to be charged with respect to the
lending transactions which are the subject of this Agreement, such Additional
Sums shall be payable by Borrower as, and shall be deemed to be, additional
interest, and for such purposes only, the agreed upon and “contracted for rate
of interest” of this transaction shall be deemed to be increased by the rate of
interest resulting from the Additional Sums.

10.9 Brokers.

Borrower hereby represents and warrants to Lender that it has not paid, agreed
to pay or caused to be paid directly or indirectly in any form, to any Person,
any

 

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commission, percentage, contingent fee, brokerage or other similar payments of
any kind, in connection with the establishment or operation of this Agreement
and the transactions contemplated hereby.

Lender hereby represents and warrants to Borrower that it has not paid, agreed
to pay or caused to be paid directly or indirectly in any form, to any Person,
any commission, percentage, contingent fee, brokerage or other similar payments
of any kind, in connection with the establishment or operation of this Agreement
and the transactions contemplated hereby.

10.10 Waiver.

Borrower hereby expressly waives: (i) notice of the acceptance by Lender of this
Agreement; (ii) notice of the existence or creation or non-payment of all or any
of the Obligations; (iii) presentment, demand, notice of dishonor, protest, and
all other notices whatsoever other than notices expressly provided for in this
Agreement or by Applicable Law; and (iv) all diligence in collection or
protection of or realization upon the Obligations or any thereof, any obligation
hereunder, or any security for or guaranty of the foregoing.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Loan and Security
Agreement to be duly executed as of the date first above written.

 

NAVISTAR FINANCIAL CORPORATION     WELLS FARGO EQUIPMENT FINANCE, INC. By:  

/s/ William V. McMenamin

    By:  

/s/ Lisa K. Lenton

Name:  

William V. McMenamin

    Name:  

Lisa K. Lenton

Title:  

Vice President, Chief Financial Officer and Treasurer

    Title:  

Senior Vice President

Address:  Navistar Financial Corporation

425 N. Martingale Road

Schaumburg, Illinois 60173

Attention: General Counsel

   

Address:  733 Marquette Avenue

Minneapolis, Minnesota 55402

Attn: Lease Portfolio Administrator

Telephone No.: 630-753-4000     Telephone: 866-726-4714
Facsimile No.:    630-753-4410     Facsimile: 866-687-5578 Jurisdiction of
Organization: Delaware       Tax ID No.: 36-2472404       Organizational No.:
0429010      

 

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Schedule A

Description of Portfolio

All information in the electronic file titled 2009C.Retail.Lease.Tape.xlsx,
which was delivered by Borrower to Lender by electronic mail at 5:55pm Central
Time on December 15, 2009 and was 4MB in size.

 

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ANNEX A

DEFINITIONS

Capitalized terms used in the Agreement and the other Transaction Documents
shall have (unless otherwise provided elsewhere in the Agreement or in the
Transaction Documents) the following respective meanings:

Account Bank shall mean The Bank of New York Mellon, a New York banking
corporation.

Account Control Agreement shall mean that certain Account Control Agreement
dated as of December 16, 2009 among Borrower, Lender and the Account Bank with
respect to the Collection Account and the Cash Collateral Account.

Accounting Date shall mean, with respect to a Monthly Period and the related
Repayment Date, the last day of the related Monthly Period.

Act shall have the meaning set forth in Section 6.9 of the Agreement.

Actual Payment shall mean, with respect to a Monthly Period, the related
Repayment Date and a Performing Contract, all Collections with respect to such
Performing Contract from or for the account of all of the Portfolio Obligors
during such Monthly Period (and, in the case of the first Repayment Date, all
Collections with respect to such Contract from or for the account of all of the
Portfolio Obligors on or after the Cutoff Date but on or prior to the related
Accounting Date) except for any Overdue Payments or Supplemental Servicing Fees.

Additional Sums shall have the meaning set forth in Section 10.8 of the
Agreement.

Affiliate shall mean, with respect to any specified Person, any other Person
controlling, controlled by or under common control with such specified Person.
For the purposes of this definition, “control” when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

Agreement shall mean that certain Loan and Security Agreement dated as of
December 16, 2009, between Lender and Borrower.

Aggregate Contract Balance shall mean, as of any date, the sum of the Contract
Balances of all Performing Contracts as of such date.

Annual Percentage Rate or APR shall mean, in the case of Retail Notes, the
annual percentage rate specified in the Contract related to such Retail Note
and, in the case of Retail Leases, the implicit interest rate in the Contract
related to such Retail Lease calculated as an annual percentage rate on a
constant yield to maturity basis (including any TRAC payment).

 

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Applicable Law shall mean all applicable laws, statutes, treaties, conventions,
judgments, decrees, injunctions, writ and orders of any court or Governmental
Authority and rules, regulations, orders, directives, licenses and permits of
any Governmental Authority as amended and revised, and any judicial or
administrative interpretation of any of the same.

Backup Servicer shall mean Portfolio Financial Servicing Company.

Backup Servicing Agreement shall mean the Backup Servicing Agreement among
Servicer, Lender and the Backup Servicer with respect to the Portfolio.

Borrower shall have the meaning set forth in the recitals to the Agreement.

Business Day shall mean any day other than a Saturday, Sunday or other day on
which banking institutions in Minneapolis, Minnesota, New York, New York or
Chicago, Illinois are authorized or required by law to close.

Cash Collateral shall mean any cash or Eligible Investments on deposit in the
Cash Collateral Account.

Cash Collateral Account shall mean the account designated as such, established
and maintained pursuant to Section 2.02(a) of the Servicing Agreement.

Certificate of Title shall mean, with respect to a Financed Vehicle, the
certificate of title or other evidence of ownership of such Financed Vehicle
issued by a registrar of titles in the jurisdiction in which such Financed
Vehicle is registered.

Change of Control shall mean the occurrence of one or more of the following
events: (a) any Person or two or more Persons acting in concert (other than NIC
or its Affiliates) shall have acquired legal and/or beneficial ownership (within
the meaning of Rule 13d-3 of the Securities and Exchange Act of 1934 and the
rules promulgated thereunder) of more than forty nine percent (49%) of the
outstanding shares of the voting Equity Interests of Borrower; (b) as of any
date a majority of the board of directors of Borrower consists (other than
vacant seats) of individuals who are not either (i) directors of Borrower as of
the Closing Date, (ii) selected or nominated to become directors by the board of
directors of Borrower of which a majority consisted of individuals described in
clause (i), or (iii) selected or nominated to become directors by the board of
directors of Borrower of which a majority consisted of individuals described in
clause (i) and individuals described in clause (ii); or (c) all or substantially
all of the assets of Borrower shall be sold to any Person (other than NIC or its
Affiliates), whether in one transaction or a series of transactions.

Claim shall have the meaning set forth in Section 6.8 of the Agreement.

Closing Date shall have the meaning set forth in Section 4.1 of the Agreement.

 

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Code Collateral shall mean any property a security interest in which may be
perfected by filing under the applicable UCC.

Collateral shall have the meaning set forth in Section 3.7 of the Agreement.

Collateral Agent shall have the meaning set forth in the Titling Trust
Agreement.

Collection Account shall mean the account designated as such, established and
maintained pursuant to Section 2.02(a) of the Servicing Agreement.

Collections shall mean all amounts received and identified from Portfolio
Obligors or otherwise in respect of the Contracts during the related Monthly
Period, whether constituting principal or interest, lease payments, payments in
respect of Residual Value, prepayments, proceeds of sales of Financed Vehicles,
benefits of any lease assignments, Insurance Proceeds, proceeds from Dealer
Liability, proceeds from Navistar Purchase Obligations, proceeds from Guaranties
or other Portfolio Documents, or otherwise, but excluding Supplemental Servicing
Fees and amounts that are required to be refunded or paid to the Portfolio
Obligor in respect of such Contract.

Compliance Certificate shall mean each compliance certificate in substantially
the form of Exhibit D to the Agreement.

Composite Schedule of Contracts shall mean the schedule of Contracts maintained
by the Servicer and delivered to the Lender as modified from time to time
pursuant to the Servicing Agreement.

Conflict Standard shall mean, to the extent commercially reasonable, that
(i) with respect to the Portfolio, the Borrower shall take such action with
respect to the Portfolio as Borrower takes with respect to other similar
equipment owned or leased by Borrower, (ii) with respect to any Portfolio
Obligor of any Financed Vehicles, that the Borrower shall take such action (and
refrain from taking such action) as Borrower takes with other lessees or
borrowers in similar circumstances as such Portfolio Obligor, and (iii) Borrower
shall not discriminate against the Financed Vehicles and the Portfolio Obligors
due to the pledging of the Portfolio pursuant to the Agreement.

Contract shall mean the related contract(s), notes or other agreement(s) with
the related Portfolio Obligor which collectively set forth the terms of the
retail loan, retail lease or other financing with respect to a Financed Vehicle,
which contract, note or other agreement is listed on the Composite Schedule of
Contracts. In the event that a contract, note, lease or other agreement relates
to a retail loan or retail lease or other financing listed on the Composite
Schedule of Contracts and retail loans, retail leases or other financings not
listed in the Composite Schedule of Contracts, “Contract” shall include only
such portion or rights under such contracts, notes or other agreements to the
extent of such retail loan, retail lease or other financing listed on the
Composite Schedule of Contracts.

Contract Balance shall mean, as of an Accounting Date, (a) with respect to any
Contract that is a Retail Note, the Starting Contract Balance thereof minus the
sum of the

 

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following amounts, in each case computed in accordance with the actuarial
method: (i) that portion of all Scheduled Payments allocated to principal due on
or after the Cutoff Date and on or prior to the Accounting Date, (ii) that
portion of all Prepayments allocated to principal, and (iii) that portion of the
following received and allocated to principal by the Servicer: benefits of any
lease assignments, proceeds from any Insurance Policies, proceeds from any
Dealer Liability, proceeds from any Navistar Purchase Obligations and proceeds
from any Guaranties and (b) with respect to any Contract that is a Retail Lease,
the remaining Scheduled Payments or purchase option price set forth in the
Retail Lease minus, without duplication, the sum of (i) Unearned Income,
(ii) all payments received by the Servicer from or for the account of the
Portfolio Obligor which are not late fees, prepayment charges or certain other
similar fees or charges, (iii) any Prepayments applied to such Retail Lease, and
(iv) proceeds received by the Servicer from any Insurance Policies with respect
to such Retail Lease.

Contract File shall have the meaning given in Section 4.01 of the Servicing
Agreement.

Credit Agreement shall mean the Amended and Restated Credit dated as of
December 16, 2009, among Borrower, JPMorgan Chase Bank, N.A., as Administrative
Agent, and the other parties thereto, as amended, supplemented, restated or
otherwise modified from time to time.

Cutoff Date shall mean November 30, 2009.

Dealer shall mean (i) a Person with whom Navistar has a valid dealer
sales/maintenance agreement to sell Navistar Vehicles, (ii) a Person with whom
Borrower has an agreement to extend Vehicle floor plan financing terms, (iii) a
Vehicle manufacturer with whom Navistar has a valid agreement to sell Navistar
Vehicles.

Dealer Liability shall mean, with respect to any Contract, all rights, claims
and actions of Borrower against the Dealer which sold the Financed Vehicle(s)
which gave rise to such Contract and any successor Dealer for recourse or
reimbursement of any losses, costs or expenses arising as a result of a default
by the Portfolio Obligor on such Contract.

Defaulted Contract shall mean a Contract (i) as to which the Servicer (a) has
reasonably determined, in accordance with its customary servicing procedures,
that eventual payment of amounts owing on such Contract is unlikely or (b) has
repossessed the Financed Vehicle or all Financed Vehicles securing the Contract,
(ii) as to which any related Scheduled Payment is at least 120 days overdue, or
(iii) as to which the related Portfolio Obligor with respect to the related
Contract has experienced an Insolvency Event.

Default Rate shall have the meaning set forth in the Note.

Deficiency shall mean the amount set forth in a Compliance Certificate.

Delaware Trustee shall have the meaning set forth in the Series 2009-WFEFI
Portfolio Supplement.

 

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Determination Date shall mean the day that is four Business Days prior to the
Repayment Date.

Dollars and the sign “$” shall mean lawful money of the United States of
America.

Eligible Contract shall mean a transaction consisting of a Contract and Related
Security that as of the Reporting Date: is not more than thirty (30) days past
due; has not been modified within the last twelve (12) months for credit
reasons; the Portfolio Obligor thereunder is not a federal, state or municipal
entity; the Portfolio Obligor thereunder is not subject to an Insolvency
Proceeding; Borrower has not declared a default to exist thereunder; is not a
Dealer capital loan; and does not relate to an automobile transaction.

Eligible Investments shall mean any of the following:

(i) Negotiable instruments or securities represented by instruments in bearer or
registered or in book-entry form which evidence (a) obligations fully guaranteed
by the United States of America; (b) time deposits in, or bankers acceptances
issued by, any depositary institution or trust company incorporated under the
laws of the United States of America or any state thereof and subject to
supervision and examination by Federal or state banking or depositary
institution authorities; provided, however, that at the time of investment or
contractual commitment to invest therein, the certificates of deposit or
short-term deposits, if any, or long-term unsecured debt obligations (other than
such obligation whose rating is based on collateral or on the credit of a Person
other than such institution or trust company) of such depositary institution or
trust company shall have a credit rating from Moody’s Investors Services, Inc.
(“Moody’s”) and Standard & Poors Ratings Services (“S&P”) of at least “P-l” and
“A-1”, respectively, in the case of the certificates of deposit or short-term
deposits, or a rating not lower than one of the two highest investment
categories granted by Moody’s and by S&P; (c) certificates of deposit having, at
the time of investment or contractual commitment to invest therein, a rating
from Moody’s and S&P of at least “P-1” and “A-1”, respectively and a maturity of
no more than thirty (30) days; or (d) investments in money market funds rated in
the highest investment category or otherwise approved in writing by the
applicable rating agencies;

(ii) Demand deposits in any depositary institution or trust company referred to
in (i)(b) above;

(iii) Commercial paper (having original or remaining maturities of no more than
thirty (30) days) having, at the time of investment or contractual commitment to
invest therein, a credit rating from Moody’s and S&P of at least “P- 1” and
“A-1”, respectively;

(iv) Eurodollar time deposits having a credit rating from Moody’s and S&P of at
least “P-1” and “A-1”, respectively;

 

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(v) Repurchase agreements involving any of the Eligible Investments described in
clauses (i)(a), (i)(c) and (iv) of this definition so long as the other party to
the repurchase agreement has at the time of investment therein, a rating from
Moody’s and S&P of at least “P-1” and “A-1”, respectively;

(vi) Commercial paper master notes having, at the time of the investment or
contractual commitment to invest therein, a credit rating from Moody’s and S&P
of at least “P-1” and “A-1”, respectively; and

(vii) Any other investment permitted by Lender.

Eligible Investments may be purchased by or through the Account Bank and its
Affiliates. The Account Bank and/or its Affiliates may act as sponsor,
administrator or issuer, or act in a similar capacity with respect to the
Eligible Investments and receive compensation for such services.

Enforcement Expenses shall mean, without duplication, the Servicing Fee and the
all documented enforcement costs and expenses (including, without limitation,
court costs and attorneys’ fees and expenses) incurred by Lender by reason of
any Event of Default or the exercise of Lender’s rights or remedies with respect
thereto, including, but not limited to, all costs and expenses incurred in
connection with (i) the return, possession or other recovery of the Financed
Vehicles in accordance with the terms of the applicable Portfolio Documents or
in placing the Financed Vehicles in the condition required thereby, (ii) the
sale, re-lease or other disposition of the Financed Vehicles (including, without
limitation, all costs of transportation, possession, storage, refurbishing,
advertising and brokers’ fees), (iii) all other pre-judgment and post-judgment
enforcement related actions taken by Lender against Borrower or the Collateral,
and/or (iv) any actions taken by Lender in connection with any bankruptcy case
involving the Borrower, any Portfolio Obligor in its capacity as such, the
Financed Vehicles or any of the other Collateral.

Environmental Contamination shall mean any actual or threatened release, spill,
emission, leaking, pumping, injection, presence, deposit, abandonment, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor
environment, or into or out of any of the Collateral, including, without
limitation, the movement of any Hazardous Substance or other substance through
or in the air, soil, surface water, groundwater or property which is not in
compliance with applicable Environmental Laws.

Environmental Law shall mean any present or future federal, foreign, state or
local law, ordinance, order, rule or regulation and all judicial, administrative
and regulatory decrees, judgments and orders, pertaining to the use, disposal or
transportation of Hazardous Substances, Environmental Contamination, or
pertaining to the protection of the environment, including, but not limited to,
the Comprehensive Environmental Response, Compensation, and Liability Act
(“CERCLA”) (42 U.S.C. §9601 et seq.), the Hazardous Material Transportation Act
(49 U.S.C. §1801 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 et seq.), the Resource Conservation and Recovery

 

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Act (42 U.S.C. §6901 et seq.), the Clean Air Act (42 U.S.C. §7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §1361 et seq.), the
Hazardous and Solid Waste Amendments (42 U.S.C. §2601 et seq.), as these laws
have been or may be amended or supplemented, and any successor thereto, and any
analogous foreign, state or local statutes, and the rules, regulations and
orders promulgated pursuant thereto.

Equity Interests shall mean stock of any class or classes issued by the Borrower
(however designated) having ordinary voting power for the election of the
directors of such corporation, other than stock having such power only by reason
of the happening of a contingency.

Event of Default shall have the meaning set forth in Section 7 of the Agreement.

Event of Loss shall mean with respect to any Financed Vehicle a total loss or
other damage or loss that for purposes of applicable insurance policy coverage
has been deemed or declared a total loss of such Financed Vehicle.

Finance Lease shall mean a Retail Lease that is not a TRAC Lease and which is
required by GAAP to be capitalized on the balance sheet of the related Portfolio
Obligor and which gives the Obligor the right to purchase the Financed Vehicle
at lease expiration for $5,200 or less.

Financed Vehicles shall mean, collectively, the Leased Vehicles and the Loan
Vehicles.

Form Portfolio Agreement means each of the Borrower’s standard form of lease and
loan agreements for use with Borrower’s commercial customers substantially in
the form attached to the Agreement as Annex E.

Full Prepayment shall mean, with respect to (i) any Contract a prepayment by the
related Portfolio Obligor that is sufficient to prepay such Contract in full, or
(ii) a Contract secured by multiple Financed Vehicles, an amount that equals the
unpaid principal amount of the Contract relating to any Financed Vehicle, as
determined by the Servicer in accordance with its customary servicing procedures
and subject to the Conflict Standard.

GAAP shall mean generally accepted accounting principles in the United States of
America in effect from time to time.

General Interest Trustee shall have the meaning set forth in the Titling Trust
Agreement.

Governmental Authority shall mean any nation or government, any state, province
or other political subdivision thereof and any entity, now existing or hereafter
created, exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

Gross Balance shall mean, as of any date of determination, with respect to any
Contract that is a Retail Lease, the aggregate remaining periodic rental
payments plus the TRAC Payment or purchase option price set forth in the Retail
Lease (which, for such purposes, shall be assumed to be made on the last day of
the lease term).

 

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Guaranty shall mean, with respect to any Contract, a personal or commercial
guaranty of a Portfolio Obligor’s performance with respect to such Contract.

Hazardous Substances shall mean and include hazardous substances as defined in
CERCLA; oil of any kind, petroleum products and their by-products, including,
but not limited to, sludge or residue; asbestos containing materials;
polychlorinated biphenyls; any and all other hazardous or toxic substances;
hazardous waste, as defined in CERCLA; medical waste; infectious waste; those
substances listed in the United States Department of Transportation Table (49
C.F.R. §172.101); explosives; radioactive materials; and all other pollutants,
contaminants and other substances regulated or controlled by the Environmental
Laws and any other substance that requires special handling in its collection,
storage, treatment or disposal under the Environmental Laws.

Idealease Chattel Paper means each lease agreement between an Idealease dealer
and the retail user with respect to a Financed Vehicle, in substantially the
form included in the Form Portfolio Agreements, with respect to the related
Financed Vehicle.

Idealease Transaction shall mean a Retail Note transaction between Borrower and
a Portfolio Obligor who is an Idealease dealer (each such Retail Note in
substantially the form of one of the documents contained in Annex E to the
Agreement), which Retail Note is secured by the applicable Financed Vehicle and
the related Idealease Chattel Paper.

Indemnitee shall have the meaning set forth in Section 6.8 of the Agreement.

Insolvency Event shall mean, with respect to a specified Person, (i) the entry
of a decree or order by a court, agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator, receiver or
liquidator for such Person, in any insolvency, readjustment of debt, marshaling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of such Person’s affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days; (ii) the
consent by such Person to the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to such Person or of or
relating to substantially all of such Person’s property, or (iii) such Person
shall admit in writing its inability to pay its debts generally as they become
due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations.

Insurance Policy shall mean, with respect to any Contract and the related
Financed Vehicle, an insurance policy covering physical damage, credit life,
credit disability, theft, mechanical breakdown or similar event to each Financed
Vehicle relating to such Contract.

 

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Insurance Proceeds shall mean proceeds of any Insurance Policy with respect to
any Contract and the related Financed Vehicle.

Interest Rate shall mean that percentage per annum as is specified as the
Interest Rate on Annex B attached to the Agreement and made a part thereof.

Lease Sale Agreement shall mean the Lease Sale Agreement, dated as of
December 16, 2009, by and between Navistar Leasing Services Corporation and
Borrower.

Leased Vehicles shall mean the Vehicles beneficially owned by the Borrower and
leased pursuant to a Retail Lease to certain Portfolio Obligors, as described in
Schedule A to the Agreement.

Lender shall have the meaning set forth in the preamble to the Agreement.

Letter Agreement shall mean the letter agreement, dated as of the Closing Date,
between Borrower and Lender, as amended, supplemented, restated or otherwise
modified from time to time.

Liens shall mean any security interest, lien, charge, pledge, equity or
encumbrance of any kind other than liens for taxes not yet due and payable,
mechanics’ liens, any liens that attach by operation of law, and any liens being
contested by appropriate measures.

Loan shall have the meaning set forth in Section 2.1 of the Agreement.

Loan Vehicles shall mean the Vehicles acquired with the proceeds of the related
Retail Note that are collateral security for loans made by the Borrower to
certain Portfolio Obligors, as described in Schedule A to the Agreement.

Lockbox shall mean that certain lockbox where Portfolio Obligors make all
payments under the Portfolio Documents.

LSA Assignment shall have the meaning set forth in Section 2.01 of the Lease
Sale Agreement.

Make Whole Amount shall mean on any date of determination an amount equal to the
present value of the aggregate interest payments (which, for purposes of
calculating the Make Whole Amount, shall be calculated using the Interest Rate
less the effective yield for U.S. Treasury notes with a maturity date on or
closest to the Maturity Date) that would be due on the then outstanding
principal amount of the Loan assuming it was repaid in accordance with
installment payments to be made pursuant to Section 3.2(a) of the Agreement from
such date until the Maturity Date, discounted at the Interest Rate.

Material Adverse Effect shall mean, with respect to a Person, a material adverse
effect on (a) the business, assets, operations, or financial condition of such
Person and its subsidiaries (taken as a whole), (b) such Person’s ability to pay
or perform its Obligations under the Transaction Documents in accordance with
the terms thereof, (c) the Collateral or the Lien of Lender on the Collateral
(taken as a whole) or the priority of any such Lien, or (d) Lender’s rights and
remedies under the Agreement and the other Transaction Documents.

 

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Material Default shall mean any Event of Default under Sections 7.1(a), (d),
(f), and (g) of the Agreement.

Material Indebtedness shall mean all obligations of the Borrower for borrowed
money in an aggregate principal amount exceeding $10,000,000.

Material Modification shall mean any waiver, amendment, alteration or
modification in any material respect to any Portfolio Document that would
materially decrease the principal amount of the remaining payments Borrower is
entitled to thereunder, or diminish or otherwise materially impair or jeopardize
the Borrower’s security interest or the Titling Trust’s ownership interest, as
the case may be, in the related Financed Vehicle.

Maturity Date shall mean March 18, 2013, unless the Loan is accelerated pursuant
to Section 8.1 of the Agreement.

Monthly Period shall mean, with respect to a Determination Date or Repayment
Date, the calendar month preceding the month in which such Determination Date or
Repayment Date occurs except that the Monthly Period relating to the first
Determination Date or Repayment Date shall be the period from the Cutoff Date to
the last day of the calendar month immediately preceding the first Determination
Date or Repayment Date.

Navistar shall mean Navistar, Inc. (f/k/a International Truck and Engine
Corporation), a Delaware corporation, and its successors and assigns.

Navistar Purchase Obligations shall mean certain obligations of Navistar,
subject to limitations, to purchase Financed Vehicles securing Contracts
pursuant to Article VI and other provisions of the Amended and Restated Master
Intercompany Agreement by and between Borrower and Navistar dated as of April 1,
2007, as such Master Intercompany Agreement may be amended, supplemented,
restated or otherwise modified.

Navistar Vehicle shall mean any Vehicle produced by or for Navistar or its
Subsidiaries or sold by Navistar or its Subsidiaries to Dealers, including any
body parts or accessions attached thereto.

NIC shall mean Navistar International Corporation, a Delaware corporation, and
its successors and assigns.

Note shall have the meaning set forth in Section 2.2 of the Agreement.

Note Purchase Agreement shall mean the Note Purchase Agreement dated as of
December 16, 2009, among the Borrower, Navistar Financial Assets Sales Corp.,
and the Lender.

 

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Notice of Assignment shall mean the Notice of Assignment substantially in the
form of Annex F to the Agreement.

November Portfolio Tape shall mean the data file delivered to the Lender by
Borrower containing information with respect to the Portfolio as of November 30,
2009, in form and substance as agreed to between Borrower and Lender.

Note Sale Agreement shall mean the Note Sale Agreement dated as of December 16,
2009, between the Borrower and Navistar Financial Assets Sales Corp.

Obligations shall mean all indebtedness, obligations or liabilities of the
Borrower owing to Lender of any kind or nature whatsoever, direct or indirect,
secured or unsecured, joint or several, absolute or contingent, due or to become
due, whether for payment or performance, now existing or hereafter created,
under, arising out of or in connection with the Agreement, the Note or any of
the other Transaction Documents or the transactions contemplated hereby or
thereby, including without limitation, any and all Enforcement Expenses,
including, without limitation, the obligation (a) to pay all principal,
interest, and late charges on the Note as and when the same shall became due and
payable, (b) to pay all Enforcement Expenses, and (c) to perform, observe and
comply with all of the other terms, covenants, conditions, and agreements
contained in the Transaction Documents.

OFAC shall have the meaning set forth in Section 5.10 of the Agreement.

Overdue Payment shall mean, with respect to a Monthly Period, the related
Repayment Date and to a Performing Contract, the amount of any due but unpaid
Scheduled Payment.

Participant shall have the meaning given such term in Section 10.5 hereof.

Performing Contracts shall mean all Retail Loans and Retail Leases excluding
therefrom: (a) those Retail Loans and Retail Leases previously excluded from the
Portfolio in prior Compliance Certificates; (b) those Retail Loans and Retail
Leases where the related Portfolio Obligor is more than 120 days past due;
(c) those Retail Loans and Retail Leases where the related Portfolio Obligor is
the subject of a bankruptcy or insolvency proceeding; and (d) that portion of
the payments due under any Retail Loans and Retail Leases where the applicable
Portfolio Obligor has prepaid any amounts due thereunder.

Permitted Liens shall mean:

(a) with respect to any Contracts and Related Security, including the Portfolio
Documents, the interests of the parties under the Transaction Documents, the
interests of the lenders party to the Credit Agreement (subject to the
Intercreditor Agreement) the applicable Portfolio Obligor under the Portfolio
Documents and, with respect to any Portfolio Document or Related Security that
relates to a retail loan, retail leases or other financing that is not a
Contract, the interest of others in such Portfolio Document or Related Security
to the extent related to such other retail loans, retail leases or financing;
and

 

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(b) with respect to any Financed Vehicle subject to a Retail Lease or any
Financed Vehicle which has been repossessed by the Servicer:

(i) any liens on the Financed Vehicle for taxes, assessments, levies, fees and
other government and similar charges not yet due and payable or the amount or
validity of which is being contested;

(ii) any liens of mechanics, suppliers, vendors, materialmen, laborers,
employees, repairmen and other like liens arising in the ordinary course of the
Titling Trust’s (or if a Retail Lease is then in effect, any Portfolio
Obligor’s) business on the Financed Vehicle related thereto securing obligations
which are not due and payable or the amount or validity of which is being
contested;

(iii) liens on the Financed Vehicle related thereto arising out of any judgment
or award or by operation of law, in any such case as a result of an act or
omission by the related Portfolio Obligor;

(iv) liens which may exist in accessions to the Financed Vehicles not financed
by the Contracts; and

(v) any lien of the Collateral Agent noted on the certificate of title of a
Financed Vehicle.

A Lien is being “contested in good faith as provided herein” if payment thereof
is being contested in good faith and by appropriate proceedings, adequate book
reserves have been set aside, and the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.

Person shall mean any legal person, including any individual, corporation,
partnership, limited liability company, association, joint stock company, trust,
unincorporated organization, governmental entity or other entity of similar
nature.

Portfolio shall mean, collectively, the Contracts and the Related Security,
including the other Portfolio Documents.

Portfolio Default shall mean any event or condition that, with the giving of
notice or the passage of time, or both, would constitute a Portfolio Event of
Default.

Portfolio Documents shall mean the Contracts and any other documents,
instruments and agreements entered into or provided by a Portfolio Obligor in
connection with the Contracts and the related Financed Vehicles and the
transactions contemplated thereby. In the event that any such document relates
to a retail loan, retail lease or other financing that is not a Contract,
“Portfolio Documents” shall include only such portion or rights under such
documents to the extent related to such Contract, it being understood that
“Portfolio Documents” shall not include such portion or rights under such
document to the extent related to such other retail loan, retail lease or other
financing and shall not include any interest in any collateral securing the
Contract or the Portfolio Documents other than the Financed Vehicles related to
such Contract.

 

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Portfolio Event of Default shall mean the occurrence of an “Event of Default”
(or similar term of equivalent meaning) under the Portfolio Documents that is
not cured within any applicable grace or cure period.

Portfolio Interest Certificate shall have the meaning given in the Titling Trust
Agreement.

Portfolio Obligor shall mean (i) with respect to any Retail Note, the purchaser
or any co-purchaser of the related Financed Vehicle or Financed Vehicles or any
other Person, including the maker of a Guaranty, who owes payments under such
Portfolio Document (whether as a principal or as a surety) and (ii) with respect
to any Retail Lease, the lessee or any co-lessee of the related Financed Vehicle
or Financed Vehicles or any other Person, including the maker of a Guaranty, who
owes payments under such Portfolio Document (whether as a principal or as a
surety).

Prepayment shall mean, with respect to a Repayment Date and to a Performing
Contract, the portion of an Actual Payment in excess of the Scheduled Payment.

Proceeds shall have the meaning assigned to it in the UCC, and in any event,
shall include, but not be limited to, all money and non-money proceeds of the
Collateral, as applicable, goods, accounts, chattel paper, documents,
instruments, general intangibles, investment property, deposit accounts, letter
of credit rights, investment property, deposit accounts and supporting
obligations, and all of Borrower’s rights in and to any of the foregoing, and
any and all rents, payments, charter hire and other amounts of any kind
whatsoever due or payable under or in connection with the Collateral, including
(without limitation) (A) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to Borrower from time to time with respect to the
Collateral, (B) any and all payments (in any form whatsoever) made or due and
payable to Borrower from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of the Collateral by any
Governmental Authority, bureau or agency or any other Person (whether or not
acting under color of Governmental Authority), and (C) any and all other rents
or profits or other amounts from time to time paid or payable under or in
connection with the Collateral.

Related Retail Note Assets shall mean, with respect to a Contract that is a
Retail Note, the right, title and interest of Borrower in and to the following
assets:

(a) all amounts due on and under such Retail Note on and after the Cutoff Date
and the fully executed original of such Retail Note;

(b) the security interests in the Financed Vehicles granted by Portfolio
Obligors pursuant to such Retail Note and, to the extent permitted by law, in
any accessions thereto which are financed by such Retail Note, and, where
permitted by law, the original Certificate of Title and otherwise such
documents, if any, that Borrower keeps on file in accordance with its customary
procedures and subject to the Conflict Standard indicating that the related
Financed Vehicle is owned by the Portfolio Obligor and subject to a security
interest in favor of Borrower;

 

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(c) any proceeds from any Insurance Policies with respect to such Retail Note
and the related Financed Vehicle and any documents evidencing or related to such
Insurance Policies;

(d) any proceeds from Dealer Liability with respect to such Retail Note,
proceeds from any Navistar Purchase Obligations with respect to such Retail Note
and proceeds from any Guaranty of such Retail Note;

(e) the benefit of any lease assignments with respect to the Financed Vehicles;
and

(f) any proceeds of the property described in clauses (a) through (e) above.

Related Security shall mean, with respect to a Retail Note or Retail Lease, the
Related Retail Note Assets or the Related Titling Trust Assets, as applicable.

Related Titling Trust Assets shall mean, with respect to a Contract that is a
Retail Lease, the following assets:

(a) each Financed Vehicle subject to such Retail Lease;

(b) the Certificate of Title of each such Financed Vehicle;

(c) the rights (but not the obligations) with respect to any such Retail Lease
or Financed Vehicle, including the right to proceeds arising from all Navistar
Purchase Obligations, if any, or any other repurchase obligation with respect to
such Retail Lease or Financed Vehicle;

(d) all of the Borrower’s Dealer Agreement Rights (as such term is defined in
the Titling Trust Agreement);

(e) any proceeds of any Insurance Policy with respect to such Retail Lease or
Financed Vehicle and any documents evidencing or related to such Insurance
Policies;

(f) any rights of the lessor with respect to any security deposit relating to
such Retail Lease in accordance with the terms of such Retail Lease;

(g) the rights with respect to such Retail Lease or Financed Vehicle under the
Titling Trust Servicing Agreement;

(h) all amounts due on and under such Retail Lease on and after the Cutoff Date
and the fully executed original of such Retail Lease;

 

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(i) all proceeds of the foregoing, including all Collections and all Liquidation
Proceeds and all Disposition Proceeds (as such terms are defined in the Titling
Trust Agreement) with respect to such Financed Vehicle; and

(j) all other Titling Trust Assets relating to such Retail Lease.

Repayment Date shall mean the eighteenth day of each month, or if the 18th is
not a Business Day, the next succeeding Business Day, commencing January 19,
2010, and ending on the Maturity Date.

Reporting Date shall mean October 31, 2009.

Residual Value shall mean, with respect to a TRAC Lease, an amount specified at
lease inception in the TRAC Lease, and with respect to a Finance Lease, the
amount of the Obligor’s purchase option under that Finance Lease.

Retail Lease shall mean a lease by a Portfolio Obligor, originated or acquired
by Borrower or one or more of its Affiliates of one or more Financed Vehicles
and listed on the Composite Schedule of Contracts. In the event at such lease
also relates to leases of Financed Vehicles not listed on the Composite Schedule
of Contracts, Retail Lease shall only include such portion or rights under such
lease to the extent of the lease of the Financed Vehicle listed on the Composite
Schedule of Contracts.

Retail Note shall mean a retail loan (including, without limitation, Idealease
Transactions), originated or acquired by Borrower or one or more of its
Affiliates evidenced by a note and secured by one or more Financed Vehicles and
listed on the Composite Schedule of Contracts. In the event at such loan also
relates to leases of Financed Vehicles not listed on the Composite Schedule of
Contracts, Retail Loan shall only include such portion or rights under such loan
to the extent of the loan of the Financed Vehicle listed on the Composite
Schedule of Contracts.

S&P shall mean Standard & Poor’s Ratings Services, or its successor.

Schedule of Retail Leases shall mean the schedule attached to the LSA Assignment
specifying the Retail Leases then being transferred to Borrower.

Scheduled Payment shall mean, with respect to any Performing Contract, a payment
which (i) is in the amount required under the terms of such Performing Contract
in effect as of the Cutoff Date except, in the case of any Performing Contract
secured by more than one Financed Vehicle, including any changes in the terms of
such Performing Contract resulting from a Full Prepayment with respect to any
Financed Vehicle related thereto, including, in the case of a TRAC Lease, the
TRAC Payment, and (ii) is payable by the Portfolio Obligor of such Performing
Contract. When Scheduled Payment is used with reference to a Repayment Date
after the Closing Date, it means the payment which is due in the related Monthly
Period; provided, however, that in the case of the first Repayment Date, the
Scheduled Payment shall include all such payments due from the Portfolio Obligor
on or after the Cutoff Date.

 

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Series 2009-WFEFI Portfolio Assets shall mean, as of any date, all of the Retail
Leases identified on any Schedule of Retail Leases attached to the LSA
Assignment on or before such date, and the Related Titling Trust Assets with
respect to such Retail Leases, other than any such Retail Leases that have been
released from the Lien of the Agreement.

Series 2009-WFEFI Portfolio Certificate shall mean the Portfolio Interest
Certificate representing the Series 2009-WFEFI Portfolio Interest.

Series 2009-WFEFI Portfolio Interest shall mean the portfolio interest created
pursuant to the Series 2009-WFEFI Portfolio Supplement.

Series 2009-WFEFI Portfolio Supplement shall mean the Series 2009-WFEFI
Portfolio Supplement to the Titling Trust Agreement, dated as of the Closing
Date, among the Titling Trust, as Grantor and Initial Beneficiary, the General
Interest Trustee, the Series 2009-WFEFI Portfolio Trustee and the Delaware
Trustee.

Series 2009-WFEFI Portfolio Trustee shall mean The Bank of New York Mellon Trust
Company, N.A.

Servicer shall mean Navistar Financial Corporation, a Delaware corporation.

Servicer Default shall mean any of the events specified in Section 7.01 of the
Servicing Agreement; provided that any requirement for the giving of notice, the
lapse of time, or both, or any other condition, has been satisfied.

Servicer Termination Date shall mean the date designated by the Lender in a
Termination Notice.

Servicing Agreement shall mean the Servicing Agreement dated as of December 16,
2009, between the Servicer and the Lender.

Servicing Fee shall mean, with respect to each calendar month after the
occurrence and during the continuance of an Event of Default, a fee equal to the
product of (x) 1/12 of 1 percent per annum and (y) the then outstanding
principal amount of the Loan.

Special Purpose Entity shall have the meaning set forth in the Titling Trust
Agreement.

Starting Contract Balance shall mean, (a) with respect to a Performing Contract
that is a Retail Note, the aggregate principal amount advanced under such
Performing Contract toward the purchase price of the Financed Vehicle or
Financed Vehicles, including insurance premiums, service and warranty contracts,
federal excise and sales taxes and other items customarily financed as part of a
Retail Note and related costs, less payments received from the Portfolio Obligor
prior to the Cutoff Date with respect to such Performing Contract allocable on
the basis of the actuarial method to principal and (b) with respect to a
Performing Contract that is a Retail Lease, the remaining Scheduled Payments or
purchase option price set forth in the Retail Lease minus, without duplication,
the sum of (i) Unearned Income and (ii) payments received from the Portfolio
Obligor prior to the Cutoff Date with respect to such Performing Contract
allocable to the principal portion of the lease payments.

 

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Subsidiary shall mean, as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person.

Supplemental Servicing Fee shall have the meaning set forth in Section 2.09 of
the Servicing Agreement.

Termination Notice shall mean the notice referred to in Section 7.02 of the
Servicing Agreement specifying the Servicer Termination Date (as defined in the
Servicing Agreement).

Titling Trust shall mean Navistar Leasing Company, a Delaware statutory trust.

Titling Trust Agreement shall mean the Trust Agreement, dated as of April 15,
1999, among Navistar Leasing, The Bank of New York Mellon Trust Company, N.A.
(as successor to J.P. Morgan Trust Company, National Association, as
successor-in-interest to Bank One, National Association), and BNY Mellon Trust
of Delaware (as successor to Chase Bank USA, National Association, as
successor-in-interest to Bank One Delaware, Inc.), as amended, modified or
supplemented from time to time.

Titling Trust Assets shall mean the “Trust Assets” as defined in the Titling
Trust Agreement.

Titling Trust Servicing Agreement shall mean the “Origination and Servicing
Agreement” as defined in the Titling Trust Agreement.

Transaction Documents shall mean the Agreement, the Note, the Letter Agreement,
and all other documents, instruments and agreements now or hereafter entered
into or provided by the Borrower to evidence or secure, or in connection with
the Loan and the transactions contemplated hereby which, for the avoidance of
doubt, does not include the Portfolio Documents.

TRAC Lease shall mean a Retail Lease that provides for a TRAC Payment by the
lessee at the expiration of the lease term pursuant to a provision in the lease
that provides in substance that, at the end of the term of the lease, after the
application of the proceeds of the sale of the Financed Vehicle (whether such
sale is to the lessee, an Affiliate of the lessor or another Person) the lessee
will be obligated to pay the lessor the excess of the TRAC Payment over the sale
proceeds or the lessor will be obligated to pay the lessee the excess of the
sale proceeds over the TRAC Payment.

 

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TRAC Payment shall mean, with respect to a TRAC Lease, a fixed amount specified
in the lease documents for such TRAC Lease.

UCC shall mean the applicable Uniform Commercial Code as the same may be in
effect, from time to time, in the State of New York; provided that, in the event
that, by reason of mandatory provisions of Applicable Law, any or all of the
attachment, perfection or priority of the Lender’s security interest and Lien in
any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.

Unearned Income shall mean, with respect to any Contract, as of any date of
determination, the portion of the Gross Balance thereof identified as unearned
income by the Servicer, in accordance with its customary applicable accounting
procedures.

Vehicle shall mean a new or used truck, truck chassis, bus van or trailer.

CONSTRUCTION.

(a) Unless the context of the Agreement otherwise clearly requires, references
to the plural include the singular, the singular include the plural, the part
includes the whole, and “or” has the inclusive meaning frequently identified by
the phrase “and/or.”

(b) References to “determination” by Lender include a good faith estimate by
Lender (in the case of a quantitative determination) and a good faith belief by
Lender (in the case of a qualitative determination). References to the terms
“acting reasonably” or “reasonably satisfactory to Lender, acting reasonably” or
terms of similar import mean satisfactory or acceptable to Lender acting in a
reasonable manner.

(c) The words “herein,” “hereunder” and “hereof’ and similar terms in the
Agreement refer to the Agreement as a whole and not to any particular provision
of the Agreement.

(d) The Agreement and all documents executed in connection herewith shall be
construed without regard to the identity of the party which prepared the same,
and no presumption shall arise as a result thereof.

(e) Any defined term in any of the Transaction Documents or the Portfolio
Documents which refers to a document, instrument, agreement, or mortgage shall
include any amendments, supplements, restatements or modifications entered into
from time to time with respect to such document, instrument, agreement, or
mortgage.

(f) Any reference to Lender or Borrower shall include their successors and
permitted assigns.

(g) Any reference to an Applicable Law shall also mean such law as amended,
superseded or replaced from time to time.

 

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ANNEX B

INTEREST RATE; PRINCIPAL AMOUNT; PRINCIPAL INSTALLMENTS

Interest Rate: 5.86 percent per annum

Principal Amount: $79,340,969.37

Principal installments:

 

Repayment Date

  Principal Amount Due   Repayment Date   Principal
Amount Due 18-Jan-10   $ 2,411,607.95   18-Sep-11   $ 1,488,868.49 18-Feb-10   $
2,413,664.27   18-Oct-11   $ 1,445,123.30 18-Mar-10   $ 3,482,877.00   18-Nov-11
  $ 1,399,306.50 18-Apr-10   $ 2,360,903.25   18-Dec-11   $ 1,292,918.18
18-May-10   $ 2,646,031.80   18-Jan-12   $ 1,233,997.34 18-Jun-10   $
2,378,452.10   18-Feb-12   $ 1,222,833.18 18-Jul-10   $ 4,044,356.14   18-Mar-12
  $ 1,191,162.54 18-Aug-10   $ 3,462,127.81   18-Apr-12   $ 1,201,718.04
18-Sep-10   $ 2,130,386.98   18-May-12   $ 1,361,651.46 18-Oct-10   $
1,958,868.62   18-Jun-12   $ 1,255,992.64 18-Nov-10   $ 1,762,126.60   18-Jul-12
  $ 1,207,785.93 18-Dec-10   $ 1,742,648.62   18-Aug-12   $ 3,126,594.12
18-Jan-11   $ 1,652,000.15   18-Sep-12   $ 1,159,036.23 18-Feb-11   $
1,490,560.52   18-Oct-12   $ 4,224,659.70 18-Mar-11   $ 1,556,273.46   18-Nov-12
  $ 1,509,084.27 18-Apr-11   $ 1,471,231.63   18-Dec-12   $ 920,231.18 18-May-11
  $ 1,511,609.96   18-Jan-13   $ 3,696,871.72 18-Jun-11   $ 1,451,901.74  
18-Feb-13   $ 2,024,227.90 18-Jul-11   $ 1,431,795.26   18-Mar-13   $
5,556,308.90 18-Aug-11   $ 1,463,173.89    

 

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ANNEX C

LENDER’S AND BORROWER’S

WIRE TRANSFER INSTRUCTIONS

LENDER

Bank Name:   Wells Fargo Bank Minnesota, N.A. ABA#:  

 

   Credit Account #:  

 

   Account Name:   Wells Fargo Equipment Finance, Inc. Phone Advise:   WFEFI
Accounting 612-667-9780 Reference:   Navistar Financial Corporation Contract No.
     BORROWER      Bank Name:   JPMorgan Chase Bank, N.A. ABA #:  

 

   Account #:  

 

   Account Name:   NFC Proceeds Deposit Account Reference:   2009-C WFEFI Loan
Transaction

 

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ANNEX D

FORM OF COMPLIANCE CERTIFICATE1

Month Ending Date:                                         ,
                    

 

To: WELLS FARGO EQUIPMENT FINANCE, INC.

Ladies and Gentlemen:

Reference is made to the Loan and Security Agreement dated as of December 16,
2009 (as amended, restated or supplemented from time to time, the “Agreement”;
capitalized terms defined therein being used herein as therein defined), between
Navistar Financial Corporation (“Borrower”) and Wells Fargo Equipment Finance,
Inc. (“Lender”).

The undersigned hereby certifies as of the date hereof that he/she is the chief
financial officer of Borrower (or his/her designee), and that, as such, he/she
is authorized to execute and deliver this Compliance Certificate to Lender on
behalf of Borrower, and that:

1. If Borrower no longer files its financial statements with the Securities and
Exchange Commission, attached hereto as Schedule 1 are the financial statements
[for the certificates delivered in March, June and September — for the most
recent fiscal quarter] [for the certificate delivered in February – for the most
recent fiscal year] of Borrower ended as of the above date. Such financial
statements fairly present the financial condition, results of operations and
cash flows of Borrower in accordance with GAAP at such date and for such
period[, subject only to normal year-end audit adjustments and the absence of
footnotes].

2. The undersigned has reviewed and is familiar with the terms of the Agreement
and has made, or has caused to be made under his/her supervision, a detailed
review of the transactions and condition (financial or otherwise) of Borrower
during the accounting period covered by the attached financial statements.

3. A review of the activities of Borrower during such fiscal period has been
made under the supervision of the undersigned with a view to determining whether
during such period Borrower performed and observed all of its obligations under
the Transaction Documents, and

[to the best knowledge of the undersigned during such fiscal period, Borrower
performed and observed each covenant and condition of the Transaction Documents
applicable to it such that no Default or Event of Default occurred.]

 

 

1

Items 1, 2, 3 and 5 will not be required for the Compliance Certificate to be
delivered in December.

 

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—or—

[the following covenants or conditions have not been performed or observed and
the following is a list of each such Default or Event of Default and its nature
and status:]

4. Attached hereto as Schedule 2 are the computations showing the calculations
with respect to the negative covenants set forth in Sections 8.01(a) of (b) of
the Credit Agreement (such provisions and related definitions all as in effect
as of the Closing Date, without regard to any amendment, waiver, modification,
deletion or other revision from time to time in the Credit Agreement after the
Closing Date, none of which shall have any force or effect on such sections for
purposes of the Agreement and the calculations set forth in Schedule 2).

5. In my capacity as                      and not in my individual capacity I
have reviewed the Financial Statements attached hereto and hereby certify that
there has been no change in GAAP, or in the application thereof, since
October 31, 2008 [, except as set forth below].

6. The representations and warranties of the Borrower contained in Section 4 of
the Agreement, or which are contained in any document furnished at any time
under or in connection with the Transaction Documents, are true and correct on
and as of the date hereof, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date.

7. The financial analyses required by Section 6.11(b) of the Agreement and the
information set forth on Schedule 3 attached hereto are true and accurate on and
as of the applicable date.

 

8. As detailed in Schedule 3 attached hereto, the Advance Rate as of the Month
Ending Date written above is     %.

9. [if the Advance Rate exceeds the Maximum Advance Rate:] Borrower shall by the
end of the calendar month in which this Compliance Certificate is delivered:

[Borrower to elect one:]

(x) remit to Lender an amount equal to the Deficiency as set forth in such
Compliance Certificate. [So long as no Default or Event of Default then exists,
Borrower hereby requests that Lender apply any payment of Deficiency to the
principal amount of the Loan then outstanding in inverse order of maturity.]

(y) subject to the prior written consent from the Lender, which consent Lender
may grant or withhold in its sole discretion, pledge sufficient additional
Portfolio Documents as Collateral to bring the Advance Rate into compliance. If
Lender consents to the pledge of additional Portfolio Documents, Borrower agrees
to execute and deliver such supplements, amendments, UCC financing statements
and other instruments, certificates, documents and agreements as Lender may
require to perfect the Lender’s security interest in such additional Portfolio
Documents and otherwise realize the benefits of the Agreement with respect to
such additional Portfolio Documents.

 

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(z) deposit cash or Eligible Investments in the Cash Collateral Account in an
amount equal to such Deficiency. [So long as no Default or Event of Default then
exists, Borrower hereby requests that Lender apply any Cash Collateral to the
principal amount of the Loan then outstanding in inverse order of maturity.]

10. Each of the Contracts listed on Annex A attached to Schedule 4 to this
Compliance Certificate is no longer a Performing Contract. So long as no Event
of Default then exists: (x) without any further act, Lender’s Lien shall be
deemed released with respect to any Portfolio Documents and the Related Security
that are no longer Performing Contracts as set forth in Annex A to this
Compliance Certificate, (y) Lender shall execute and deliver to Borrower the
Release attached hereto as Schedule 4, which Release shall attach thereto Annex
A thereto listing the Contracts that are no longer Performing Contracts as of
such Statement Date that were not previously identified as no longer being
Performing Contracts, and (z) to the extent that no Deficiency exists or would
result after giving effect thereto, Lender shall pay to Borrower the amount of
any Cash Collateral then in the Cash Collateral Account ($                    ).

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as
of                                         ,             .

 

NAVISTAR FINANCIAL CORPORATION By:  

 

Name:   Title:  

 

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For the month ended                                          (“Statement Date”)

SCHEDULE 1

to the NFC Compliance Certificate

FINANCIAL STATEMENTS2

 

2

NFC shall not be obligated to deliver financial statements to Lender so long as
such financial statements are filed with the SEC.

 

4

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For the month ended                                         (“Statement Date”)

SCHEDULE 2

to the NFC Compliance Certificate

FINANCIAL COVENANT CALCULATIONS

[NFC to provide the detail on covenant calculation]

 

5

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For the month ended                                          (“Statement Date”)

SCHEDULE 3

to the NFC Compliance Certificate

A: Current Outstanding Principal Balance of the Loan minus amounts currently on
deposit in the Cash Collateral Account: $                    

B: Aggregate Contract Balance under Performing Contracts (as defined in the
Agreement): $                    

Advance Rate = A divided by B (expressed as a percentage)
(                    %) (Current Outstanding Principal Balance of the Loan minus
amounts currently on deposit in the Cash Collateral Account divided by Aggregate
Contract Balance under Performing Contracts)

If the Advance Rate exceeds the Maximum Advance Rate (defined in the next
sentence), then the Deficiency is calculated as set forth below. The Maximum
Advance Rate shall be 50% for so long as either (x) a Servicer Default exists or
(y) the calculations in Schedule 2 to this Compliance Certificate show that the
Borrower is not in compliance with the financial covenants in Sections 8.01(a)
of (b) of the Credit Agreement (such provisions and related definitions all as
in effect as of the Closing Date, without regard to any amendment, waiver,
modification, deletion or other revision from time to time in the Credit
Agreement after the Closing Date, none of which shall have any force or effect
on such sections for purposes of the Agreement and the calculations set forth in
Schedule 2); otherwise, the Maximum Advance Rate is:

 

With respect to Compliance Certificate

   Maximum Advance Rate  

First Quarterly Compliance Certificate

   62.0 % 

Second Quarterly Compliance Certificate

   61.0 % 

Third Quarterly Compliance Certificate and thereafter

   60.0 % 

Maximum Loan Amount = Maximum Advance Rate (                    )% multiplied by
the Aggregate Principal Balance under Performing Contracts
($                                        ) =
$                                    

Deficiency = Outstanding Principal Balance of the Loan
($                                    ) minus amounts currently on deposit in
the Cash Collateral Account ($                                    ) and minus
the Maximum Loan Amount ($                                        ) =
($                                        )

 

6

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For the month ended                                          (“Statement Date”)

SCHEDULE 4

to the NFC Compliance Certificate

RELEASE

THIS RELEASE, dated as of                     , 201    , is made by Wells Fargo
Equipment Finance, Inc., a Minnesota corporation (“Lender”), and relates to the
security interest and lien granted by Navistar Financial Corporation, a Delaware
corporation (the “Borrower”), pursuant to the Loan and Security Agreement, dated
as of December 16, 2009 (as amended, supplemented, restated or otherwise
modified from time to time (the “Loan and Security Agreement”), between Lender
and Borrower. Capitalized terms used herein and not defined herein have the
meanings assigned to such terms in the Loan and Security Agreement. The Lender
hereby releases from the security interest and lien created pursuant to the Loan
and Security Agreement, without representation, warranty or recourse, express or
implied, all of its right, title and interest in, to and under the Contracts
listed on Schedule A hereto and all Related Security related thereto.

 

WELLS FARGO EQUIPMENT FINANCE, INC. By:  

 

  Name:  

 

  Title:  

 

 

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Schedule A to Release

[List Contracts that are no longer Performing Contracts]

 

8

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ANNEX E

FORM OF PORTFOLIO DOCUMENTS

[attach index and forms of Navistar loan and lease documents]

 

9

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ANNEX F

NOTICE OF ASSIGNMENT

[to be provided on NFC’s letterhead]

NOTICE OF ASSIGNMENT

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

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

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

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

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

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

Customer should settle all claims against Navistar arising prior to
                                , 20    , whether arising under the Contract or
otherwise, directly with Navistar. Customer should not, without WFEFI’s prior
written consent: (i) seek to modify or amend the Contract, (ii) assign, encumber
or sublet its rights under the Contract or in the equipment leased under the
Contract, (iii) exercise any of its rights under the Contract which are
exercisable only with the consent of Navistar, (iv) return the equipment under
the Contract to Navistar, or (v) settle any insurance claims with respect to the
equipment. WFEFI is irrevocably appointed as Customer’s attorney-in-fact to make
claim for, receive payment of and execute and endorse all documents, checks or
drafts received under any insurance policy in payment for loss or damage to the
equipment.

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

 

1

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

 

Navistar Financial Corporation By:  

 

Name:   Title:  

 

2