Exhibit 10.01

                               SERVICING AGREEMENT

                                      AMONG

                            NAVISTAR LEASING COMPANY,

                          HARCO LEASING COMPANY, INC.,

                      TRUCK RETAIL INSTALMENT PAPER CORP.,

                              THE BANK OF NEW YORK

                              AS COLLATERAL AGENT,

                         BANK ONE NATIONAL ASSOCIATION,

                              AS PORTFOLIO TRUSTEE

                                       AND

                         NAVISTAR FINANCIAL CORPORATION,

                                   AS SERVICER

                          DATED AS OF OCTOBER 16, 2000


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                                TABLE OF CONTENTS
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ARTICLE I DEFINITIONS; SERVICING SUPPLEMENT.......................................................................2
         SECTION 1.01      Certain Defined Terms..................................................................2
         SECTION 1.02      Supplement to Titling Trust Servicing Agreement........................................2

ARTICLE II ADMINISTRATION AND SERVICING OF RECEIVABLES............................................................3
         SECTION 2.01      Duties of the Servicer.................................................................3
         SECTION 2.02      Establishment of Accounts..............................................................4
         SECTION 2.03      Collection of Receivables Payments.....................................................5
         SECTION 2.04      Realization Upon Liquidating Receivables...............................................5
         SECTION 2.05      Maintenance of Insurance Policies......................................................6
         SECTION 2.06      Maintenance of Interests in Vehicles...................................................7
         SECTION 2.07      Covenants of the Servicer..............................................................7
         SECTION 2.08      Purchase of Receivables Upon Breach of Covenant........................................7
         SECTION 2.09      Servicing Fee..........................................................................8
         SECTION 2.10      Servicer Expenses......................................................................8
         SECTION 2.11      Deposits to Collection Account.........................................................8
         SECTION 2.12      Collections............................................................................9
         SECTION 2.13      Application of Collections.............................................................9
         SECTION 2.14      Monthly Advances.......................................................................9
         SECTION 2.15      Additional Deposits...................................................................10
         SECTION 2.16      Net Deposits..........................................................................10
         SECTION 2.17      Monthly Calculations..................................................................10

ARTICLE III STATEMENTS AND REPORTS...............................................................................11
         SECTION 3.01      Annual Statement as to Compliance;
                                    Notice of Servicer Default...................................................11
         SECTION 3.02      Annual Accountants' Report............................................................11
         SECTION 3.03      Access to Certain Documentation and Information
                                    Regarding Receivables........................................................12
         SECTION 3.04      Maintenance of Composite Schedule of Receivables......................................12
         SECTION 3.05      Amendments to Composite Schedule of Receivables.......................................12
         SECTION 3.06      Maintenance of Systems and Receivables List...........................................12

ARTICLE IV THE CUSTODIAN.........................................................................................13
         SECTION 4.01      Custody of Receivable Files...........................................................13
         SECTION 4.02      Duties of Servicer as Custodian.......................................................14
         SECTION 4.03      Custodian's Indemnification...........................................................15
         SECTION 4.04      Effective Period and Termination......................................................15

ARTICLE V REPRESENTATIONS AND WARRANTIESOF THE SERVICER..........................................................15
         SECTION 5.01      Representations and Warranties of the Servicer........................................15

ARTICLE VI THE SERVICER..........................................................................................17
         SECTION 6.01      Merger or Consolidation of, or Assumption
                                    of the Obligations of, the Servicer..........................................17
         SECTION 6.02      Limitation on Liability of Servicer and Others........................................17
         SECTION 6.03      Delegation of Duties..................................................................18
         SECTION 6.04      Servicer Not to Resign................................................................18
         SECTION 6.05      Servicer Indemnification of the Indenture Trustee.....................................18

ARTICLE VII DEFAULT..............................................................................................19
         SECTION 7.01      Servicer Defaults.....................................................................19
         SECTION 7.02      Consequences of a Servicer Default....................................................20
         SECTION 7.03      Indenture Trustee to Act; Appointment of Successor....................................21
         SECTION 7.04      Waiver of Past Defaults...............................................................21

ARTICLE VIII MISCELLANEOUS.......................................................................................22
         SECTION 8.01      Amendment.............................................................................22
         SECTION 8.02      Termination...........................................................................22
         SECTION 8.03      Notices  22
         SECTION 8.04      Governing Law.........................................................................22
         SECTION 8.05      Severability..........................................................................22
         SECTION 8.06      Assignment............................................................................22
         SECTION 8.07      Successors and Assigns................................................................23
         SECTION 8.08      Counterparts..........................................................................23
         SECTION 8.09      Headings and Cross-References.........................................................23
         SECTION 8.10      No Petition Covenants.................................................................23
         SECTION 8.11      Third Party Beneficiary...............................................................24

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                               SERVICING AGREEMENT

                  SERVICING  AGREEMENT,  dated as of October 16, 2000 (as it may
be further amended,  supplemented or modified,  this  "Agreement"),  among Truck
Retail  Instalment  Paper Corp.,  a Delaware  corporation  ("Issuer"),  Navistar
Leasing  Company,  a Delaware  business  trust (the "Titling  Trust"),  Navistar
Financial Corporation,  a Delaware corporation  (hereinafter,  together with its
successors  and assigns,  "Navistar  Financial"  or, in its capacity as servicer
hereunder, the "Servicer"), The Bank of New York, a New York banking corporation
(the "Collateral  Agent"),  Bank One, National  Association,  a national banking
association,  as Portfolio Trustee (the "Portfolio  Interest Trustee") and Harco
Leasing  Company,  Inc., a wholly owned  subsidiary of Navistar  Financial and a
Delaware   corporation   (hereinafter,   together   with  its   successors   and
assigns, "Harco Leasing").

                                RECITALS:


                  WHEREAS,  Navistar  Financial  has been  performing  servicing
obligations  relating to the Titling Trust Assets  pursuant to the Titling Trust
Servicing Agreement;

                  WHEREAS,  pursuant to the Titling Trust Agreement a portion of
the General Trust Assets has been allocated to the TRIP Portfolio Interest;

                  WHEREAS,  Issuer and  Navistar  Financial  are  parties to the
Receivables Purchase Agreement,  pursuant to which Issuer will purchase the Trip
Portfolio  Interest  and the  Retail  Leases  and  other  Titling  Trust  Assets
allocated  thereto  from time to time and  Retail  Notes  from time to time from
Navistar Financial;

                  WHEREAS,  Issuer  will issue Notes  pursuant to the  Indenture
between the Issuer and The Bank of New York, a New York banking corporation,  as
indenture  trustee (the "Indenture  Trustee"),  and use the proceeds  thereof to
fund the  acquisition  of the Trip  Portfolio  Interest  (and the Retail  Leases
allocated  thereto) and the Retail Notes from Navistar Financial pursuant to the
Receivables Purchase Agreement;

                  WHEREAS,  the  Servicer is willing to continue  its  servicing
functions  as it  relates  to the  Titling  Trust  Assets  comprising  the  TRIP
Portfolio  Interest  pursuant to the Titling Trust Servicing  Agreement and this
Agreement for and in  consideration  of the fees and other benefits set forth in
this Agreement; and

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


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                  WHEREAS,   the  parties  wish  to  set  forth  the  terms  and
conditions upon which the  Receivables  (including the Retail Leases and Related
Titling  Trust  Assets  allocated  to the  TRIP  Portfolio  Interest)  are to be
serviced by the Servicer.

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

                        DEFINITIONS; SERVICING SUPPLEMENT

         Certain Defined Terms. Capitalized terms used in the above recitals and
in this Agreement shall have the respective meanings assigned them in Appendix A
to the  Indenture  dated as of the date  hereof  between  Issuer  and  Indenture
Trustee, unless otherwise defined herein. The rules of construction set forth in
Part II of Appendix A to the Indenture shall be applicable to this Agreement.

         Supplement to Titling Trust Servicing Agreement.

                  (a) Pursuant to Section 5.13 of the Titling  Trust  Agreement,
each of the Titling  Trust,  Harco  Leasing,  Navistar  Financial and the Issuer
hereby  appoints  Navistar  Financial as the  Servicer  with respect to the TRIP
Portfolio  Interest and the TRIP Portfolio  Assets, to serve in accordance with,
and  subject  to,  the terms of the  Titling  Trust  Servicing  Agreement,  this
Agreement and the other Basic Documents.

                  (b) The Servicer shall account to the Portfolio  Trustee,  the
Issuer and the  Indenture  Trustee with respect to the TRIP  Portfolio  Interest
separately from any other Portfolio Interests.


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                  (c) This  Agreement  shall  constitute a "Portfolio  Servicing
Agreement  Supplement" under the Titling Trust Servicing  Agreement with respect
to the  TRIP  Portfolio  Interest  and the  TRIP  Portfolio  Assets.  Except  as
otherwise  specifically  provided  herein or in the other Basic  Documents,  the
parties to the Titling Trust  Servicing  Agreement shall continue to be bound by
all provisions of the Titling Trust Servicing Agreement with respect to the TRIP
Portfolio  Interest and the TRIP Portfolio  Assets,  including the provisions of
Article III thereof relating to the  administration  and servicing of the Retail
Leases.  To the  extent  that the  provisions  of the  Titling  Trust  Servicing
Agreement (as expressly  amended,  supplemented or waived by this Agreement) are
not directly  inconsistent with the provisions set forth herein,  the provisions
of the Titling Trust Servicing  Agreement shall be made a part of this Agreement
and shall  govern the  servicing  of the TRIP  Portfolio  Interest  and the TRIP
Portfolio Assets.  However,  in the event of any conflict between the provisions
of the Titling Trust Servicing Agreement (as expressly amended,  supplemented or
waived by this  Agreement)  and the  provisions  set forth or in any other Basic
Document,  the provisions set forth herein or in such other Basic Document shall
prevail.

                  (d) For purposes of  determining  the  Servicer's  obligations
with  respect  to the  servicing  of the TRIP  Portfolio  Interest  and the TRIP
Portfolio Assets under this Agreement,  general  references in the Titling Trust
Servicing  Agreement to: (i) a Portfolio  Interest shall be deemed to refer more
specifically  to  the  TRIP  Portfolio  Interest;  (ii)  a  Portfolio  Servicing
Agreement  Supplement  shall  be  deemed  to  refer  more  specifically  to this
Agreement;  and (iii) a  Portfolio  Supplement  shall be  deemed  to refer  more
specifically to the TRIP Portfolio Supplement.

                    (e) The Servicer shall perform the obligations specified for
it in the TRIP Portfolio Interest.



                   ADMINISTRATION AND SERVICING OF RECEIVABLES

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


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

         Establishment of Accounts. The Servicer shall establish and maintain an
Eligible  Deposit Account in the name of the Indenture  Trustee on behalf of the
Noteholders  which shall bear a designation  clearly  indicating  that the funds
deposited therein are held for the benefit of the Noteholders into which amounts
paid on or with respect to the Receivables  will be deposited by the Servicer in
accordance  with this  Agreement  and  withdrawn  by the  Indenture  Trustee  in
accordance  with the Indenture (the  "Collection  Account").  The Servicer shall
also  establish  and  maintain  an Eligible  Deposit  Account in the name of the
Indenture  Trustee on behalf of the  Noteholders  which shall bear a designation
clearly  indicating that the funds deposited therein are held for the benefit of
the  Noteholders,  into which  amounts  will be deposited  and  withdrawn by the
Indenture  Trustee  in  accordance  with  the  Indenture  (the  "Excess  Funding
Account").  As and to the extent provided in a Series  Supplement,  the Servicer
shall  also   establish  and  maintain  for  each  series  of  Notes  each  Note
Distribution   Account  and  each  Reserve  Account  described  in  such  Series
Supplement in accordance with the terms of such Series Supplement.

         If a Designated  Account ceases to be an Eligible  Deposit  Account for
any reason,  including as a result of the  institution at which such  Designated
Account is maintained ceasing to be an Eligible Institution, the Servicer shall,
with the Indenture  Trustee's  assistance as  necessary,  cause such  Designated
Account to be an Eligible Deposit Account.

         Unless otherwise provided in the applicable Series Supplement, funds in
any Designated Account shall be invested in Eligible Investments.


<PAGE>



         The Indenture  Trustee  shall possess all right,  title and interest in
all funds from time to time on deposit in, and all Eligible Investments credited
to, the Designated Accounts and in all proceeds thereof. The Designated Accounts
shall be under the sole  dominion and control of the  Indenture  Trustee for the
benefit of the Noteholders. If, at any time, any Designated Account ceases to be
an Eligible  Deposit  Account,  the  Servicer,  within 10 Business Days (or such
longer  period,  not to exceed  thirty  calendar  days,  as to which each Rating
Agency may  consent) of  determining  or  receiving  notice  from the  Indenture
Trustee that any Designated  Account is no longer an Eligible  Deposit  Account,
shall  establish  in the name of the  Indenture  Trustee a  substitute  Eligible
Deposit Account as such Designated  Account,  instruct the Indenture  Trustee or
the Issuer as applicable,  in writing,  to transfer any cash and/or any Eligible
Investments  to such  new  Designated  Account  and,  from  the  date  any  such
substitute account is established, such account shall be the Designated Account.
Neither the Transferor nor the Servicer,  nor any person or entity  claiming by,
through or under the  Transferor  or  Servicer,  shall have any right,  title or
interest in, or any right to withdraw any amount from, the Designated  Accounts.
The  Servicer  shall have the power,  revocable  by the  Indenture  Trustee,  to
instruct  the  Indenture  Trustee  to make  withdrawals  and  payments  from the
Designated  Accounts  for the  purposes of carrying  out the  Servicer's  duties
specified in this Agreement or permitting the Indenture Trustee to carry out its
duties under the Indenture.

         All Eligible Investments shall be held by the Indenture Trustee for the
benefit of the  Noteholders  in  accordance  with Section 8.3 of the  Indenture.
Funds on deposit in the Designated  Accounts  shall at the written  direction of
the  Servicer  be  invested  by  the  Indenture  Trustee,   solely  in  Eligible
Investments  that will mature so that such funds will be  available at the close
of business on or before the Business Day immediately preceding the next Payment
Date (or on or before 10:00 a.m. on such  following  Payment Date in the case of
Eligible Investments in respect of which the Indenture Trustee is the obligor).

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

         Investment  earnings on funds in all the  Designated  Accounts shall be
treated as Collections,  and all such  investment  earnings shall be included in
the Total Collected Amount for each Payment Date and deposited in the Collection
Account.


<PAGE>



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

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

         (c)  The  second  sentence  of  Section  3.5(b)  of the  Titling  Trust
Servicing Agreement shall not be applicable to the TRIP Portfolio Assets.

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

          With respect to Retail Leases and the related Financed  Vehicles,  the
Servicer  shall  comply  with the  obligations  specified  in Section 3.8 of the
Titling Trust Servicing Agreement.

<PAGE>



          The  Servicer  shall  maintain  one  or  more  contingent  and  excess
liability  insurance  policies (the "primary  contingent  policies")  naming the
Titling  Trust as the insured with at least a $1 million limit for each accident
and no annual or aggregate limit on the number of accidents covered. The primary
contingent  policies  will  respond if, at the time of an  accident  involving a
vehicle  owned by the  Titling  Trust that  causes  bodily  injury and  property
damages to a third person,  the insurance required to be provided by the Obligor
in  accordance  with the  related  Retail  Lease has not been  provided,  is not
collectible or has inadequate  limits to protect the Titling Trust. In addition,
the Servicer  shall  maintain  excess  insurance  coverage for which the Titling
Trust is an  additional  named  insured,  which  coverage has a  deductible  not
greater than the amount of coverage provided by the primary contingent policies,
and which  provides  insurance  coverage of more than $10 million per occurrence
(collectively, the primary contingent policies and the excess coverage policies,
which are in effect at any time, are referred to as the  "Contingent  and Excess
Liability Insurance Policies").

         Maintenance of Interests in Vehicles. The Servicer shall, in accordance
with its customary servicing procedures and at its own expense,  take such steps
as are necessary to maintain  perfection of the first priority security interest
of the  Seller  created  by a Retail  Note in the  related  Financed  Vehicle or
Financed  Vehicles and of the first priority security interest of the Collateral
Agent in the Financed Vehicle or Financed  Vehicles related to any Retail Lease.
Issuer hereby  authorizes the Servicer to re-perfect such security  interests as
necessary  because  of the  relocation  of a  Financed  Vehicle or for any other
reason.

         Covenants of the Servicer.  The Servicer hereby covenants as follows:


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

the  Servicer  shall  do  nothing  to  impair  the  rights of the  Issuer or the
Indenture Trustee in the Receivables;

the Servicer shall not amend or otherwise  modify any  Receivable  such that the
APR is decreased  or such that the final  scheduled  payment on such  Receivable
will be due any  later  than  the last day of the  calendar  month  prior to the
Stated Final Maturity Date of any Series then outstanding; and

the  Servicer  shall not at any time have or in any way  attempt  to assert  any
interest  in any  Receivables  or  Related  Assets  or  records  related  to the
Collateral  other than solely for the purpose of  collecting  or  enforcing  the
Receivables  for the benefit of the  Indenture  Trustee and the entire legal and
equitable interest of the Issuer in such Receivables and Related Assets shall at
all times be vested in the Issuer.


<PAGE>



         Purchase of Receivables Upon Breach of Covenant.

          (a) Upon discovery by the Servicer or a Responsible  Officer of any of
the Interested Parties of a breach of any of the covenants set forth in Sections
2.06 and 2.07 with respect to any Receivable,  the party discovering such breach
shall give prompt written  notice  thereof to the others.  As of the last day of
the second (or, if the Servicer so elects,  the first)  calendar month following
notice  to or  discovery  by the  Servicer  of a breach of any  covenant  of the
Servicer that  materially  and adversely  affects any Receivable and unless such
breach is cured in all material  respects,  the Servicer shall,  with respect to
such  Receivable  (an  "Administrative  Receivable"):  release  all  claims  for
reimbursement  of Monthly  Advances made on such  Administrative  Receivable and
purchase such Administrative  Receivable from the Issuer at a price equal to the
Contract Value thereof (the  "Administrative  Purchase  Payment").  The Servicer
shall pay the Administrative Purchase Payment as described in Section 2.10.

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

         (b) Upon receipt of the Administrative Purchase Payment with respect to
a Receivable which is an Administrative Receivable, the Interested Parties shall
each assign, without recourse,  representation or warranty, to the Servicer (and
shall take such other actions as the Servicer may reasonably  request in writing
to perfect or confirm such  assignment)  all of such  Interested  Party's right,
title and interest in, to and under (i) such  Administrative  Receivable and all
monies  due  thereon  and  (ii)  all  Related   Assets  with   respect  to  such
Administrative Receivable,  such assignment being an assignment outright and not
for security. Upon the assignment of such Administrative Receivable described in
the preceding sentence,  the Servicer shall own such Administrative  Receivable,
and all such Related Assets,  free of any further obligations to such Interested
Party with respect  thereto.  The Servicer shall  contribute any  Administrative
Receivable and its Related  Assets to the General  Interest in the Titling Trust
(or to such other person as shall be designated by Harco Leasing).

         Servicing  Fee. In  consideration  for its  services  hereunder  and as
compensation  for expenses paid as  contemplated  by Section 2.10,  the Servicer
shall be entitled to receive on each  Payment  Date a servicing  fee (the "Basic
Servicing  Fee") for the related  Monthly Period equal to one-twelfth of 1% (the
"Basic Servicing Fee Rate") multiplied by the average Aggregate Discounted Asset
Balance during such Monthly  Period.  On each Payment Date, the Servicer will be
paid the Basic  Servicing Fee and any unpaid Basic Servicing Fees from all prior
Payment Dates  (collectively,  the "Total Servicing Fee") to the extent of funds
available  therefor.  In addition,  the Servicer will be entitled to receive any
late fees,  prepayment  charges or certain  similar  fees and charges  collected
during a Monthly Period (the  "Supplemental  Servicing Fee"). The Servicer shall
be paid the Total Servicing Fee and the applicable Supplemental Servicing Fee in
accordance with Section 8.2 (i) of the Indenture.

         Servicer  Expenses.  The Servicer shall be required to pay all expenses
incurred by it in connection with its activities  hereunder,  including fees and
disbursements  of  independent  accountants,  taxes  imposed on the Servicer and
expenses incurred in connection with distributions and reports.


<PAGE>



         Deposits  to  Collection  Account.  The  Servicer  shall  remit  to the
Indenture  Trustee for deposit to the  Collection  Account  all  Collections  it
receives  during each  Monthly  Period  within two Business  Days after  receipt
thereof.  The  Servicer  shall  remit to the  Indenture  Trustee for deposit (in
immediately   available   funds)  in  the   Collection   Account  the  aggregate
Administrative  Purchase Payments with respect to Administrative  Receivables to
be  purchased  as of the last day of any  Monthly  Period  on the  Business  Day
immediately preceding the immediately succeeding Payment Date.

         Collections. In the event that:

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

the short-term unsecured debt of the Servicer is rated at least A-1 by  S&P  and
P-1 by  Moody's or

a standby letter of credit has been issued by an Eligible  Institution which, as
of each date during the period that the Servicer is making  monthly  remittances
of  Collections,  has an undrawn  amount at least equal to 150% of all Scheduled
Payments due in respect of the Issuer  Receivables for the latest Monthly Period
ended prior to the next  succeeding  Payment Date (and the  aggregate  amount of
unremitted  Collections does not at any time exceed 90% of the undrawn amount of
such letter of credit),  (each, a "Monthly Remittance  Condition") then, so long
as Navistar  Financial is the Servicer  and,  provided  that no Event of Default
exists,  the  Servicer  shall not be  required to deposit  Collections  into the
Collection  Account until the Business Day preceding the Payment Date  following
the Monthly Period during which such Collections were received.  Pending deposit
into the Collection Account,  Collections may be employed by the Servicer at its
own risk and for its own benefit and will not be segregated from its own funds.

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

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


<PAGE>



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

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

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

         Net  Deposits.  For  so  long  as a  Monthly  Remittance  Condition  is
satisfied  and the  Servicer  is not  required to remit  Collections  within two
Business Days of receipt thereof, then (1) as an administrative convenience, the
Servicer  shall be  permitted  to make the  deposit  of  Collections,  aggregate
Monthly  Advances,   Warranty  Purchase  Payments  and  Administrative  Purchase
Payments,  net of  distributions  to be made to the Servicer with respect to the
related  Monthly  Period on the  related  Payment  Date in  accordance  with the
Indenture,  provided,  however, that the Servicer shall account to the Indenture
Trustee and the Noteholders of each Series as if all deposits, distributions and
other  remittances  were made  individually,  and (2) the  Servicer  may  retain
Collections  until the Business Day  preceding  the related  Payment  Date,  and
pending deposit into the Collection Account, such Collections may be employed by
the Servicer at its own risk and for its own benefit and will not be  segregated
from its own funds.


<PAGE>



         Monthly  Calculations.  On  or  before  each  Determination  Date,  the
Servicer  will  calculate,  with respect to the related  Monthly  Period and the
related   Payment  Date,  each  of  the   withdrawals,   deposits  and  payments
contemplated by the Basic Documents.  Based on such  calculations,  the Servicer
will deliver to the Indenture  Trustee a certificate  instructing  the Indenture
Trustee to make the  withdrawals,  deposits and  payments,  as determined by the
Servicer, on the day preceding the related Payment Date.

         On each  Determination  Date,  the Servicer  shall  calculate the Total
Collected   Amount  with  respect  to  the  related  Monthly  Period.   On  each
Determination Date, the Servicer shall also calculate the Total Available Amount
with respect to the next succeeding Payment Date.

                             STATEMENTS AND REPORTS

         Annual Statement as to Compliance;  Notice of Servicer Default.
(a) The  Servicer  shall  deliver  to  Issuer,  the  Indenture  Trustee  and the
Collateral Agent, on or before February 1 of each year, beginning with the first
February 1 which is at least twelve  months after the Closing Date, an officer's
certificate signed by the Chairman of the Board, Vice Chairman of the Board, the
President or any Vice  President of the  Servicer,  dated as of the  immediately
preceding  October  31,  stating  that (i) a  review  of the  activities  of the
Servicer  during the  preceding  12-month  period (or, with respect to the first
such certificate, such period as shall have elapsed from the Closing Date to the
date of such  certificate)  and of its performance  under this Agreement and the
Titling  Trust   Servicing   Agreement  has  been  made  under  such   officer's
supervision,  and (ii) to such officer's  knowledge,  based on such review,  the
Servicer has fulfilled all its obligations  under this Agreement and the Titling
Trust  Servicing  Agreement  throughout  such  period,  or,  if there has been a
default in the fulfillment of any such obligation,  specifying each such default
known  to such  officer  and  the  nature  and  status  thereof.  A copy of such
certificate  may be  obtained by any  Noteholder  by a request in writing to the
Indenture  Trustee,  addressed to the  Corporate  Trust Office of the  Indenture
Trustee.

(b) The Servicer shall deliver to Issuer, the Indenture Trustee,  the Collateral
Agent and each Rating Agency,  promptly after having obtained knowledge thereof,
but in no event later than five Business Days thereafter,  written notice of any
event which with the giving of notice or lapse of time, or both,  would become a
Servicer Default under Section 7.01.


<PAGE>



         Annual  Accountants'  Report.

(a) The Servicer  shall cause a firm of  independent  accountants,  who may also
render  other  services  to the  Servicer or Issuer,  to deliver to Issuer,  the
Indenture  Trustee,  the  Collateral  Agent and each Rating  Agency,  as soon as
available  and in any event within 100 days after the end of each fiscal year of
the  Servicer,  beginning  with the fiscal  year ended  October 31,  2001,  with
respect to such fiscal year (or,  with  respect to the first such  report,  such
period  as  shall  have  elapsed  from  the  Closing  Date  to the  date of such
certificate),  a report (the  "Accountants'  Report")  addressed to the board of
directors of the Servicer to the effect that such firm has audited the financial
statements of the Servicer and issued its report thereon and that such audit (i)
was made in accordance with generally accepted auditing standards, (ii) included
tests  relating  to  Receivables  serviced  for  others in  accordance  with the
requirements  of the Uniform  Single  Audit  Program for  Mortgage  Bankers (the
"Program"),  to the extent the  procedures in the Program are  applicable to the
servicing  obligations  set  forth  in  this  Agreement  and the  Titling  Trust
Servicing  Agreement  and (iii) except as described in the report,  disclosed no
exceptions or errors in the records relating to Receivables  serviced for others
that, in the firm's opinion, paragraph four of the Program requires such firm to
report.

(b) The Accountants'  Report shall also indicate that the firm is independent of
the  Issuer and the  Servicer  within  the  meaning of the Code of  Professional
Ethics of the American Institute of Certified Public Accountants.

(c) A copy of the  Accountant's  Report may be obtained by any  Noteholder  by a
request in writing to the Indenture  Trustee,  addressed to the Corporate  Trust
Office of the Indenture Trustee.

         Access to Certain Documentation and Information Regarding  Receivables.
The Servicer shall provide to the Issuer,  the Indenture Trustee and Noteholders
reasonable  access to the Servicer's  records regarding the Receivables owned by
the Issuer.  The Servicer  shall provide such access to any  Noteholder  only in
such cases where a Noteholder is required by applicable  statutes or regulations
to review  such  documentation.  In each case,  such  access  shall be  afforded
without charge but only upon reasonable request and during normal business hours
at offices of the Servicer  designated by the Servicer.  Nothing in this Section
3.03  shall  derogate  from  the  obligation  of the  Servicer  to  observe  any
applicable law prohibiting disclosure of information regarding Obligors, and the
failure of the Servicer to provide  access as provided in this Section 3.03 as a
result of such obligation shall not constitute a breach of this Section 3.03.

         Maintenance of Composite  Schedule of  Receivables.  The Servicer shall
maintain  at  all  times  a  composite  schedule  (the  "Composite  Schedule  of
Receivables")  which shall list  separately (i) all Retail Notes which are owned
by the  Issuer  and (ii) all  Retail  Leases  which  are  allocated  to the TRIP
Portfolio  Interest.  The Composite  Schedule of Receivables shall be updated to
reflect all purchases  and sales of  Receivables  by the Issuer  (including as a
result of a  Receivable  becoming a  Warranty  Receivable  or an  Administrative
Receivable).  The  Servicer  shall  deliver an  updated  Composite  Schedule  of
Receivables on or before each Receivables Purchase Date, each Sale Date and each
Payment  Date to the Issuer,  the  Indenture  Trustee and the  Collateral  Agent
(provided  that the  Servicer  need  deliver  to the  Collateral  Agent just the
portion of the Composite  Schedule of Leases which lists Retail  Leases),  which
Composite  Schedule of Receivables shall be accurate as of the related Reference
Date,  after giving pro forma effect to any purchase or sale of  Receivables  to
occur on such date.


<PAGE>



         Amendments  to  Composite  Schedule of  Receivables.  If the  Servicer,
during a Monthly Period,  assigns to a Receivable an account number that differs
from the account number previously  identifying such Receivable on the Composite
Schedule of  Receivables,  the Servicer  shall amend the  Composite  Schedule of
Receivables to report the newly assigned account number. Each Composite Schedule
of  Receivables  delivered on a Payment Date pursuant to Section 3.04 shall list
all new account numbers  assigned to Receivables  during such Monthly Period and
shall  show by cross  reference  the  prior  account  numbers  identifying  such
Receivables on the previously distributed Composite Schedule of Receivables.

         Maintenance  of Systems and  Receivables  List.  (a) The Servicer shall
maintain  accounts and records as to each Issuer Receivable in sufficient detail
to permit (i) the reader  thereof to know the status of such Issuer  Receivable,
including  payments and  recoveries  made and payments  owing (and the nature of
each) and extensions of any scheduled  payments made not less than 45 days prior
thereto,  and (ii)  reconciliation  between  payments or  recoveries on (or with
respect to) each Issuer  Receivable  and the amounts from time to time deposited
in the Collection Account in respect to such Issuer Receivable.

                  (b) The Servicer shall  maintain its computer  systems so that
the Servicer's  master  computer  records  (including any backup  archives) that
refer to any Issuer Receivable shall indicate clearly that the Issuer Receivable
is owned by Issuer and that such Issuer Receivable has been pledged by Issuer to
the  Indenture  Trustee.  Indication  of Issuer's  and the  Indenture  Trustee's
interest  in an Issuer  Receivable  shall be  deleted  from or  modified  on the
Servicer's  computer systems when, and only when, the related Issuer  Receivable
shall have been paid in full,  repurchased by Navistar  Financial,  purchased by
the Servicer or become a Liquidating Receivable.

                    (c) If at any time the Servicer shall propose to sell, grant
a security  interest in, or  otherwise  transfer any interest in medium or heavy
duty truck, bus or trailer receivables to any prospective  purchaser,  lender or
other transferee, the Servicer shall give to such prospective purchaser,  lender
or other transferee computer tapes, records or printouts (including any of those
restored from backup  archives) that, if they refer in any manner  whatsoever to
any Issuer  Receivable,  indicate  clearly that such Issuer  Receivable has been
sold and is owned by Issuer and has been pledged to the Indenture Trustee unless
such  Issuer  Receivable  has  been  paid  in full or  repurchased  by  Navistar
Financial, purchased by the Servicer.

                    (d) The Servicer shall furnish to the Issuer,  the Indenture
Trustee,  on behalf of the Noteholders,  at any time upon request, a list of all
Issuer Receivables, together with a reconciliation of such list to each Schedule
of  Receivables  relating to Issuer  Receivables  and to each of the  Servicer's
reports   furnished   before  such  request   indicating   transfers  of  Issuer
Receivables.

                    (e) The  Servicer  shall  furnish to the  Issuer,  Indenture
Trustee and Rating  Agencies,  on or before  February 1 of each year,  beginning
February 1, 2002, an officer's  certificate signed by the Chairman of the Board,
Vice Chairman of the Board, the President or any Vice President of the Servicer,
dated as of the immediately  preceding  October 31, that discloses the existence
of any vicarious tort liability  claims relating to the TRIP Portfolio Assets on
such date, if any, and the estimated or actual costs of any such claims.

<PAGE>




                                  THE CUSTODIAN

         Custody of Receivable Files. To assure uniform quality in servicing the
Receivables  and to reduce  administrative  costs,  Issuer  hereby  appoints the
Servicer,  and the Servicer hereby accepts such appointment,  to act as agent of
Issuer  as  custodian  to  maintain  custody  of  the  following   documents  or
instruments  with  respect  to each  Receivable  owned by the Issuer (as to each
Receivable,   the  "Receivable  File"),  which  will  be  hereby  constructively
delivered to the Issuer and the Indenture Trustee:

the fully executed original of each Retail Note or Retail Lease included in  the
Receivables;

documents evidencing or related to any related Insurance Policy;

if such  Receivable  is a Retail  Note,  where  permitted  by law,  the original
Certificate of Title (when received) and otherwise such  documents,  if any that
Navistar  Financial  keeps on file in accordance  with its customary  procedures
indicating that the Financed  Vehicle is owned by the Obligor and subject to the
interest of Navistar Financial as first lienholder or secured party;

if such Receivable is a Retail Lease, the original Certificate of Title and such
other  documents  that  Navistar  Financial is required to maintain  pursuant to
Section 3.6 of the Titling Trust Servicing Agreement; and

any and all other documents that Navistar Financial, keeps on file in accordance
with its customary procedures relating to the individual Receivable,  Obligor or
Financed Vehicle.

         Duties of  Servicer  as  Custodian.  (a) The  Servicer  shall  hold the
Receivable  Files for the  benefit  of Issuer and  maintain  such  accurate  and
complete  accounts,  records and computer systems  pertaining to each Receivable
File as shall  enable  Issuer to  comply  with its  obligations  under the Basic
Documents.  In performing  its duties as custodian  the Servicer  shall act with
reasonable  care,  using that degree of skill and  attention  that the  Servicer
exercises with respect to the receivable files relating to comparable medium and
heavy duty truck,  bus and trailer  receivables  that the Servicer  services and
holds  for  itself  or  others.  The  Servicer  shall  conduct,  or  cause to be
conducted,  periodic  physical  inspections of the  Receivable  Files held by it
under this Agreement, and of the related accounts, records and computer systems,
in such manner as shall enable the  Indenture  Trustee to verify the accuracy of
the Servicer's  inventory and record keeping. The Servicer shall promptly report
to Issuer any failure on its part to hold the Receivable  Files and maintain its
accounts,  records and computer  systems as herein  provided  and promptly  take
appropriate action to remedy any such failure.


<PAGE>



         (b) The Servicer shall maintain each  Receivable  File at its principal
office at 2850 West Golf Road, Rolling Meadows, Illinois 60008, or at such other
office of the  Servicer as shall from time to time be  identified  to Issuer and
the  Indenture  Trustee upon 60 days prior written  notice.  Subject only to the
Custodian's security requirements  applicable to its own employees having access
to similar records held by the Servicer and the limitations set forth in Section
3.03 hereof and  otherwise in the Basic  Documents,  the  Servicer  shall permit
Issuer, the Indenture Trustee, their duly authorized representatives,  attorneys
or auditors to inspect the Receivable  Files and the related  accounts,  records
and computer systems maintained by the Servicer pursuant hereto at such times as
such party may reasonably request.

         (c) In  general,  the  Servicer  shall  attend to all  nondiscretionary
details in connection  with  maintaining  custody of the  Receivable  Files.  In
addition  the Servicer  shall assist  Issuer  generally  in the  preparation  of
routine  reports  to  regulatory  bodies  to  the  extent  necessitated  by  the
Servicer's custody of the Receivable Files.

         Custodian's Indemnification.  The Servicer as custodian shall indemnify
Issuer,  the Indenture  Trustee,  the Collateral  Agent, and the Noteholders and
each of  their  officers,  directors  and  agents  for any and all  liabilities,
obligations,  losses,  compensatory damages,  payments, costs or expenses of any
kind whatsoever  that may be imposed on, incurred by or asserted  against Issuer
and the Indenture  Trustee,  the Noteholder or any of their officers,  directors
and agents as the result of any  improper act or omission in any way relating to
the  maintenance  and custody by the  Servicer as  custodian  of the  Receivable
Files; provided,  however, that the Servicer shall not be liable for any portion
of any  such  amount  resulting  from  the  willful  misfeasance,  bad  faith or
negligence of the Indenture Trustee.

         Effective  Period  and  Termination.   The  Servicer's  appointment  as
custodian with respect to a Receivable File hereunder shall become  effective as
of the related  Receivable  Purchase  Date and shall  continue in full force and
effect until  terminated  pursuant to this Section 4.04.  If the Servicer  shall
resign as Servicer in accordance with the provisions of this Agreement or if all
of the rights and obligations of any Servicer shall have been  terminated  under
Section VI, the  appointment of such Servicer as custodian  shall be terminated.
Upon (i) the  repurchase of a Receivable by Navistar  Financial  pursuant to the
Receivables Purchase Agreement, (ii) purchase of an Administrative Receivable by
the Servicer  pursuant to Section 2.08(a) of this Agreement or (iii) a sale of a
Receivable by the Issuer in accordance  with the  Indenture,  the Servicer shall
deliver the related  Receivable  File to the  purchaser  or its  assignee.  Upon
delivery of such  Receivable  File, the Servicer's  obligations  with respect to
such Receivable File shall terminate.

                         REPRESENTATIONS AND WARRANTIES

                                 OF THE SERVICER

         Representations  and  Warranties of the Servicer.  The Servicer  hereby
represents and warrants to Issuer that as of each Receivable Purchase Date:


<PAGE>



Organization  and Good  Standing.  The Servicer has been duly  organized  and is
validly  existing as a  corporation,  and in good standing under the laws of the
State of Delaware, with power and authority to own its properties and to conduct
its  business  as such  properties  are  presently  owned and such  business  is
presently  conducted,  and  had at all  relevant  times,  and  now  has,  power,
authority  and legal  right to  service  the  Receivables  as  provided  in this
Agreement and the Titling Trust Servicing Agreement.

Due  qualification.  The Servicer is duly  qualified to do business as a foreign
corporation  in good  standing,  and has  obtained  all  necessary  licenses and
approvals,  in all  jurisdictions in which the ownership or lease of property or
the conduct of its  business  (including  the  servicing of the  Receivables  as
required by this Agreement and the Titling Trust Servicing  Agreement)  requires
such  qualification,  except to the extent that the failure to comply  therewith
would not, in the aggregate,  have a Material Adverse Effect with respect to the
Servicer.

Power and  Authority.  The Servicer  has the  corporate  power and  authority to
execute and deliver this Agreement and the Titling Trust Servicing Agreement and
to perform its obligations hereunder and thereunder and the execution,  delivery
and  performance  by the  Servicer  of  this  Agreement  and the  Titling  Trust
Servicing  Agreement have been duly authorized by all necessary corporate action
on the part of the  Servicer.  Except  as  expressly  contemplated  in the Basic
Documents,  no consent or  authorization  of, filing with, or other act by or in
respect of, any Governmental Authority or other Person is required in connection
with the execution,  delivery,  performance,  validity or enforceability against
the Servicer of this Agreement and the Titling Trust Servicing Agreement.

Binding  Obligation.  This Agreement and the Titling Trust  Servicing  Agreement
each  constitutes  a  legal,  valid  and  binding  obligation  of  the  Servicer
enforceable  against  the  Servicer  in  accordance  with its  terms,  except as
enforceability   may  be   limited   by   applicable   bankruptcy,   insolvency,
reorganization  or other similar laws  affecting the  enforcement  of creditors'
rights in general and by general  principles  of equity,  regardless  of whether
such enforceability is considered in a proceeding in equity or at law.

No Violation. The execution and delivery of this Agreement and the Titling Trust
Servicing  Agreement  by the  Servicer and its  performance  of its  obligations
hereunder and thereunder  will not violate any Requirement of Law or Contractual
Obligation  of the Servicer and will not result in, or require,  the creation or
imposition  of any Lien on any of its  property  or assets  pursuant to any such
Requirement of Law or Contractual  Obligation  other than as contemplated by the
Basic Documents.


<PAGE>



No  Proceedings.  There  are no  actions,  proceedings  or,  to  the  Servicer's
knowledge,  investigations  pending or, to the Servicer's knowledge,  threatened
before any Governmental Authority (i) asserting the invalidity of this Agreement
or  the  Titling  Trust  Servicing  Agreement,   (ii)  seeking  to  prevent  the
consummation  of any of the  transactions  contemplated by this Agreement or the
Titling Trust Servicing Agreement,  or (iii) seeking any determination or ruling
that would reasonably be expected to have a Material Adverse Effect with respect
to the Servicer.

No Consent.  Except as expressly contemplated by the Basic Documents, no consent
or  authorization  of,  filing  with,  or other  act by or in  respect  of,  any
Governmental  Authority or any other Person is required in  connection  with the
execution, delivery,  performance,  validity or enforceability by or against the
Servicer of this Agreement or the Titling Trust Servicing Agreement.

                                  THE SERVICER

         Merger or  Consolidation  of, or Assumption of the  Obligations of, the
Servicer.  Any Person (a) into which the Servicer may be merged or consolidated,
(b) resulting from any merger, conversion or consolidation to which the Servicer
shall be a party,  (c)  succeeding to the business of the Servicer,  or (d) more
than 50% of the voting  stock or other  interest  of which is owned  directly or
indirectly  by  NIC  and  which  is  otherwise  servicing  Navistar  Financial's
receivables, which Person in any of the foregoing cases executes an agreement of
assumption to perform  every  obligation  of the Servicer  under this  Agreement
shall  be the  successor  to the  Servicer  under  this  Agreement  without  the
execution  or filing of any paper or any  further  act on the part of any of the
parties to this  Agreement,  notwithstanding  anything in this  Agreement to the
contrary.  The Servicer  shall provide  notice of any merger,  consolidation  or
succession  pursuant  to  this  Section  6.01  to the  Rating  Agencies  and the
Indenture Trustee.

         Limitation on Liability of Servicer and Others.  (a) The Servicer shall
be  liable  in  accordance  with  this  Agreement  only  to  the  extent  of the
obligations  in this  Agreement  specifically  undertaken by the  Servicer.  The
Servicer  shall defend,  indemnify  and hold harmless the Issuer,  the Indenture
Trustee,  the  Noteholders,  the  Collateral  Agent and any of their  respective
trustees,  officers,  directors  and agents  from and against any and all costs,
expenses,  losses, damages, claims and liabilities,  arising out of or resulting
from:

          the use,  ownership  or  operation  by the  Servicer or any  Affiliate
     thereof of any Financed Vehicle with respect to a Receivable;

          any taxes that may at any time be  asserted  against  any such  Person
     with respect to the transactions  contemplated herein, including any sales,
     gross receipts, general corporation,  tangible personal property, privilege
     or license taxes (but not including any taxes asserted with respect to, and
     as of the date of,  the sale or pledge of  Receivables  to any  Person,  or
     asserted with respect to ownership of the Receivables,  or federal or other
     income taxes arising out of payments of, or distributions on or any fees or
     other  compensation  payable to any such  Person) and costs and expenses in
     defending against the same; and


<PAGE>



          the  negligence,  willful  misfeasance or bad faith of the Servicer in
     the  performance  of, or by reason of its  failure to  perform,  its duties
     under this  Agreement  or any of the other Basic  Documents or by reason of
     reckless  disregard of its  obligations  and duties under this Agreement or
     any of the other Basic Documents.

         Indemnification  under this Section 6.02 shall survive the  termination
of this  Agreement or prior  removal of any  indemnified  party hereto and shall
include  reasonable fees and expenses of counsel and expenses of litigation.  If
the Servicer  shall have made any  indemnity  payments  pursuant to this Section
6.02 and the Person to or on behalf of whom such  payments  are made  thereafter
collects any of such amounts from others,  such Person shall promptly repay such
amounts to the Servicer, without interest.

         (b)  Neither  the  Servicer  nor any of the  directors  or  officers or
employees or agents of the Servicer  shall be under any  liability to the Issuer
or any Noteholder,  except as specifically  provided in this Agreement,  for any
action taken or for  refraining  from the taking of any action  pursuant to this
Agreement  or for errors in judgment;  provided,  however,  that this  provision
shall not protect the  Servicer or any such Person  against any  liability  that
would  otherwise  be  imposed  by reason of  willful  misfeasance,  bad faith or
negligence  (except  errors in judgment) in the  performance  of the  Servicer's
duties or by reason of reckless  disregard of  obligations  and duties under the
Basic Documents. The Servicer and any director,  officer or employee or agent of
the  Servicer may rely in good faith on the advice of counsel or on any document
of any kind prima facie properly executed and submitted by any Person respecting
any matters arising under this Agreement.

         (c) Except as provided in this  Agreement,  the  Servicer  shall not be
under any obligation to appear in,  prosecute or defend any legal action that is
not incidental to its duties to service the  Receivables in accordance with this
Agreement  and that in its opinion  may involve it in any expense or  liability;
provided, however, that the Servicer may undertake any reasonable action that it
may deem  necessary or desirable in respect of this Agreement and the rights and
duties of the parties to this Agreement.

         Delegation of Duties.  So long as Navistar  Financial acts as Servicer,
the  Servicer  may, at any time without  notice or consent,  delegate any duties
under this  Agreement  to any Person more than 50% of the voting  stock or other
interest of which is owned, directly or indirectly,  by NIC. The Servicer may at
any time perform specific duties as Servicer through subservicers who are in the
business of servicing medium and heavy duty truck, bus and trailer  receivables;
provided,  however,  that no such  delegation  shall relieve the Servicer of its
responsibility with respect to such duties.


<PAGE>



         Servicer Not to Resign.  Subject to the provisions of Section 7.02, the
Servicer shall not resign from the  obligations and duties imposed on it by this
Agreement  or the Titling  Trust  Servicing  Agreement  as Servicer  except upon
determination  that the  performance  of its duties under this  Agreement or the
Titling Trust Servicing Agreement is no longer permissible under applicable law.
Any such  determination  permitting  the  resignation  of the Servicer  shall be
evidenced  by an Opinion of Counsel to such effect  delivered  to the  Indenture
Trustee.  No such resignation shall become effective until the Indenture Trustee
or a successor Servicer shall have assumed the  responsibilities and obligations
of the Servicer in accordance with Section 7.02.

         Servicer Indemnification of the Indenture Trustee.


The Servicer out of its own funds shall indemnify,  defend and hold harmless the
Indenture Trustee, and its officers,  directors,  employees and agents, from and
against  any taxes that may at any time be asserted  against it with  respect to
the transactions contemplated in this Agreement,  including, without limitation,
any sales,  gross receipts,  general  corporation,  tangible personal  property,
privilege or license taxes (but not  including  any taxes  asserted with respect
to, or arising out of, (i) the sale of any Receivables to the Issuer  hereunder,
(ii) the issuance and original  sale of any Notes,  (iii)  distributions  or the
receipt of payment on the Notes or (iv) any fees or other  compensation  payable
to the Indenture Trustee.

The  Servicer  out of its own  funds  shall  indemnify  and  hold  harmless  the
Indenture Trustee, and its officers,  directors,  employees and agents, from and
against any loss, liability,  expense, damage or injury suffered or sustained by
reason of any acts,  omissions  or  alleged  acts or  omissions  arising  out of
activities of the Servicer pursuant to this Agreement;  provided,  however, that
the  Servicer  shall not  indemnify  if such acts,  omissions or alleged acts or
omissions constitute fraud, gross negligence, breach of fiduciary duty or wilful
misconduct by the Indenture Trustee.

The Servicer out of its own funds shall indemnify,  defend and hold harmless the
Indenture Trustee and its officers,  directors,  employees and agents,  from and
against  any  loss,  liability,  expense,  damage or  injury  arising  out of or
incurred in  connection  with (i) the  Indenture  Trustee's  performance  of its
duties  under  the  Indenture,   or  (ii)  the  acceptance,   administration  or
performance  by, or action or inaction of, the  Indenture  Trustee of the trusts
and duties contained in the Basic  Documents,  except in each case to the extent
that such cost,  expense,  loss, claim,  damage or liability:  (A) is due to the
wilful  misfeasance,  bad faith or negligence (except for errors in judgment) of
the  Indenture  Trustee,  (B) to the extent  otherwise  payable to the Indenture
Trustee,   arises   from  the   Indenture   Trustee's   breach  of  any  of  its
representations  or  warranties in Section 6.13 of the  Indenture,  or (C) shall
arise out of or be incurred in connection  with the performance by the Indenture
Trustee of the duties of successor Servicer hereunder.

Indemnification under this Section 6.05 shall include,  without limitation,  any
judgment,  award, settlement,  reasonable attorneys' fees and expenses and other
costs or expenses as  incurred in  connection  with the defense of any actual or
threatened action, proceeding or claim; provided,  however, that if the Servicer
has made any indemnity  payments pursuant to this Section 6.05 and the recipient
thereafter  collects  any of such  amounts  from  others,  the  recipient  shall
promptly repay such amounts collected to the Servicer, without interest.

Any  indemnification  under this Section 6.05 shall survive the  termination  of
this Agreement and the resignation and removal of the Indenture Trustee.


<PAGE>






                                     DEFAULT

         Servicer Defaults.  Each of the following shall constitute a  "Servicer
Default":

     any failure by the Servicer to deliver to the Indenture Trustee for deposit
in any of  the  Designated  Accounts  any  required  payment  or to  direct  the
Indenture  Trustee to make any required  distributions  therefrom,  in each case
which failure  continues  unremedied for five Business Days after the earlier of
written  notice from the  Indenture  Trustee,  is  received  by the  Servicer or
discovery of such failure by an officer of the Servicer;

     any  failure by the  Servicer  duly to  observe or perform in any  material
respect  any other  covenant  or  agreement  of the  Servicer  set forth in this
Agreement,  the Titling Trust  Servicing  Agreement or any other Basic Documents
which failure materially and adversely affects the rights of the Noteholders and
which  continues  unremedied  for 60 days after the giving of written  notice of
such failure (A) to the Servicer by the  Indenture  Trustee or the Issuer or (B)
to the Servicer, the Indenture Trustee and the Issuer by the holders of not less
than 25% of the outstanding  principal  amount of the  Controlling  Class of any
Series of Notes;

     any representation, warranty or certification made by the Servicer pursuant
to this  Agreement,  the Titling  Trust  Servicing  Agreement or any other Basic
Documents shall prove to have been incorrect in any material  respect when made,
and if the consequences of such representation,  warranty or certification being
incorrect  shall  be  susceptible  of  remedy  in all  material  respects,  such
consequences shall not be remedied in all material respects within 30 days after
the  Servicer  first  becomes  aware or is  advised  that  such  representation,
warranty or certification was incorrect in a material respect; and

     the occurrence of an Insolvency Event with respect to the Servicer.



<PAGE>



         Consequences of a Servicer  Default.  If a Servicer Default shall occur
and be continuing, the Indenture Trustee or holders of Notes evidencing not less
than a majority in principal  amount of the Controlling  Class of each Series of
Notes then outstanding  may, in addition to other rights and remedies  available
in a  court  of law  or  equity  to  damages,  injunctive  relief  and  specific
performance,  terminate all the rights and obligations of the Servicer hereunder
and under the Titling Trust Servicing Agreement, whereupon the Indenture Trustee
will succeed to all the responsibilities, duties and liabilities of the Servicer
under this  Agreement  and the Titling  Trust  Servicing  Agreement  and will be
entitled to similar  compensation  arrangements.  On or after the receipt by the
Servicer of such written  notice,  all authority and power of the Servicer under
this Agreement and the Titling Trust Servicing  Agreement,  whether with respect
to the  Receivables  or otherwise,  shall pass to and be vested in the Indenture
Trustee  pursuant  to and under  this  Section  7.02.  Upon the  receipt of such
notice,  the Servicer's  appointment as custodian  shall be terminated and, upon
instruction  from  the  Indenture  Trustee,   the  Servicer  shall  release  any
Receivable File to the Indenture  Trustee,  or its respective agent or assignee,
as the case may be,  at such  place  or  places  as the  Indenture  Trustee  may
designate, as soon as practicable. The Servicer shall be deemed to have received
proper  instructions  with respect to the  Receivable  Files upon its receipt of
written  instructions  signed  by an  officer  of  the  Indenture  Trustee.  The
Indenture Trustee is hereby authorized and empowered to execute and deliver,  on
behalf of the Servicer, as attorney-in-fact or otherwise,  any and all documents
and  other  instruments,  and to do or  accomplish  all  other  acts  or  things
necessary or appropriate  to effect the purposes of such notice of  termination,
whether to complete the transfer and  endorsement of the Receivables and related
documents,  or otherwise.  The predecessor Servicer agrees to cooperate with the
Indenture Trustee or the successor  Servicer in effecting the termination of the
responsibilities and rights of the Servicer under this Agreement and the Titling
Trust Servicing  Agreement,  including the transfer to the Indenture Trustee for
deposit in the Collection  Account of all cash amounts that shall at the time be
held by the Servicer or thereafter  received by the Servicer with respect to the
Receivables.

         Indenture  Trustee to Act;  Appointment of Successor.  On and after the
time the Servicer receives a notice of termination pursuant to Section 7.02, the
Indenture  Trustee shall be the successor in all respects to the Servicer in its
capacity as  servicer  under this  Agreement  and the  Titling  Trust  Servicing
Agreement and the  transactions  set forth or provided for in this Agreement and
the  Titling  Trust  Servicing  Agreement,  and  shall  be  subject  to all  the
responsibilities,  restrictions,  duties and liabilities relating thereto placed
on the Servicer by the terms and  provisions  of this  Agreement and the Titling
Trust Servicing  Agreement;  provided,  however,  that the predecessor  Servicer
shall remain liable for, and the successor Servicer shall have no liability for,
any  indemnification  obligations  of the Servicer  arising as a result of acts,
omissions or occurrences during the period in which the predecessor Servicer was
the Servicer; and provided, further, that Navistar Financial shall remain liable
for all such  indemnification  obligations  of the  Servicer  without  regard to
whether it is still Servicer hereunder.  As compensation therefor, the Indenture
Trustee  shall be  entitled  to such  compensation  (whether  payable out of the
Collection  Account or  otherwise)  as the Servicer  would have been entitled to
under  this  Agreement  if  no  such  notice  of  termination  had  been  given.
Notwithstanding  the above, the Indenture  Trustee may, if it shall be unwilling
so to act, or shall, if it is legally unable so to act,  appoint,  or petition a
court of competent  jurisdiction to appoint,  a successor (i) having a net worth
of not less than  $100,000,000  and (ii) whose  regular  business  includes  the
servicing of medium and heavy duty bus,  truck and trailer  receivables,  as the
successor to the Servicer under this  Agreement and the Titling Trust  Servicing
Agreement in the assumption of all or any part of the  responsibilities,  duties
or  liabilities  of the  Servicer  under this  Agreement  and the Titling  Trust
Servicing  Agreement.  In connection with such  appointment and assumption,  the
Indenture  Trustee  may make  such  arrangements  for the  compensation  of such
successor out of payments on Receivables  as it and such successor  shall agree;
provided,  however,  that  no  such  compensation  shall  be in  excess  of that
permitted the Servicer  under this  Agreement  and the Titling  Trust  Servicing
Agreement.  The  Indenture  Trustee and such  successor  shall take such action,
consistent  with this  Agreement,  as shall be necessary to effectuate  any such
succession.


<PAGE>



         Waiver of Past Defaults. The Indenture Trustee, at the direction of the
holders of not less than a majority of the outstanding Notes of each Controlling
Class of each Outstanding Series of Notes, may waive any default by the Servicer
in the performance of its obligations  hereunder and its consequences,  except a
default in making any required deposits to the Collection  Account in accordance
with this Agreement.  Upon any such waiver of a past default, such default shall
cease to exist,  and any Servicer  Default arising  therefrom shall be deemed to
have been  remedied for every  purpose of this  Agreement.  No such waiver shall
extend  to any  subsequent  or other  default  or impair  any  right  consequent
thereon.  The  Servicer  shall give  written  notice of each such  waiver to the
Rating Agencies.

                                  MISCELLANEOUS

     Amendment. Subject to the provisions of Section 3.17 of the Indenture, this
Agreement may be amended from time to time in a writing  executed by each of the
parties hereto.

     Termination. The respective obligations and responsibilities of the parties
hereto pursuant to this Agreement shall terminate upon the earlier of:

          the maturity or other  liquidation  of the last Issuer  Receivable and
     the  disposition  of any  amounts  received  upon  liquidation  of any such
     remaining Issuer Receivables or

          the  payment to the  holders of any  outstanding  Notes of all amounts
     required to be paid to them pursuant to this  Agreement and any other Basic
     Documents.

         Notices. Except where telephonic instructions or notices are authorized
herein to be given, all notices,  requests and demands to or upon the respective
parties  hereto  to be  effective  shall be in  writing  and,  unless  otherwise
expressly provided herein,  shall be deemed to have been duly given or made when
delivered by hand or by overnight  courier,  or, in the case of telecopy notice,
when received, addressed as follows or to such party or parties to whom the same
is required to be  delivered  at the  addresses  specified  in Appendix B to the
Indenture.

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


<PAGE>



         Severability.  Any provision of this  Agreement  which 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, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

         Assignment. Except to the extent permitted by Article VI or as required
by  Article  VII,  the  Servicer  may not  assign  its  rights or  delegate  its
obligations  hereunder  or under the  Titling  Trust  Servicing  Agreement.  The
Servicer  acknowledges that the Issuer shall assign all of its rights, title and
interest in this Agreement to the Indenture Trustee on behalf of the Noteholders
pursuant to the Indenture.  The Servicer agrees that the Indenture  Trustee,  to
the extent provided in the Indenture,  shall be entitled to enforce the terms of
this Agreement and the rights (including, without limitation, the right to grant
or withhold  any  consent or waiver) of Issuer  directly  against the  Servicer.
Until the  satisfaction  and  discharge of all  obligations  of the Issuer,  the
Servicer further agrees that, in respect of its obligations  hereunder,  it will
act at the  direction of and in  accordance  with all requests and  instructions
from the Indenture Trustee given in accordance with the Indenture. The Indenture
Trustee shall have the rights of a third-party beneficiary under this Agreement.
The  Servicer  shall  deliver  copies of all  statements,  reports,  Opinions of
Counsel, notices,  requests,  demands and other documents to be delivered by the
Servicer to Issuer pursuant to the terms hereof to the Indenture Trustee.

         Successors and Assigns.  This  Agreement  shall inure to the benefit of
and be binding upon the parties  hereto,  and their  respective  successors  and
permitted  assigns.  Except as  otherwise  provided  in Section  6.02 or in this
Article VIII, no other Person shall have any right or obligation hereunder.

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

         Headings and  Cross-References.  The various headings in this Agreement
are  included  for  convenience  only  and  shall  not  affect  the  meaning  or
interpretation of any provision of this Agreement.


<PAGE>



         No Petition  Covenants.  Notwithstanding  any prior termination of this
Agreement,  the Servicer  shall not, prior to the date which is one year and one
day after payment in full of all  obligations  and the  distribution  to the all
Noteholders  of all amounts to be distributed  to them,  acquiesce,  petition or
otherwise  invoke  or cause  Issuer  to  invoke  or join  any  other  Person  in
instituting the process of any court or government  authority for the purpose of
commencing or sustaining a case against Issuer any  bankruptcy,  reorganization,
arrangement,  insolvency,  liquidation proceeding,  or similar law of the United
States or any state of the United  States.  Nothing in this  Section  8.10 shall
preclude, or be deemed to estop the Servicer from taking or omitting to take any
action  prior to such date in (i) any case or  proceeding  voluntarily  filed or
commenced  by or on behalf of Issuer  under or  pursuant to any such law or (ii)
any  involuntary  case or  proceeding  pertaining  to  Issuer  which is filed or
commenced  by or on behalf of a Person other than Issuer (or any Person to which
Issuer shall have assigned,  transferred  or otherwise  conveyed any part of the
obligations of Issuer hereunder) under or pursuant to any such law.

          Third Party Beneficiary. The Indenture Trustee shall be deemed a third
party beneficiary of this Agreement.


<PAGE>






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

                                 NAVISTAR FINANCIAL CORPORATION,
               as Servicer

                                 By:__________________________________________
                  Name:

                 Title:

                                 TRUCK RETAIL INSTALMENT PAPER CORP.

                                 By:__________________________________________
                  Name:

                 Title:

                                 HARCO LEASING COMPANY, INC.

                                 By:__________________________________________
                  Name:

                 Title:

                                 THE BANK OF NEW YORK

                                 not in its individual capacity, but solely
                                 as Collateral Agent

                                 By:__________________________________________
                  Name:

                 Title:

                                 BANK ONE, NATIONAL ASSOCIATION

                                 not  in its  individual  capacity,  but  solely
                                 as  Portfolio Trustee

                                 By:__________________________________________
                  Name:

                 Title:
<PAGE>

Exhibit 10.02


                         RECEIVABLES PURCHASE AGREEMENT

                                     BETWEEN

                         NAVISTAR FINANCIAL CORPORATION

                                       AND

                       TRUCK RETAIL INSTALMENT PAPER CORP.

                          DATED AS OF OCTOBER 16, 2000


<PAGE>




                                      -iii-

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                               Page
<S>                                                                                                              <C>

ARTICLE IDEFINITIONS..............................................................................................1
         SECTION 1.01      Certain Defined Terms..................................................................1

ARTICLE IIPURCHASE AND SALE OF RECEIVABLES........................................................................1
         SECTION 2.02      The Closings...........................................................................3

ARTICLE IIIREPRESENTATIONS AND WARRANTIES.........................................................................3
         SECTION 3.01      Seller Representations and Warranties

                                    Regarding Receivables.........................................................3
         SECTION 3.02      Representations and Warranties Regarding Seller........................................4
         SECTION 3.03      Representations and Warranties Regarding Titling Trust.................................6
         SECTION 3.04      Representations and Warranties of Buyer................................................8

ARTICLE IVCONDITIONS..............................................................................................9
         SECTION 4.01      Conditions Precedent to Buyer's Initial

                                    Purchase of Receivables.......................................................9
         SECTION 4.02      Conditions Precedent to All of Buyer's

                                    Purchases of Receivables.....................................................10
         SECTION 4.03      Required Interest Rate Hedges.........................................................11
         SECTION 4.04      Conditions To Obligation of Seller....................................................13

ARTICLE VADDITIONAL AGREEMENTS...................................................................................13
         SECTION 5.01      Initial UCC Filings...................................................................13
         SECTION 5.02      Computer Files Marked.................................................................13
         SECTION 5.03      Protection of Title...................................................................13
         SECTION 5.04      Other Liens or Interests..............................................................14
         SECTION 5.05      Indemnification.......................................................................14
         SECTION 5.06      Credit and Collection Policy..........................................................14
         SECTION 5.07      Repurchase Events.....................................................................14
         SECTION 5.08      Further Assignments...................................................................15
         SECTION 5.09      Pre-Closing Collections...............................................................15
         SECTION 5.10      Limitation on Transfer of International Purchase Obligations..........................16
         SECTION 5.11      Bankruptcy Proceeding.................................................................16
         SECTION 5.12      Sale Treatment........................................................................16

ARTICLE VIMISCELLANEOUS PROVISIONS...............................................................................16
         SECTION 6.01      Amendment.............................................................................16
         SECTION 6.02      Survival 16
         SECTION 6.03      Termination...........................................................................16
         SECTION 6.04      Notices  17
         SECTION 6.05      Governing Law.........................................................................17
         SECTION 6.06      Waivers  17
         SECTION 6.07      Costs and Expenses....................................................................17
         SECTION 6.08      Confidential Information..............................................................17
         SECTION 6.09      Headings 17
         SECTION 6.10      Counterparts..........................................................................17
         SECTION 6.11      Severability of Provisions............................................................17
         SECTION 6.12      Assignment............................................................................18
         SECTION 6.13      Further Assurances....................................................................18
         SECTION 6.14      No Third-Party Beneficiaries..........................................................18
         SECTION 6.15      Merger or Consolidation of, or Assumption of
                                    the Obligations of, Seller...................................................18
         SECTION 6.16      Merger and Integration................................................................18
         SECTION 6.17      No Petition Covenants.................................................................18






Exhibit A         Form of Receivable Assignment
Schedule I        Schedule of Retail Notes
Schedule II       Schedule of Retail Leases

</TABLE>

<PAGE>





                         RECEIVABLES PURCHASE AGREEMENT

         This  Receivables  Purchase  Agreement (the  "Agreement") is made as of
October 16,  2000 by and  between  NAVISTAR  FINANCIAL  CORPORATION,  a Delaware
corporation  ("Seller"),  and TRUCK RETAIL  INSTALMENT  PAPER CORP.,  a Delaware
corporation ("Buyer").

         Buyer desires to purchase  Receivables  and related  assets from Seller
from time to time.

         Seller is willing, on the terms and subject to the conditions set forth
herein, to sell such Receivables and related assets to Buyer.

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

                                    ARTICLE 1

                                   DEFINITIONS

SECTION 1.1 Certain Defined Terms.  Capitalized terms used in the above recitals
and in this  Agreement  shall  have the  respective  meanings  assigned  them in
Appendix A to the  Indenture  dated as of October 16, 2000 between the Buyer and
The Bank Of New York, a New York banking corporation.

                                   ARTICLE 2

                        PURCHASE AND SALE OF RECEIVABLES

SECTION 2.1       Purchase and Sale of Receivables.

(1)  Initial  Purchase  and  Sale.  On the date  hereof,  Seller  hereby  sells,
transfers,  assigns,  delivers and conveys to Buyer, without recourse, and Buyer
hereby  purchases from Seller all of Seller's  right,  title and interest in and
to:

          (1) the TRIP Portfolio  Interest,  the TRIP Portfolio  Certificate and
     the beneficial interest in the TRIP Portfolio Assets represented thereby;

          (2) the rights,  but not the  obligations,  of Seller  under the Harco
     Purchase Agreement; and

          (3) the  Retail  Notes  identified  on the  Schedule  of Retail  Notes
     delivered  to the Buyer on the date  hereof  and the  Related  Retail  Note
     Assets.


<PAGE>





                                      -19-

(2)  Subsequent  Purchases  and Sales.  From time to time,  on such dates as are
mutually  agreeable  to Seller and Buyer (the Closing Date and each such date, a
"Purchase  Date"),  subject to the  satisfaction of the conditions  specified in
Article IV, Seller shall sell,  transfer,  assign and otherwise convey to Buyer,
without  recourse,  and Buyer shall purchase from Seller,  all right,  title and
interest of Seller in, to and under the following assets:

          (1) the  beneficial  interest in the Retail  Leases  identified on the
     Schedule of Retail Leases attached to the Receivable  Assignment  delivered
     on such Purchase Date and the Related  Titling Trust Assets with respect to
     such Retail Leases; and

          (2) the  Retail  Notes  identified  on the  Schedule  of Retail  Notes
     attached to the Receivable  Assignment  delivered on such Purchase Date and
     the Related Retail Note Assets with respect to such Retail Notes.

(3) Definitions.  As used herein:


          (1) "Sold  Receivables"  means the  beneficial  interest in the Retail
     Leases and the Retail  Notes  which have been sold  hereunder  (or,  as the
     context may require, which are being sold on a Purchase Date);

          (2) "Related  Assets" means,  collectively,  the Related Titling Trust
     Assets which are related to the Retail Leases that are Sold Receivables and
     the other Titling Trust Assets  allocated to the TRIP  Portfolio  Interest,
     the Related  Retail  Note Assets that are related to the Retail  Notes that
     are Sold  Receivables and the rights of the Seller under the Harco Purchase
     Agreement;

          (3) "Schedule of Receivables"  means  collectively,  with respect to a
     Purchase  Date,  the  Schedule of Retail  Leases and the Schedule of Retail
     Notes  attached to the  Receivables  Assignment  delivered on such Purchase
     Date; and

          (4) "Sold Assets" means,  collectively  the Sold  Receivables  and the
     Related Assets.


         It is  the  intention  of  Seller  that  the  transfer  and  assignment
contemplated by this Agreement  shall  constitute a sale of the Sold Assets from
Seller  to Buyer  and the legal  and  beneficial  interest  in title to the Sold
Assets  shall not be part of  Seller's  estate  in the event of the  filing of a
bankruptcy  petition by or against Seller under any bankruptcy  law.  Seller and
Buyer intend to treat such transfer and  assignment as a sale for accounting and
tax purposes.  Notwithstanding the foregoing,  in the event a court of competent
jurisdiction  determines  that such transfer and  assignment  did not constitute
such a sale or that such legal and  beneficial  interest  is a part of  Seller's
estate,  then Seller shall be deemed to have  granted to Buyer a first  priority
perfected  security interest in all of Seller's right, title and interest in, to
and under the assets  conveyed  pursuant to this  Agreement,  and Seller  hereby
grants such security interest.  For purposes of such grant, this Agreement shall
constitute a security agreement under the UCC.


<PAGE>



SECTION  2.2  The  Closings.   The   consummation  of  each  purchase  and  sale
contemplated by Section 2.01 (each, a "Receivable  Closing") shall take place on
the  related  Purchase  Date,  and at such  place and at such time as Seller and
Buyer may agree upon.  At each  Receivable  Closing,  Seller  shall  execute and
deliver an assignment (the "Receivable  Assignment") in the form attached hereto
as Exhibit A with  respect to the Sold Assets to be  purchased  and sold on such
Retail Receivable  Purchase Date. In consideration  for such Sold Assets,  Buyer
shall pay to  Seller on such  Purchase  Date an  amount  equal to the  aggregate
Contract  Value of such Sold  Receivables  as of the  related  Cutoff  Date plus
interest thereon at a rate per annum equal to One-Month LIBOR for such date plus
1%  (calculated  on the basis of a 360 day year and actual days elapsed) for the
period from such Cutoff Date through such  Purchase  Date,  provided  that in no
event shall such amount  represent  less than the fair value of such Sold Assets
(determined based on, among other things,  then prevailing  interest rates) (the
"Receivable  Purchase Price"). A portion of the Receivable  Purchase Price equal
to the Receivable  Cash Purchase  Price set forth in the  Receivable  Assignment
shall be paid to Seller in immediately  available funds and the remainder of the
Receivable  Purchase  Price shall be recorded as an advance from Seller to Buyer
under the  Purchase  Money Note issued to Seller  pursuant  to the  Intercompany
Advance Agreement. On each Purchase Date, the Buyer shall instruct the Indenture
Trustee to withdraw the  Receivable  Cash Purchase Price from the Excess Funding
Account and pay such amount to the Seller.

         On each Purchase Date, to the extent required, the Buyer shall instruct
the  Indenture  Trustee to withdraw  funds from the Excess  Funding  Account and
deposit them into the Loss Reserve  Account and/or the Interest  Reserve Account
so that the  amount of funds on deposit  in such  accounts  will be equal to the
Loss Reserve  Specified  Balance and the  Interest  Reserve  Specified  Balance,
respectively.

                                   ARTICLE 3

                         REPRESENTATIONS AND WARRANTIES

SECTION 3.1       Seller Representations and Warranties Regarding Receivables.


(1) As of each  Purchase  Date,  including  the initial  Purchase  Date,  Seller
represents and warrants to Buyer as follows with respect to the Sold Receivables
and the Related Assets for such date:

          (1) Eligible  Receivables.  Each such Sold  Receivable  is an Eligible
     Receivable.


          (2)  Schedule of  Receivables.  The  information  regarding  such Sold
     Receivables  set forth in the related  Schedule of  Receivables is true and
     correct in all material  respects.  The Seller has not used any criteria it
     believes to be adverse to the Buyer or the  Noteholders  in  selecting  the
     Sold Receivables.

          (3) Title.




<PAGE>




                    1. The Seller  has good  title to each such Sold  Receivable
               which is a Retail  Note free and clear of all Liens  (other  than
               Permitted  Liens  and  Liens  that  will be  released  as of such
               transfer).  On the date hereof, good and valid title to each such
               Sold  Receivable  which  is a Retail  Note  will be  validly  and
               effectively  conveyed to, and vested in, Buyer, free and clear of
               all Liens,  other than Permitted  Liens, and the transfer of such
               Sold  Receivable by Seller to Buyer has been perfected  under the
               UCC.

                    2. The Seller has good title to the  beneficial  interest in
               the Retail  Leases  identified  on the Schedule of Retail  Leases
               attached to the Receivable Assignment free and clear of all Liens
               (other than Permitted Liens). On the date hereof,  good and valid
               title to the  beneficial  interest in such Retail  Leases will be
               validly and effectively  conveyed to, and vested in, Buyer,  free
               and clear of all  Liens,  other  than  Permitted  Liens,  and the
               transfer of the  beneficial  interest  in such  Retail  Leases by
               Seller to Buyer has been perfected.

          (2) As of the date  hereof,  Seller  represents  and warrants to Buyer
     that the Seller has good title to the TRIP Portfolio  Interest and the TRIP
     Portfolio  Certificate,  free and clear of all Liens (other than  Permitted
     Liens).  On the date  hereof,  good and valid  title to the TRIP  Portfolio
     Interest and the TRIP Portfolio Certificate will be validly and effectively
     conveyed to, and vested in, Buyer, free and clear of all Liens;  other than
     Permitted  Liens,  and the transfer of the TRIP Portfolio  Interest and the
     TRIP Portfolio  Certificate by Seller to Buyer has been perfected.  SECTION

3.2  Representations  and Warranties  Regarding  Seller.  Seller  represents and
warrants to Buyer as of the date hereof and as of each Sold Receivable  Purchase
Date, that:
         (a) Organization and Good Standing.  Seller has been duly organized and
is validly  existing as a corporation and in good standing under the laws of the
State of Delaware, with power and authority to own its properties and to conduct
its  business  as such  properties  are  presently  owned and such  business  is
presently  conducted,  and  had at all  relevant  times,  and  now  has,  power,
authority and legal right to acquire and own such Sold Receivables.

         (b) Due  Qualification.  Seller is duly  qualified  to do business as a
foreign  corporation in good standing,  and has obtained all necessary  licenses
and approvals,  in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualification  except to the extent
that the  failure  to comply  therewith  would  not,  in the  aggregate,  have a
Material Adverse Effect with respect to Seller.


<PAGE>



         (c) Power and Authority.  Seller has the corporate  power and authority
to execute and deliver this Agreement and to perform its  obligations  hereunder
and the  execution,  delivery and  performance  of this Agreement have been duly
authorized  by Seller by all necessary  corporate  action on the part of Seller.
Seller has the  corporate  power and  authority to sell and assign to Buyer such
Receivables and the Related Assets and has duly authorized such transfers by all
necessary corporate action on the part of Seller.

         (d) Valid Sale; Binding Obligation.  This Agreement,  together with the
Receivable  Assignment for such Sold  Receivables and the Related  Assets,  when
duly  executed  and  delivered,  shall  constitute  a valid sale,  transfer  and
assignment of such Sold Receivables and the Related Assets,  enforceable against
creditors  of  Seller  and  this  Agreement   constitutes  and  such  Receivable
Assignment,  when duly executed and delivered,  shall constitute, a legal, valid
and binding obligation of Seller  enforceable  against Seller in accordance with
its terms,  except as  enforceability  may be limited by applicable  bankruptcy,
insolvency,  reorganization,  moratorium  or other  similar laws  affecting  the
enforcement of creditors' rights in general and by general principles of equity,
regardless  of whether such  enforceability  is  considered  in a proceeding  in
equity or at law.

         (e) No  Violation.  The  execution  and  delivery of this  Agreement by
Seller and its  performance  of its  obligations  hereunder will not violate any
Requirement of Law or Contractual  Obligation of Seller, and will not result in,
or require,  the creation or  imposition of any Lien upon any of its property or
assets pursuant to any such Requirement of Law or Contractual Obligation,  other
than as contemplated by the Basic Documents.

         (f) No Proceedings.  There are no actions,  proceedings or, to Seller's
knowledge,  investigations pending or, to Seller's knowledge, threatened, before
any Governmental Authority (i) asserting the invalidity of this Agreement,  (ii)
seeking to prevent the consummation of any of the  transactions  contemplated by
this  Agreement,  or (iii)  seeking  any  determination  or  ruling  that  would
reasonably be expected to have a Material Adverse Effect with respect to Seller.

         (g)  No  Consent.   Except  as  expressly  contemplated  by  the  Basic
Documents,  no consent or  authorization  of, filing with, or other act by or in
respect  of, any  Governmental  Authority  or any other  Person is  required  in
connection with the execution, delivery, performance, validity or enforceability
against Seller of this Agreement.

         (h)  No  Default.  Seller  is not  in  default  under  or with  respect
to any of its Contractual Obligations which would have a Material Adverse Effect
with respect to it.

         (i) Taxes. Seller has filed or caused to be filed all tax returns which
are  required  to be filed by Seller  (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 and all other  taxes,  fees or other  charges
imposed on it or any of its property by any  Governmental  Authority (other than
any, the amount or validity of which is currently  being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP  have  been  provided  on the  books of  Seller).  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,
Seller or any of its subsidiaries and remains in effect.


<PAGE>



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

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

         (l) Investment  Company Act.  Seller is not, and is not controlled  by,
an "investment  company"  within the meaning of, and is not required to register
as an "investment company" under, the Investment Company Act.

         The representations and warranties set forth in this Section 3.02 shall
survive the  transfer  and  assignment  of the  Receivables  to the Buyer.  Upon
discovery by the Seller, the Indenture  Trustee,  or the Servicer of a breach of
any of the foregoing representations and warranties,  the party discovering such
breach  shall  give  prompt  written  notice  to the  other  parties  and to any
Enhancement Providers.

         In the event the  Noteholders of a majority in principal  amount of the
Controlling Class of each Series of Notes shall have exercised the right to have
all outstanding  Notes redeemed pursuant to Section 10.01(b) of the Indenture as
a result of a breach of any of the  representations  and warranties set forth in
this Section 3.02 which breach has a material adverse effect on the Noteholders,
the  Seller  shall  deposit  into  the  applicable  Excess  Funding  Account  in
immediately  available funds, on the Business Day preceding the Redemption Date,
an amount  equal to the sum of the amounts  specified  therefor  with respect to
each outstanding Series in the related Series Supplement.  The obligation of the
Seller to make the deposit  specified in this Section 3.02 will  constitute  the
sole remedy of the Indenture  Trustee on behalf of the  Noteholders or any other
Person as a result of the breach of the representations and warranties set forth
in this Section 3.02.

SECTION 3.3       Representations and Warranties Regarding Titling Trust. Seller
represents  and warrants to Buyer as of the date hereof and as of each  Purchase
Date, that:

         (a)  Organization  and Good Standing.  The Titling Trust is a statutory
business trust duly formed, validly existing and in good standing under the laws
of the State of Delaware,  with power and authority to own its properties and to
conduct its business as such properties are presently owned and such business is
presently  conducted,  and  had at all  relevant  times,  and  now  has,  power,
authority and legal right to acquire and own the Retail Leases.


<PAGE>



         (b) Due  Qualification.  The  Titling  Trust  is duly  qualified  to do
business as a foreign business trust and in good standing under the laws of each
jurisdiction where the character of its property,  the nature of its business or
the performance of its obligations make such qualification necessary and has all
powers and all  governmental  licenses,  authorizations,  consents and approvals
required  to carry on its  business  as now  conducted  and for  purposes of the
transactions contemplated by the Basic Documents,  except to the extent that the
failure to have any such  governmental  licenses,  authorizations,  consents  or
approvals  would not,  in the  aggregate,  have a Material  Adverse  Effect with
respect to the Titling Trust.

         (c) Power and Authority.  The Titling Trust has the power and authority
to execute and deliver the Basic Documents to which it is a party and to perform
its  obligations  hereunder and the execution,  delivery and  performance of the
Basic  documents to which it is a party have been duly authorized by the Titling
Trust.

         (d) Valid and Binding. Each of the Basic Documents to which the Titling
Trust is a party has been duly  executed  and  delivered  by or on behalf of the
Titling  Trust and  constitutes  a legal,  valid and binding  obligation  of the
Titling  Trust  enforceable  against the Titling  Trust in  accordance  with its
terms,  except  as  enforceability  may be  limited  by  applicable  bankruptcy,
insolvency,  reorganization,  or other similar laws affecting the enforcement of
creditors' rights in general and by general principles of equity,  regardless of
whether such enforceability is considered in a proceeding in equity or at law.

         (e) No  Violation.  The  execution and delivery by the Titling Trust of
the  Basic  Documents  to  which  it is a  party  and  its  performance  of  its
obligations  thereunder  will not violate any  Requirement of Law or Contractual
Obligation  of the  Titling  Trust,  and will not  result  in, or  require,  the
creation or imposition  of any Lien upon any of its property or assets  pursuant
to any  such  Requirement  of Law  or  Contractual  Obligation,  other  than  as
contemplated by the Basic Documents.

         (f) No  Proceedings.  There are no  actions  or  proceeding  or, to the
Buyer's  knowledge,   investigation  pending  or,  to  the  Seller's  knowledge,
threatened before any Governmental Authority (i) asserting the invalidity of any
of the Basic  Documents to which the Titling  Trust is a party,  (ii) seeking to
prevent the consummation of any of the  transactions  contemplated by any of the
Basic  Documents  to which the  Titling  Trust is a party or (iii)  seeking  any
determination  or ruling  that would  reasonably  be expected to have a Material
Adverse Effect with respect to the Titling Trust.

         (g) No Consent.  No consent or  authorization  of, or filing  with,  or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the execution,  delivery,  performance,  validity or
enforceability  against the Titling Trust of any of the Basic Documents to which
it is a party.


<PAGE>



         (h) Taxes.  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 retains 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.

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

         (j) Investment Company Act. The  Titling  Trust  is  not,  and  is  not
controlled  by, an  "investment  company"  within  the  meaning  of,  and is not
required to register as an "investment  company" under,  the Investment  Company
Act.

         (k) TRIP Portfolio Certificate. The TRIP Portfolio Certificate has been
duly executed and delivered by the General  Interest  Trustee in accordance with
the  Origination  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.

SECTION 3.4 Representations and Warranties of Buyer. Buyer hereby represents and
warrants to Seller as of the date hereof and as of each  Purchase  Date (and, as
applicable, with respect to the Sold Receivables for such date), that:

          (1) Organization and Good Standing.  Buyer has been duly organized and
is validly  existing as a corporation and in good standing under the laws of the
State of Delaware, with power and authority to own its properties and to conduct
its  business  as such  properties  are  presently  owned and such  business  is
presently  conducted,  and  had at all  relevant  times,  and  now  has,  power,
authority  and legal  right to acquire  and own such Sold  Receivables.

          (2) Due  Qualification.  Buyer is duly  qualified  to do business as a
foreign  corporation in good standing,  and has obtained all necessary  licenses
and  approvals  in all  jurisdictions,  in which the  ownership  or lease of its
property or the conduct of its business  requires such  qualification  except to
the  extent  that the  failure  to comply  therewith  would not have a  Material
Adverse Effect with respect to Buyer.

          (3) Power and Authority.  Buyer has the corporate  power and authority
to execute and deliver this Agreement and to perform its  obligations  hereunder
and the  execution,  delivery and  performance  of this Agreement have been duly
authorized by all necessary corporate action on the part of Buyer.

          (4) Binding Obligation.  This Agreement constitutes a legal, valid and
binding  obligation of Buyer  enforceable  against Buyer in accordance  with its
terms,  except  as  enforceability  may be  limited  by  applicable  bankruptcy,
insolvency,  reorganization,  or other similar laws affecting the enforcement of
creditors' rights in general and by general principles of equity,  regardless of
whether such enforceability is considered in a proceeding in equity or at law.

<PAGE>



          (5) No  Violation.  The  execution  and delivery of this  Agreement by
Buyer and its  performance  of its  obligations  hereunder  will not violate any
Requirement of Law or Contractual  Obligation of Buyer,  and will not result in,
or require,  the creation or  imposition of any Lien upon any of its property or
assets pursuant to any such Requirement of Law or Contractual Obligation,  other
than as contemplated by the Basic Documents.

          (6) No Material  Litigation.  No litigation  or proceeding  or, to the
knowledge of Buyer,  investigation  of or before any arbitrator or  Governmental
Authority  is pending or, to the  knowledge of Buyer,  threatened  by or against
Buyer or against any of its  properties  or revenues  (i) with respect to any of
the Basic  Documents  or any of the  transactions  contemplated  thereby or (ii)
which  would  reasonably  be  expected  to have a Material  Adverse  Effect with
respect to Buyer.

          (7)  No  Consent.  Except  as  expressly  contemplated  by  the  Basic
Documents, no consent or authorization of, or filing with, or other act by or in
respect  of, any  Governmental  Authority  or any other  Person is  required  in
connection with the execution, delivery, performance, validity or enforceability
against Buyer of this Agreement.

                                   ARTICLE 4

                                   CONDITIONS

SECTION 4.1 Conditions Precedent to Buyer's Initial Purchase of Receivables. The
obligation  of Buyer to purchase  from Seller Sold  Receivables  and the Related
Assets on the  Closing  Date is subject  to the  satisfaction  of the  following
conditions:

          (1) Agreement. Buyer shall have received this Agreement, duly executed
and  delivered  by  Seller.   Buyer  shall  have  received  the  TRIP  Portfolio
Certificate registered in the name of the Indenture Trustee.

          (2)  Servicing  Agreements.  Buyer shall have  received the  Servicing
Agreement, duly executed and delivered by Navistar Financial.

          (3) Sale of Series 2000-1 Notes.  All of the conditions to the sale of
the Series 2000-1 Notes under the Series 2000-1 Note  Purchase  Agreement  shall
have been  satisfied  (other  than the  closing  of the  transaction  under this
Agreement).

          (4) Certificate of Incorporation; By-laws. Buyer shall have received a
true and complete copy of the certificate of incorporation of Seller,  certified
as a true and correct  copy  thereof by the  Secretary  of State of the State of
Delaware, and a true and complete copy of the by-laws of Seller,  certified as a
true and correct  copy thereof by the  Secretary  or an  Assistant  Secretary of
Seller.

<PAGE>



          (5)  Resolutions.  Buyer shall have  received  copies of duly  adopted
resolutions of the Board of Directors of Seller as in effect on the Closing Date
and in form and substance  reasonably  satisfactory  to Buyer,  authorizing  the
execution,  delivery and performance of this Agreement, the Servicing Agreement,
the  documents  to be  delivered  by Seller  hereunder  and  thereunder  and the
transactions  contemplated hereby and thereby,  certified by the Secretary or an
Assistant Secretary of Seller.

          (6) Incumbency Certificate. Buyer shall have received a certificate as
to the  incumbency  and  signature of the officers of Seller  authorized to sign
this  Agreement,  the  Servicing  Agreement on behalf of Seller,  together  with
evidence of the incumbency of such Secretary or Assistant  Secretary,  certified
by the Secretary or Assistant Secretary of Seller.

          (7)  Representations  and  Warranties.  Buyer  shall  have  received a
certificate  of  a  Responsible  Officer  of  Seller  to  the  effect  that  all
representations  and warranties of Seller  contained in Sections 3.01,  3.02 and
3.03,  in  Section  5.01  of the  Servicing  Agreement,  or in  any  certificate
delivered in connection  with this Agreement or the Servicing  Agreement  (other
than those made as of a specified date  specified  therein) are true and correct
and with the same force and effect as though such representations and warranties
had been made as of such date.

SECTION 4.2 Conditions Precedent to All of Buyer's Purchases of Receivables. The
obligation of Buyer to purchase Sold  Receivables  and the Related  Assets to be
purchased  hereunder on any Purchase Date is subject to the  satisfaction of the
following   conditions  by  the  Seller  (the   "Receivables   Purchase  Closing
Conditions"):

          (1) the  representations  and  warranties of the Seller  regarding the
Sold  Receivables,  including that such  Receivables  are Eligible  Receivables,
shall be true and correct on and as of such  Purchase  Date with the same effect
as if then made, and Seller shall have performed all obligations with respect to
such Sold Receivables to be performed by it hereunder on or prior to such date;

          (2) on a pro forma basis  after such  purchase,  the Pool  Composition
Condition shall be satisfied;

          (3) on a pro forma basis after such purchase, the Borrowing Base shall
equal or exceed the Aggregate Note Principal  Balance as of the related Purchase
Date;

          (4) on a pro forma basis after such  purchase,  the balance on deposit
in each Reserve  Account,  shall equal or exceed the specified  required balance
for such Reserve Account established in the related Series Supplement;

               (5) the Buyer shall have entered into the Required  Interest Rate
Hedge as of such Purchase Date;

               (6) no Amortization Event, Receivable Purchase Termination Event,
Lease Purchase Termination Event, or Servicer Default shall have occurred; and


<PAGE>



               (7) the Seller shall have delivered the following documents at or
prior to each Receivable Closing:

               (1) Receivable Purchase Date Schedule. Seller shall have executed
and delivered to Buyer and the Indenture Trustee the related Receivable Purchase
Date Schedule.

               (2) The  Receivable  Assignment.  Seller shall have  executed and
delivered the related Receivable Assignment and Interest Rate Hedge Assignment.

               (3) Other  Documents.  Seller  shall  have  provided  such  other
documents as Buyer may reasonably request.


SECTION 4.3       Required Interest Rate Hedges.


          (1) On or before  each  Purchase  Date,  Buyer  shall  enter  into and
thereafter  maintain  one or more  interest  rate  hedge  agreements  (each,  an
"Interest  Rate Hedge")  which,  after giving effect to the  transactions  to be
consummated on such Purchase Date,  satisfy the  requirements  contained in this
Section 4.03 with respect to the Pool,  after giving effect to the  transactions
on such Purchase Date (the "Required Interest Rate Hedges").  Each Interest Rate
Hedge shall have a notional  amount on any Purchase  Date or date of issuance of
any additional series of Notes that is, in the aggregate,  at least equal to the
lesser of the following:

               (1) the Aggregate Note Principal Balance and

               (2) the Aggregate Discounted Asset Balance.

     (2) On each Payment Date  following  such Purchase Date or date of issuance
of any additional  series of Notes (each a "Future Payment Date"),  the Interest
Rate Hedge(s) will be required to have a notional amount that, in the aggregate,
will be at least equal to the lesser of the following:

          (1) the Aggregate Note Principal Balance and

          (2) the Highest Scheduled  Aggregate  Discounted Asset Balance on such
     Future Payment Date.

     (3) The Hedge  Provider shall be obligated to make payments to the Buyer on
each  Future  Payment  Date in an amount  equal to the  product of the  notional
amount on such  Payment  Date and the  product  of (i) the  excess,  if any,  of
One-Month  LIBOR over the  Effective  Strike Rate and (ii) the actual  number of
calendar days in the related  Monthly Period divided by 360 (the amount received
by the Buyer on each such Payment  Date,  the "Hedge  Receipts" for such Payment
Date).

     (4) On each Payment Date, the Hedge Provider shall pay Hedge  Receipts,  if
any, to the Indenture Trustee for deposit into the Collection Account.




<PAGE>




     (5) The Interest Rate Hedges will terminate on the earliest of:

          (1) the Stated Final Maturity Date for the last outstanding Series;

          (2) the Future Payment Date when the Aggregate Note Principal  Balance
     is reduced to zero; and

          (3)  the  date  designated  by  the  Indenture  Trustee  as  an  early
     termination date for the Interest Rate Hedge(s) following a payment default
     by the Hedge  Provider or other  events of default as  specified in Section
     5.1  of  the  Indenture  including  illegality,  certain  tax  events,  the
     occurrence of certain  bankruptcy and insolvency events with respect to the
     Hedge Provider and certain other events.

     (6) Interest Rate Hedges  satisfying the  requirements of this Section 4.03
shall be with an Eligible Counterparty or Eligible Counterparties.

     (7) Buyer  agrees  that,  at any time that it enters into an Interest  Rate
Hedge,  it shall execute and deliver to the  Indenture  Trustee an assignment of
all amounts payable to Buyer under such Interest Rate Hedge.

     (8) Each  Interest  Rate  Hedge  shall  provide  that if as a  result  of a
downgrade by any one of the Rating Agencies the Hedge Provider  thereunder is no
longer an  Eligible  Counterparty,  the Hedge  Provider  shall  (within 30 days)
either:

          (1) find a replacement Hedge Provider who is an Eligible Counterparty,

          (2) obtain a guarantor who would be an Eligible  Counterparty  for the
     Hedge Provider's obligations thereunder or

          (3) take such other  steps as each Rating  Agency that has  downgraded
     the Hedge  Provider may require to cause the Hedge  Provider's  obligations
     thereunder to be treated by such Rating Agency as if such  obligations were
     owed by an Eligible Counterparty.


<PAGE>



     (9) Any of the foregoing  actions taken by the Hedge Provider shall require
confirmation  from each of the Rating  Agencies that such action will not result
in a reduction of withdrawal of its then current ratings  assigned to any Series
of Notes issued by the Issuer under the  Indenture.  If the Hedge Provider fails
to comply with the foregoing obligations under its Interest Rate Hedge or if the
Rating  Agencies  downgrades  the Hedge Provider to below a short term unsecured
debt rating of P-3 in the case of Moody's or below A-3 in the case of S&P, or if
such Hedge Provider does not have a short term  unsecured  debt rating,  below a
long term debt rating of Baa2 in the case of Moody's or below BBB in the case of
S&P, the Buyer will replace the Hedge  Provider.  If the Hedge Provider fails to
take any of the  foregoing  actions  within  30 days of a  downgrade,  the Hedge
Provider shall,  while it continues to seek a replacement  Hedge Provider,  post
collateral to secure its obligations  under the Interest Rate Hedge and maintain
such  collateral  in an amount  equal to the  greatest of (i) the mark to market
value of the Interest Rate Hedge, (ii) the amount payable,  if any, by the Hedge
Provider to the Issuer on the next  succeeding  Payment Date and (iii) 1% of the
notional  amount for the Payment  Period ending on the next  succeeding  Payment
Date.

SECTION 4.4 Conditions To Obligation of Seller. The obligation of Seller to sell
to Buyer the Sold  Receivables  and Related  Assets to be sold  hereunder on any
Purchase Date is subject to the satisfaction of the following conditions:

     (1) Representations and Warranties True. The representations and warranties
of Buyer hereunder shall be true and correct on such Purchase Date with the same
effect as if then made.

     (2) Receivable  Purchase Price. Buyer shall have paid to Seller the related
Receivable  Purchase  Price  as  provided  in  Section  2.02 of this  Agreement.



                                   ARTICLE 5

                              ADDITIONAL AGREEMENTS

SECTION 5.1  Initial UCC  Filings.  On or prior to the  initial  Purchase  Date,
Seller shall record and file, at its own expense, a UCC-1 financing statement in
each  jurisdiction in which it is required by applicable law, executed by Seller
as Seller or debtor,  naming  Buyer as  purchaser  or secured  party,  naming as
collateral  the Sold  Receivables  and Related  Assets to be purchased  and sold
hereunder from time to time,  meeting the  requirements of the laws of each such
jurisdiction  and in such manner as is  necessary  to perfect  under the UCC the
sale, transfer,  assignment and conveyance to Buyer of such Sold Receivables and
Related Assets (to the extent constituting UCC Collateral). Seller shall deliver
a file-stamped copy, or other evidence  satisfactory to Buyer of such filing, to
Buyer on or prior to the initial Purchase Date.

SECTION 5.2 Computer Files Marked. Seller shall, at its own expense, on or prior
to each Purchase Date, indicate in its computer files created in connection with
the Sold Receivables for such Purchase Date that such Sold Receivables have been
sold to Buyer pursuant to this Agreement.

SECTION 5.3       Protection of Title.




<PAGE>



     (1) Seller shall execute and file such financing  statements,  and cause to
be executed and filed such continuation and other statements, all in such manner
and in such places as may be required by law fully to perfect and  preserve  the
sale hereunder to Buyer of the Sold  Receivables,  the Related Assets,  the TRIP
Portfolio  Interest  and the  TRIP  Portfolio  Certificate  and in the  proceeds
thereof and hereby authorizes Buyer to file financing  statements and amendments
thereto and continuation  statements relative to all or any part thereof without
the signature of Seller where  permitted by law.  Seller shall deliver (or cause
to be delivered) to Buyer  file-stamped  copies of, or filing  receipts for, any
document filed as provided above, as soon as available following such filing.

     (2) Seller shall not change its name,  identity or  corporate  structure in
any  manner  that  would,  could  or  might  make  any  financing  statement  or
continuation  statement  filed by  Seller in  accordance  with  Section  5.01 or
5.03(a) seriously  misleading within the meaning of Section 9-402(7) of the UCC,
unless it shall have given Buyer at least 60 days prior written  notice  thereof
and shall file such  financing  statements  or amendments as may be necessary to
continue  the  perfection  of Buyer's  interest in all Sold  Assets  transferred
hereunder, the TRIP Portfolio Interest and the TRIP Portfolio Certificate.

     (3) Seller hereby  represents and warrants that its chief place of business
and  principal  executive  office,  and the place  where its  principal  records
pertaining to the Sold  Receivables,  the Related  Assets and the TRIP Portfolio
Interest are kept, is located at 2850 West Golf Road, Rolling Meadows,  Illinois
60008.  Seller  shall give Buyer at least 60 days  prior  written  notice of any
relocation of its principal executive office if, as a result of such relocation,
the  applicable  provisions of the UCC would require the filing of any amendment
of any  previously  filed  financing  or  continuation  statement  or of any new
financing  statement.  Seller shall at all times maintain each office from which
it services  Receivables  and its principal  executive  office within the United
States of America.

SECTION 5.4 Other Liens or Interests.  Except for the conveyances  hereunder and
as contemplated by the Basic Documents, Seller shall not sell, pledge, assign or
transfer  any Sold Assets,  the TRIP  Portfolio  Interest or the TRIP  Portfolio
Certificate to any other Person, or grant,  create,  incur,  assume or suffer to
exist any Lien  thereon  (except  Permitted  Liens) and Seller  shall defend the
right,  title and interest of Buyer in, to and under all Sold Assets transferred
hereunder,  the  TRIP  Portfolio  Interest  and the TRIP  Portfolio  Certificate
against  all claims of third  parties  (other  than  Permitted  Liens)  claiming
through or under Seller.

SECTION 5.5 Indemnification. Seller shall indemnify Buyer for any liability as a
result of the failure of a Receivable  transferred hereunder to be originated in
compliance  with  all  Requirements  of Law  and for  any  breach  of any of its
representations and warranties with respect thereto contained herein unless such
breach shall be cured in all material respects.  This indemnity obligation shall
be in addition to any obligation that Seller may otherwise have.

SECTION 5.6       Credit and Collection Policy.

     (1)  Seller  shall not make any  change or  modification  to the Credit and
Collection  Policy that could  reasonably be expected to have a material adverse
effect on the Noteholders.

     (2) Seller  shall not make any change or  modification  to the terms of the
Retail  Leases or the Retail Notes that could  reasonably  be expected to have a
material adverse effect on the Noteholders.


<PAGE>



SECTION 5.7 Repurchase Events. (a) Seller hereby covenants and agrees with Buyer
for the benefit of Buyer and the  Indenture  Trustee  that in the event of (i) a
breach of any of Seller's  representations  and warranties  contained in Section
3.01 hereof with respect to any Sold  Receivable,  unless such breach shall have
been cured in all material respects,  or (ii) a breach by Seller of Section 5.04
hereof with respect to any Sold Receivable,  the TRIP Portfolio  Interest or the
TRIP  Portfolio  Certificate,  which  breach  has a material  adverse  effect on
Buyer's  interest in such Sold  Receivable,  the TRIP Portfolio  Interest or the
TRIP Portfolio Certificate,  Seller will repurchase such Sold Receivable (or, in
the case of the TRIP Portfolio Interest or the TRIP Portfolio  Certificate,  all
Sold  Receivables  which are then included in the TRIP Portfolio  Interest),  as
applicable,  from  Buyer as of the last day of the  second  (or,  if the  Seller
elects,  the first)  Monthly  Period during which Seller  discovered or received
notice of such breach, by delivering to the Indenture Trustee for deposit in the
Collection  Account on the  Business  Day  preceding  the related  Payment  Date
immediately  following  such  Monthly  Period  an amount  equal to the  Warranty
Payment  for any such Sold  Receivable.  It is  understood  and agreed  that the
obligation of Seller to repurchase any Sold  Receivable as to which a breach has
occurred and is continuing  shall, if such  obligation is fulfilled,  constitute
the sole remedy against Seller for such breach available to Buyer.

         (b)  Upon  receipt  of the  Warranty  Payment  with  respect  to a Sold
Receivable which is a Warranty Receivable, Buyer shall assign, without recourse,
representation or warranty,  to Seller all of Buyer's right,  title and interest
in, to and under such Warranty Receivable and all Related Assets with respect to
such Warranty  Receivable,  such assignment being an assignment outright and not
for  security.  Upon the  assignment  of such  Warranty  Receivable  and Related
Assets,  Seller shall own such  Warranty  Receivable  and all such  security and
documents,  free of any further obligations to Buyer with respect thereto. If in
any  proceeding it is held that Seller may not enforce a Warranty  Receivable on
the  ground  that it is not a real party in  interest  or a holder  entitled  to
enforce the Warranty  Receivable,  Buyer shall, at Seller's  expense,  take such
steps as Seller deems  necessary to enforce the Warranty  Receivable,  including
bringing suit in the name of such Person.  Seller will  contribute  any Warranty
Receivable  which  is a Retail  Lease  and its  Related  Assets  to the  General
Interest in the Titling Trust (or to such other person as shall be designated by
Harco Leasing).

SECTION 5.8 Further  Assignments.  Seller  acknowledges  that Buyer has pledged,
assigned  and  transferred  all of its  right,  title and  interest  in the Sold
Receivables,  Related Assets, the TRIP Portfolio Interest and the TRIP Portfolio
Certificate and its rights hereunder to the Indenture Trustee,  on behalf of the
Noteholders,  pursuant to the Indenture.  Seller consents to such assignment and
agrees that the  Indenture  Trustee,  to the extent  provided in the  Indenture,
shall be  entitled  to  enforce  the  terms  of this  Agreement  and the  rights
(including  the right to grant or  withhold  any  consent  or  waiver)  of Buyer
directly  against  Seller.  Seller  further  agrees  that,  in  respect  of  its
obligations  hereunder,  it will act at the direction of and in accordance  with
all requests and instructions from the Indenture  Trustee delivered  pursuant to
the Basic Documents until the payment in full of all Notes and the  satisfaction
and discharge of the Indenture.  Except as otherwise  contemplated  by the Basic
Documents,  the  Indenture  Trustee  shall  have  the  rights  of a third  party
beneficiary  under this  Agreement.  Seller shall deliver copies of all notices,
requests, demands and other documents to be delivered by it to Buyer pursuant to
the terms hereof to the Indenture Trustee.


<PAGE>



SECTION  5.9  Pre-Closing  Collections.  Within  two  Business  Days  after each
Purchase Date, Seller shall transfer to the Indenture Trustee for deposit in the
Collection  Account all collections (from whatever source) on or with respect to
the related  Sold Assets held by Seller on such  Purchase  Date and  conveyed to
Buyer pursuant to Section 2.01 of this Agreement.

SECTION 5.10 Limitation on Transfer of International Purchase Obligations. Buyer
acknowledges and agrees that the rights pursuant to the  International  Purchase
Obligations  are  personal to Seller,  and only the proceeds of such rights have
been assigned to Buyer.  Buyer is not and is not intended to be (and none of the
Indenture  Trustee nor any  Noteholder  is or is  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, Buyer or the Indenture Trustee.

SECTION 5.11 Bankruptcy  Proceeding.  Buyer hereby  covenants and agrees that it
shall  not,  prior to the date  which is one  year  and a day  after  which  all
obligations  under each Permitted  Financing 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
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 special purpose  entity,  or
(iii) ordering the winding up or liquidation of the affairs of the Titling Trust
or special purpose entity.

SECTION 5.12 Sale Treatment. Seller intends to treat the transfer and assignment
described herein as a sale for accounting and tax purposes.

                                   ARTICLE 6

                            MISCELLANEOUS PROVISIONS

SECTION  6.1  Amendment.  Subject  to the  provisions  of  Section  3.17  of the
Indenture, this Agreement may be amended from time to time in a writing executed
by each of the parties hereto.

SECTION 6.2 Survival.  The  representations,  warranties and covenants of Seller
set forth in this  Agreement  shall  remain in full  force and  effect and shall
survive  each  Receivable  Closing  under  Section  2.02  hereof and any related
transfer under this Agreement or the Indenture.

SECTION 6.3 Termination.  The respective obligations and responsibilities of the
Seller and the Buyer pursuant to this Agreement shall terminate upon the earlier
of:

     (1) the maturity or other  liquidation of the last Sold  Receivable and the
disposition of any amounts  received upon liquidation of any such remaining Sold
Receivables or



<PAGE>



     (2) the  payment to the holders of all  outstanding  Series of Notes of all
amounts  required to be paid to them  pursuant to this  Agreement  and any other
Basic Documents.

SECTION 6.4 Notices.  All  demands,  notices and  communications  upon or to the
Seller,  the Buyer, the Servicer,  the Indenture  Trustee or the Rating Agencies
under this  Agreement  shall be  delivered  as  specified  in  Appendix B to the
Indenture.

SECTION 6.5 Governing Law. All questions  concerning the construction,  validity
and  interpretation  of this Agreement and each Receivable  Assignment  shall be
governed by and construed  and enforced in accordance  with the internal laws of
the State of Illinois,  without  giving  effect to any choice of law or conflict
provision or rule  (whether of the State of Illinois or any other  jurisdiction)
that would cause the application of the laws of any jurisdiction  other than the
State of Illinois.

SECTION 6.6 Waivers.  No failure or delay on the part of any party in exercising
any power,  right or remedy under this  Agreement or any  Receivable  Assignment
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any such power,  right or remedy preclude any other or further  exercise thereof
or the exercise of any other power, right or remedy.

SECTION  6.7  Costs  and  Expenses.   Seller   agrees  to  pay  all   reasonable
out-of-pocket  costs and  expenses  of Buyer,  including  fees and  expenses  of
counsel,  in connection  with the perfection as against third parties of Buyer's
right,  title and  interest  in, to and  under  all Sold  Receivables  purchased
hereunder,  Related Assets,  the TRIP Portfolio  Interest and the TRIP Portfolio
Certificate and the enforcement of any obligation of Seller hereunder.

SECTION 6.8 Confidential Information. Buyer agrees that it shall neither use nor
disclose to any person the names and  addresses of the Obligors  with respect to
any  Sold  Receivables  purchased  hereunder,  except  in  connection  with  the
enforcement of Buyer's rights hereunder,  under the Sold Receivables,  under the
Basic Documents or as required by law.

SECTION 6.9 Headings. The various headings in this Agreement are for purposes of
reference  only and  shall not  affect  the  meaning  or  interpretation  of any
provision of this Agreement.

SECTION  6.10  Counterparts.  This  Agreement  may be  executed  in two or  more
counterparts,  and by different parties on separate counterparts,  each of which
shall be an original,  but all of which  together  shall  constitute one and the
same instrument.

SECTION 6.11  Severability  of Provisions.  If any one or more of the covenants,
agreements,  provisions  or  terms  of  this  Agreement  shall  for  any  reason
whatsoever be held invalid, then such covenants, agreements, provisions or terms
shall be deemed  enforceable  to the  fullest  extent  permitted,  and if not so
permitted,  shall be deemed severable from the remaining covenants,  agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability  of the  other  provisions  of  this  Agreement  or of any  Basic
Documents or rights of any party thereto.




<PAGE>




SECTION 6.12  Assignment.  The Buyer  acknowledges  the rights  granted by it to
Seller pursuant to the Intercompany Agreement. Except (i) as provided in Section
5.07, (ii) for the grant of a security  interest  described in the  Intercompany
Security Agreement, and (iii) as expressly permitted herein, no party may assign
its rights hereunder without the other party's prior written consent.  The party
granting any such consent shall give notice thereof to the Rating Agencies.

SECTION 6.13 Further Assurances.  Seller and Buyer agree to do and perform, from
time to time,  any and all acts and to execute any and all  further  instruments
required or reasonably  requested by the other more fully to effect the purposes
of this  Agreement,  including  the  execution of any  financing  statements  or
continuation  statements relating to any Sold Receivables,  Related Assets, TRIP
Portfolio Interest or TRIP Portfolio  Certificate purchased hereunder for filing
under the provisions of the UCC of any applicable jurisdiction.

SECTION 6.14 No  Third-Party  Beneficiaries.  Except as  specifically  set forth
herein,  this  Agreement  shall inure to the benefit of and be binding  upon the
parties hereto and their respective successors and permitted assigns.  Except as
otherwise  expressly provided in this Agreement,  no other Person shall have any
right or obligation hereunder.

SECTION 6.15 Merger or  Consolidation  of, or Assumption of the  Obligations of,
Seller.  Any  Person (a) into which  Seller may be merged or  consolidated,  (b)
resulting from any merger,  conversion or consolidation to which Seller shall be
a party,  (c) succeeding to the business of Seller,  or (d) more than 50% of the
voting stock of which is owned, directly or indirectly,  by NIC, which Person in
any of the foregoing  cases executes an agreement of assumption to perform every
obligation of Seller under this Agreement shall be the successor to Seller under
this  Agreement  without the execution or filing of any paper or any further act
on the party of any of the parties to this Agreement;  provided,  however,  that
Seller  shall have  delivered to Buyer and the  Indenture  Trustee an Opinion of
Counsel  either (A) stating that, in the opinion of such counsel,  all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary fully to preserve and protect the interest of Buyer
and the  Indenture  Trustee,  respectively,  in the Sold  Receivables,  the TRIP
Portfolio  Interest and the TRIP Portfolio  Certificate and reciting the details
of such filings or (B) stating  that,  in the opinion of such  counsel,  no such
action shall be necessary to preserve and protect such interests.

SECTION 6.16 Merger and  Integration.  Except as specifically  stated  otherwise
herein,  this  Agreement  sets forth the  entire  understanding  of the  parties
relating to the subject matter hereof, and all prior understandings,  written or
oral,  are  superseded by this  Agreement.  This  Agreement may not be modified,
amended, waived, or supplemented except as provided herein.


<PAGE>



SECTION 6.17 No Petition  Covenants.  Notwithstanding  any prior  termination of
this  Agreement,  Seller shall not,  prior to the date which is one year and one
day after payment in full of all Notes and the satisfaction and discharge of the
Indenture,  acquiesce,  petition or otherwise invoke or cause Buyer to invoke or
join any other  Person in  instituting  the  process of any court or  government
authority for the purpose of commencing or sustaining a case against Buyer under
any bankruptcy, reorganization, arrangement, insolvency, liquidation proceeding,
or similar law of the United States or any state of the United  States.  Nothing
in this Section 6.16 shall preclude,  or be deemed to estop,  Seller from taking
or omitting to take any action prior to such date in (i) any case or  proceeding
voluntarily filed or commenced by or on behalf of Buyer under or pursuant to any
such law or (ii) any involuntary case or proceeding pertaining to Buyer which is
filed or  commenced  by or on behalf of a Person other than Buyer (or any Person
to which Buyer shall have assigned,  transferred or otherwise  conveyed any part
of the obligations of Buyer hereunder) under or pursuant to any such law.



<PAGE>





         IN  WITNESS  WHEREOF,  the  parties  hereto  have  duly  executed  this
Agreement as of the date and year first above written.

                                       NAVISTAR FINANCIAL CORPORATION


                                       By: ______________________________
                                                Name:
                                                Title:



                                       TRUCK RETAIL INSTALMENT PAPER CORP.


                                       By: ______________________________
                                                Name:
                                                Title:


<PAGE>





                                                                    Exhibit A to
                                                  Receivables Purchase Agreement

                          FORM OF RECEIVABLE ASSIGNMENT

         FOR  VALUE  RECEIVED,  in  accordance  with  the  Receivables  Purchase
Agreement,  dated as of October 16, 2000 (the "Receivables Purchase Agreement"),
between Navistar Financial Corporation,  a Delaware corporation ("Seller"),  and
Truck Retail Instalment Paper Corp., a Delaware  corporation  ("Buyer"),  Seller
does hereby sell,  assign,  transfer and  otherwise  convey unto Buyer,  without
recourse, all right, title and interest of Seller in, to and under the following
assets:

          (1) the Retail Notes  listed on the Schedule of Retail Notes  attached
     hereto as  Schedule I and the  beneficial  interest  in the  Retail  Leases
     listed on the  Schedule  of Retail  Leases  attached  hereto as Schedule II
     (such  Retail  Notes and such  beneficial  interest in such Retail  Leases,
     collectively,  the "Sold  Receivables")  and all  payments  paid on and due
     under each such Sold Receivable on or after the related Cutoff Date;

          (2)  all  Related   Retail  Note  Assets  with  respect  to  the  Sold
     Receivables;

          (3)  all  Related  Titling  Trust  Assets  with  respect  to the  Sold
     Receivables.


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

         It is the  intention  of  Seller  and  Buyer  that  the  transfers  and
assignments  contemplated by this Assignment shall constitute a sale from Seller
to Buyer of the property described herein and in Section 2.01 of the Receivables
Purchase  Agreement and the beneficial  interest in title to such property shall
not be part of  Seller's  estate  in the  event of the  filing  of a  bankruptcy
petition by or against Seller under any bankruptcy  law. Seller and Buyer intend
to treat such transfer and assignment as a sale for accounting and tax purposes.
Notwithstanding  the foregoing,  in the event a court of competent  jurisdiction
determines  that such transfer and assignment did not constitute  such a sale or
that such beneficial interest is a part of Seller's estate, then Seller shall be
deemed to have granted to Buyer a first priority  perfected security interest in
all of Seller's  right title and interest  in, to and under the assets  conveyed
pursuant to this  Assignment,  and Seller hereby grants such security  interest.
For  purposes  of such  grant,  this  Assignment  shall  constitute  a  security
agreement under the UCC.

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


<PAGE>





                                       A-6

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


<PAGE>



         IN WITNESS WHEREOF, the undersigned has caused this  Assignment  to  be
duly executed as of __________, ____

                                           NAVISTAR FINANCIAL CORPORATION


                                           By: _________________________
                                                    Name:
                                                    Title:


<PAGE>



                                                                      Schedule I
                                                        to Receivable Assignment

                            SCHEDULE OF RETAIL NOTES

         This Schedule of Retail Notes is made as of __________,  __ by NAVISTAR
FINANCIAL CORPORATION,  a Delaware corporation ("NFC"), in favor of TRUCK RETAIL
INSTALMENT  PAPER CORP., a Delaware  corporation  ("TRIP"),  as  contemplated by
Section 2.02 of the  Receivables  Purchase  Agreement dated as of October , 2000
(the "Receivables Purchase Agreement") between TRIP and NFC.

         Capitalized  terms used herein and not otherwise defined shall have the
meanings assigned to them in the Receivables Purchase Agreement.

         As contemplated by Article II of the  Receivables  Purchase  Agreement,
TRIP and NFC hereby agree to the  following  with respect to the Retail Notes to
be purchased and sold on the Purchase Date set forth below:

          1. A listing  of such  Retail  Notes [is  attached  hereto]  [has been
     separately delivered by NFC to TRIP].

          2. The Purchase Date shall be _________________________.

          3. The Cutoff Date shall be _______________________.

          4. The  aggregate  Contract  Value of all such  Receivables  as of the
     Cutoff Date is $------------------.

          5. The Receivable  Purchase Price is $____________,  of which $_______
     will be paid in cash and $________ will be recorded as an advance under the
     Intercompany Advance Agreement.

          6. Interest on the Receivable Purchase Price is a rate per annum equal
     to One-Month  LIBOR for such date plus 1% (calculated on the basis of a 360
     day year and actual  days  elapsed)  for the period  from such  Cutoff Date
     through such Purchase Date.



<PAGE>



         IN WITNESS WHEREOF, the parties hereto have duly executed this Schedule
of Retail Receivables as of the date and year first above written.

                                   NAVISTAR FINANCIAL CORPORATION


                                   By: ______________________________
                                            Name:
                                            Title:



                                   TRUCK RETAIL INSTALMENT PAPER CORP.


                                   By: ______________________________
                                            Name:
                                            Title:




<PAGE>



                                                                     Schedule II
                                                        to Receivable Assignment

                        FORM OF SCHEDULE OF RETAIL LEASES

         This  Schedule of Retail  Leases is made as of  __________  ________ by
Navistar Financial  Corporation,  a Delaware  corporation,  ("NFC"), in favor of
Truck  Retail  Instalment  Paper  Corp.,  a Delaware  corporation  ("TRIP"),  as
contemplated by Section 2.02 of the Receivables  Purchase  Agreement dated as of
October ____, 2000 (the "Receivables Purchase Agreement") between TRIP and NFC.

         Capitalized  terms used herein and not otherwise defined shall have the
meanings assigned to them in the Receivables Purchase Agreement.

         As contemplated by Article II of the  Receivables  Purchase  Agreement,
TRIP and NFC hereby agree to the following  with respect to the Retail Leases to
be purchased and sold on the Purchase Date set forth below:

          1. A listing of such  Retail  Leases [is  attached  hereto]  [has been
     separately delivered by NFC to TRIP].

          2. The Purchase Date shall be ____________________________.

          3.  The   Cutoff   Date   shall  be   _______________________________,
     _________________.

          4. The  aggregate  Contract  Value of all such Retail Leases as of the
     Cutoff Date is $------------------ .

          5.  The  Receivable   Purchase  Price  is   $_____________   of  which
     $______________ will be paid in cash and $_____________ will be recorded as
     an advance under the Intercompany Advance Agreement.

          6. Interest on the Receivable Purchase Price is a rate per annum equal
     to One-Month  LIBOR for such date plus 1% (calculated on the basis of a 360
     day year and actual  days  elapsed)  for the period  from such  Cutoff Date
     through such Purchase Date.





<PAGE>





         IN WITNESS WHEREOF, the parties hereto have duly executed this Schedule
Lease Receivables as of the date and year first above written.

                                   TRUCK RETAIL INSTALMENT PAPER CORP.


                                   By: _________________________________________
                                        Name:
                                        Title:



                                   NAVISTAR FINANCIAL CORPORATION


                                   By: _________________________________________
                                        Name:
                                        Title:

<PAGE>
Exhibit 10.03

                       TRUCK RETAIL INSTALMENT PAPER CORP.

                               Asset-Backed Notes

                                    INDENTURE

                          Dated as of October 16, 2000

                              THE BANK OF NEW YORK

                                Indenture Trustee


<PAGE>







                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                                                              <C>
                                                                                                                Page
GRANTING CLAUSE...................................................................................................4

ARTICLE IDEFINITIONS AND INCORPORATION BY REFERENCE...............................................................4
         1.1      Definitions.....................................................................................5
         1.2      [reserved]......................................................................................5

ARTICLE IITHE NOTES...............................................................................................5
         2.1      Issuance of Notes; Execution, Authentication and Delivery.......................................5
         2.2      Form of Notes and Indenture Trustee's Certificate of Authentication.............................8
         2.3      Temporary Notes.................................................................................8
         2.4      Registration; Registration of Transfer and Exchange of Notes....................................9
         2.5      Mutilated, Destroyed, Lost or Stolen Notes.....................................................10
         2.6      Persons Deemed Noteholders.....................................................................11
         2.7      Payment of Principal and Interest..............................................................11
         2.8      Cancellation of Notes..........................................................................12
         2.9      [reserved].....................................................................................13
         2.10     Book-Entry Notes...............................................................................13
         2.11     Notices to Clearing Agency.....................................................................13
         2.12     Definitive Notes...............................................................................14
         2.13     Seller as Noteholder...........................................................................14
         2.14     Tax Treatment..................................................................................14
         2.15     Special Terms Applicable to Subsequent Transfers of Certain Notes..............................14

ARTICLE IIICOVENANTS.............................................................................................15
         3.1      Payment of Principal and Interest..............................................................15
         3.2      Maintenance of Agency Office...................................................................15
         3.3      Money for Payments To Be Held in Trust.........................................................16
         3.4      Existence......................................................................................17
         3.5      Protection of Collateral; Acknowledgment of Pledge.............................................18
         3.6      Opinions as to Collateral......................................................................18
         3.7      Performance of Obligations; Servicing of Receivables...........................................19
         3.8      Negative Covenants.............................................................................19
         3.9      Annual Statement as to Compliance..............................................................20
         3.10     Consolidation, Merger, etc., of Issuer.........................................................20
         3.11     Successor or Transferee........................................................................21
         3.12     No Other Business..............................................................................21
         3.13     No Borrowing...................................................................................22
         3.14     Guarantees, Loans, Advances and Other Liabilities..............................................22
         3.15     Servicer's Obligations.........................................................................22
         3.16     Capital Expenditures...........................................................................22
         3.17     Amendments to and Waivers of Transfer and Servicing Agreements.................................22
         3.18     Payment of Obligations; Compliance with Laws...................................................24
         3.19     Inspection of Property, Books and Records......................................................24
         3.20     Notice of Material Proceedings.................................................................24
         3.21     Further Requests...............................................................................24
         3.22     Certificate of Incorporation...................................................................24
         3.23     No Other Agreements............................................................................24
         3.24     No ERISA Plan..................................................................................25
         3.25     Notice of Events of Default....................................................................25
         3.26     Further Instruments and Acts...................................................................25
         3.27     Indenture Trustee's Assignment of Interests in Certain Receivables.............................25
         3.28     Representations and Warranties by the Issuer to the Indenture Trustee..........................25

ARTICLE IVSATISFACTION AND DISCHARGE.............................................................................28
         4.1      Satisfaction and Discharge of Indenture........................................................28
         4.2      Application of Trust Money.....................................................................29
         4.3      Repayment of Monies Held by Paying Agent.......................................................29

ARTICLE VDEFAULT AND REMEDIES....................................................................................29
         5.1      Events of Default..............................................................................29
         5.2      Acceleration of Maturity; Rescission and Annulment.............................................30
         5.3      Collection of Indebtedness and Suits for Enforcement by Indenture Trustee......................31
         5.4      Remedies; Priorities...........................................................................33
         5.5      Optional Preservation of the Collateral........................................................34
         5.6      Limitation of Suits............................................................................35
         5.7      Unconditional Rights of Noteholders To Receive Principal and Interest..........................35
         5.8      Restoration of Rights and Remedies.............................................................36
         5.9      Rights and Remedies Cumulative.................................................................36
         5.10     Delay or Omission Not a Waiver.................................................................36
         5.11     Control by Noteholders.........................................................................36
         5.12     Waiver of Past Defaults........................................................................37
         5.13     Undertaking for Costs..........................................................................37
         5.14     Waiver of Stay or Extension Laws...............................................................38
         5.15     Action on Notes................................................................................38
         5.16     Performance and Enforcement of Certain Obligations.............................................38
         5.17     Amortization Events............................................................................39
         5.18     Limited Recourse...............................................................................39

ARTICLE VITHE INDENTURE TRUSTEE..................................................................................40
         6.1      Duties of Indenture Trustee....................................................................40
         6.2      Rights of Indenture Trustee....................................................................41
         6.3      Indenture Trustee May Own Notes................................................................42
         6.4      Indenture Trustee's Disclaimer.................................................................42
         6.5      Notice of Defaults.............................................................................42
         6.6      Reports by Indenture Trustee to Holders........................................................43
         6.7      Compensation; Indemnity........................................................................43
         6.8      Replacement of Indenture Trustee...............................................................44
         6.9      Merger or Consolidation of Indenture Trustee...................................................45
         6.10     Appointment of Co-Indenture Trustee or Separate Indenture Trustee..............................45
         6.11     Eligibility; Disqualification..................................................................46
         6.12     Schedule of Receivables........................................................................47
         6.13     Representations and Warranties of Indenture Trustee............................................47
         6.14     Indenture Trustee May Enforce Claims Without Possession of Notes...............................47
         6.15     Suit for Enforcement...........................................................................48
         6.16     Rights of Noteholders to Direct Indenture Trustee..............................................48

ARTICLE VIINOTEHOLDERS' LISTS AND REPORTS........................................................................48
         7.1      Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders.........................48
         7.2      Preservation of Information....................................................................49
         7.3      Fiscal Year....................................................................................49
         7.4      Reports by Indenture Trustee...................................................................49
         7.5      Indenture Trustee to Provide Copies of the Indenture and Series Supplements to Noteholders.....49

ARTICLE VIIIACCOUNTS, DISBURSEMENTS AND RELEASES.................................................................49
         8.1      Collection of Money............................................................................49
         8.2      Designated Accounts; Allocations; Payments.....................................................49
         8.3      General Provisions Regarding Designated Accounts...............................................51
         8.4      Release of Collateral..........................................................................53
         8.5      Sales of Receivables by the Issuer. ...........................................................54

ARTICLE IXSUPPLEMENTAL INDENTURES................................................................................55
         9.1      Supplemental Indentures Without Consent of Noteholders.........................................55
         9.2      Supplemental Indentures With Consent of Noteholders............................................56
         9.3      Execution of Supplemental Indentures...........................................................57
         9.4      Effect of Supplemental Indenture...............................................................57
         9.5      [reserved].....................................................................................57
         9.6      Reference in Notes to Supplemental Indentures..................................................57

ARTICLE XREDEMPTION OF NOTES.....................................................................................58
         10.1     Redemption.....................................................................................58
         10.2     Form of Redemption Notice......................................................................58
         10.3     Notes Payable on Redemption Date...............................................................59

ARTICLE XIMISCELLANEOUS..........................................................................................59
         11.1     Compliance Certificates and Opinions, etc......................................................59
         11.2     Form of Documents Delivered to Indenture Trustee...............................................60
         11.3     Acts of Noteholders............................................................................61
         11.4     Notices, etc., to Indenture Trustee, Issuer and Rating Agencies................................61
         11.5     Notices to Noteholders; Waiver.................................................................62
         11.6     Alternate Payment and Notice Provisions........................................................63
         11.7     [reserved].....................................................................................63
         11.8     Effect of Headings and Table of Contents.......................................................63
         11.9     Successors and Assigns.........................................................................63
         11.10  Separability.....................................................................................63
         11.11  Benefits of Indenture............................................................................63
         11.12  Legal Holidays...................................................................................63
         11.13  GOVERNING LAW....................................................................................64
         11.14  Counterparts.....................................................................................64
         11.15  Recording of Indenture...........................................................................64
         11.16  No Recourse......................................................................................64
         11.17  No Petition......................................................................................65
         11.18  Inspection 65



EXHIBIT A.........         Form of Indenture Trustee's Lien Release Certificate
EXHIBIT B.........         Form of Issuer's Sale Date Certificate
</TABLE>


<PAGE>





                  INDENTURE,  dated as of October 16, 2000, between Truck Retail
Instalment Paper Corp., a Delaware  corporation (the "Issuer"),  and THE BANK OF
NEW YORK, a New York banking  corporation,  as indenture  trustee (as  indenture
trustee and not in its individual capacity, the "Indenture Trustee").

                                 GRANTING CLAUSE

                  The Issuer  hereby  confirms its grant of a security  interest
in, transfer,  assignment and conveyance to the Indenture Trustee on the Closing
Date, as trustee for the benefit of the Noteholders,  all of the Issuer's right,
title  and  interest  in,  to  and  under  (a)  all  Receivables  including  all
Receivables  acquired  after the Closing Date,  all Related  Assets with respect
thereto, all monies due or to become due thereon (including, with respect to any
Receivable,  monies due or to become due thereon after the related  Cutoff Date,
whether paid or payable) and all amounts received with respect thereto;  (b) the
Receivables Purchase Agreement; (c) the rights of the Transferee under the Harco
Purchase Agreement  assigned to the Issuer pursuant to the Receivables  Purchase
Agreement; (d) the Servicing Agreement; (e) the Titling Trust Documents; (f) all
Collections;  (g) all funds on deposit in the Designated Accounts; (h) the Hedge
Agreement and all Hedge Receipts;  (i) any Enhancement issued or established for
a Series or class of Notes;  (j) a security  interest in the  Financed  Vehicles
related  to all  Issuer  Receivables;  and (k)  any  proceeds  of the  foregoing
(including "proceeds" as defined in Section 9-306 of the UCC) (collectively, the
"Collateral"); provided, however, that the preceding clauses (a) through (k) and
the term  Collateral  shall not be deemed to include the TRIP Residual  Interest
which has been  pledged  by the Issuer to  Navistar  Financial  pursuant  to the
Intercompany Security Agreement.

                  The foregoing grant has been made and will continue to be made
in trust to secure the payment of  principal  of and  interest on, and any other
amounts owing in respect of, the Notes,  equally and ratably without  prejudice,
priority or distinction  (except as otherwise  provided in any Series Supplement
or supplement  hereto),  and to secure  compliance  with the  provisions of this
Indenture,  all as provided in this  Indenture.  This  Indenture  constitutes  a
security agreement under the UCC.

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

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

<PAGE>

                                    ARTICLE I

                   DEFINITIONS AND INCORPORATION BY REFERENCE




                  SECTION I.1  Definitions.  Certain  capitalized  terms used in
this  Indenture  shall have the respective  meanings  assigned them in Part I of
Appendix A to this Indenture.  All references  herein to "this Indenture" are to
this Indenture as it may be amended, supplemented or modified from time to time,
and all references herein to Articles, Sections, subsections and exhibits are to
Articles, Sections,  subsections and exhibits of this Indenture unless otherwise
specified.  All terms defined in this Indenture shall have the defined  meanings
when used in any certificate,  notice,  Note or other document made or delivered
pursuant hereto unless otherwise defined therein.  The rules of construction set
forth in Part II of Appendix A to this  Indenture  shall be  applicable  to this
Indenture.

                  SECTION I.2       [reserved].



                                   ARTICLE II

                                    THE NOTES

                  SECTION II.1      Issuance of Notes; Execution, Authentication
 and Delivery.


          Notes may be issued by the Issuer upon execution of this Indenture and
from time to time  thereafter,  in each case, in  accordance  with the terms and
conditions  authorized by or pursuant to a Series  Supplement.  The Notes may be
issued in one or more Series. The aggregate principal amount of the Notes of all
Series  that may be  authenticated  and  delivered  and  outstanding  under this
Indenture is not limited.

          The Notes  shall be  executed  on  behalf of the  Issuer by any of its
Authorized  Officers.  The signature of any such Authorized Officer on the Notes
may be manual or facsimile.  Notes bearing the manual or facsimile  signature of
individuals  who were at any time  Authorized  Officers of the Issuer shall bind
the Issuer,  notwithstanding that such individuals or any of them have ceased to
hold such office prior to the  authentication  and delivery of such Notes or did
not hold such office at the date of such Notes.

          Prior to or concurrently with the delivery of any Note of a new Series
to the Indenture  Trustee for  authentication,  the parties hereto shall execute
and deliver a Series  Supplement  which will specify the principal terms of such
new Series  including  any  classes of Notes of that  Series.  The terms of such
Series  Supplement  may  modify or amend the terms of this  Indenture  solely as
applied to such new Series of Notes.

          The  Series  Supplement  shall set  forth,  in  addition  to all other
          provisions  of  the  Series  of  Notes   established  by  such  Series
          Supplement:

                    the name or  designation  of the  particular  Series  (which
               shall distinguish such Series from all other Series);



<PAGE>



                    the  initial  aggregate  principal  amount of the Series and
               each class of Notes within the Series (or method for  calculating
               its initial  principal  amount)  which may be  authenticated  and
               delivered  under this Indenture  (except for Notes  authenticated
               and delivered upon  registration  and transfer of, or in exchange
               for, or in lieu of,  other Notes of such Series  pursuant to this
               Indenture);

                    the method for  allocating  principal  and  interest  to the
               Noteholders including among classes of Notes in that Series;

                    the rate or rates (or the method for  determining  its rate)
               at  which  the  Notes  and  classes  of such  Series  shall  bear
               interest, if any, or the initial interest rate and the method for
               determining  subsequent  interest rates, which interest rates may
               differ  from the  interest  rates of other  Series or  classes of
               Notes;

                    the  date,  if other  than the  Payment  Date,  during  each
               Monthly Period when payments are to be made on such Series;

                    the terms of the Note  Distribution  Account(s)  established
               for such Series and any other terms pertaining
                  thereto;

                    the time and terms under which funds will be withdrawn  from
               the  Excess  Funding  Account  for  the  purpose  of  paying  the
               outstanding principal balance of such Series;

                    the amount of funds allocated to a Series to be deposited in
               the Excess Funding  Account after making the other prior deposits
               and payments for that Series;

                    the terms on which the Notes of such  Series  and each class
               of the Notes of such Series may be exchanged for Notes of another
               Series,  be  subject  to  repurchase,   optional   redemption  or
               mandatory  redemption  by  the  Issuer  or be  remarketed  by any
               remarketing agent;

                    the method for determining the amount of Excess Collections,
               if any,  for such  Series and the terms  under  which such Excess
               Collections would be available for payments on any other Series;

                    the  method  for   determining  the  amount  of  the  Series
               Shortfall   for  such  Series  for  each  Payment  Date  and  the
               application  of Excess  Collections,  if any,  available  to such
               Series;


<PAGE>



                    the issuer and terms of any  Enhancement for that Series and
               any levels and terms of  subordination  among classes of Notes in
               that Series;

                    the Stated Final Maturity Date for that Series;

                    each Rating Agency rating such Series; and

                    any other terms permitted by this Indenture.

          The obligation of the Indenture  Trustee to authenticate  the Notes of
     such new Series and to execute and deliver the related Series Supplement is
     subject to the  satisfaction,  as of the date of  issuance,  of each Series
     Issuance  Condition  and  the  delivery  to the  Indenture  Trustee  of the
     following:

                    for any Series  Supplement  to be delivered  after the first
               Series Supplement has been delivered under this Indenture,  on or
               before the fifth  Business Day  immediately  preceding the Series
               Issuance Date, the Issuer shall have given the Indenture Trustee,
               the Servicer,  each Rating Agency,  any Agent and any Enhancement
               Provider  written notice of such issuance and the Series Issuance
               Date;

                    a Series  Supplement in form  satisfactory  to the Indenture
               Trustee,  executed by each party hereto other than the  Indenture
               Trustee;

                    the related Enhancement Agreement and any related agreement,
               executed by each party hereto other than the  Indenture  Trustee;
               and

                    an Opinion of Counsel to the effect  that,  (x) for  federal
               income tax purposes, the issuance of the Notes will not adversely
               affect  the  characterization  of the  Notes  of any  outstanding
               Series or class of Notes,  as debt, nor will the issuance cause a
               taxable event for any  Noteholder  and (y) the new Series will be
               characterized as debt for federal income tax purposes.

          For each  issuance of a Series of Notes after the first  issuance of a
Series of Notes pursuant to this Indenture,  prior to or concurrently  with each
such new  issuance  the  Issuer  shall  have  represented  and  warranted  in an
Officer's Certificate delivered to the Indenture Trustee that the issuance shall
not, in the  reasonable  belief of the Issuer,  cause an  Amortization  Event to
occur for any outstanding Series or class of Notes.

         Upon  execution  and  delivery of a Series  Supplement,  the  Officer's
Certificate,  if any,  required  under Section 2.1(d) and the Opinion of Counsel
referred to in Section  2.1(c)(ii)(D),  to the Indenture Trustee,  the Indenture
Trustee shall  thereupon  authenticate  and deliver the related Notes to or upon
the written order of the Issuer, signed by any Authorized Officer.


<PAGE>




         Unless otherwise  provided in the related Series  Supplement,  the cash
proceeds of any issuances of a Series of Notes shall be applied first to satisfy
any Series Issuance Conditions required to be satisfied in connection  therewith
and second to repay principal on any Series of Notes to be redeemed or repaid in
connection  with such issuance and all remaining funds shall be deposited in the
Excess  Funding  Account or applied to make any  required  initial  deposits  or
payments in respect of any Enhancement established for such Series.

         On each  Series  Issuance  Date,  the Issuer may elect to  establish  a
minimum rate per annum for the Discount  Rate which minimum rate per annum shall
remain in effect for so long as the Issuer shall specify in connection with such
election.

                  SECTION II.2      Form   of   Notes  and  Indenture  Trustee's
Certificate of Authentication.

         The  Notes  shall  be in the  forms  provided  from  time to time by or
pursuant to a Series  Supplement in accordance  with the terms of this Indenture
and may  have  such  letters,  numbers  or  other  marks  of  identification  or
designation and such legends or endorsements  printed,  lithographed or engraved
thereon as the Issuer may deem appropriate and as are not inconsistent  with the
provisions  of this  Indenture,  or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock  exchange  on which the Notes may be listed or to conform to usage.
Any  portion  of the text of any Note may be set forth on the  reverse  thereof,
with an  appropriate  reference  thereto on the face of the Note. The Definitive
Notes shall be typewritten, printed, lithographed or engraved or produced by any
combination  of these methods (with or without steel engraved  borders),  all as
determined by the Authorized  Officer executing such Notes, as evidenced by such
officer's execution of such Notes.

         The  Indenture  Trustee's   certificate  of  authentication   shall  be
substantially in the following form:


<PAGE>



                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

                          THE BANK OF NEW YORK, not in its individual  capacity
                          but solely as Indenture Trustee

                          By:       ______________________________
                          Name:
                          Title:

                          Dated:    ______________________________

          Each  Note  shall be  dated  the  date of its  authentication.  Unless
otherwise provided in the related Series Supplement, each Note shall be issuable
as a  registered  Note in the  minimum  denomination  of $1,000 and in  integral
multiples thereof.

                  SECTION II.3      Temporary Notes.


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

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

                  SECTION  II.4  Registration;   Registration  of  Transfer  and
Exchange of Notes.


<PAGE>



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

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

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

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

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

          Every Note presented or surrendered  for  registration  of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form  satisfactory to the Indenture  Trustee and the Note Registrar,
duly executed by the Holder thereof or such Holder's attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company.

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


<PAGE>



          The  preceding  provisions  of this Section 2.4  notwithstanding,  the
Issuer  shall  not be  required  to  transfer  or make  exchanges,  and the Note
Registrar need not register transfers or exchanges,  (i) of Notes that have been
selected for redemption pursuant to Article X, if applicable; (ii) of Notes that
are due for repayment within 15 days of submission to the Corporate Trust Office
or the Agency  Office;  or (iii) if Section 2.15 has not been  complied  with in
connection with such transfer.

          Neither the Indenture  Trustee nor the Note  Registrar  shall have any
responsibility  to monitor or restrict the transfer of  beneficial  ownership in
any Note an interest in which is  transferable  through  the  facilities  of the
Clearing Agency.

                  SECTION II.5      Mutilated, Destroyed, Lost or Stolen Notes.


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

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

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


<PAGE>



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

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

                  SECTION  II.6  Persons  Deemed   Noteholders.   Prior  to  due
presentment for registration of transfer of any Note, the Issuer,  the Indenture
Trustee  and any agent of the  Issuer  or the  Indenture  Trustee  may treat the
Person in whose name any Note is registered (as of the day of  determination) as
the  Noteholder  for the  purpose of  receiving  payments  of  principal  of and
interest on such Note and for all other purposes whatsoever, whether or not such
Note be overdue,  and neither the Issuer, the Indenture Trustee nor any agent of
the Issuer or the Indenture Trustee shall be affected by notice to the contrary.

                  SECTION II.7      Payment of Principal and Interest.


          Interest  on each  Series of Notes  shall  accrue  and be  payable  as
provided in the applicable Series  Supplement.  Unless otherwise provided in the
applicable  Series  Supplement,  any installment of interest payable on any Note
shall be  punctually  paid or duly  provided for by a deposit by or on behalf of
the Issuer into the Note Distribution Account established for such Series on the
applicable  Payment Date and shall be paid to the Person in whose name such Note
(or one or more Predecessor  Notes) is registered on the applicable Record Date,
by check mailed  first-class,  postage  prepaid to such  Person's  address as it
appears on the Note Register on such Record Date; provided,  however, that, with
respect to Book-Entry Notes registered on the applicable Record Date in the name
of the Clearing Agency or its nominee for which  Definitive  Notes have not been
issued  pursuant  to Section  2.12,  payment  shall be made by wire  transfer in
immediately available funds to the account designated by such Holder.


<PAGE>



          The  principal of each Series of Notes shall be payable as provided in
the applicable Series Supplement. All principal payments on each Series of Notes
shall be made pro rata to the Noteholders of such Series entitled thereto unless
otherwise provided in the related Series  Supplement.  Unless otherwise provided
in the applicable Series Supplement, any installment of principal payable on any
Note shall be punctually  paid or duly provided for by a deposit by or on behalf
of the Issuer into the Note Distribution  Account established for such Series on
the  applicable  Payment Date and shall be paid to the Person in whose name such
Note (or one or more Predecessor  Notes) is registered on the applicable  Record
Date, by check mailed  first-class,  postage prepaid to such Person's address as
it appears on the Note Register on such Record Date;  provided,  however,  that,
with respect to  Book-Entry  Notes  registered on the Record Date in the name of
the  Clearing  Agency or its  nominee for which  Definitive  Notes have not been
issued  pursuant  to Section  2.12,  payment  shall be made by wire  transfer in
immediately available funds to the account designated by such Holder, except for
the final installment of principal on any such Note and the Redemption Price for
any Notes,  if so called,  which,  in each  case,  shall be payable as  provided
herein.  The funds  represented  by any such  checks in respect of  interest  or
principal returned undelivered shall be held in accordance with Section 3.3.

          With  respect to any Payment  Date on which the final  installment  of
principal and interest on a Series of Notes is to be paid, the Indenture Trustee
shall notify each  Noteholder  of such Series of Notes as of the Record Date for
such  Payment  Date of the fact that the final  installment  of principal of and
interest  on such  Note is to be paid on such  Payment  Date.  With  respect  to
Book-Entry Notes for which  Definitive  Notes have not been issued,  such notice
shall be sent on the Business Day prior to such Payment Date by  facsimile,  and
with respect to Definitive Notes, such notice shall be sent not later than three
Business Days after such Record Date in accordance with Section 11.5(a), and, in
each case, shall specify that such final  installment shall be payable only upon
presentation  and  surrender of such Note and shall specify the place where such
Note may be  presented  and  surrendered  for payment of such  installment.  The
Indenture  Trustee shall not be liable for any failure to provide  notice to the
Noteholders as required pursuant to this Section 2.7(c) to the extent it has not
received  notice of such  expected  final Payment Date from the Issuer not later
than two  Business  Days  after the Record  Date.  Notices  in  connection  with
redemptions of Notes shall be mailed to Noteholders as provided in Section 10.2.

                  SECTION II.8  Cancellation of Notes. All Notes surrendered for
payment, redemption,  exchange or registration of transfer shall, if surrendered
to any Person other than the  Indenture  Trustee,  be delivered to the Indenture
Trustee and shall be promptly canceled by the Indenture Trustee.  The Issuer may
at any  time  deliver  to the  Indenture  Trustee  for  cancellation  any  Notes
previously  authenticated  and  delivered  hereunder  which the  Issuer may have
acquired in any manner whatsoever,  and all Notes so delivered shall be promptly
canceled by the  Indenture  Trustee,  as  directed in writing by the Issuer.  No
Notes shall be authenticated in lieu of or in exchange for any Notes canceled as
provided in this Section 2.8,  except as expressly  permitted by this Indenture.
All  canceled  Notes may be held or  disposed  of by the  Indenture  Trustee  in
accordance  with its standard  retention or disposal  policy as in effect at the
time unless the Issuer  shall direct by an Issuer Order that they be returned to
it; provided,  however,  that such Issuer Order is timely and the Notes have not
been previously disposed of by the Indenture Trustee.

                  SECTION II.9      [reserved].


                  SECTION II.10 Book-Entry Notes.  Unless otherwise  provided in
the applicable Series Supplement,  each Series of Notes, upon original issuance,
shall be  issued in the form of a  typewritten  Note or Notes  representing  the
Book-Entry  Notes,  to be delivered  to the initial  Clearing  Agency,  by or on
behalf of the  Issuer  and such Note or Notes  shall be  registered  on the Note
Register in the name of the Clearing  Agency or its nominee  (initially,  Cede &
Co.).  No Note Owner shall  receive a  Definitive  Note  representing  such Note
Owner's  interest in such Note,  except as provided in Section 2.12.  Unless and
until  Definitive Notes with respect to such Notes have been issued to such Note
Owners pursuant to Section 2.12, with respect to such Notes:

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


<PAGE>




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

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

          the rights of the Note  Owners  shall be  exercised  only  through the
Clearing Agency and shall be limited to those  established by law and agreements
between such Note Owners and the  Clearing  Agency  and/or the  Clearing  Agency
Participants,  and unless and until  Definitive  Notes are  issued  pursuant  to
Section  2.12,  the initial  Clearing  Agency  shall make  book-entry  transfers
between the Clearing Agency  Participants  and receive and transmit  payments of
principal of and interest on such Notes to such  Clearing  Agency  Participants,
pursuant to the Clearing Agency Agreement; and

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

                  SECTION II.11 Notices to Clearing Agency.  With respect to any
Notes issued as Book-Entry  Notes,  whenever a notice or other  communication to
the  Noteholders is required under this Indenture,  unless and until  Definitive
Notes  representing such Notes shall have been issued to the related Note Owners
pursuant to Section 2.12, the Indenture  Trustee shall give all such notices and
communications  specified  herein to be given to the related  Noteholders to the
Clearing Agency and shall have no obligation to such Note Owners.


<PAGE>



                  SECTION  II.12  Definitive  Notes.  If for any Notes issued as
Book-Entry  Notes (i) the Issuer  advises the Indenture  Trustee in writing that
the  Clearing  Agency is no longer  willing or able to  properly  discharge  its
responsibilities with respect to such Notes and the Issuer is unable to locate a
qualified  successor;  (ii) the  Issuer,  at its option,  advises the  Indenture
Trustee in writing that it elects to terminate the book-entry system through the
Clearing  Agency;  or (iii)  after the  occurrence  of an Event of  Default or a
Servicer Default,  Note Owners representing  beneficial interests aggregating at
least a majority of the outstanding  principal  balance of such Notes advise the
Clearing Agency in writing that the continuation of a book-entry  system through
the Clearing Agency is no longer in the best interests of such Note Owners, then
the Clearing  Agency shall notify all Note Owners and the  Indenture  Trustee in
writing  of the  occurrence  of any  such  event  and  of  the  availability  of
Definitive Notes to such Note Owners  requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Note or Notes  representing such Book-Entry
Notes by the Clearing  Agency,  accompanied by  registration  instructions,  the
Issuer shall execute and the Indenture  Trustee shall  authenticate  the related
Definitive  Notes in accordance with the  instructions  of the Clearing  Agency.
None of the Issuer,  the Note Registrar or the Indenture Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be fully protected in relying on, such instructions.  Upon the issuance of
such Definitive Notes, the Indenture Trustee shall recognize the Holders of such
Definitive  Notes as Noteholders.  The Indenture  Trustee shall not be liable if
the Issuer or the  Indenture  Trustee is unable to locate a qualified  successor
Clearing Agency.

                  SECTION  II.13  Seller  as  Noteholder.   The  Seller  in  its
individual or any other capacity may become the owner or pledgee of Notes of any
Series and may otherwise  deal with the Issuer or its  affiliates  with the same
rights it would have if it were not the Seller.

                  SECTION  II.14 Tax  Treatment.  The Issuer  and the  Indenture
Trustee,  by entering  into this  Indenture,  and the  Noteholders  and the Note
Owners, by acquiring any Note or interest  therein,  (i) express their intention
that the Notes qualify under  applicable tax law as indebtedness  secured by the
Collateral and (ii) unless otherwise required by appropriate taxing authorities,
agree to treat the  Notes as  indebtedness  secured  by the  Collateral  for the
purpose of federal  income,  state and local  income and  franchise  taxes,  any
applicable single business tax, and any other taxes imposed upon, measured by or
based upon gross or net income.

                  SECTION II.15 Special Terms Applicable to Subsequent Transfers
of Certain Notes.




<PAGE>



          The  Notes  of a  Series  may  not  have  been  registered  under  the
Securities Act, or the securities laws of any other jurisdiction.  Consequently,
such Notes (the  "Unregistered  Notes") are not transferable other than pursuant
to an exemption  from the  registration  requirements  of the Securities Act and
satisfaction  of certain  other  provisions  specified  herein or in the related
Series  Supplement.  Unless otherwise provided in the related Series Supplement,
no sale, pledge or other transfer of any Unregistered Note (or interest therein)
after the date  thereof may be made by any Person  unless  either (i) such sale,
pledge  or other  transfer  is made to a  "qualified  institutional  buyer"  (as
defined  under  Rule  144A  under  the  Securities  Act) or to an  institutional
investor that is an "accredited investor" (as described in Rule 501(a)(1),  (2),
(3) or (7) under the  Securities  Act) and, if so requested by the Issuer or the
Indenture Trustee,  such proposed transferee executes and delivers a certificate
in form and substance satisfactory to the Indenture Trustee and the Issuer, (ii)
such sale,  pledge or other  transfer  occurs  outside of the United States to a
non-United  States Person in accordance with Regulation S of the Securities Act,
(iii) such sale,  pledge or other  transfer is otherwise  made in a  transaction
exempt from the  registration  requirements of the Securities Act, in which case
(A) the Indenture Trustee shall require that both the prospective transferor and
the prospective  transferee  certify to the Indenture  Trustee and the Issuer in
writing the facts  surrounding such transfer,  which  certification  shall be in
form and substance satisfactory to the Indenture Trustee and the Issuer, and (B)
the Indenture  Trustee shall require a written  opinion of counsel  (which shall
not be at the expense of the Issuer,  the  Servicer  or the  Indenture  Trustee)
satisfactory  to the Issuer and the  Indenture  Trustee to the effect  that such
transfer  will not violate the  Securities  Act or (iv) such sale  satisfies the
restrictions on transfer set forth in the applicable Series  Supplement.  Unless
otherwise  provided in the related Series  Supplement,  no sale, pledge or other
transfer of any Note that is an Unregistered  Note (or interest  therein) may be
made by any Person  unless the Issuer  shall have  consented  in writing to such
transfer.  Neither the Issuer nor the  Indenture  Trustee  shall be obligated to
register  any   Unregistered   Notes  under  the  Securities  Act,  qualify  any
Unregistered   Notes  under  the  securities   laws  of  any  state  or  provide
registration rights to any purchaser or holder thereof.

          Unless  otherwise  provided  in the  related  Series  Supplement,  the
Unregistered Notes may be acquired by or for the account of a Benefit Plan.

          Unless  otherwise  set forth in the related  Series  Supplement,  each
Unregistered Note shall bear a legend to the effect of subsection (a) above.

                                   ARTICLE III

                                    COVENANTS

                  SECTION III.1  Payment of Principal  and Interest.  The Issuer
shall duly and  punctually  pay the  principal  of and  interest on the Notes in
accordance with the terms of the Notes and this Indenture. On each date on which
any  payments are to be made,  the Issuer shall cause  amounts on deposit in the
Note Distribution  Accounts to be paid to the Noteholders in accordance with the
terms of the Series  Supplements,  the Notes and this  Indenture,  less  amounts
properly  withheld under the Code by any Person from a payment to any Noteholder
of interest  and/or  principal.  Any amounts so withheld  shall be considered as
having  been paid by the  Issuer to such  Noteholder  for all  purposes  of this
Indenture.

                  SECTION III.2  Maintenance of Agency Office. As long as any of
the Notes  remains  outstanding,  the Issuer  shall  maintain  in the Borough of
Manhattan,  the City of New York,  an office  (the  "Agency  Office"),  being an
office or agency where Notes may be surrendered  to the Issuer for  registration
of transfer or exchange,  and where notices and demands to or upon the Issuer in
respect  of the  Notes and this  Indenture  may be  served.  The  Issuer  hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes,  which  address is The Bank of New York,  101 Barclay  Street Floor 12
East, New York, New York, 10286, Attn:  Corporate Trust  Administration.  If the
Indenture  Trustee is not the agent, the Issuer shall give prompt written notice
to the Indenture Trustee of the location,  and of any change in the location, of
any such office or agency.  If at any time the Issuer shall fail to maintain any
such office or agency or shall fail to furnish the  Indenture  Trustee  with the
address thereof,  such surrenders,  notices and demands may be made or served at
the  Corporate  Trust Office of the  Indenture  Trustee,  and the Issuer  hereby
appoints  the  Indenture  Trustee as its agent to receive  all such  surrenders,
notices and demands.

                  SECTION III.3     Money for Payments To Be Held in Trust.




<PAGE>



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

          On or  before  each  date  on  which  payments  are to be  made or the
Redemption  Date  (if  applicable),  the  Issuer  shall  deposit  or cause to be
deposited in the Note Distribution Accounts aggregate sums sufficient to pay the
amounts then  becoming  due with  respect to the Notes,  such sums to be held in
trust for the benefit of the Persons  entitled  thereto and (if the Paying Agent
is not the Indenture  Trustee)  shall promptly  notify the Indenture  Trustee in
writing of its action or failure to so act.

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

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

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

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

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

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

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


<PAGE>




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

                  SECTION III.4 Existence.  The Issuer shall keep in full effect
its  existence,  rights and  franchises as a  corporation  under the laws of the
State of Delaware  (unless it becomes,  or any successor  Issuer hereunder is or
becomes,  organized under the laws of any other state or of the United States of
America,  in which case the  Issuer  shall  keep in full  effect its  existence,
rights  and  franchises  under the laws of such  other  jurisdiction)  and shall
obtain and preserve its  qualification  to do business in each  jurisdiction  in
which such  qualification  is or shall be  necessary to protect the validity and
enforceability  of this  Indenture,  the Notes,  the  Collateral  and each other
instrument or agreement included in the Collateral.

                  SECTION III.5     Protection of Collateral; Acknowledgment of
Pledge.

                  The Issuer  shall from time to time  execute  and  deliver all
such  supplements  and  amendments  hereto  and all such  financing  statements,
amendments  thereto,   continuation   statements,   assignments,   certificates,
instruments  of further  assurance  and other  instruments,  and shall take such
other action necessary or advisable to:


<PAGE>



                    maintain or preserve the lien and security interest (and the
priority  thereof) of this Indenture or carry out more  effectively the purposes
hereof,  including by making the  necessary  filings of financing  statements or
amendments  thereto  within  thirty days prior to the  occurrence  of any of the
following:  (A) any change in the Issuer's  name, (B) any change in the location
of the Issuer's principal place of business,  (C) any merger or consolidation or
other  change  in the  Issuer's  identity  or  organizational  structure  and by
promptly  notifying in writing the Indenture Trustee of any such filings and (D)
any other  change or  occurrence  that would  make any  financing  statement  or
amendment  seriously  misleading  within the meaning of Section  9-402(7) of the
UCC;

                    perfect,  publish  notice of or protect the  validity of any
grant of a security interest made or to be made by this Indenture;

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

                    preserve and defend title to the  Collateral  and the rights
               of the
Indenture  Trustee and the Noteholders in such Collateral  against the claims of
all Persons and parties,  and the Issuer hereby designates the Indenture Trustee
its agent and attorney-in-fact to execute any financing statement,  continuation
statement  or  other  instrument  required  pursuant  to this  Section  3.5.  In
addition,  the Issuer  shall  deliver to the  Indenture  Trustee  all  documents
constituting "instruments" (as defined in the UCC as in effect in the applicable
jurisdiction)  as shall have been delivered to it by the Seller  pursuant to the
terms of the Receivables Purchase Agreement relating to the Collateral with such
endorsements attached as the Indenture Trustee may reasonably require.

                  SECTION III.6     Opinions as to Collateral.


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

          On or before April 30 in each calendar year, beginning April 30, 2001,
the Issuer shall furnish to the Indenture  Trustee an Opinion of Counsel  either
stating that,  in the opinion of such  counsel,  such action has been taken with
respect to the recording,  filing,  re-recording and refiling of this Indenture,
any indentures  supplemental  hereto and any other requisite  documents and with
respect to the execution and filing of any financing statements and continuation
statements as is necessary to maintain the lien and security interest created by
this  Indenture  and  reciting the details of such action or stating that in the
opinion of such  counsel no such action is  necessary  to maintain  the lien and
security interest created by this Indenture.  Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture, any
indentures  supplemental  hereto  and  any  other  requisite  documents  and the
execution and filing of any financing  statements  and  continuation  statements
that will, in the opinion of such counsel,  be required to maintain the lien and
security  interest of this  Indenture  until April 30 in the following  calendar
year.


<PAGE>



                  SECTION III.7      Performance  of  Obligations;  Servicing of
Receivables.

          The  Issuer  shall not take any  action  and shall use its  reasonable
efforts  not to permit any action to be taken by others  that would  release any
Person from any of such Person's  material  covenants or  obligations  under any
instrument or agreement  included in the  Collateral or that would result in the
amendment, hypothecation,  subordination, termination or discharge of, or impair
the validity or  effectiveness  of, any such instrument or agreement,  except as
otherwise expressly provided in the Basic Documents.

          The Issuer may contract  with other Persons to assist it in performing
its duties under this Indenture,  and any performance of such duties by a Person
identified  to the  Indenture  Trustee  herein or in the Basic  Documents  or an
Officers'  Certificate  of the Issuer  shall be deemed to be action taken by the
Issuer.  The  Indenture  Trustee  shall  not be  responsible  for the  action or
inaction of the Servicer or a Person acting on behalf of the Issuer.

          The Issuer shall punctually perform and observe all of its obligations
and  agreements  contained in this  Indenture,  the Basic  Documents  and in the
instruments and agreements included in the Collateral, including but not limited
to filing or causing to be filed all UCC financing  statements and  continuation
statements required to be filed under the terms of this Indenture, the Servicing
Agreement and the Receivables  Purchase  Agreement in accordance with and within
the time periods provided for herein and therein.  Except as otherwise expressly
provided  herein  or  therein,  the  Issuer  shall  not  waive,  amend,  modify,
supplement or terminate any Basic Document or any provision  thereof without the
consent of the Indenture Trustee.

          If the Issuer  shall have  knowledge of the  occurrence  of a Servicer
Default under the Servicing Agreement or the occurrence of any default or breach
under any Basic  Documents,  the Issuer  shall  promptly  notify  the  Indenture
Trustee and the Rating  Agencies in writing  thereof,  and shall specify in such
notice the  response or action,  if any,  the Issuer has taken or is taking with
respect to such default.

                  SECTION III.8     Negative  Covenants.  So  long  as any Notes
are outstanding, the Issuer shall not:

          sell, transfer, exchange or otherwise dispose of any of the properties
or assets of the Issuer,  except the Issuer may: (i) collect,  liquidate,  sell,
transfer,  assign or otherwise dispose of the Issuer's interest (whether pledged
to the Indenture Trustee or not) in the Issuer Receivables including Liquidating
Receivables,  Warranty Receivables,  Administrative  Receivables and the Related
Assets with respect  thereto in accordance  with the express terms hereof,  (ii)
make cash payments out of the Designated  Accounts and (iii) take other actions,
in each case as contemplated by the Basic Documents;


<PAGE>



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

          either (i) permit the validity or  effectiveness  of this Indenture to
be impaired,  or permit the lien of this Indenture to be amended,  hypothecated,
subordinated, terminated or discharged, or permit any Person to be released from
any  covenants or  obligations  with  respect to the Notes under this  Indenture
except as may be  expressly  permitted  hereby,  (ii)  permit any lien,  charge,
excise,  claim,  security  interest,  mortgage or other encumbrance  (other than
Permitted Liens) to be created on or extend to or otherwise arise upon or burden
the  Collateral  or any part  thereof or any  interest  therein or the  proceeds
thereof or (iii)  permit the lien of this  Indenture  not to  constitute a valid
first priority  security  interest in the Collateral (other than with respect to
Permitted Liens); or

          waive  any of  the  conditions  to the  obligation  of the  Issuer  to
purchase Receivables under Section 4.02 of the Receivables Purchase Agreement or
make any such purchase without the satisfaction of such conditions.

                  SECTION III.9 Annual  Statement as to  Compliance.  The Issuer
shall deliver to the Indenture  Trustee,  on or before  February 1 of each year,
beginning  February 1, 2002,  an Officer's  Certificate  signed by an Authorized
Officer of the Issuer, dated as of October 31 of such year, stating that:

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

          to the  best of such  Authorized  Officer's  knowledge,  based on such
review, the Issuer has fulfilled in all material respects all of its obligations
under this  Indenture  throughout  such year, or, if there has been a default in
the  fulfillment of any such  obligation,  specifying each such default known to
such  Authorized  Officer  and the  nature and  status  thereof.  A copy of such
certificate  may be  obtained by any  Noteholder  by a request in writing to the
Issuer addressed to the Corporate Trust Office of the Indenture Trustee.

                  SECTION III.10    Consolidation, Merger, etc., of Issuer.
                                    --------------------------------------

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

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


<PAGE>




          immediately  after giving effect to such merger or  consolidation,  no
          Event of Default shall have occurred and be continuing;

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

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

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

                    that  such  consolidation  or merger  and such  supplemental
                    indenture comply with this Section 3.10; and

                    that all conditions  precedent  herein  provided for in this
                    Section 3.10 have been  complied  with,  which shall include
                    any filing required by the Exchange Act; and

          the  Issuer  has  received  a Tax  Opinion  regarding  the  merger  or
          consolidation.

          Except as otherwise expressly permitted by this Indenture or the other
Basic  Documents,  the Issuer  shall not sell,  convey,  exchange,  transfer  or
otherwise  dispose of any material portion of the properties and assets included
in the Collateral to any Person.

                  SECTION III.11 Successor or Transferee. Upon any consolidation
or merger of the Issuer in accordance with Section 3.10(a), the Person formed by
or  surviving  such  consolidation  or merger (if other than the  Issuer)  shall
succeed to, and be  substituted  for, and may exercise every right and power of,
the Issuer under this  Indenture with the same effect as if such Person had been
named as the Issuer herein.

                  SECTION III.12 No Other Business.  The Issuer shall not engage
in any business or activity other than acquiring,  holding,  owning, selling and
managing the Collateral and the proceeds therefrom in the manner contemplated by
the Basic Documents, issuing and selling the Notes, making payments on the Notes
and such  other  activities  that  are  necessary,  suitable  or  convenient  to
accomplish the foregoing or are incidental thereto or are otherwise contemplated
by the  Basic  Documents,  including  as  set  forth  in  Article  THIRD  of the
Certificate of Incorporation,  including entering into and making payments under
any Enhancements.


<PAGE>



                  SECTION  III.13 No  Borrowing.  The  Issuer  shall not  issue,
incur, assume, guarantee or otherwise become liable, directly or indirectly, for
any indebtedness  other than  indebtedness in respect of the Notes,  pursuant to
the  Intercompany  Advance  Agreement or otherwise in accordance  with the Basic
Documents.

                  SECTION   III.14   Guarantees,   Loans,   Advances  and  Other
Liabilities.  Except for the Intercompany  Agreements and except as contemplated
by this  Indenture or the other Basic  Documents,  the Issuer shall not make any
loan or advance or credit to, or  guarantee  (directly  or  indirectly  or by an
instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise),  endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or  dividends  of, or own,  purchase,  repurchase  or  acquire  (or agree
contingently to do so) any stock,  obligations,  assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.

                  SECTION III.15  Servicer's  Obligations.  The Issuer shall use
its best  efforts to cause the  Servicer  to comply with its  obligations  under
Sections 3.01 and 3.02 of the Servicing Agreement.

                  SECTION III.16 Capital Expenditures. The Issuer shall not make
any  expenditure  (whether by  long-term or operating  lease or  otherwise)  for
capital assets  (either real,  personal or intangible  property)  other than the
purchase of  Receivables  and other  property  and rights from the Seller on the
Closing  Date and  from  time to time  thereafter  pursuant  to the  Receivables
Purchase Agreement.

                  SECTION  III.17  Amendments  to and  Waivers of  Transfer  and
          Servicing  Agreements.

          The Issuer covenants and agrees that,  unless  otherwise  specifically
permitted under this Indenture,  it will not,  without the prior written consent
of the  Indenture  Trustee or the  Holders  of not less than a  majority  of the
principal  amount of the  Controlling  Class of each  Series of Notes,  waive or
agree to any waiver of, the terms of any of the Basic  Documents or waive timely
performance or observance by Harco Leasing under the Harco  Purchase  Agreement,
the Seller under the  Receivables  Purchase  Agreement,  the Servicer  under the
Servicing Agreement or the Titling Trust under the Titling Trust Documents.

     The Issuer  shall not enter into,  or permit  Navistar  Financial  or Harco
Leasing to enter into, any amendment or supplement to any Transfer and Servicing
Agreement except in compliance with the following provisions:

          Without Consent of Noteholders.  Without the consent of the Holders of
any Notes but with prior notice to the Rating Agencies,  the Issuer, at any time
and from time to time,  may enter into one or more  amendments or supplements to
any Transfer and Servicing Agreement for any of the following purposes:

          to cure any  ambiguity  or to  correct  or  supplement  any  provision
          therein  or in  any  amendment  or  supplement  thereto  which  may be
          defective  or  inconsistent  with any  other  provision  of the  Basic
          Documents;


<PAGE>




          to  add  or  supplement  any  Enhancements  for  the  benefit  of  the
          Noteholders of one or more Series  (provided that if any such addition
          or supplement  affects any Series  differently  than any other Series,
          then such  addition  shall not, as evidenced by an Opinion of Counsel,
          adversely  affect,  in any  material  respect,  the  interests of such
          Series differently than such other Series);

          to add to the  covenants,  restrictions  or  obligations  of  Navistar
          Financial,  the Servicer, the Issuer, Harco Leasing, the Other Titling
          Trust Parties or the Indenture Trustee; or

          for the purpose of adding any provisions  to,  changing in any manner,
          or eliminating any of the provisions therein; provided,  however, that
          such  action  shall  not,  as  evidenced  by an  Opinion  of  Counsel,
          adversely  affect  in  any  material  respect  the  interests  of  any
          Noteholder unless such Noteholders' consent is obtained as provided in
          this Section 3.17(b).

          With Consent of Noteholders.  The Issuer may, with prior notice to the
Rating  Agencies and with the written  consent of the Holders of not less than a
majority  of the  principal  amount of the  Controlling  Class of each Series of
Notes  affected  thereby,  enter into an amendment or supplement to any Transfer
and  Servicing  Agreement  for  any  purpose;  provided,  however,  that no such
amendment or supplemental shall, without the consent of the Noteholders affected
thereby:

          materially  increase  or  reduce  in any  manner  the  amount  of,  or
          accelerate  or  delay  the  timing  of,   collection  of  payments  on
          Receivables  or take any action with  respect to the Notes which would
          be prohibited under the Indenture or the Series Supplements,

          change or otherwise  modify the method of  calculation of the Warranty
          Purchase Payment or the Administrative Purchase Payment, or

          modify any  provision  of this  Section  3.17 to decrease the required
          minimum  percentage   necessary  to  approve  any  amendments  to  any
          provisions of a Transfer and Servicing Agreement.

          It  shall  be  sufficient  if  an  Act  of  Noteholders  approves  the
substance,  but not the form,  of any  proposed  amendment  or  supplement  to a
Transfer and Servicing Agreement which requires the consent of the Noteholders.

          Promptly  after  the  execution  by the  Issuer  of any  amendment  or
supplement to a Transfer and Servicing  Agreement  pursuant to Section  3.17(b),
the Issuer shall mail to the  Noteholders  to which such amendment or supplement
relates a notice  setting forth in general terms the substance of such amendment
or  supplement.  Any  failure of the Issuer to mail such  notice,  or any defect
therein,  shall not,  however,  in any way impair or affect the  validity of any
such amendment or supplement.


<PAGE>




SECTION III.18 Payment of Obligations; Compliance with Laws. The Issuer will pay
and discharge, at or before maturity, all of its respective material obligations
and  liabilities,  including,  without  limitation,  tax  liabilities  and other
governmental  claims,  except  where the same may be  contested in good faith by
appropriate proceedings, and will maintain, in accordance with GAAP, reserves as
appropriate  for the  accrual of any of the same.  The Issuer will comply in all
respects  with all  Requirements  of Law and all  applicable  laws,  ordinances,
rules,  regulations,  and requirements of Governmental  Authorities  (including,
without limitation, ERISA and the rules and regulations thereunder) except where
the necessity of

<PAGE>
                                   APPENDIX A

                              PART I - DEFINITIONS

         All terms used in this  Appendix  shall have the defined  meanings  set
forth in this Part I when used in the Basic Documents,  unless otherwise defined
therein.

         "Act "  shall  mean  an Act as  specified  in  Section  11.3(a)  of the
Indenture.

         "Accountants'  Report"  shall  have the  meaning  given to such term in
Section 3.02 of the Servicing Agreement.

         "Administrative  Purchase Payment" shall have the meaning given to such
term in Section 2.08 of the Servicing Agreement.

         "Administrative  Receivable"  shall have the meaning given to such term
in Section 2.08 of the Servicing Agreement.

         "Affiliate" shall mean, with respect to any specified Person, any other
Person  controlling or 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.

         "Agency Office" shall mean the office of the Issuer maintained pursuant
to Section 3.2 of the Indenture.

         "Agent"  shall  mean,  with  respect  to  any  Series,  the  Person  so
designated in the related Series Supplement.

         "Aggregate  Discounted  Asset  Balance"  shall mean,  as of any date of
determination during a Payment Period, the sum of:

         (1) the present value,  using the Discount Rate as of such date, of the
remaining  Scheduled  Payments  on all  Issuer  Receivables  other  than  Issuer
Receivables  that are Level Principal  Retail Notes and Issuer  Receivables that
have an APR in excess of the Discount Rate;


<PAGE>



         (2) the present value,  using the Discount Rate as of such date, of the
remaining  principal payments on all Issuer Receivables that are Level Principal
Retail  Notes and that have an APR not in excess of the Discount  Rate,  and the
pro forma  interest  payments on such Level  Principal  Retail Notes assuming an
interest  rate  equal  to the  weighted  average  interest  rate on  such  Level
Principal  Retail  Notes and  assuming  that all  payments  are made on a timely
basis; and

         (3) the Contract Value of all Issuer Receivables that have an APR in
excess of the Discount Rate as of such date; provided that, with respect to each
of the foregoing  clauses (1), (2) and (3), the calculation of the present value
or Contract Value, as applicable, shall in all cases be made (A) with respect to
the Receivables which were Issuer Receivables as of the close of business on the
last day of the Monthly Period that  immediately  preceded the first day of such
Payment  Period,  as of such last day and (B) with  respect  to the  Receivables
which were Issuer  Receivables  that were  transferred  to the Issuer  after the
close of  business  on the  last  day of the  Monthly  Period  that  immediately
preceded the first day of such Payment Period,  as of the Cutoff Date applicable
thereto. For purposes of determining the Aggregate Discounted Asset Balance, any
remaining payments on a Liquidating Receivable will be assigned a value of zero.

         "Aggregate Note Principal  Balance" shall mean the sum of the aggregate
outstanding principal balance of all Series issued by the Issuer.

         "Agreement"  shall  mean  when  used  in  any  Basic  Document  (unless
otherwise  defined therein),  such Basic Document,  as the same may from time to
time be amended, supplemented or otherwise modified.

         "Amortization  Date" shall mean, with respect to an Amortization Event,
the date on which such  Amortization  Event as  described in Section 5.17 of the
Indenture or a Series Supplement  occurs;  provided that any requirement for the
giving of notice, the lapse of time, the declaration by any Person, or any other
condition  relating  to  the  occurrence  of the  Amortization  Event  has  been
satisfied.

         "Amortization  Event"  shall  have the  meaning  given to such  term in
Section 5.17 of the Indenture.

         "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.


<PAGE>



         "Applicable   One-Month  LIBOR"  shall  mean  (i)  with  respect  to  a
determination of the Discount Rate on a Determination  Date,  One-Month LIBOR in
effect during the last Payment Period when a Purchase Date, Series Issuance Date
or a Sale Date (but, in the case of a Sale Date, only if the sale of Receivables
by the Issuer  which  occurred  on such Sale Date was a sale of less than all of
the  Receivables  then held by the Issuer)  occurred  or (ii) with  respect to a
determination  of the Discount Rate in  connection  with a Sale Date, a Purchase
Date, a Series  Issuance Date or a  Determination  Date that falls on one of the
preceding  three dates,  One-Month  LIBOR in effect during the Payment Period in
which such date falls.

         "Authorized Officer" shall mean, with respect to the Issuer, an officer
who is  authorized  to act for the Issuer and who is identified to the Indenture
Trustee on the Closing Date (as such list may be modified or  supplemented  from
time to time  thereafter)  and  with  respect  to any  other  Person,  any  Vice
President  or more senior  officer of such Person who is  authorized  to act for
such Person with respect to such matters.

         "Balloon  Receivable" shall mean either a Retail Note that provides for
a  principal  payment on the final  payment  date for such  Retail  Note that is
larger than the principal  payments due prior to the final payment date for such
Retail Note or a TRAC Lease.

         "Bankruptcy  Remote Borrowing  Conditions" shall mean, prior to lending
to the Titling Trust,  that such lender must (i) give a no-petition  covenant in
favor of the Titling  Trust and,  (ii) execute an  undertaking  in favor of each
holder or transferee  from time to time of any  Portfolio  Interest or Portfolio
Interest  Certificate to release all claims to each Portfolio  Interest  whether
then or  thereafter  created  and,  in the event that such  release is not given
effect,  to fully  subordinate  all claims it may be deemed to have against each
Portfolio  Interest  whether  then or  thereafter  created  and  provide to each
Titling  Trustee an opinion  of  counsel to the effect  that,  in the event of a
bankruptcy  or  insolvency  of such lender,  the assets and  liabilities  of the
Titling  Trust  will  not be  substantially  consolidated  with the  assets  and
liabilities of such lender.

         "Basic Documents" shall mean the Issuer's Certificate of Incorporation,
the Indenture (including all Series Supplements and other supplements  thereto),
the Receivables Purchase Agreement,  the Servicing Agreement, the Harco Purchase
Agreement,  the  Titling  Trust  Documents,  the  Enhancement  Agreements,  each
Schedule of Receivables,  and the other documents and certificates  delivered in
connection therewith from time to time.

         "Basic  Servicing  Fee"  shall have the  meaning  given to such term in
Section 2.09 of the Servicing Agreement.

         "Basic Servicing Fee Rate" shall have the meaning given to such term in
Section 2.09 of the Servicing Agreement.

         "Benefit  Plan" shall mean any one of (a) an employee  benefit plan (as
described in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA,  (b) a plan  described  in Section  4975(e)(1)  of the Code or (c) any
entity  whose  underlying  assets  include  plan  assets  by  reason of a plan's
investment in such entity.

         "Book-Entry  Note" shall mean Notes in which  ownership  and  transfers
shall be made through book entries by a Clearing  Agency as described in Section
2.10 of the Indenture.


<PAGE>



         "Borrowing Base" shall mean, as of any date of  determination,  the sum
of (a) the outstanding  principal  balance of all cash and Eligible  Investments
held in the  Excess  Funding  Account  and (b) the  Aggregate  Discounted  Asset
Balance.

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

         "Buyer" shall mean the Issuer as Buyer under the  Receivables  Purchase
Agreement.

         "Calculation  Date" shall mean a Purchase  Date, a Sale Date, a Payment
Date, or a Determination Date.

         "Certificated  Security"  shall mean, as of any date, the meaning given
to such term under the applicable UCC in effect on such date.

         "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.

         "Certificates"  shall have the meaning  given to such term in Exhibit A
of the TRIP Portfolio Supplement.

         "Certificate   of   Incorporation"   shall  mean  the   Certificate  of
Incorporation of the Issuer.

         "Class Rate" shall mean,  with  respect to any class of Notes,  for any
date of  determination,  the current per annum rate at which such class of Notes
pays interest.

         "Class Spread" shall mean, with respect to any class of Notes,  for any
date of determination, the per annum spread in excess of One-Month LIBOR used to
determine  the rate at which  interest  accrues  on such  class of Notes for the
current Payment Period.

         "Clearing Agency" shall mean an organization  registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. Unless otherwise  specified
in a Series  Supplement,  the initial  Clearing  Agency for each series of Notes
shall be The Depository Trust Company. The Clearing Agency shall at all times be
a "clearing corporation" as defined in Section 8-102(3) of the New York UCC.

         "Clearing  Agency  Agreement" shall mean, with respect to any Series or
class of Notes,  the agreement among the Issuer,  the Indenture  Trustee and the
initial Clearing  Agency,  dated as of the Closing Date, as amended from time to
time.


<PAGE>



         "Clearing Agency  Participant" shall mean a securities broker,  dealer,
bank,  trust company,  clearing  corporation or other  financial  institution or
other  Person for whom from time to time a Clearing  Agency  effects  book entry
transfers and pledges of securities deposited with the Clearing Agency.

         "Closing Date" shall mean October 16, 2000.

         "Code" shall mean the Internal  Revenue Code of 1986,  as amended,  and
Treasury Regulations promulgated thereunder.

         "Collateral" shall have the meaning set forth in the granting clause of
the Indenture.

         "Collateral  Account"  shall have the meaning given to such term in the
Titling Trust Agreement.

         "Collateral Agency Agreement" shall have the meaning given to such term
in the Titling Trust Agreement.

         "Collateral  Agent"  shall have the  meaning  given to such term in the
Titling Trust Agreement.

         "Collateral  Supplement"  shall  mean a  supplement  to the  Collateral
Agency Agreement  related to the TRIP Portfolio  Interest executed in accordance
therewith.

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

         "Collections"   shall  mean  all  amounts  received  from  Obligors  or
otherwise  in respect of Issuer  Receivables,  whether  constituting  principal,
interest, TRAC Payments,  proceeds of sales of Receivables or Financed Vehicles,
Liquidation  Proceeds  or  otherwise,  except for  Supplemental  Servicing  Fees
received on the Receivables  and the Related Assets,  during the related Monthly
Period.

         "Composite  Schedule of  Receivables"  shall have the meaning  given to
such term in Section 3.04 of the Servicing Agreement.

         "Contract"  shall mean,  with respect to a Retail Note or Retail Lease,
the related contract(s) or other agreement(s) with the related Obligor which set
for the terms of such Retail Note or Retail Lease as the case may be.

         "Contract  Value"  shall  mean,  for any  Receivable  as of any date of
determination, the excess of (i) the Gross Balance of such Receivable as of such
date over (ii) the Unearned  Income with respect to such  Receivable  as of such
date.


<PAGE>



         "Contractual Obligation" shall mean, as to any Person, any provision of
any  security  issued  by such  Person  or any  agreement,  instrument  or other
undertaking  to  which  such  Person  is a party  or by  which  it or any of its
property is bound.

         "Control" shall mean

         (x) the Indenture Trustee shall have obtained "Control" over a Security
Entitlement if:

                  (i)      (a)     the  Indenture  Trustee  is  the   Securities
                                   Intermediary for the  Designated  Account  in
                                   which such Security Entitlement is held, or

                           (b)     the Indenture Trustee

                           (1)     is  identified  in   the   records   of   the
                                   Securities Intermediary as the person  having
                                   such  a  Security  Entitlement  against   the
                                   Securities Intermediary, or


                           (2)     has  obtained  the  agreement, in writing, of
                                   the Securities Intermediary for such Security
                                   Entitlement that it will comply  with  orders
                                   of the Indenture  Trustee  regarding the sale
                                   or  redemption  of  the  Security Entitlement
                                   without  further consent of any other person,
                                   and

                  (ii)     the Securities Intermediary for such Security
                           Entitlement

                           (a)      is  the  registered  owner  of  the  related
                                    Financial Asset,

                           (b)      is the holder of  the  Security  Certificate
                                    for the related Financial Asset, or

                           (c)      holds its interest in the related  Financial
                                    Asset   directly    through    a    clearing
                                    corporation   (as   defined    in    Revised
                                    Article 8); and

         (y) the Indenture Trustee shall have obtained  "Control" over a Federal
Book-Entry Security if:

                  (i)      (a)      the Indenture  Trustee  is  a participant in
                                    the  book  entry  system  maintained  by the
                                    Federal  Reserve  Bank  that  is  acting  as
                                    fiscal agent for the issuer of such  Federal
                                    Book-Entry Security; and

                           (b)      such Federal  Reserve Bank has  indicated by
                                    book  entry  that  such  Federal  Book-Entry
                                    Security has been  credited to the Indenture
                                    Trustee's  securities  account  in such book
                                    entry system; or


<PAGE>



                  (ii)     (a)      the Indenture Trustee

                                    (1)     is  identified  in the  records of a
                                            Securities   Intermediary   as   the
                                            Person having a Security Entitlement
                                            in   respect    of   such    Federal
                                            Book-Entry   Security  against  such
                                            Securities Intermediary; or

                                    (2)     has  obtained  the   agreement,   in
                                            writing,     of    the    Securities
                                            Intermediary   for   such   Security
                                            Entitlement that it will comply with
                                            orders  of  the  Indenture   Trustee
                                            regarding  the sale or redemption of
                                            the  Security   Entitlement  without
                                            further consent of any other Person;
                                            and

                           (b)      the   Securities   Intermediary   for   such
                                    Security Entitlement is a participant in the
                                    book entry system  maintained by the Federal
                                    Reserve  Bank that is acting as fiscal agent
                                    for the  issuer of such  Federal  Book-Entry
                                    Security; and

                           (c)      such Federal  Reserve Bank has  indicated by
                                    book  entry  that  such  Federal  Book-Entry
                                    Security has been credited to the Securities
                                    Intermediary's  securities  account  in such
                                    book entry system.

         "Controlling  Class" shall mean, with respect to a Series, (1) if there
is only one class of Notes in that Series, all the Notes of that Series, and (2)
if there is more than one class of Notes  outstanding in that Series,  the class
or classes with the highest initial rating from the Rating Agencies.

         "Corporate  Trust  Office"  shall mean with  respect  to the  Indenture
Trustee,  the  principal  office at which at any  particular  time the corporate
trust business of the Indenture  Trustee shall be administered,  which office at
the Closing Date is located at The Bank of New York, 101 Barclay Street Floor 12
East, New York, New York, 10286, Attn: Corporate Trust Administration.

         "Credit and Collection  Policy" shall mean the credit criteria  applied
in respect of the origination of the Designated Retail Leases and the Designated
Retail  Notes or the credit  review  process  followed  in  connection  with the
collection of the Designated  Retail Leases and the Designated  Retail Notes, as
the same may be modified  from time to time in  accordance  with Section 5.06 of
the  Receivables  Purchase  Agreement  and  Section  5.06 of the Harco  Purchase
Agreement.

         "Cutoff  Date" shall mean,  with respect to any Purchase Date after the
initial  Purchase  Date, a date selected by the Servicer which shall not be more
than 31 days  prior to such  Purchase  Date and,  with  respect  to the  initial
Purchase Date, the Initial Cutoff Date.


<PAGE>



         "Dealer"  shall mean (i) a Person with whom  International  has a valid
dealer sales/maintenance  agreement to sell Navistar Vehicles, (ii) a truck, bus
or trailer equipment  manufacturer to whom International sells vehicles pursuant
to a valid agreement or (iii) a Person with whom Navistar  Financial has a valid
agreement to extend new or used truck or trailer floor plan terms.

         "Dealer  Liability"  shall mean,  with respect to any  Receivable,  all
rights,  claims and  actions of  Navistar  Financial  against  the Dealer  which
originated such Receivable or which sold the Financed Vehicle[s] which gave rise
to such Receivable and any successor Dealer for recourse or reimbursement of any
losses,  costs or  expenses  arising as a result of a default by the  Obligor on
such Receivable.

         "Delivery" shall mean, with respect to Designated Account Property:

(i) (a) with respect to Physical Property or any Certificated Security, transfer
thereof  to the  Indenture  Trustee  or its  nominee or  custodian  by  physical
delivery to the  Indenture  Trustee or its nominee or custodian  endorsed to, or
registered in the name of, the Indenture  Trustee or its nominee or custodian or
endorsed in blank;  and (b) with respect to a Security  Certificate or any other
Designated Account Property that constitutes Physical Property and that is not a
Security  Entitlement  transfer of such Security Certificate or other Designated
Account  Property  to the  Indenture  Trustee  or its  nominee or  custodian  by
physical delivery to the Indenture Trustee or its nominee or custodian  endorsed
to, or  registered  in the name of,  the  Indenture  Trustee  or its  nominee or
custodian  or endorsed  in blank;  and (ii) with  respect to any  Uncertificated
Security that is not a Federal  Book-Entry  Security:  (a) if the issuer of such
Uncertificated  Security is organized under the laws of a jurisdiction  that has
not  adopted  Revised  Article 8,  registration  on the books and records of the
issuer  thereof  in the name of the  financial  intermediary,  the  sending of a
confirmation  by the  financial  intermediary  of the transfer to the  Indenture
Trustee or its nominee or  custodian  of such  Uncertificated  Security  and the
making by such  financial  intermediary  of  entries  on its  books and  records
identifying such Uncertificated Securities as belonging to the Indenture Trustee
or its  nominee  or  custodian;  and (b) if the  issuer  of such  Uncertificated
Security is organized under the laws of a jurisdiction  that has adopted Revised
Article 8, (x) the issuer  registers  the  Indenture  Trustee as the  registered
owner or (y) the Indenture  Trustee  otherwise  satisfies the  requirements  for
obtaining "control" under Section 8-106(c) of Revised Article 8.


<PAGE>



         "Definitive  Notes"  shall  mean  the  Notes  issued  pursuant  to  the
Indenture in definitive form either upon original  issuance or upon  termination
of book-entry  registration  with respect to such Notes pursuant to Section 2.12
of the Indenture.

         "Delaware  Trustee"  shall have the  meaning  given to such term in the
Titling Trust Agreement.

         "Designated Accounts" shall mean, collectively, the Collection Account,
the Excess Funding Account, all Reserve Accounts, the Note Distribution Accounts
and any  other  account  established  pursuant  to a  Series  Supplement  unless
otherwise specified therein.

         "Designated Account Property" shall mean the Designated  Accounts,  all
amounts  and  investments  held  from  time to time  in any  Designated  Account
(whether  in  the  form  of  deposit  accounts,  Physical  Property,  book-entry
securities,  uncertificated  securities  or  otherwise)  and all proceeds of the
foregoing.

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

         "Designated  Retail  Leases"  shall  have  the  meaning  it is given in
Section 2.03 of the Harco Purchase Agreement.

         "Determination  Date" shall mean the third  Business  Day prior to each
Payment Date.

         "Discount  Rate"  shall  mean,  as of any  date of  determination,  the
greater of (A) the sum of Applicable  One-Month  LIBOR on such date and 6.5% per
annum and (B) the minimum Discount Rate, if any, in effect following an election
of the Issuer as provided  under Section  2.1(g) of the  Indenture,  which shall
remain in effect for so long as the Issuer  specifies  in  connection  with such
election.

         "Dollars"  or "$" shall mean lawful  currency  of the United  States of
America.


<PAGE>



         "EFA  Allocable  Amount" shall mean,  with respect to a Series of Notes
and a  Payment  Date or a  Redemption  Date,  an  amount  equal to (a) if (1) no
Amortization  Event  has  occurred  and is  continuing  on such  date  and (2) a
Principal  Payment  Commencement  Date or  Redemption  Date for such  Series has
occurred  or  will  occur  on  such  date,  the  lesser  of  (i)  the  Principal
Distributable  Amount  for  such  Series  and  (ii)  the  result  of the  Series
Allocation  Percentage  for  such  Series  as of the  related  Payment  Date  or
Redemption Date divided by the sum of the Series Allocation  Percentages for all
Series for which a Principal  Payment  Commencement  Date or Redemption Date has
occurred or will occur on such Payment Date or Redemption Date multiplied by the
amount on deposit in the Excess Funding  Account prior to the application of any
funds in other Designated Accounts to be deposited in the Excess Funding Account
on such date, (b) if an  Amortization  Event has occurred and is continuing with
respect to any Series of Notes,  the lesser of (i) the  Principal  Distributable
Amount for such Series and (ii) the Series Allocation Percentage for such Series
as of the related Payment Date multiplied by the amount on deposit in the Excess
Funding  Account  prior to the  application  of any  funds  in other  Designated
Accounts to be deposited in the Excess  Funding  Account on such date and (c) in
any other event, zero.

         "Effective  Strike  Rate" shall mean,  as of a Purchase  Date or Future
Payment  Date,  as the case may be, the Discount Rate minus the sum of the Basic
Servicing  Fee Rate,  the highest  Weighted  Average  Spread with respect to any
outstanding Series of Notes on such Purchase Date or Future Payment Date, as the
case may be, and 1%.

         "Electing  Holder"  shall  have the  meaning  given to such term in the
Titling Trust Agreement.

         "Eligible Counterparty" shall mean a Person organized under the laws of
the United  States of America or any of the states  thereof or the  District  of
Columbia  (or any  domestic  branch of a  foreign  bank)  which has a  long-term
unsecured debt rating of Aa3 from Moody's and a short-term unsecured debt rating
of A-1 from S&P (or, if the Hedge Provider does not have a short-term  unsecured
debt  rating  from S&P, a  long-term  unsecured  debt rating of at least A+ from
S&P).

         "Eligible  Deposit Account" shall mean either (i) a segregated  account
with an  Eligible  Institution  or (ii) a  segregated  trust  account  with  the
corporate trust department of a depository  institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Columbia (or any domestic branch of a foreign bank),  having  corporate trust
powers and acting as trustee for funds  deposited in such account so long as any
of the securities of such depository  institution have a credit rating from each
Rating Agency in one of its generic rating categories which signifies investment
grade.

         "Eligible  Institution" shall mean a depository  institution  organized
under the laws of the United States of America or any one of the states  thereof
or the  District of Columbia  (or any domestic  branch of a foreign  bank),  (A)
which has either (1) a  long-term  unsecured  debt rating of at least "AA-" from
S&P and "Aa3" from Moody's or (2) a short-term  unsecured debt or certificate of
deposit  rating of at least  "A-1+" from S&P and "P-1" from  Moody's,  (B) whose
deposits  are insured by the FDIC and (C) having a combined  capital and surplus
of at least  $50,000,000 as set forth in its most recent published annual report
of condition.

         "Eligible  Investments"  shall mean any of the  following  in each case
with a remaining  term of no later than the Business Day  immediately  preceding
the  Payment  Date  next  following  the  date of  investment:  (a)  (i)  direct
obligations of, and obligations guaranteed as to full and timely payment by, the
United  States  or any  agency  or  instrumentality  of the  United  States  the
obligations  of which are  backed by the full  faith  and  credit of the  United
States  (other than the  Government  National  Mortgage  Association),  and (ii)
direct  obligations of, or obligations fully guaranteed by, the Federal National
Mortgage  Association or any state then rated with the Required  Rating for such
obligations,  which  obligations  are,  at the  time  of  investment,  otherwise
acceptable to each Rating Agency;

<PAGE>



         (b)  certificates  of deposit,  demand or time  deposits  of,  bankers'
acceptances  issued by, or federal funds sold by any  depository  institution or
trust company (including the Indenture  Trustee)  incorporated under the laws of
the United  States or any state  thereof  (or any  domestic  branch of a foreign
bank) and subject to supervision and examination by federal and/or state banking
authorities  and the deposits of which are fully insured by the FDIC, so long as
at the time of such  investment  or  contractual  commitment  providing for such
investment either such depository  institution or trust company has the Required
Rating or the Rating Agency Condition has been satisfied;

         (c)  repurchase  obligations  held by the  Indenture  Trustee  that are
acceptable to the Indenture  Trustee with respect to (i) any security  described
in  clause  (a)  above  or (e)  below,  or (ii) any  other  security  issued  or
guaranteed by any agency or instrumentality of the United States, in either case
entered into with a federal  agency or depository  institution  or trust company
(including the Indenture Trustee) acting as principal,  whose obligations having
the  same  maturity  as that  of the  repurchase  agreement  would  be  Eligible
Investments under clause (a)(ii) or (b) above;

         (d)  securities  bearing  interest or sold at a discount  issued by any
corporation  incorporated  under the laws of the  United  States or any state so
long as at the time of such investment or contractual  commitment  providing for
such investment either the long-term, unsecured debt of such corporation has the
Required Rating or the Rating Agency Condition has been satisfied, or commercial
paper or other short-term debt having the Required Rating;

         (e) interests in any open-end or closed-end  management type investment
company or investment trust (i) registered under the Investment Company Act, the
portfolio  of which is  limited to the  obligations  of, or  guaranteed  by, the
United  States  and  to  agreements  to  repurchase  such   obligations,   which
agreements,   with  respect  to  principal  and  interest,  are  at  least  100%
collateralized  by such  obligations  marked to market on a daily  basis and the
investment  company or investment  trust shall take delivery of such obligations
either  directly or through an  independent  custodian  designated in accordance
with the  Investment  Company Act and (ii)  acceptable to each Rating Agency (as
approved in writing by each Rating Agency) as collateral  for securities  having
ratings equivalent to the ratings of the Notes;

          (f) guaranteed  reinvestment  agreements issued by any bank, insurance
company or other  corporation  for which the Rating  Agency  Condition  has been
satisfied;

         (g) investments in Eligible Investments maintained in "sweep accounts",
short-term asset  management  accounts and the like utilized for the investment,
on an overnight basis, of residual balances in investment accounts maintained at
the  Indenture  Trustee or any other  depository  institution  or trust  company
organized  under the laws of the United  States or any state that is a member of
the FDIC, the short-term debt of which has the Required Rating;

         (h)  guaranteed  investment  contracts  entered into with any financial
institution  having a final maturity of not more than one month from the date of
acquisition,  the  short-term  debt  securities  of which  institution  have the
Required Rating;


<PAGE>



         (i) funds  classified as money market funds  (including those for which
the Indenture Trustee acts as investment manager or advisor) consisting of: U.S.
Treasury bills, other obligations  issued or guaranteed by the U.S.  government,
its   agencies  or   instrumentalities;   certificates   of  deposit;   banker's
acceptances;  and commercial  paper  (including  variable  master demand notes);
provided,  however,  that the fund shall be rated with the  Required  Rating and
redemptions shall be permitted on a daily or next business day basis; and

          (j) such other  investments for which the Rating Agency  Condition has
been satisfied.

         Notwithstanding  anything to the contrary  contained  in the  foregoing
definition, no Eligible Investment may be purchased at a premium.

         "Eligible  Receivable"  shall mean,  as of a Cutoff Date, a Receivable,
owing by an Obligor that satisfies the following criteria:

                 (a) it constitutes chattel paper within the meaning of the UCC;

                  (b) in the case of a Retail  Note,  immediately  prior to  the
transfer and assignment  thereof to the Issuer by Navistar Financial pursuant to
the Receivables  Purchase  Agreement,  Navistar  Financial had good title to it,
free of any Lien (except for Permitted  Liens and Liens that will be released as
of such transfer), and all right, title and interest in it has been validly sold
by  Navistar  Financial  to the  Issuer  pursuant  to the  Receivables  Purchase
Agreement,  and the Issuer has good title to it,  free of any Lien  (except  for
Permitted  Liens),  and its transfer to the Issuer has been perfected  under the
UCC;

                   (c) in the case of a Retail  Lease, (i) such Retail  Lease is
owned of record by the Titling Trust,  (ii) immediately  prior to the allocation
of such  Retail  Lease to the TRIP  Portfolio  Interest,  Harco  Leasing was the
beneficial  owner of such Retail  Lease free of any Lien  (except for  Permitted
Liens and Liens that will be released as of such  transfer),  (iii) all of Harco
Leasing's  right,  title and interest in such Retail Lease has been validly sold
by Harco Leasing to Navistar Financial pursuant to the Harco Purchase Agreement,
(iv) all right, title and interest in such Retail Lease (other than the interest
therein of the Titling Trust) has been validly sold by Navistar Financial to the
Issuer pursuant to the  Receivables  Purchase  Agreement,  (v) the Issuer is the
owner of all right,  title and  interest  in such Retail  Lease  (other than the
interest of the Titling Trust) free of any Lien (except for Permitted Liens) and
(vi) its transfer to the Issuer has been perfected under the UCC;

<PAGE>



                  (d) in the case of a Retail Note, it has created or shall
create a valid, a binding and enforceable  first priority  security  interest in
favor of Navistar Financial in each Financed Vehicle related thereto (except for
Permitted  Liens),  which security interest will be validly assigned by Navistar
Financial  to the  Issuer  and is  assignable  by the  Issuer  to the  Indenture
Trustee;
                  (e) 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 the  Issuer  is the  beneficial  owner  through  its  ownership  of the TRIP
Portfolio  Interest of such  Financed  Vehicle 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;

                  (f) in the case of a Retail Lease,  the Collateral  Agent  (or
its nominee) has a first  priority  perfected  security  interest in such Retail
Lease and the related  Financed  Vehicle  which will be validly  assigned by the
Seller to the Issuer and is assignable by the Issuer to the Indenture Trustee;

                  (g) in the case of a  Retail  Lease,  as of the  Purchase Date
with respect to such Retail Lease,  such Retail Lease has been  allocated to the
TRIP Portfolio Interest;

                  (h) in the case of a  Retail  Lease,  as of the  Purchase Date
with respect to such Retail Lease,  the related Financed Vehicle will be free of
all Liens (other than Permitted Liens);

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

                  (j) it has not been satisfied, subordinated or rescinded;

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

                  (l) it is not subject to any dispute in whole or in part or to
 any offset, counterclaim or defense;


<PAGE>



                  (m) it is not a Liquidating Receivable;

                  (n) as of such Cutoff Date, there has been no default, breach,
violation or event permitted  acceleration  under the terms thereof and no event
had occurred and was continuing that with notice or the lapse of time would have
constituted a default,  breach,  violation or event  permitting  acceleration or
termination under the terms thereof, and Navistar Financial or Harco Leasing, as
the case may be, had not waived any of the  foregoing,  in each case  except for
payments on such  Receivable  that are not more than 60 days past due  (measured
from the date of any Scheduled Payment);

                  (o) it was originated in the United States and is payable onl
 in Dollars;

                  (p) in the case of a Retail Note,it was originated by Navistar
Financial or its Affiliates for the retail sale of one or more Financed Vehicles
in the  ordinary  course of  business  and in  accordance  with the  Credit  and
Collection Policies with respect thereto, was fully and properly executed by the
parties thereto,  and, in the case of a Retail Lease, it was originated by Harco
Leasing,  the Titling  Trust or one or more of their  Affiliates  for the retail
lease of one or more Financed  Vehicles in the ordinary course of business,  was
fully and properly  executed by the parties thereto,  in each case in accordance
with the Credit and Collection Policies with respect thereto;

                  (q) in  respect  of  which  all  requirements  of  applicable
federal,  state and local laws and regulations  thereunder,  including the Equal
Credit  Opportunity  Act,  the  Federal  Reserve  Board's  Regulation  "B ," the
Soldiers' and Sailors' Civil Relief Act of 1940,  any  applicable  bulk sales or
bulk transfer law and other equal credit  opportunity  and disclosure  laws have
been complied with in all material  respects and it and the sale or lease of the
related Financed Vehicle or Financed Vehicles  evidenced thereby complied at the
time it was  originated or made,  and on the related Cutoff Date complied in all
material  respects with all legal  requirements of the  jurisdiction in which it
was originated or made;

                  (r) it arises under a Contract  having a  maximum  term not in
excess of 85 months from  origination  and has a remaining term of not more than
85 months from the related Cutoff Date;

                  (s) in the case of a Retail  Note, it  provides  for  payments
(including  balloon  payments) that fully amortize the amount  financed over its
original term to maturity and yields interest at a fixed APR;

<PAGE>



                  (t) in the case of a  Finance Lease, it provides for  payments
(including purchase option payments) that fully amortize the Initial Capitalized
Cost over its original term to maturity and yields implicit  interest at a fixed
APR,  with a purchase  option  price that does not exceed  $1,000 or such higher
amount as the Rating Agencies shall approve;

                 (u) in the case of a TRAC Lease, it provides for payments  that
fully  amortize  the  Initial  Capitalized  Cost to an amount  equal to the TRAC
Payment,  and,  in the event of a  termination  of the TRAC  Lease,  the  amount
payable  thereunder  by the  Obligor  is at  least  equal to the  excess  of the
Outstanding  Capitalized  Cost of the related Financed Vehicle over the proceeds
from the sale of such Financed Vehicle;

                  (v) the Obligor thereon  is  required to  maintain a  physical
damage  insurance  policy for each Financed  Vehicle related thereto of the type
that Navistar Financial  requires in accordance with its customary  underwriting
standards  for the  purchase  or lease of medium  and heavy  duty  truck,  truck
chassis,  bus  and  trailer  receivables,   unless  Navistar  Financial  has  in
accordance with its customary  procedures  permitted such Obligor to self-insure
such Financed Vehicle;

                 (w) in the  case  of a  Retail  Lease, such Obligor is required
to maintain the related  Financed Vehicle in good repair and is obligated to pay
the cost of all necessary repairs,  maintenance and replacements with respect to
such Financed Vehicle and all costs, expenses,  fees and charges incurred in the
use and operation of such Financed  Vehicle and all taxes on or relating to such
Financed Vehicle;

                  (x) all right,  title  and  interest  of  the  Issuer  in such
Receivable and the related  Financed  Vehicles has been pledged by the Issuer to
the Indenture Trustee and all filings  (including UCC filings)  necessary in any
jurisdiction to give the Indenture Trustee a first priority  perfected  security
interest in it and in the Issuer's  interest in each  Financed  Vehicle  related
thereto have been made;
                  (y) the Financed Vehicle(s) related to the Receivable is a new
or used medium or heavy duty truck, truck chassis, bus or trailer;

                  (z) the Obligor thereon is not the  United  States of  America
or any state or any agency,  department or  instrumentality of the United States
of America or any state;


<PAGE>



                  (aa) it has not been originated  in, nor is it subject to  the
laws of, any  jurisdiction  under which its sale,  transfer and assignment under
the Harco Purchase  Agreement,  in the case of a Retail Lease,  the  Receivables
Purchase Agreement or the Indenture is unlawful, void or voidable; and

                  (bb) there is only one original executed copy of it.

         "Enhancement"  shall  mean the  rights  and  benefits  provided  to the
Noteholders  of any Series or class  pursuant  to any  letter of credit,  surety
bond,  cash  collateral  account,  spread  account,  guaranteed  rate agreement,
maturity  liquidity  facility,  tax  protection  agreement,  interest  rate swap
agreement,   interest  rate  hedge,  cap,  floor  or  collar  or  other  similar
arrangement.  The  subordination  of any Series or class to any other  Series or
class or of a portion of the Certificates to any Series or class shall be deemed
to be an Enhancement.

         "Enhancement  Agreement"  shall mean the Hedge  Agreement and any other
agreement,  instrument  or document  governing the terms of any  Enhancement  or
pursuant to which any Enhancement is issued or outstanding.

         "Enhancement  Provider"  shall mean a Person,  other  than the  Issuer,
providing  any   Enhancement,   other  than  any  Noteholder   whose  Notes  are
subordinated to any Series or class of Notes.

         "Event of Default" shall mean an event  described in Section 5.1 of the
Indenture;  provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.

         "Excess  Collections"  shall mean any funds allocated to a Series which
are in excess of all of the payments and deposits required to be made in respect
of such Series as of a date of determination and which are expressly  designated
as "Excess Collections" under the Series Supplement related to such Series.

         "Excess  Funding  Account"  shall mean the account  designated as such,
established and maintained pursuant to Section 2.02 of the Servicing Agreement.

         "Excess  Funding  Account  Investment  Earnings"  shall mean investment
earnings on funds  deposited in the Excess  Funding  Account,  net of losses and
investment expenses.

         "Exchange  Act"  shall mean the  Securities  Exchange  Act of 1934,  as
amended.

         "Executive  Officer" shall mean, with respect to any  corporation,  the
Chief Executive  Officer,  Chief  Operating  Officer,  Chief Financial  Officer,
President,  Executive Vice  President,  any Vice President,  the Secretary,  the
Treasurer,  Assistant Secretary or Assistant Treasurer of such corporation;  and
with respect to any partnership, any general partner thereof.


<PAGE>



         "Fair  Market  Value  Lease" shall mean a retail lease of a new or used
medium or heavy  duty  truck,  truck  chassis,  bus or  trailer,  originated  by
Navistar  Financial  or one or more of its  Affiliates,  pursuant  to which  the
lessee  ordinarily has the option to purchase the leased vehicle for fair market
value upon termination of the lease.

         "FDIC"  shall mean the Federal  Deposit  Insurance  Corporation  or any
successor entity thereto.

         "Federal  Book-Entry  Security" shall mean an obligation  issued by the
U.S.  Treasury,  the  Federal  Home Loan  Mortgage  Corporation  or the  Federal
National Mortgage Association,  or any other direct obligation of, or obligation
fully  guaranteed as to timely  payment of principal and interest by, the United
States of  America,  that is a  book-entry  security  held  through  the Federal
Reserve System pursuant to Federal Book-entry regulations.

         "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
Obligor.

         "Financed Vehicle" shall mean a new or used medium or heavy duty truck,
truck chassis, bus or trailer which is financed by a Receivable.

         "Financial  Asset" shall have the meaning  given such term in Article 8
of the New York UCC. As used herein, the Financial Asset "related to" a Security
Entitlement is the Financial Asset in which the  entitlement  holder (as defined
in Article 8 of the New York UCC)  holding  such  Security  Entitlement  has the
rights and property interest specified in Article 8 of the New York UCC.

         "Full  Prepayment"  shall  mean,  with  respect  to a  Retail  Note,  a
Prepayment  of  the  entire  Receivable  or  of  the  entire  principal  balance
outstanding  or, with respect to a Retail  Lease,  a payment of the  Outstanding
Capitalized Cost on the Financed Vehicle related thereto.

         "Future Payment Date" shall mean each Payment Date following a Purchase
Date or the date of issuance of any Series.

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

         "General  Collection Account" shall have the meaning given to such term
in the Titling Trust Agreement.

         "General  Interest"  shall have the  meaning  given to such term in the
Titling Trust Agreement.

         "General Interest Trustee" shall have the meaning given to such term in
the Titling Trust Agreement.


<PAGE>



         "General Titling Trust Assets" shall have the meaning given to the term
"General Trust Assets" in the Titling Trust Agreement.

         "GI Holder" shall mean a holder of a certificate representing a divided
beneficial interest in the General Interest.

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

         "Grantors"  shall have the  meaning  given to such term in Exhibit A of
the TRIP Portfolio Supplement.

         "Gross Balance" shall mean, as of any date of  determination,  (i) with
respect to a Retail Note, the unpaid principal balance of such Retail Note as of
such  date  plus,  with  respect  to a  Retail  Note  classified  as a  "finance
charge-included contract", the finance charges included in the payments due with
respect to such  Retail Note on or after such date,  and (ii) with  respect to a
Retail Lease,  the aggregate  remaining  periodic  rental payments plus the TRAC
Payment or purchase option price set forth in such Retail Lease (which, for such
purposes, shall be assumed to be made on the last day of the lease term).

         "Gross Balance Past Due" shall mean the aggregate Gross Balance for the
Navistar  Serviced  Portfolio that have  installments  past due by the indicated
number of days (other than Liquidating Receivables).

         "Guaranty"  shall mean, with respect to any  Receivable,  a personal or
commercial guaranty of an Obligor's performance with respect to such Receivable.

         "Harco Leasing" shall  mean  Harco  Leasing Company,  Inc.,  a Delaware
 corporation.

         "Harco  Purchase  Agreement"  shall mean the Lease Purchase  Agreement,
dated  as of the  date  hereof,  by  and  between  Harco  Leasing  and  Navistar
Financial.

         "Hedge  Agreement"  shall  mean the  Hedge  Agreement,  dated as of the
Closing Date,  between the Issuer and the initial  Hedge  Provider and any other
interest  rate  hedge  agreement  entered  into  between  the Issuer and a Hedge
Provider  to  satisfy  the  Issuer's  obligations  under  Section  4.03  of  the
Receivables Purchase Agreement in respect of an Interest Rate Hedge.

         "Hedge  Provider" shall mean a provider of an Interest Rate Hedge which
Person shall be an Eligible  Counterparty  at the  commencement  of any Interest
Rate Hedge provided by such Person.

         "Hedge  Receipts"  shall mean the  payments  required to be made by the
Hedge Provider to the Issuer pursuant to the Hedge Agreement.


<PAGE>



         "Highest Scheduled Aggregate Discounted Asset Balance" shall mean, with
respect to any date of determination, the highest scheduled Aggregate Discounted
Asset  Balance as of each Future  Payment  Date where the  Aggregate  Discounted
Asset Balance is determined on the  assumption  that there will be no prepayment
of principal on the  Receivables  and that no additional  Receivables  will have
been acquired by the Issuer.

         "Holder"  shall mean the Person in whose name a Note is  registered  on
the Note Register.

         "Indenture"  shall  mean the  Indenture,  between  the  Issuer  and the
Indenture  Trustee,  dated as of the date  hereof,  as the same may from time to
time be amended, modified or otherwise supplemented.

         "Indenture Trustee" shall mean The Bank of New York, a New York banking
corporation,  not in its  individual  capacity  but solely as trustee  under the
Indenture, or any successor indenture trustee under the Indenture.

         "Independent"  shall  mean,  when used with  respect  to any  specified
Person,  that the Person (a) is in fact  independent  of the  Issuer,  any other
obligor upon the Notes,  the Seller and any  Affiliate  of any of the  foregoing
Persons,  (b) does  not  have any  direct  financial  interest  or any  material
indirect financial interest in the Issuer, any such other obligor, the Seller or
any Affiliate of any of the foregoing  Persons and (c) is not connected with the
Issuer,  any such  other  obligor,  the  Seller or any  Affiliate  of any of the
foregoing  Persons as an  officer,  employee,  promoter,  underwriter,  trustee,
partner, director or person performing similar functions.

         "Independent  Certificate"  shall mean a  certificate  or opinion to be
delivered to the  Indenture  Trustee under the  circumstances  described in, and
otherwise  complying  with, the applicable  requirements  of Section 11.1 of the
Indenture,  made by an  Independent  appraiser or other  expert  appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or  certificate  shall state that the signer has read the
definition  of  "Independent"  and that the  signer is  Independent  within  the
meaning thereof.

         "Initial  Beneficiary"  shall  have the  meaning  given to such term in
Exhibit A page A-1 of the TRIP Portfolio Supplement.

         "Initial  Capitalized Cost" shall mean, with respect to a Retail Lease,
the aggregate  amount of financing  provided by the Seller and its  Subsidiaries
for the related  Financed  Vehicle or Vehicles,  including  insurance  premiums,
service and warranty  contracts,  federal excise taxes,  sales taxes,  and other
items customarily financed as part of Retail Leases and related costs.

         "Initial Cutoff Date" shall mean August 31, 2000.


<PAGE>



         "Insolvency  Event" shall mean with respect to a specified Person,  (i)
such Person shall  commence any case,  proceeding  or other action (A) under any
existing or future law of any  jurisdiction,  domestic  or foreign,  relating to
bankruptcy, insolvency,  reorganization or relief of debtors, seeking to have an
order for relief  entered  with  respect to it, or  seeking to  adjudicate  it a
bankrupt  or  insolvent,  or seeking  reorganization,  arrangement,  adjustment,
winding-up, liquidation,  dissolution,  composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian
or  other  similar  official  for it or for all or any  substantial  part of its
assets,  or such Person shall make a general  assignment  for the benefit of its
creditors; (ii) there shall be commenced against such Person any case proceeding
or other action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such  adjudication or appointment or (B)
remains  undismissed,  undischarged  or unbonded for a period of 60  consecutive
days; (iii) there shall be commenced against such Person any case, proceeding or
other action seeking issuance of a warrant of attachment,  execution,  distraint
or similar  process  against  all or any  substantial  part of its assets  which
results in the entry of an order for any such  relief  which shall not have been
vacated,  discharged, or stayed or bonded pending appeal within 60 days from the
entry  thereof;  (iv) such Person  shall take any action in  furtherance  of, or
indicating its consent to, approval of, or acquiescence  in, any of the acts set
forth in clause (i),  (ii) or (iii) above;  or (v) such Person  shall  generally
not, or shall be unable to, or shall admit in writing its  inability to, pay its
debts as they become due.

         "Insolvency  Laws"  shall  mean  the  Bankruptcy  Code  and  any  other
applicable federal or state bankruptcy, insolvency or other similar law.

         "Insurance  Policy"  shall mean,  with  respect to any  Receivable,  an
insurance  policy covering  physical  damage,  credit life,  credit  disability,
theft,  mechanical  breakdown or similar event to each Financed Vehicle securing
such Receivable.

         "Insurance  Proceeds" shall mean proceeds of any Insurance  Policy with
respect to such Receivable.

         "Intercompany  Advance  Agreement" shall mean the Intercompany  Advance
Agreement,  dated as of November 7, 1994,  between  Navistar  Financial  and the
Issuer, as amended by the First Amendment thereto dated October 16, 2000, as the
same may be amended, restated or otherwise supplemented from time to time.

         "Intercompany Agreements" shall mean the Intercompany Advance Agreement
and each  Purchase  Money Note  issued  thereunder,  the  Intercompany  Security
Agreement and the Intercompany Tax Allocation Agreement, in each case, including
all amendments, supplements, schedules, exhibits and other attachments thereto.

         "Intercompany  Security Agreement" shall mean the Intercompany Security
Agreement dated as of April 26, 1993, between Navistar Financial and the Issuer,
as amended by Amendment No. 1 to Security Agreement,  dated on or about November
30, 1994 and  Amendment  No. 2 dated as of August 29, 2000 and  Amendment  No. 3
dated as of October 16, 2000, as the same may be amended,  restated or otherwise
supplemented from time to time.


<PAGE>



         "Intercompany  Tax Allocation  Agreement" shall mean the Tax Allocation
Agreement  effective October 1, 1981 between and among International and certain
of its subsidiaries, as amended and supplemented from time to time including the
Amendment to Tax Allocation Agreement and Acknowledgment,  dated as of April 20,
1993 among International, Navistar Financial and the Issuer.

         "Interest  Rate  Hedge"  shall have the  meaning  given to such term in
Section 4.03 of the Receivables Purchase Agreement.

         "Interest Rate Hedge  Assignment"  shall have the meaning given to such
term in Section 4.03 of the Receivables Purchase Agreement.

         "Interested  Parties"  shall  have the  meaning  given to such  term in
Section 2.01 of the Servicing Agreement.

         "International" shall mean International Truck and Engine  Corporation,
a Delaware corporation.

         "International  Purchase Obligations" shall mean certain obligations of
International,  subject to limitations,  to purchase  Financed Vehicles securing
Liquidating  Receivables  pursuant  to  Article VI and other  provisions  of the
Master   Intercompany   Agreement  by  and  between   Navistar   Financial   and
International dated as of April 26, 1993, as such Master Intercompany  Agreement
may be amended, supplemented, restated or otherwise modified.

         "Investment Company Act" shall mean the Investment Company Act of 1940,
as amended.

         "Involuntary  Filing  Event"  shall mean,  with  respect to a specified
Person,  that there shall be commenced against such Person any case,  proceeding
or other  action  (A) under any  existing  or  future  law of any  jurisdiction,
domestic  or foreign,  relating to  bankruptcy,  insolvency,  reorganization  or
relief of debtors,  seeking to have an order for relief  entered with respect to
it,  or  seeking  to  adjudicate   it  a  bankrupt  or  insolvent,   or  seeking
reorganization,  arrangement, adjustment, winding-up, liquidation,  dissolution,
composition  or other  relief  with  respect to it or its debts,  or (B) seeking
appointment of a receiver,  trustee,  custodian or other similar official for it
or for all or any substantial part of its assets.

         "Issuer"  shall  mean  Truck  Retail Instalment Paper Corp., a Delaware
corporation, and any successor thereto.




<PAGE>



         "Issuer Receivables" shall mean each Receivable purchased by the Issuer
pursuant  to  the  Receivables   Purchase  Agreement  and  not  theretofore  (i)
repurchased by the Seller as a Warranty  Receivable  pursuant to Section 5.07 of
the  Receivables  Purchase  Agreement,  (ii)  repurchased  by the Servicer as an
Administrative  Receivable pursuant to Section 2.08 of the Servicing  Agreement,
(iii)  sold by the Issuer  pursuant  to Section  8.5 of the  Indenture,  or (iv)
released from the Lien of the Indenture pursuant to Section 8.4 thereof.

         "Issuer  Order" and  "Issuer  Request"  shall  mean a written  order or
request signed in the name of the Issuer by any one of its  Authorized  Officers
and delivered to the Indenture Trustee.

         "Lease Assignment" shall have the meaning given to such term in Section
2.03 of the Lease Purchase Agreement.

         "Lease  Purchase  Closing" shall have the meaning given to such term in
Section 2.03 of the Lease Purchase Agreement.

         "Lease  Purchase  Date"  shall have the  meaning  given to such term in
Section 2.02 of the Lease Purchase Agreement.

         "Lease  Purchase  Price"  shall have the meaning  given to such term in
Section 2.03 of the Lease Purchase Agreement.

         "Lease  Purchase  Termination  Event"  shall  mean the  occurrence  and
continuation of any of the following events:

                  (a) the Transferor  shall fail to pay any amount payable under
the Harco Purchase Agreement when due in accordance with the terms thereof; or

                  (b) the  Transferor  shall  fail to  observe or perform in any
material  respect any  covenant or agreement  applicable  to it contained in the
Harco  Purchase  Agreement  (other than as  specified in  subsection  (a) above)
provided,  that no such failure shall  constitute a Lease  Purchase  Termination
Event under this subsection (b) unless (i) such failure continues unremedied for
a period  of 30 days  from the date on which  written  notice  of such  failure,
requiring the same to be remedied, shall have been received by the Transferor or
(ii) such failure is in respect of Section 5.04 of the Harco Purchase  Agreement
and the  Transferor  shall  have  failed  to  repurchase  the  related  Warranty
Receivable  within two Business Days of when the  Transferor was obligated to do
so; or

                  (c) any representation,  warranty,  certification or statement
made or deemed made by the  Transferor  in the Harco  Purchase  Agreement  shall
prove to have been  incorrect in any material  respect on or as of the date made
or deemed made,  provided,  that a Lease Purchase Termination Event shall not be
deemed to have  occurred  under this  subsection  (c) based upon a breach of any
representation  or  warranty  regarding a  Designated  Lease  Receivable  if the
Transferor shall have repurchased the Receivable and paid the Warranty  Purchase
Payment in respect  thereof  within two Business Days of when the Transferor was
obligated to do so; or

<PAGE>



                  (d)  there  shall  have  occurred  an  Insolvency  Event or an
Involuntary  Filing  Event with  respect to the  Transferor  or there shall have
occurred an Insolvency Event or an Involuntary  Filing Event with respect to the
Titling Trust; or
                  (e) the  occurrence  of  a  Receivables  Purchase  Termination
Event; or

                  (f) the Titling Trust or the Transferor becomes an "investment
company"  within the meaning of the  Investment  Company Act and is not exempted
from registration thereunder; or

                  (g) the Transferee  shall for any reason cease to have a valid
and perfected first priority  ownership interest in any of the Sold Retail Lease
Property; or

                  (h)  the   United   States   Government   or  any   agency  or
instrumentality  thereof files notice of a Lien on the assets of the  Transferor
or the Titling  Trust under  Section  6323 of the Code or any similar  statutory
provision  which is or may in the future be prior to the Lien of the  Transferee
on the Sold Retail Lease  Property and such Lien shall not have been  terminated
within 30 days.

         "Lease  Receivable  Purchased  Assets"  shall have the meaning given to
such term in Section 2.01 of the Lease Purchase Agreement.

         "Lease Receivable  Transferred  Assets" shall have the meaning given to
such term in Section 2.02 of the Lease Purchase Agreement.

         "Level Principal Retail Notes" shall mean Retail Notes that provide for
monthly payments (i) consisting of level principal amounts together with accrued
and unpaid interest on the unpaid principal  balance on such Retail Notes,  (ii)
in  eleven or fewer  months  of each  twelve-month  period  consisting  of level
principal  amounts  together  with  accrued  and unpaid  interest  on the unpaid
principal  balance on such Retail Notes or (iii)  consisting of level  principal
amounts  together  with  accrued  and unpaid  interest  on the unpaid  principal
balance on such Retail Notes, except that a larger principal payment becomes due
on the final maturity date for such Retail Notes.

         "LIBOR  Determination  Date"  shall have the  meaning  set forth in the
definition of One-Month LIBOR herein.

         "Lien"  shall mean any  mortgage,  pledge,  hypothecation,  assignment,
deposit  arrangement,  encumbrance,  lien (statutory or other),  charge or other
security  interest or any  preference,  priority or other security  agreement or
preferential  arrangement of any kind or nature whatsoever  (including,  without
limitation,  any  conditional  sale or other title  retention  agreement and any
financing  lease having  substantially  the same  economic  effect as any of the
foregoing).


<PAGE>



         "Liquidating  Receivable"  shall  mean an Issuer  Receivable  (i) as to
which the Servicer has  reasonably  determined in accordance  with its customary
servicing procedures,  that eventual payment of amounts owing on such Receivable
is unlikely, (ii) as to which the Financed Vehicle or Financed Vehicles relating
to such  Receivable  have been  repossessed and sold or repossessed and held for
more than ninety days or (iii) as to which any related  Scheduled  Payment is at
least 210 days  overdue  (excluding  any  Receivable  as to which  the  Financed
Vehicle or Financed Vehicles relating thereto have been repossessed).

         "Liquidation  Expenses"  shall mean an amount to which the  Servicer is
entitled as an allowance for amounts  charged to the account of the Obligor,  in
keeping with the Servicer's customary procedures, for repossession, refurbishing
and disposition of any Financed Vehicle and other out-of-pocket costs related to
the liquidation.

         "Liquidation  Proceeds" shall mean,  with respect to a Receivable,  all
amounts realized with respect to such Receivable,  including the benefits of any
lease  assignments,  Insurance  Proceeds,  proceeds  from any Dealer  Liability,
proceeds  from any  International  Purchase  Obligations  and proceeds  from any
Guaranties,  net of amounts  that are  required to be refunded to the Obligor on
such Receivable.

         "London  Business Day" shall mean a day upon which dealings in deposits
in  Dollars  are  transacted  in  the  London   interbank   market  and  banking
institutions  in London are not  authorized or obligated by law or regulation to
close.

         "Material  Adverse  Effect"  shall mean,  with  respect to a Person,  a
material  adverse  effect  on (a) the  ability  of such  Person to  perform  its
obligations   under  any  of  the  Basic   Documents  or  (b)  the  validity  or
enforceability  of any of the Basic  Documents  or the rights or remedies of any
other Person thereunder.

         "Monthly  Advance"  shall have the meaning set forth in Section 2.13 of
the Servicing Agreement.

         "Monthly  Period"  shall mean,  with respect to the first Payment Date,
the  period  beginning  on the  Initial  Cutoff  Date and ending at the close of
business on the last day of the following  calendar month,  and, with respect to
each  subsequent  Payment  Date,  the Monthly  Period means the  calendar  month
preceding such Payment Date.

         "Monthly  Remittance  Conditions"  shall have the  meaning set forth in
Section 2.12 of the Servicing Agreement.

         "Moody's" shall mean Moody's Investors Service, Inc., or its successor.

         "Navistar  Financial"  shall  mean  Navistar  Financial  Corporation, a
Delaware corporation.




<PAGE>



         "Navistar   Serviced   Portfolio"   shall  mean,  as  of  any  date  of
determination, all outstanding Receivables and Fair Market Value Leases owned or
serviced by Navistar Financial (or any successor servicer of all or a portion of
such Receivables or Fair Market Value Leases) as of such date.

         "Navistar  Vehicle"  shall mean any medium or heavy duty  truck,  truck
chassis,  bus  or  trailer  produced  by  or  for,  International  and  sold  by
International to Dealers.

         "New  York  UCC"  shall  mean the UCC as in  effect in the State of New
York.

         "NIC"  shall  mean  Navistar  International   Corporation,  a  Delaware
corporation.

         "Note" shall mean any  asset-backed  Note executed by the Issuer by any
of its Authorized  Officers and  authenticated  by the Indenture  Trustee in the
form attached to the Series Supplement applicable to such Series.

         "Note Distribution  Account" shall mean the account designated as such,
established and maintained  pursuant to Section 2.02 of the Servicing  Agreement
or each other account designated as a Note Distribution Account, established and
maintained pursuant to a Series Supplement.

         "Note Owner" shall mean, with respect to a Book-Entry  Note, any person
who is a beneficial owner of a Book-Entry Note.

         "Note Register"  shall have the meaning  specified in Section 2.4(a) of
the Indenture.

         "Note  Registrar"  shall  mean  the  registrar  at any time of the Note
Register, appointed pursuant to Section 2.4 of the Indenture.

         "Noteholder" shall mean any Holder of a Note.

         "Notice of Default"  shall have the meaning set forth in Section 5.1(d)
of the Indenture.

         "Obligor"  shall  mean,  (i) with  respect to any Retail Note or Retail
Lease,  the purchaser or any  co-purchaser  of the related  Financed  Vehicle or
Financed Vehicles or any other Person,  other than the maker of a Guaranty,  who
owes payments  under such  Receivable 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, other than the maker of a Guaranty, who owes payments under
such Receivable.

         "Officers' Certificate" shall mean (i) with respect to any corporation,
unless otherwise  specified in this Agreement,  a certificate  signed by (a) the
Chairman  of the  Board,  Vice  Chairman  of the  Board,  President  or any Vice
President  and (b) a  Treasurer,  Assistant  Treasurer,  Secretary  or Assistant
Secretary of such  corporation  and (ii) with  respect to any limited  liability
company,  unless otherwise specified in this Agreement,  a certificate signed by
any manager of such limited liability company.


<PAGE>



         "One-Month  LIBOR"  shall mean,  for any Payment  Period,  the rate per
annum at which deposits in Dollars  having a one-month  maturity that appears on
Telerate Page 3750 at approximately 11:00 a.m., London time, two London Business
Days prior to the Payment  Date on which that Payment  Period  begins  (each,  a
"LIBOR Determination Date"). Notwithstanding the foregoing, in the event that no
rate  for  one-month  Dollar  deposits  appears  on  Telerate  Page  3750 on the
applicable  LIBOR   Determination  Date,  then  One-Month  LIBOR  shall  be  the
arithmetic  mean  (rounded  upwards to the nearest  one-sixteenth  of 1%) of the
rates at which  one-month  Dollar  deposits  are  offered to prime  banks in the
London  interbank  market by four major  banks in that  market  selected  by the
Indenture  Trustee as of the  determination  date and time specified  above.  If
fewer than two quotations are provided by such banks, then One-Month LIBOR shall
be the  arithmetic  mean  (rounded  upwards  as  above)  of the  rates  at which
one-month loans in Dollars are offered to leading  European banks by three major
banks in New York City  selected by the  Indenture  Trustee as of 11:00 a.m. New
York City time on the applicable LIBOR  Determination Date. If no such quotation
can be obtained, One-Month LIBOR for such Payment Period will be One-Month LIBOR
for the prior Payment Period.

         "Opinion of Counsel" shall mean a written opinion of counsel,  who may,
except for Tax Opinions and as otherwise expressly  provided,  be an employee of
the Seller,  the  Servicer  or the  Issuer.  In  addition,  for  purposes of the
Indenture:  (a) such counsel shall be satisfactory to the Indenture Trustee, (b)
the opinion shall be addressed to the  Indenture  Trustee as Trustee and (c) the
opinion shall comply with any applicable  requirements of Section 11.1(a) of the
Indenture  and  shall be in form and  substance  satisfactory  to the  Indenture
Trustee.  Any Opinion of Counsel may rely as to factual  matters on an Officers'
Certificate.

         "Other Titling Trust Parties" shall mean the Titling Trust, the Titling
Trustees, the Collateral Agent, and Harco Leasing.

         "Outstanding  Capitalized  Cost" shall mean,  with  respect to a Retail
Lease, the amount to which the Initial  Capitalized Cost of the related Financed
Vehicle has been  amortized  at the APR by the periodic  lease  payments on such
Financed Vehicle and any purchase  payments or, in the case of a TRAC Lease, the
TRAC Payments made upon expiration of such TRAC Lease.

         "Outstanding  Monthly  Advances"  shall mean, as of a Payment Date with
respect to a Receivable,  the sum of all Monthly Advances made as of or prior to
such  Payment  Date minus all  payments  or  collections  as of or prior to such
Payment Date which are specified in Section 2.14 of the  Servicing  Agreement as
reducing Outstanding Monthly Advances with respect to such Receivable.

         "Partial  Prepayment"  shall  mean  a  Prepayment  other  than  a  Full
Prepayment  the amount of which is equal to one or more  Scheduled  Payments and
which  results  in a rebate  to the  Obligor  of  unearned  finance  charges  in
accordance with the Servicer's customary procedures.


<PAGE>



         "Paying Agent" shall mean with respect to the Indenture,  the Indenture
Trustee  or any other  Person  that  meets  the  eligibility  standards  for the
Indenture  Trustee  specified in Section 6.11 of the Indenture and is authorized
by  the  Issuer  to  make  the  payments  to and  distributions  from  the  Note
Distribution  Accounts,  including  payment of  principal  of or interest on the
Notes on behalf of the Issuer.

         "Payment  Date" shall mean the  fifteenth day of each month or, if such
day is not a Business Day, the next succeeding Business Day.

         "Payment  Period"  shall mean,  with respect to any Payment  Date,  the
period from and including the Payment Date  immediately  preceding  such Payment
Date to but excluding such Payment Date.

         "Permitted  Financing"shall  have the meaning given to such term in the
Titling Trust Agreement.

         "Permitted Liens" shall mean:

         (A) with respect to any Collateral, the interests of the  parties under
the Basic Documents; and

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

                  (1)      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;

                  (2)      any   liens   of   mechanics,   suppliers,   vendors,
materialmen,  laborers, employees, repairmen and other like liens arising in the
ordinary  course of Harco Leasing's or the Titling Trust's (or if a Retail Lease
is then in effect,  any  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;

                  (3)      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 Obligor; and

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



<PAGE>



         "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.

         "Physical Property" shall mean bankers' acceptances,  commercial paper,
negotiable  certificates  of  deposit  and  other  obligations  that  constitute
"instruments"  within  the  meaning of  Section  9-105(1)(i)  of the UCC and are
susceptible of physical delivery.

         "Plan" shall mean, with respect to a Person,  at a particular time, any
employee  benefit  plan  which is  covered by ERISA and in respect of which such
Person or a Commonly  Controlled  Entity with  respect to such Person is (or, if
such plan were  terminated  at such time,  would under  Section 4069 of ERISA be
deemed to be) an "employer" as defined in Section 3(5) of ERISA.

         "Pool"  shall mean,  on any date of  determination,  the pool of Issuer
Receivables on such date.

         "Pool  Balance"  shall  mean,  on any  date of  determination  during a
Payment Period, the aggregate Contract Value of the Receivables that were Issuer
Receivables; provided that, the calculation of Contract Value shall in all cases
be made (A) with respect to the Receivables  that were Issuer  Receivables as of
the close of  business on the last day of the  Monthly  Period that  immediately
preceded the first day of such Payment Period,  as of such last day and (B) with
respect to the Receivables that were Issuer Receivables that were transferred to
the Issuer  after the close of business  on the last day of the  Monthly  Period
that immediately preceded the first day of such Payment Period, as of the Cutoff
Date applicable thereto.

         "Pool  Composition  Condition" shall mean, with respect to any Purchase
Date or Sale Date, that each of the following  conditions relating to the Issuer
Receivables  in the Pool at the close of business on such  Purchase Date or such
Sale Date will be true on a pro forma basis  after the  purchase or sale on such
Purchase Date or Sale Date as applicable:

         (1)      Receivables of Obligors that are located  in  a  single  state
represent no greater than 10% of the Pool Balance;

         (2)      Receivables of no single Obligor represent more than 2% of the
Pool Balance;

         (3)      Used Vehicle Receivables do not represent more than 35% of the
Pool Balance;

         (4)      Skip Receivables do not represent more than  15%  of  the Pool
Balance;

         (5)      Balloon Receivables do not represent more than 50% of the Pool
Balance;

         (6)      Balloon  Receivables  and  Finance  Leases,  together,  do not
represent more than 50% of the Pool Balance;



<PAGE>



         (7)      Retail Leases do not represent greater than 50%  of  the  Pool
Balance; and

         (8)      the Pool does not have a  Weighted  Average  Maturity  greater
than 60 months.

         "Portfolio Assets" shall have the meaning given to such term in Exhibit
A page A-2 of the TRIP Portfolio Supplement.

         "Portfolio  Interest"  shall have the meaning given to such term in the
Titling Trust Agreement.

         "Portfolio Interest  Certificates" shall have the meaning given to such
term in the Titling Trust Agreement.

         "Portfolio  Interest Trustee" shall have the meaning given to such term
in Preamble of the Servicing Agreement.

         "Portfolio  Servicing  Agreement  Supplement  " shall have the  meaning
given to such term in Section 1.02 of the Servicing Agreement.

         "Portfolio Supplement" shall have the meaning given to such term in the
Titling Trust Agreement.

         "Portfolio  Trustee"  shall have the meaning  given to such term in the
Titling Trust Agreement.

         "Predecessor  Note"  shall mean with  respect to any  particular  Note,
every  previous  Note  evidencing  all or a  portion  of the  same  debt as that
evidenced by such particular Note; and, for the purpose of this definition,  any
Note authenticated and delivered under Section 2.5 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note.

         "Principal  Distributable  Amount" shall mean, with respect to a Series
and a Payment Date on or after the Principal Payment  Commencement Date for such
Series, the amount specified in the applicable Series Supplement.

         "Principal  Payment  Commencement  Date" shall mean,  with respect to a
Series,  the date on which the Issuer will begin paying the principal  amount of
such Series as specified in the Series Supplement for such Series.

         "Priority of Payments" shall have the meaning  assigned to such term in
Section 2.18 of the Servicing Agreement.

         "Proceeding"  shall  mean any suit in  equity,  action  at law or other
judicial or administrative proceeding.


<PAGE>



         "Program"  shall have the meaning given to such term in Section 3.02 of
the Servicing Agreement.

         "Purchase  Agreement"  shall have the meaning  assigned to such term in
the Series Supplement.

         "Purchase  Date" shall mean the date of the closing of each purchase of
Receivables by the Issuer pursuant to the Receivables Purchase Agreement.

         "Purchase  Money  Note"  shall mean the  revolving  note  issued to the
Seller by the Issuer pursuant to the Intercompany Advance Agreement.

         "Rated  Notes"  shall mean each class of Notes that is then being rated
by a Rating Agency.

         "Rating Agency" shall mean, with respect to any Series,  any nationally
recognized  rating agency designated by the Issuer in the Series Supplement with
respect to such Series or otherwise rating such Series.

         "Rating Agency Condition" shall mean, with respect to any action,  that
each Rating Agency with respect to an outstanding Series shall have notified the
Issuer, the Servicer, and the Indenture Trustee in writing that such action will
not result in the  withdrawal or downgrade of the rating of such Series or class
of Notes in such Series,  unless otherwise  specified in the Series  Supplement,
below its  current  rating (or,  for any class that has had its rating  upgraded
since its issuance, below its initial rating).

         "Rebate" shall mean,  with respect to a given date and to a Receivable,
the rebate under such  Receivable that is or would be payable to the Obligor for
unearned  finance charges or any other charges that are or would be subject to a
rebate  to the  Obligor  upon the  payment  of a  Partial  Prepayment  or a Full
Prepayment.

          "Receivable"  shall  mean (a) as used in the  Basic  Documents  in the
context of a transfer of a Receivable or the ownership of a Receivable, a Retail
Note or the  beneficial  interest in a Retail Lease the record owner of which is
the Titling Trust and (b) as used in the Basic  Documents in all other contexts,
a Retail Lease or a Retail Note.

         "Receivable  Assignment" shall mean an assignment  substantially in the
form of Exhibit A to the  Receivables  Purchase  Agreement,  as such form may be
amended, supplemented or otherwise modified from time to time.

         "Receivable Cash Purchase Price" shall mean, with respect to a Purchase
Date, the cash portion of the Receivable  Purchase Price payable by the Buyer on
such Purchase Date, as set forth on the related Purchase Date Schedule.


<PAGE>



         "Receivable  Closing"  shall  have the  meaning  given to such  term in
Section 2.02 of the Receivables Purchase Agreement.

         "Receivables  File" shall have the meaning set forth in Section 4.01 of
the Servicing Agreement.

         "Receivable  Purchase Closing  Conditions" shall have the meaning given
to such term in Section 4.02 of the Receivables Purchase Agreement.

         "Receivable  Purchase  Date  Schedule"  shall have the meaning given to
such term in Section 2.02 of the Receivables Purchase Agreement.

         "Receivable  Purchase  Price" shall have the meaning given to such term
in Section 2.02 of the Receivables Purchase Agreement.

         "Receivable  Purchase  Termination Event" shall mean the occurrence and
continuation of any of the following events:

                  (a)  Seller  shall fail to pay any  amount  payable  under the
Receivables Purchase Agreement when due in accordance with the terms thereof; or

                  (b)  the  Seller  shall  fail to  observe  or  perform  in any
material  respect any  covenant or agreement  applicable  to it contained in the
Receivables Purchase Agreement (other than as specified in subsection (a) above)
provided,   that  no  such  failure  shall  constitute  a  Receivable   Purchase
Termination  Event under this  subsection (b) unless (i) such failure  continues
unremedied for a period of 30 days from the date on which written notice of such
failure,  requiring  the same to be  remedied,  shall have been  received by the
Seller or (ii) such  failure is in respect  of Section  5.04 of the  Receivables
Purchase  Agreement  and Seller  shall have  failed to  repurchase  the  related
Warranty Receivable within two Business Days of when the Seller was obligated to
do so; or

                  (c) any representation,  warranty,  certification or statement
made or deemed made by the Seller in the  Receivables  Purchase  Agreement shall
prove to have been  incorrect in any material  respect on or as of the date made
or deemed made, provided, that a Receivable Purchase Termination Event shall not
be deemed to have occurred under this  subsection (c) based upon a breach of any
representation or warranty  regarding a Sold Receivable if the Seller shall have
repurchased  the  Receivable and paid the Warranty  Purchase  Payment in respect
thereof within two Business Days of when the Seller was obligated to do so; or

                  (d)  there  shall  have  occurred  an  Insolvency  Event or an
Involuntary Filing Event with respect to the Seller or there shall have occurred
an  Insolvency  Event  or an  Involuntary  Filing  Event  with  respect  to  the
Transferor; or

<PAGE>



                  (e)  the occurrence of a Lease Purchase Termination Event; or

                  (f) the  Seller  becomes  an  "investment  company" within the
meaning of the  Investment  Company Act and is not  exempted  from  registration
thereunder; or
                  (g) the Buyer shall for any reason cease to have a  valid  and
perfected first priority ownership interest in any of the Sold Receivables; or

                  (h)  the   United   States   Government   or  any   agency  or
instrumentality thereof files notice of a Lien on the assets of the Seller under
Section 6323 of the Code or any similar  statutory  provision which is or may in
the  future  be  prior to the Lien of the  Buyer  on the Sold  Receivables,  the
Related Assets,  the TRIP Portfolio  Interest or the TRIP Portfolio  Certificate
and such Lien shall not have been terminated within 30 days.

         "Receivable Sale Closing  Conditions"  shall mean each of the following
conditions:

                  (a)      the   Borrowing   Base  would  equal  or  exceed  the
Aggregate  Note  Principal  Balance as of the Sale Date  after  giving pro forma
effect to such sale of Receivables  and the  application of the proceeds of such
sale;
                  (b)      the balance on deposit in each Reserve  Account shall
equal or exceed the specified balance for such Reserve Account as of the related
Sale Date,  after giving pro forma effect to the  application of the proceeds of
such sale;
                  (c)      if such sale will not be a sale of all of the  Issuer
Receivables,  the Rating  Agency  Condition  shall have been  satisfied for such
sale;
                  (d)      if such sale will not be a sale of all of the  Issuer
Receivables, no Servicer Default shall have occurred and be continuing;

                  (e)      such sale  will  be  on  an  "as-is"  basis   without
recourse to the Issuer;

                  (f)      if such sale will not be a sale of all of the  Issuer
Receivables,  the Pool  Composition  Condition  will be satisfied on a pro forma
basis after such sale;

                  (g)      in the  reasonable belief of the Issuer, the purchase
price for such  Receivables  and the Related Assets thereto is equal to the fair
value thereof; and

                  (h)      no  Event  of  Default  shall  have  occurred  and be
continuing.

         "Receivables  Purchase  Agreement" shall mean the Receivables  Purchase
Agreement,  dated  as of the  date  hereof,  between  the  Issuer  and  Navistar
Financial,  as the same may from time to time be amended,  modified or otherwise
supplemented.


<PAGE>



         "Record Date" shall mean,  with respect to any Payment Date,  the close
of business on the day preceding  such Payment Date;  provided that with respect
to any  Payment  Date for a Series for which  Definitive  Notes have been issued
pursuant to Section 2.12 of the  Indenture,  subsequent  to the issuance of such
Definitive  Notes the Record Date for such Payment Date shall be the last day of
the month preceding the month in which such Payment Date occurs.

         "Redemption  Date" shall mean the date  specified as such by the Issuer
as described in Sections 10.1 and 10.2 of the Indenture.

         "Redemption  Price" shall mean the price  specified  in the  applicable
Series Supplement.

         "Reference Date" shall mean, with respect to any Calculation  Date, the
last day of the  Monthly  Period  preceding  the  calendar  month in which  such
Calculation Date occurs.

         "Related  Assets"  shall have the meaning set forth in Section  2.01 of
the Receivables Purchase Agreement.

         "Related Retail Note Assets" shall mean, with respect to a Retail Note,
the right, title and interest of the Seller in and to the following assets:

                  (a)      all amounts due on and under such Retail Note on  and
after the applicable Cutoff Date;

                  (b)      the  security  interests  in  the  Financed  Vehicles
granted by Obligors pursuant to such Retail Note and, to the extent permitted by
law, in any accessions thereto which are financed by the Seller;

                  (c)      any proceeds from any Insurance Policies with respect
to such Retail Notes;

                  (d)      any proceeds  from Dealer  Liability  with respect to
such Retail Notes,  proceeds from any  International  Purchase  Obligations with
respect to such Retail Notes and  proceeds  from any  Guaranties  of such Retail
Notes;
                  (e)      the benefit of any lease assignments with respec  to
the Financed Vehicles; and

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

         "Related Security" shall have the meaning given to such term in Section
2.02 of the Lease Purchase Agreement.

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


<PAGE>



                  (i)   each Financed Vehicle subject to such Retail Leases;

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

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

                  (iv)  all of the  Transferor's or Navistar  Financial's Deale
Agreement Rights (as such term is defined in the Titling Trust Agreement);

                  (v)   any proceeds of any Insurance  Policy  with  respect  to
such Retail Lease or Financed Vehicle;

                  (vi)  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;

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

                  (viii)all amounts due on and under such Retail  Lease  on  and
after the applicable Cutoff Date;

                  (ix)  all proceeds of the foregoing, including all Collections
and all  Liquidation  Proceeds  and all  Disposition  Proceeds  (as such term is
defined in the Titling Trust Agreement) with respect to such Financed  Vehicles;
and
                  (x)   all other Titling Trust Assets relating to  such  Retail
Lease.

         "Remaining Available Funds" shall have the meaning set forth in Section
6.7 of the Indenture.

         "Required  Deposit Rating" shall mean that the Indenture  Trustee has a
short-term  unsecured debt  obligations  rating of P-1 by Moody's and of A-1+ by
S&P.

         "Required  Global Secured Parties" shall have the meaning given to such
term in the Titling Trust Agreement.

         "Required  Interest  Rate Hedges"  shall have the meaning given to such
term in Section 4.03 of the Receivables Purchase Agreement.


<PAGE>



         "Required  Rating" shall mean (1) a rating on commercial paper or other
short term unsecured  debt  obligations of Prime-1 by Moody's and A-1+ by S & P;
or (2) such lower credit  rating (as approved in writing by each Rating  Agency)
as will not result in the qualification, downgrading or withdrawal of the rating
then assigned to any Rated Notes by such Rating  Agency.  Any  requirement  that
deposits or debt  obligations  have the  "Required  Rating" shall mean that such
deposits or debt  obligations  have the foregoing  required ratings from Moody's
and S&P.
         "Requisite  GI Holder" shall have the meaning given to such term in the
Titling Trust Agreement.

         "Requirement  of Law" shall mean, as to any Person,  the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person,  and  any  law,  treaty,  rule  or  regulation  or  determination  of an
arbitrator or a court or other Governmental  Authority,  in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

         "Reserve  Account"  shall  mean  an  account  which  is an  Enhancement
established   and   maintained   pursuant  to  the   Indenture  and  the  Series
Supplement(s)  or any  other  Basic  Documents  for the  benefit  of one or more
Series.

         "Responsible Officer" shall mean, (i) with respect to any Person, other
than the Indenture Trustee, the president, the  vice-president-controller or the
vice-president-treasurer  of such Person and (ii) with respect to the  Indenture
Trustee,  any  officer  within  the  Corporate  Trust and  Agency  Group (or any
successor  group  of  the  Indenture  Trustee)  including  any  vice  president,
assistant vice president,  assistant secretary, assistant treasurer or any other
officer of the Indenture  Trustee  customarily  performing  functions similar to
those  performed  by the  persons  who at  the  time  shall  be  such  officers,
respectively,  or to whom any corporate trust matter is referred  because of his
knowledge of and familiarity with the particular subject.

         "Retail Assignment" shall mean an assignment  substantially in the form
of Exhibit A to the Receivables Purchase Agreement, as such form may be amended,
supplemented or otherwise modified from time to time.

         "Retail Lease" shall mean a lease by an Obligor of one or more Financed
Vehicles, originated by Navistar Financial or one or more of its Affiliates.

         "Retail Note" shall mean a retail loan  evidenced by a note and secured
by one or more Financed  Vehicles,  originated  by Navistar  Financial or one or
more of its Affiliates.

         "Sale  Date"  shall  mean  the  date of the  closing  of  each  sale of
Receivables by the Issuer to another Person.


<PAGE>



         "Schedule  of  Receivables"  shall have the meaning  given such term in
Section 2.01(c) of the Receivables Purchase Agreement.

         "Schedule  of  TRIP   Portfolio   Assets"   shall  mean  each  schedule
designating certain Retail Leases and the Related Titling Trust Assets which are
to be or have been assigned to the TRIP Portfolio  Interest,  as the context may
require, in the form of Schedule 1 to Exhibit A to the Harco Purchase Agreement.

         "Scheduled  Payment"  shall mean,  with  respect to any  Receivable,  a
payment which (i) is in the amount required under the terms of such  Receivable,
including, in the case of a TRAC Lease, the TRAC Payment, (ii) is payable by the
Obligor of such  Receivable,  and (iii) in the case of a Retail  Note,  includes
finance  charges  which accrue at the APR. When  Scheduled  Payment is used with
reference to a Payment  Date,  it means the payment  which is due in the related
Monthly Period; provided,  however, that in the case of Receivables purchased by
the Issuer during a Monthly Period, the Scheduled Payment shall only include the
payments  due from the  Obligor  on or after the  Cutoff  Date  related  to such
purchase.

         "Securities" shall mean the Notes.

         "Securities  Act" shall mean the United States  Securities Act of 1933,
as amended from time to time.

         "Securities  Intermediary" shall have the meaning given to such term in
Section 8.3(c) of the Indenture.

         "Security  Certificate"  shall  have the  meaning  given  such  term in
Revised Article 8.

         "Security  Document"  shall  have the  meaning  given  to such  term in
Section 11.1 of the Collateral Supplement.

         "Security  Entitlement"  shall  have the  meaning  given  such  term in
Revised Article 8.

         "Seller" shall mean Navistar  Financial as Seller under the Receivables
Purchase Agreement.

         "Series"  shall  mean  any  Series  of  Notes  designated  by a  Series
Supplement.

         "Series Aggregate  Discounted Asset Balance" shall mean with respect to
a Series  and as of any date of  determination,  the  product  of (x) the Series
Allocation  Percentage for such Series as of such date of determination  and (y)
the Aggregate Discounted Asset Balance as of such date of determination.


<PAGE>



         "Series  Allocable  Amount" shall mean,  with respect to a Series and a
Payment  Date,  the  product of the  weighted  average of the Series  Allocation
Percentages  for such Series for each  Business  Day during the related  Monthly
Period and the Total Available Amount for such Payment Date.

         "Series  Allocable  Excess Funding  Amount" shall mean, with respect to
any Series and for any day, the product of the Series  Allocation  Percentage on
that day and the amount on deposit in the Excess Funding Account on that day.

         "Series Allocation Percentage" shall mean, with respect to a Series for
any Business Day, the result of (i) the aggregate  outstanding principal balance
of the Notes of such Series divided by (ii) the aggregate  outstanding principal
balance of all outstanding Notes of all Series.

         "Series  Cutoff  Date"  shall  have the  meaning,  with  respect to any
Series, specified in the Series Supplement for such Series.

         "Series  Enhancement  Proceeds"  shall mean,  with respect to a Monthly
Period,  the amount of any payments made to the Issuer by Enhancement  Providers
with respect to a Series Specific  Enhancements  net of any payments made or due
from the Issuer to such Enhancement Providers in respect of such Series Specific
Enhancements.

         "Series Issuance  Conditions"  shall mean, with respect to the issuance
of a Series of Notes, each of the following conditions:

                  (a)      the   Borrowing   Base  would  equal  or  exceed  the
Aggregate  Note Principal  Balance as of the related Series  Issuance Date after
giving pro forma  effect to such  issuance and the  application  of the proceeds
thereof;
                  (b)      the balance on deposit in each Reserve Account on the
Series  Issuance  Date shall  equal or exceed  the  Specified  Balance  for such
Reserve Account as of the related Series Issuance Date;

                  (c)      the Issuer shall have  satisfied  the  Rating  Agency
Condition with respect to such issuance;

                  (d)      the Required Interest Rate Hedge shall be in place on
the close of business on the date of issuance;

                  (e)      no  Amortization  Event  shall have  occurred  and be
continuing with respect to any Series unless the Notes of such Series shall have
been paid in full;
                  (f)      no  Servicer  Default  shall  have  occurred  and  be
continuing;

                  (g)      no Receivables Purchase Termination Event shall  have
occurred and be continuing; and


<PAGE>




                  (h)      no  Event  of  Default  shall  have  occurred  and be
continuing.

         "Series Issuance Date" shall mean, with respect to any Series, the date
on which the Notes of such Series are originally  issued in accordance  with the
Indenture and the related Series Supplement.

         "Series  Shortfall"  shall  mean,  in respect of a Series and a Payment
Date, a shortfall in the payments and deposits required to be made in respect of
such Series the amount of which shall be specified in the Series  Supplement for
each Series.

         "Series Specific  Enhancements" shall mean any Enhancement  established
solely to support a specific Series pursuant to the Basic Documents.

         "Series   Supplement"  shall  mean,  with  respect  to  any  Series,  a
supplement  to the  Indenture,  executed and  delivered in  connection  with the
original  issuance  of the Notes of such  Series  pursuant to Section 2.1 of the
Indenture, and all amendments thereof and supplements thereto.

         "Series 2000-1 Purchase  Agreement"  shall mean the Purchase  Agreement
dated as of September  29, 2000 among the Issuer,  Navistar  Financial and Chase
Securities  Inc.,  as  Representative  of the initial  purchasers  of the Series
2000-1 Asset-Backed Notes.

         "Series 2000-1 Supplement" shall mean the Series  Supplement,  dated as
of the Closing Date,  for the Series 2000-1 Asset Backed Notes,  as the same may
be amended or supplemented from time to time.

         "Servicer" shall mean Navistar  Financial,  in its capacity as Servicer
under the Servicing Agreement and any successor Servicer.

         "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.

         "Servicing  Agreement" shall mean the Servicing Agreement,  dated as of
the date hereof by and among Navistar  Leasing  Company,  Harco Leasing Company,
Inc., the Issuer, the Servicer,  the Collateral Agent and the Portfolio Trustee,
as amended and supplemented from time to time.

         "Skip  Receivable"  shall mean a Receivable  that  provides for monthly
payments in eleven or fewer months of each twelve-month period.

         "Sold Assets" shall have the meaning given to such term in Section 2.01
of the Receivables Purchase Agreement.


<PAGE>



         "Sold  Receivables" shall have the meaning set forth in Section 2.01 of
the Receivables Purchase Agreement.

         "Sold  Retail  Lease  Property"  shall have the  meaning it is given in
Section 2.04 of the Harco Purchase Agreement.

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

         "Specified Balance" shall mean, with respect to a Reserve Account,  the
Specified  Balance for such Reserve Account  specified in the Series  Supplement
related to the Series for which such Reserve Account was established.

         "Stated Final  Maturity  Date" shall mean,  with respect to any Series,
the final maturity date of such Series  specified in the Series  Supplement with
respect to such Series.

         "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 given to such term
in Section 2.09 of the Servicing Agreement.

         "Targeted  Final Payment Date" shall mean,  with respect to any Series,
the date specified in the related Series Supplement.

         "Tax  Opinion"  shall mean,  with respect to any action,  an Opinion of
Counsel to the effect that, for U.S. federal income tax purposes (a) such action
will not cause a taxable event with respect to any Noteholders,  (b) in the case
of  Section  2.14  of the  Indenture,  the  Notes  of the  new  Series  will  be
characterized as debt.

         "Telerate  Page 3750" shall mean the display page so  designated on the
Bridge Information  Systems Telerate Service (or such other pages as may replace
that page on that service or such other  service or services as may be nominated
by the  British  Banker's  Association  for the  purpose  of  displaying  London
interbank offered rates for Dollar deposits).

         "Temporary  Notes" shall mean the Notes specified in Section 2.3 of the
Indenture.

         "Termination  Date"  shall  mean,  with  respect  to  any  Series,  the
termination date specified in the related Series Supplement.


<PAGE>



         "Titling  Trust"  shall  mean  Navistar  Leasing  Company,  a  Delaware
statutory business trust formed pursuant to the Titling Trust Agreement.

         "Titling Trust Agreement"  shall mean the Trust Agreement,  dated as of
July 25,  1997,  as amended  and  restated  as of April 15,  1999,  among  Harco
Leasing, as Grantor and Initial Beneficiary,  Bank One, National Association, as
General Interest Trustee, and Bank One Delaware Inc., a Delaware corporation, as
Delaware Trustee.

         "Titling  Trust Assets" shall have the meaning given to the term "Trust
Assets" in the Titling Trust Agreement.

         "Titling Trust  Documents"  shall mean the TRIP Portfolio  Certificate,
Titling Trust Agreement,  the Titling Trust Servicing Agreement,  the Collateral
Agency Agreement, the TRIP Portfolio Supplement, and the Collateral Supplement.

         "Titling Trust Servicing Agreement" shall mean the meaning given to the
term "Origination and Servicing Agreement" in the Titling Trust Agreement.

         "Titling Trust Servicer Funding  Advances" shall have the meaning given
to the term "Servicer Funding Advances" in the Titling Trust Agreement.

         "Titling Trustees" shall mean each of the General Interest Trustee, the
Delaware Trustee and each Portfolio Trustee.

         "Total Available  Amount" shall mean, with respect to any Payment Date,
the Total  Collected  Amount with respect to the related Monthly Period less the
sum of (i) the Total  Servicing Fee due to the Servicer for the related  Monthly
Period  pursuant to Section 2.09 of the Servicing  Agreement and (ii) the amount
the  Servicer is entitled to be  reimbursed  in respect of  Outstanding  Monthly
Advances  during such  related  Monthly  Period  pursuant to Section 2.14 of the
Servicing  Agreement and payments in respect of Liquidation  Expenses due to the
Servicer  for the related  Monthly  Period  pursuant  to Section  2.04(b) of the
Servicing Agreement.

         "Total Collected  Amount" shall mean, with respect to a Monthly Period,
the sum of:

         (1)      all Collections received by the Servicer  during  the  Monthly
Period,

         (2)      Monthly Advances made by the Servicer pursuant to Section 2.14
of the Servicing Agreement on the related Determination Date,

         (3)      the aggregate  Warranty Purchase  Payments and  Administrative
Purchase  Payments  paid by the Seller and the  Servicer,  respectively,  on the
Business Day preceding the related Payment Date, plus

<PAGE>



         (4)      Excess  Funding  Account  Investment  Earnings and  investment
earnings on funds deposited in all other Designated Accounts,  net of losses and
investment expenses, received during the Monthly Period, and

         (5)      Hedge  Receipts due  on  the  related Payment  Date; provided,
however,  that,  unless  otherwise  provided in a Series  Supplement,  the Total
Collected  Amount shall not include  amounts  received or paid in respect of any
Enhancements other than the Hedge Receipts.

         "Total  Servicing  Fee"  shall have the  meaning  given to such term in
Section 2.09 of the Servicing Agreement.

         "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.

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

         "Transfer and Servicing Agreements" shall mean the Receivables Purchase
Agreement,  the Servicing Agreement,  the Harco Purchase Agreement,  the Titling
Trust Servicing  Agreement,  the Titling Trust Agreement,  the Collateral Agency
Agreement, the TRIP Portfolio Supplement and the Collateral Supplement.

         "Transferee"  shall mean  Navistar  Financial as  Transferee  under the
Harco Purchase Agreement.

         "Transferor"  shall mean Harco  Leasing as  Transferor  under the Harco
Purchase Agreement.

         "TRIP  Allocation  Notice" shall mean a notice in the form of Exhibit A
to the Harco Purchase Agreement, including the Schedule of TRIP Portfolio Assets
attached thereto.

         "TRIP  Portfolio  Assets" shall mean, as of any date, all of the Retail
Leases  identified on any Schedule of TRIP Portfolio Assets attached to the TRIP
Allocation  Notice dated as of the Closing Date or a Lease  Purchase  Date on or
before such date,  and the Related  Titling  Trust  Assets with  respect to such
Retail  Leases,  other  than any  such  Retail  Leases  which  are (i)  Warranty
Receivables  which have been  repurchased  by the  Seller,  (ii)  Administrative
Receivables  which have been  repurchased  by the Servicer,  or (iii) which have
otherwise been terminated, on or before such date (and the Related Titling Trust
Assets).


<PAGE>



         "TRIP  Portfolio   Certificate"   shall  mean  the  Portfolio  Interest
Certificate   (as  such  term  is  defined  in  the  Titling  Trust   Agreement)
representing the TRIP Portfolio Interest.

         "TRIP  Portfolio  Interest" shall mean the portfolio  interest  created
pursuant to the TRIP Portfolio Supplement.

         "TRIP Portfolio  Interest  Certificate" shall have the meaning given to
such term in Exhibit A page A-1 of the TRIP Portfolio Supplement.

         "TRIP Portfolio  Interest  Collateral"  shall have the meaning given to
such term in Section 11.2 of the Collateral Supplement.

         "TRIP  Portfolio  Interest  Trustee"  shall  mean  Bank  One,  National
Association.

         "TRIP  Portfolio  Obligor" shall have the meaning given to such term in
the Recitals of the Collateral Supplement.

         "TRIP Portfolio Supplement" shall mean the TRIP Supplement to the Trust
Agreement  dated as of the  Closing  Date among  Harco  Leasing,  as Grantor and
Initial  Beneficiary,  the General  Interest  Trustee,  the  Portfolio  Interest
Trustee and the Delaware Trustee.

         "TRIP Residual  Interest"  shall mean the Issuer's right to receive all
amounts  which are  withdrawn on any date in  accordance  with the Indenture and
Series 2000-1  Supplement (after the application of funds on such date) from any
Reserve Account.

         "TRIP  Secured  Party" shall have the meaning given to such term in the
Recitals of the Collateral Supplement.

         "True-up Date" shall have the meaning given to such term in the Titling
Trust Agreement.

         "Trust  Agreement" shall have the meaning given to such term in Exhibit
A page A-1 of the TRIP Portfolio Supplement.

         "Trust  Assets"  shall have the meaning given to such term in Exhibit A
page A-2 of the TRIP Portfolio Supplement.

         "Trust  Indenture  Act" or "TIA" shall mean the Trust  Indenture Act of
1939, as amended.

         "UCC"  shall  mean the  Uniform  Commercial  Code,  as in effect in the
relevant jurisdiction.

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


<PAGE>



         "Uncertificated  Security"  shall have the  meaning  given to such term
under the applicable UCC as in effect on such date.

         "Unearned Income" shall mean, with respect to any Receivable, as of any
date of  determination,  the portion of the Gross Balance thereof  identified as
unearned income by the Issuer or the Servicer, as the case may be, in accordance
with its customary applicable accounting procedures.

         "Unregistered  Note"  shall mean any Note that has not been  registered
under the Securities Act and is subject to the provisions of Section 2.15 of the
Indenture.

         "Used Vehicle  Percentage" shall mean with respect to any Determination
Date (i) the percentage equivalent of a fraction,  the numerator of which is the
aggregate  Contract  Values of all  Eligible  Receivables  that are Used Vehicle
Receivables and the denominator of which is the Pool Balance as of such date.

         "Used Vehicle  Receivable"  shall mean a either (a) Retail Note secured
by one or more related Financed  Vehicles that were used vehicles at the time of
origination  or (b) a  Retail  Lease  pursuant  to  which  one or more  Financed
Vehicles that were used vehicles at the time of origination is being leased.

         "Warranty  Purchase Payment" shall mean, with respect to a Payment Date
and to a Warranty  Receivable  repurchased as of the related  Reference  Date, a
release  of all  claims  for  reimbursement  of  Monthly  Advances  made on such
Warranty  Receivable  plus a payment  equal to the Contract  Value thereof as of
such date.

         "Warranty  Receivable"  shall  mean a  Receivable  which the Seller has
become  obligated  to  repurchase  pursuant to Section  5.06 of the  Receivables
Purchase Agreement.

         "Weighted  Average Maturity" shall mean, for any date of determination,
the weighted average maturity of Eligible  Receivables in the Pool,  weighted on
the basis of the Contract Value of each such Eligible Receivable.

         "Weighted  Average  Spread"  shall mean,  with respect of any Series of
Notes, for any date of determination, a fraction expressed as a percentage equal
to the sum of the product of the following  clauses (i) and (ii)  calculated for
each  class of  Notes  outstanding  in such  Series  on such  date:  (i)(a)  the
outstanding  principal  balance  of  such  class  of  Notes  divided  by (b) the
Aggregate  Note  Principal  Balance  multiplied  by (ii) the Class  Spread  with
respect to such class of Notes.


<PAGE>



                                   APPENDIX A

                         PART II - RULES OF CONSTRUCTION

         (A) Accounting  Terms. As used in this Appendix or the Basic Documents,
accounting  terms which are not defined,  and accounting  terms partly  defined,
herein  or  therein  shall  have the  respective  meanings  given to them  under
generally accepted accounting principles.  To the extent that the definitions of
accounting terms in this Appendix or the Basic Documents are  inconsistent  with
the meanings of such terms under generally accepted accounting  principles,  the
definitions contained in this Appendix or the Basic Documents will control.

         (B) "Hereof," etc. The words  "hereof,"  "herein" and  "hereunder"  and
words of similar  import when used in this  Appendix or any Basic  Document will
refer  to  this  Appendix  or such  Basic  Document  as a  whole  and not to any
particular  provision  of this  Appendix or such Basic  Document;  and  Section,
Schedule and Exhibit references contained in this Appendix or any Basic Document
are  references  to Sections,  Schedules  and Exhibits in or to this Appendix or
such Basic Document unless otherwise specified. The word "or" is not exclusive.

         (C) Use of "related". As used in this Appendix and the Basic Documents,
with  respect to any Payment  Date,  (i) the "related  Determination  Date," the
"related Monthly  Period," the "related  Reference Date" and the "related Record
Date" will mean the Determination  Date, the Monthly Period,  the Reference Date
and Record Date, respectively,  immediately preceding such Payment Date and (ii)
the "related Payment Period" will mean the Payment Period ending on such Payment
Date and the relationships among each of the foregoing terms will be correlative
to the foregoing relationships.  With respect to any Series, the "related Series
Supplement"  will mean the Series  Supplement  establishing  such  Series.  With
respect to any Purchase  Date,  the  "related  Cutoff Date" will mean the Cutoff
Date established for the closing of the purchase of receivables on that Purchase
Date.

         (D) Use of "outstanding"  etc. Whenever the term  "outstanding  Notes,"
"outstanding  principal  amount"  and words of  similar  import are used in this
Appendix  or  any  Basic  Document  for  purposes  of  determining  whether  the
Noteholders  of the  requisite  outstanding  principal  amount of the Notes have
given any request, demand,  authorization,  direction, notice, consent or waiver
hereunder  or under any Basic  Document,  Notes owned by the  Issuer,  any other
obligor  upon the Notes,  the Seller or any  Affiliate  of any of the  foregoing
Persons shall be disregarded and deemed not to be  outstanding,  except that, in
determining whether the Indenture Trustee shall be protected in relying upon any
such request, demand, authorization,  direction, notice, consent or waiver, only
Notes that the Indenture  Trustee knows to be so owned shall be so  disregarded.
Notes so  owned  that  have  been  pledged  in good  faith  may be  regarded  as
"outstanding"  if the pledgee  establishes to the  satisfaction of the Indenture
Trustee the  pledgor's  right so to act with  respect to such Notes and that the
pledgee is not the Issuer,  any other obligor upon the Notes,  the Seller or any
Affiliate of any of the foregoing Persons.


<PAGE>



         (E) Number and Gender.  Each defined term used in this  Appendix or the
Basic  Documents  has a  comparable  meaning when used in its plural or singular
form. Each gender-specific term used in this Appendix or the Basic Documents has
a comparable  meaning  whether used in a masculine,  feminine or  gender-neutral
form.

         (F) Including.  Whenever the term "including" (whether or not that term
is followed by the phrase "but not limited to" or "without  limitation" or words
of similar effect) is used in this Appendix or the Basic Documents in connection
with a listing of items within a particular classification, that listing will be
interpreted to be illustrative  only and will not be interpreted as a limitation
on, or exclusive listing of, the items within that classification.

         (G) UCC  References.  References to sections or provisions of Article 9
of the UCC in any of the Basic  Documents  shall be  deemed to be  automatically
updated  to  reflect  the  successor,  replacement  or  functionally  equivalent
sections or provisions of Revised Article 9, Secured  Transactions (2000) at any
time in any jurisdiction which has made such revised article effective.


<PAGE>



                                   APPENDIX B

                         NOTICE ADDRESSES AND PROCEDURES

                  All requests, demands, directions, consents, waivers, notices,
authorizations and communications provided or permitted under any Basic Document
to be made upon,  given or furnished to or filed with the Seller,  the Servicer,
the Indenture  Trustee,  the Issuer or the Rating  Agencies shall be in writing,
personally  delivered,  sent by facsimile  with a copy to follow via first class
mail, overnight mail or mailed by certified  mail-return receipt requested,  and
shall be deemed to have been duly given upon receipt:

(1)      in the case of the Seller, at the following address:

                           Navistar Financial Corporation
                           2850 West Golf Road
                           Rolling Meadows, IL  60008
                           Attention:  General Counsel
                           Telecopy:   (847) 734-4090

(2)      in the case of the Servicer, at the following address:

                           Navistar Financial Corporation
                           2850 West Golf Road
                           Rolling Meadows, IL  60008
                           Attention:  General Counsel
                           Telecopy:   (847) 734-4090

(3)      in the case of the Indenture Trustee, at its Corporate Trust Office,

(4)      in the case of the Issuer, at the following address,

                           Truck Retail Instalment Paper Corp.
                           c/o Navistar Financial Corporation
                           2850 West Golf Road
                           Rolling Meadows, IL  60008
                           Attention:  General Counsel
                           Telecopy:   (847) 734-4090




<PAGE>



(5)      in the case of Harco Leasing, at the following address,

                           Harco Leasing Company, Inc.
                           c/o Navistar Financial Corporation
                           2850 West Golf Road
                           Rolling Meadows, IL  60008
                           Attention:  General Counsel
                           Telecopy:   (847) 734-4000

(6)      in the case of the Collateral Agent, at the following address,

                           The Bank of New York
                           2 North LaSalle Street
                           Suite 1020
                           Chicago, IL 60602

                           Attention: Indenture Trust Administration
                           Telecopy:   (312) 827-8562

(7) in the case of the Titling  Trust,  to the General  Interest  Trustee at its
Corporate  Trust Office (as such term is used in the Titling  Trust  Agreement),
with a copy to Harco Leasing and Navistar Financial.

The  Issuer  shall  promptly  transmit  any  notice  received  by  it  from  the
Noteholders  to the Indenture  Trustee and the Indenture  Trustee shall likewise
promptly transmit any notice received by it from the Noteholders to the Issuer.

(8)      in the case of Moody's Investors Service, Inc., to:

                           Moody's Investors Service, Inc.
                           ABS Monitoring Department
                           99 Church Street
                           New York, New York 10007

(9)      in the case of Standard & Poor's Ratings Services, to:

                           Standard & Poor's Ratings Services
                           55 Water Street
                           40th Floor
                           New York, NY 10041-0003
                           Attention: Asset Backed Surveillance Department

or at such other  address  as shall be  designated  by such  Person in a written
notice to the other parties to the Basic Documents to which they are party.


<PAGE>



                  Where any Basic Document provides for notice to Noteholders of
any  condition  or  event,  such  notice  shall be  sufficiently  given  (unless
otherwise  herein   expressly   provided)  if  it  is  in  writing  and  mailed,
first-class, postage prepaid or by overnight mail to each Noteholder affected by
such  condition  or event,  at such  Person's  address as it appears on the Note
Register,  not later than the latest  date,  and not earlier  than the  earliest
date, prescribed in such Basic Document for the giving of such notice. If notice
to Noteholders is given by mail, neither the failure to mail such notice nor any
defect in any notice so mailed to any  particular  Noteholders  shall affect the
sufficiency  of such notice with  respect to other  Noteholders,  and any notice
that is mailed in the manner herein  provided shall  conclusively be presumed to
have been duly given  regardless  of  whether  such  notice is in fact  actually
received.



<PAGE>

Exhibit 10.04
                            SERIES 2000-1 SUPPLEMENT

                          Dated as of October 16, 2000

                                       to

                                    INDENTURE

                          Dated as of October 16, 2000

                       TRUCK RETAIL INSTALMENT PAPER CORP.

                                    as Issuer

                                       and

                              THE BANK OF NEW YORK,

                              as Indenture Trustee

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

                       TRUCK RETAIL INSTALMENT PAPER CORP.
                               SERIES 2000-1 NOTES


<PAGE>




                                      -ii-

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                               Page
<S>                                                                                                             <C>

ARTICLE IDEFINITIONS..............................................................................................1

ARTICLE IICREATION OF THE SERIES 2000-1 NOTES.....................................................................7
                  SECTION 2.01.     Designation...................................................................7
                  SECTION 2.02.     Denomination, Form, Book Entry Registration and Transfer Restrictions.........8

ARTICLE IIIPAYMENTS TO SERIES 2000-1 HOLDERS AND ALLOCATION AND APPLICATION OF FUNDS..............................9
                  SECTION 3.01.     Interest9
                  SECTION 3.02.     Principal.....................................................................9
                  SECTION 3.03.     Allocations and Application of Funds..........................................9
                  SECTION 3.04.     Establishment of the Series 2000-1 Accounts..................................11

ARTICLE IVDISTRIBUTIONS AND REPORTSTO SERIES 2000-1 HOLDERS......................................................13
                  SECTION 4.01.     Distributions................................................................13
                  SECTION 4.02.     Reports and Statements to Series 2000-1 Holders..............................14

ARTICLE VAMORTIZATION EVENTS.....................................................................................15
                  SECTION 5.01.     Additional Amortization Events...............................................15

ARTICLE VIOPTIONAL REDEMPTION, TRANSFER RESTRICTIONS AND CERTAIN TERMS...........................................17
                  SECTION 6.01.     Optional Redemption..........................................................17
                  SECTION 6.02.     Transfer Restrictions........................................................18
                  SECTION 6.03.     Certain Terms Used in Basic Documents........................................18

ARTICLE VIIMISCELLANEOUS PROVISIONS..............................................................................19
                  SECTION 7.01.     Ratification of Agreement....................................................19
                  SECTION 7.02.     Counterparts.................................................................19
                  SECTION 7.03.     GOVERNING LAW................................................................20

</TABLE>

                                    EXHIBITS

Exhibit A-1       Form of Class A Rule 144A Global Note
Exhibit A-2       Form of Class A Regulation S Global Note
Exhibit A-3       Form of Euroclear/Cedelbank Certification
Exhibit A-4       Form of Regulation S Certification
Exhibit B-1       Form of Class B Rule 144A Global Note
Exhibit B-2       Form of Class B Regulation S Global Note
Exhibit B-3       Form of Euroclear/Cedelbank Certification
Exhibit B-4       Form of Regulation S Certification
Exhibit C         Form of Monthly Payment Date Statement

                                    SCHEDULES

Schedule 1        Series 2000-1 Accounts


<PAGE>



         THIS  SERIES  SUPPLEMENT,  dated as of October  16,  2000 (as  amended,
supplemented or otherwise modified,  this "Series  Supplement") to the Indenture
dated as of the date hereof (as amended, supplemented or otherwise modified, the
"Indenture"),  among Truck Retail  Instalment Paper Corp. (the "Issuer") and THE
BANK OF NEW YORK,  a New York  banking  corporation,  as  Indenture  Trustee (as
indenture trustee and not in its individual capacity, the "Indenture Trustee").

         Section 2.1 of the Indenture  provides that the Issuer may from time to
time  issue  one or more new  Series of Notes.  The  principal  terms of any new
Series  of Notes are to be set forth in a Series  Supplement.  Pursuant  to this
Series Supplement,  the Issuer and the Indenture Trustee shall create the Series
2000-1  Notes  and  specify  the  principal  terms  thereof.   The  Servicer  is
acknowledging  this Series Supplement and agrees to comply with the terms hereof
applicable to the Servicer.

                                    ARTICLE I

                                   DEFINITIONS

         (a)  Capitalized  terms not  otherwise  defined  herein  shall have the
respective  meanings  assigned  them in Part I of  Appendix A to the  Indenture.
Whenever  used in this Series  Supplement,  the  following  words shall have the
following meanings:

         "Aged Pool  Period"  shall mean a period of time  beginning on any date
when in excess of 25% of the Issuer Receivables (measured by Pool Balance) as of
such date is represented by Receivables  which have been Issuer  Receivables for
at least seven continuous months and ending on the first Sale Date thereafter on
which the Issuer sells in excess of 50% of the Issuer  Receivables  (measured by
Pool Balance).

         "Aggregate  Issuer Net Losses"  shall mean,  with  respect to a Monthly
Period,  the  result  of  (i)  the  aggregate  Contract  Values  of  all  Issuer
Receivables   newly  designated   during  such  Monthly  Period  as  Liquidating
Receivables minus (ii) Liquidation Proceeds collected during such Monthly Period
with respect to all Liquidating Receivables which were Issuer Receivables during
such Monthly Period.

         "Class A Holder" shall mean a Holder of a Class A Note.

         "Class A Interest Distributable Amount" shall mean, with respect to any
Payment Date,  the sum of (1) the product of (A) the sum of (i) the  outstanding
principal  balance  of the Class A Notes on the  preceding  Payment  Date  after
giving  effect to all  payments of  principal in respect of the Class A Notes on
such  preceding  Payment Date (or, in the case of the initial  Payment Date, the
outstanding  principal balance on the Closing Date) and (2) the aggregate amount
of accrued and unpaid  interest owed with respect to the Class A Notes as of the
preceding  Payment  Date and (B) the  product  of the  Class A Note Rate for the
related  Payment  Period and a fraction,  the  numerator  of which is the actual
number of days in such Payment  Period and the  denominator  of which is 360 and
(2) the  excess  of the  Class A  Interest  Distributable  Amount  for the prior
Payment  Date over the amount that was actually  deposited in the Series  2000-1
Note  Distribution  Account on the Business Day  preceding  such Payment Date in
respect of interest on the Class A Notes.

         "Class A Note"  shall  have the  meaning  given to such term in Section
2.01 hereof.

         "Class A Note Rate" shall mean (i) with respect to the initial  Payment
Period,  6.96%,  (ii) with respect to any Payment Period thereafter which begins
before the Targeted  Final Payment Date for the Series  2000-1 Notes,  One-Month
LIBOR for such  Payment  Period plus 0.34% and (iii) with respect to any Payment
Period which begins on or after the Targeted  Final  Payment Date for the Series
2000-1 Notes, One-Month LIBOR for such Payment Period plus 0.68%.

         "Class B Holder" shall mean a Holder of a Class B Note.

         "Class B Interest Distributable Amount" shall mean, with respect to any
Payment Date,  the sum of (1) the product of (A) the sum of (i) the  outstanding
principal  balance  of the Class B Notes on the  preceding  Payment  Date  after
giving  effect to all  payments of  principal in respect of the Class B Notes on
such  preceding  Payment Date (or, in the case of the initial  Payment Date, the
outstanding  principal balance on the Closing Date) and (2) the aggregate amount
of accrued and unpaid  interest owed with respect to the Class B Notes as of the
preceding  Payment  Date and (B) the  product  of the  Class B Note Rate for the
related  Payment  Period and a fraction,  the  numerator  of which is the actual
number of days in such Payment  Period and the  denominator  of which is 360 and
(2) the  excess  of the  Class B  Interest  Distributable  Amount  for the prior
Payment  Date over the amount that was actually  deposited in the Series  2000-1
Note  Distribution  Account on the Business Day  preceding  such Payment Date in
respect of interest on the Class B Notes.

         "Class B Note"  shall  have the  meaning  given to such term in Section
2.01 hereof.

         "Class B Note Rate" shall mean (i) with respect to the initial  Payment
Period,  7.17%,  (ii) with respect to any Payment Period thereafter which begins
before the Targeted  Final Payment Date for the Series  2000-1 Notes,  One-Month
LIBOR for such  Payment  Period plus 0.55% and (iii) with respect to any Payment
Period which begins on or after the Targeted  Final  Payment Date for the Series
2000-1 Notes, One-Month LIBOR for such Payment Period plus 1.10%.

         "Combined   Three-Month  Net  Loss  Percentage"  shall  mean,  for  any
Reference Date, the percentage equivalent of a fraction,  the numerator of which
is equal to  Combined  Three-Month  Net Losses for that  Reference  Date and the
denominator of which is equal to Three-Month Liquidations for the Monthly Period
ending on such  Reference Date minus  Combined  Three-Month  Net Losses for that
Reference Date.

         "Combined  Three-Month  Net Losses" shall mean, for any Reference Date,
for all Receivables in the Navistar  Serviced  Portfolio  written off during the
Monthly  Period  ending  on such  Reference  Date  and the two  Monthly  Periods
preceding such Monthly Period,  the sum of (A) the unpaid principal plus accrued
and unpaid  interest  on such  Receivables  at the time of  repossession  of the
truck(s),  bus(es) or trailer(s) securing all such written off Receivables,  net
of all  recoveries  with respect to such  Receivables  and (B) the net losses of
International  (determined on the basis of International's  normal practices) on
the Navistar Serviced Portfolio.

         "Combined   Twelve-Month  Net  Loss  Percentage"  shall  mean  for  any
Reference Date, the percentage equivalent of a fraction,  the numerator of which
is equal to Combined  Twelve-Month  Net Losses for that  Reference  Date and the
denominator  of  which is equal to  Twelve-Month  Liquidations  for the  Monthly
Period ending on such Reference Date minus Combined  Twelve-Month Net Losses for
that Reference Date.

         "Combined  Twelve-Month Net Losses" shall mean, for any Reference Date,
for all Receivables in the Navistar  Serviced  Portfolio  written off during the
Monthly  Period ending on such  Reference  Date and the eleven  Monthly  Periods
preceding such Monthly Period,  the sum of (A) the unpaid principal plus accrued
and unpaid  interest at the time of  repossession  of the  truck(s),  bus(es) or
trailer(s) securing all such written off Receivables, net of all recoveries with
respect to such Receivables and (B) the net losses of International  (determined
on the basis of  International's  normal  practices)  on the  Navistar  Serviced
Portfolio.

         "Distribution  Compliance  Period"  shall have the meaning set forth in
Section 6.02.

         "Exchange Date" shall have the meaning set forth in Section 2.02(g).

         "First Reserve  Account  Trigger Event" shall mean an event which shall
occur and be continuing if, as determined on any Calculation Date:

          (1) the Combined Three-Month Net Loss Percentage exceeded 3.5% for the
     applicable Reference Date;

          (2) the Combined  Twelve-Month  Net Loss Percentage  exceeded 3.0% for
     the applicable Reference Date;
                  or

          (3) the  Three-Month  Delinquency  Percentage  exceeded  2.0%  for the
     applicable Reference Date.

         "Initial Payment Date" shall mean November 15, 2000.

         "Issuer  Delinquency  Percentage" shall mean, with respect to a Monthly
Period, the aggregate Contract Value of all Issuer Receivables which are 61 days
or more past due as of the last day of such Monthly  Period,  as  determined  in
accordance with the Servicer's  normal  practices,  expressed as a percentage of
the aggregate  Contract  Value of all Issuer  Receivables  as of the last day of
such Monthly Period.

         "Issuer  Net Loss  Percentage"  shall mean,  with  respect to a date of
determination,  the product  (expressed as a percentage) of (A) twelve and (B) a
fraction, the numerator of which is equal to the sum of the Aggregate Issuer Net
Losses plus  Liquidation  Proceeds for each of the Monthly Periods which are the
sixth,  fifth and fourth Monthly  Periods  preceding the Monthly Period in which
such  determination date occurs,  minus the sum of the Liquidation  Proceeds for
the Monthly  Periods  which are the  second,  third and fourth  Monthly  Periods
preceding the Monthly Period in which such  determination  date occurs,  and the
denominator of which is the sum of the Contract Value of all  Receivables  owned
directly or  indirectly by the Issuer as of the last day of each of the seventh,
sixth and fifth  Monthly  Periods  preceding  the  Monthly  Period in which such
determination date occurs.

         "NSP  Delinquency  Percentage"  shall mean,  with  respect to a Monthly
Period, the aggregate Contract Value of all Receivables in the Navistar Serviced
Portfolio  which are 61 days or more past due as of the last day of such Monthly
Period,  as determined  in  accordance  with the  Servicer's  normal  practices,
expressed as a percentage of the aggregate  Contract Value of all Receivables in
the Navistar Serviced Portfolio as of the last day of such Monthly Period.

         "Purchase Agreement" shall mean the Purchase Agreement, dated September
29, 2000, by and among Navistar Financial, the Issuer and Chase Securities Inc.,
as representative of the several initial purchasers.

         "Redemption  Price"  shall have the meaning  set forth in Section  6.01
hereof.

         "Second Reserve Account Trigger Event" shall mean an event, which shall
occur and be continuing if, as determined on any Calculation  Date, the Combined
Twelve-Month Net Loss Percentage exceeded 3.5%.

         "Series  2000-1 EFA Deposit  Amount"  shall mean,  with  respect to any
Payment Date, the excess, if any, of the aggregate outstanding principal balance
of the Series 2000-1 Notes as of the related  Reference Date over the product of
(i) the Series  Allocation  Percentage  for the Series  2000-1  Notes as of such
Payment Date and (ii) the Borrowing Base as of such Payment Date.

         "Series  2000-1  Holders"  shall mean the Holders of the Series  2000-1
Notes.

         "Series  2000-1  Interest  Reserve  Account" shall have the meaning set
forth in Section 3.04.

         "Series  2000-1  Interest  Reserve  Deposit  Amount"  shall mean,  with
respect to any Payment Date, the excess,  if any, of the Series 2000-1  Interest
Reserve  Specified  Balance for such  Payment Date over the amount on deposit in
the Series 2000-1  Interest  Reserve Account at the close of business on the day
preceding such Payment Date.

         "Series 2000-1 Interest  Reserve  Specified  Balance" shall mean, as of
any date of determination during a Payment Period, the product of (a) 0.25% plus
the Weighted Average Interest Rate for such payment period minus One-Month LIBOR
for such Payment Period and (b) the outstanding  principal balance of the Series
2000-1 Notes.

         "Series 2000-1 Interest Reserve  Withdrawal  Amount" shall mean (1) for
any Payment Date prior to the Series 2000-1 Principal Payment Commencement Date,
the sum of (A) (i) the product of (a) the Class A Interest  Distributable Amount
with respect to such Payment Date plus the Class B Interest Distributable Amount
with respect to such Payment Date and (b) the Weighted  Average  Excess  Funding
Account Balance for the related  Monthly Period divided by the Weighted  Average
Notes  Principal  Balance for such Monthly  Period minus (ii) the product of (a)
Weighted  Average Series  Allocation  Percentage for such Monthly Period and (b)
investment  earnings on the Excess  Funding  Account for such Monthly Period and
(B) the  excess,  if any,  of (a) the amount on  deposit  in the  Series  2000-1
Interest  Reserve  Account as of such  Payment  Date over (b) the Series  2000-1
Interest  Reserve  Specified  Balance  as of such  Payment  Date less the amount
specified in clause (A) of this definition for such Payment Date;  provided that
the Series 2000-1 Interest Reserve  Withdrawal Amount may not be less than zero,
and (2) for any Payment  Date on or after the Series  2000-1  Principal  Payment
Date, the balance of the Series 2000-1 Interest Reserve Account.

         "Series  2000-1 Loss Reserve  Account" shall have the meaning set forth
in Section 3.04.

         "Series 2000-1 Loss Reserve Deposit Amount" shall mean, with respect to
any  Payment  Date,  the  excess,  if any,  of the Series  2000-1  Loss  Reserve
Specified  Balance  as of such  Payment  Date over the  amount on deposit in the
Series 2000-1 Loss Reserve Account at the close of business on the day preceding
such Payment Date.

         "Series  2000-1 Loss Reserve  Specified  Balance"  shall mean as of any
date,  the lesser of (i) the Series  Aggregate  Discounted  Asset  Balance  with
respect to the Series 2000-1 Notes on such date and (ii) the greatest of (a) the
product of (1) 7.00% and (2) such Series Aggregate Discounted Asset Balance, (b)
if a First Reserve  Account Trigger Event has occurred and is continuing on such
date, the product of (1) 10.00% and (2) such Series  Aggregate  Discounted Asset
Balance,  (c) if a Second  Reserve  Account  Trigger  Event has  occurred and is
continuing on such date, the product of (1) 13.00% and (2) such Series Aggregate
Discounted  Asset  Balance,  and  (d)  4.00%  of the  highest  Series  Aggregate
Discounted  Asset Balance with respect to the Series 2000-1 Notes since the date
of the most recent Sale Date; provided, however, that if a Third Reserve Account
Event has occurred and is  continuing on such date,  each  percentage in clauses
(ii)(a),  (ii)(b)  and  (ii)(c)  above  shall  equal  the sum of 3.00%  and such
percentage.

         "Series  2000-1 Notes" shall have the meaning set forth in Section 2.01
hereof.

         "Series  2000-1 Note  Distribution  Account" shall have the meaning set
forth in Section 3.04 hereof.

         "Series  2000-1  Principal  Payment  Commencement  Date" shall mean the
earlier of the Targeted  Final  Payment Date for the Series 2000-1 Notes and the
Amortization Date, if any.

         "Series  2000-1  Reserve  Accounts"  shall mean the Series  2000-1 Loss
Reserve Account and the Series 2000-1 Interest Reserve Account.

         "Third  Reserve  Account  Trigger Event" shall occur if, as the date of
determination thereof, an Aged Pool Period is in effect on such date and (i) the
Issuer Net Loss  Percentage as of such  determination  date exceeds 1.5% or (ii)
the average of the Issuer Delinquency  Percentages for the three Monthly Periods
preceding such determination date exceeds 2.0%.

         "Three-Month  Delinquency  Percentage"  shall mean, with respect to any
Reference Date, the average of the NSP  Delinquency  Percentages for the Monthly
Period ending on such Reference Date and the two preceding Monthly Periods.

         "Three-Month  Liquidations"  shall mean,  for any Reference  Date,  the
Gross Balance of all Receivables in the Navistar Serviced Portfolio  outstanding
on the date that is two Monthly Periods  preceding the beginning of that Monthly
Period plus the Gross Balance of all Receivables  added to the Navistar Serviced
Portfolio  during that Monthly Period and the two Monthly Periods  preceding the
beginning of that Monthly  Period minus the Gross Balance of all  Receivables in
the Navistar Serviced Portfolio outstanding at the end of such Monthly Period.

         "Twelve-Month Liquidations" shall mean for any Monthly Period the Gross
Balance of all Receivables in the Navistar Serviced Portfolio outstanding on the
date that is eleven  Monthly  Periods  preceding  the  beginning of that Monthly
Period plus the Gross Balance of all Receivables  added to the Navistar Serviced
Portfolio  during that Monthly Period and the eleven Monthly  Periods  preceding
the beginning of that Monthly Period minus the Gross Balance of all  Receivables
in the  Navistar  Serviced  Portfolio  outstanding  at the end of  that  Monthly
Period.

         "U.S. Person" shall have the meaning set forth in Rule  902  under  the
Securities Act.

         "Weighted  Average Class Percentage" shall mean, for any Payment Period
with  respect  to the  Class  A  Notes  or the  Class  B  Notes,  the  aggregate
outstanding  principal  balance  of such  class on the first day of the  Payment
Period  divided by the  aggregate  outstanding  principal  balance of the Series
2000-1 Notes on the first day of the Payment Period,  after giving effect to any
payment to be made to the Series 2000-1 Holders on such date.

         "Weighted Average EFA Balance" shall mean, for any Monthly Period,  the
result of (i) the sum of the balance in the Excess Funding  Account at the close
of business on each Business Day during such Monthly  Period divided by (ii) the
actual number of Business Days during such Monthly Period.

         "Weighted  Average Interest Rate" shall mean, for any Payment Period, a
fraction expressed as a percentage equal to the sum of (i) the Class A Note Rate
in effect for such  Payment  Period  multiplied  by the Weighted  Average  Class
Percentage  for the Class A Notes for such  Payment  Period and (ii) the Class B
Note Rate in effect for such Payment Period  multiplied by the Weighted  Average
Class Percentage for the Class B Notes for such Payment Period.

         "Weighted Average Notes Principal  Balance" shall mean, for any Monthly
Period, the result of (i) the sum of the aggregate outstanding principal balance
of all  outstanding  Notes at the close of business on each  Business Day during
such Monthly  Period  divided by (ii) the actual  number of Business Days during
such Monthly Period.

         "Weighted  Average Series  Allocation  Percentage"  shall mean, for any
Monthly Period,  the result of (i) the sum of the Series  Allocation  Percentage
for the Series 2000-1 Notes at the close of business on each Business Day during
such Monthly  Period  divided by (ii) the actual  number of Business Days during
such Monthly Period.

         (b) The rules of construction set forth in Part II of Appendix A to the
Indenture  shall be  applicable  to this Series  Supplement.  References  to any
Article, Section or Exhibit are references to Articles, Sections and Exhibits in
or to this Series Supplement unless otherwise specified.

                                   ARTICLE II

                       CREATION OF THE SERIES 2000-1 NOTES

         SECTION 2.01.     Designation.

         (a) There is hereby created a Series of Notes to be issued  pursuant to
the Indenture and this Series Supplement to be known as the "Series 2000-1 Asset
Backed Notes". Such Series shall be comprised of two classes:  the Series 2000-1
Floating Rate Asset Backed  Notes,  Class A (the "Class A Notes") and the Series
2000-1  Floating  Rate Asset  Backed  Notes,  Class B (the  "Class B Notes" and,
together with the Class A Notes, the "Series 2000-1 Notes").

         (b) In the event  that any term or  provision  contained  herein  shall
conflict  with or be  inconsistent  with any term or provision  contained in the
Indenture, the terms and provisions of this Series Supplement shall govern.

         (c) The Issuer shall issue and the Indenture Trustee shall authenticate
and deliver to the Issuer the Class A Notes,  in the form of Notes as  described
in  Section  2.02  hereto,  in  the  initial   aggregate   principal  amount  of
$475,000,000 and the Class B Notes, in the form of Notes as described in Section
2.02 hereto, in the initial aggregate principal amount of $25,000,000.

         SECTION 2.02.      Denomination,  Form,  Book  Entry  Registration  and
Transfer Restrictions.

         (a) The Series 2000-1 Notes shall be issued in minimum denominations of
$100,000 and integral multiples of $1,000 in excess thereof.

         (b) Upon original issuance,  the Series 2000-1 Notes shall be issued as
Book Entry Notes in the form of typewritten Global Notes ("Global Notes").

         (c) The Global Notes in substantially the form set forth in Exhibit A-1
and B-1,  respectively,  shall  represent  the  Class A Notes and Class B Notes,
respectively, which have been issued and sold to the initial purchasers pursuant
to the Purchase  Agreement and  initially  resold in reliance upon the exemption
from  registration  under the  Securities  Act  provided  by Rule 144A under the
Securities Act (the "Rule 144A Global Note").

         (d) The Global  Notes in  substantially  the forms set forth in Exhibit
A-2 and B-2,  respectively,  shall initially represent the Class A Notes and the
Class B Notes, respectively,  which have been initially sold to non-U.S. Persons
in reliance on the exemption from registration under the Securities Act provided
by  Regulation S (the  "Temporary  Regulation S Global  Notes").  The  Temporary
Regulation S Global Notes will not be exchangeable  for Definitive  Notes in any
circumstances.

         (e)  Interests  in the  Temporary  Regulation  S  Global  Notes  may be
exchanged in  accordance  with the terms  thereof for interests in the Permanent
Regulation S Global Notes not earlier than the day following the last day of the
Distribution  Compliance  Period (the "Exchange  Date").  Such exchange shall be
made only upon certification as to non-U.S. beneficial ownership.

         (f) On or before the Exchange Date, the Indenture  Trustee will execute
one or more  Global  Notes (the  "Permanent  Regulation  S Global  Notes") to be
issued  and  delivered  in  exchange  for all or part  of the  interests  in the
Temporary  Regulation S Global Notes upon  presentation to the Indenture Trustee
through the Clearing  Agency by Euroclear  and Cedelbank of a  certification  of
non-U.S.  beneficial  ownership,  substantially  in  the  form  attached  to the
Temporary Regulation S Global Note.

         (g) Each of the Global Notes will be in fully registered form,  without
interest  coupons  attached.  Each of the Global Notes will be registered on the
Note Register in the name of the Clearing Agency.

                                   ARTICLE III

                      PAYMENTS TO SERIES 2000-1 HOLDERS AND

                       ALLOCATION AND APPLICATION OF FUNDS

         SECTION  3.01.  Interest.  Interest  on the Series  2000-1  Notes shall
accrue during each Payment Period on the  outstanding  principal  balance of the
Series  2000-1  Notes at the  Class A Note  Rate or the  Class B Note  Rate,  as
applicable,  in effect  for such  Payment  Period  calculated  on the basis of a
360-day year and the actual  number of days elapsed  during such Payment  Period
(or, in the case of the initial  Payment Date,  from the Closing Date to the end
of such Payment Period).  Accrued interest shall be due and payable to the Class
A Holders in respect of the Class A Notes on each Payment Date and shall be paid
from the deposits to the Series 2000-1 Note  Distribution  Account in respect of
the payment of interest on the Class A Notes  pursuant to Section 3.03.  Accrued
interest shall be due and payable to the Class B Holders in respect of the Class
B Notes on each  Payment  Date and  shall be paid in the  amount of and from the
deposits  to the  Series  2000-1  Note  Distribution  Account  in respect of the
payment of interest on the Class B Notes  pursuant to Section  3.03. No interest
shall be  payable  on the Class A Notes or the Class B Notes from and after such
time as the  outstanding  principal  balance  of such  Class A Notes  or Class B
Notes, as applicable, has been reduced to zero.

         SECTION 3.02. Principal. Other than after the occurrence of an Event of
Default and  acceleration  of the Series 2000-1 Notes in accordance with Section
5.2(a) of the Indenture,  the principal of each class of the Series 2000-1 Notes
shall be due and  payable  in full on the  Stated  Final  Maturity  Date for the
Series  2000-1  Notes and, to the extent of funds  available  therefor,  on each
Payment  Date  occurring  on and  after  the  Series  2000-1  Principal  Payment
Commencement  Date from funds  deposited in the Series 2000-1 Note  Distribution
Account  in the  amounts  and in  accordance  with the  priorities  set forth in
Section 3.03 until the outstanding  principal balance of the Series 2000-1 Notes
has been  reduced to zero.  Payments  to the Holders of the Class A Notes or the
Class B Notes in respect of  principal  shall reduce the  outstanding  principal
balance of the Class A Notes or the Class B Notes, as applicable.

         SECTION 3.03.     Allocations and Application of Funds.

         (a) All funds and amounts allocated to the Series 2000-1 Notes pursuant
to the Indenture,  including Section 8.2(i) thereof,  this Series Supplement and
any other Basic  Document  shall be  allocated  and applied as set forth in this
Section 3.03.

         (b) On the Business Day immediately  preceding the initial Payment Date
occurring on or after the Series 2000-1 Principal Payment Commencement Date, the
Servicer  shall  instruct the  Indenture  Trustee in writing to withdraw on that
date (a) an amount equal to the EFA Allocable  Amount with respect to the Series
2000-1  Notes for such  Payment  Date from the Excess  Funding  Account,  to the
extent of funds available  therefor and (b) an amount equal to the Series 2000-1
Interest  Reserve  Withdrawal  Amount from the Series  2000-1  Interest  Reserve
Account,  and deposit such amount in the Series 2000-1 Note Distribution Account
in respect of the payment of principal on the Series 2000-1 Notes; provided that
any  amounts  to be  deposited  therein in excess of the  aggregate  outstanding
principal  amount of the  Series  2000-1  Notes  shall  instead  be  applied  in
accordance with Section 3.03(c).

         (c) On the Business Day  immediately  preceding  each Payment Date, the
Servicer  shall  instruct the  Indenture  Trustee in writing to withdraw on that
date (i) an amount equal to the Series  Allocable  Amount for the Series  2000-1
Notes for the  related  Payment  Date from the  Collection  Account  and (ii) an
amount equal to the Series 2000-1 Interest  Reserve  Withdrawal  Amount for such
Payment Date from the Series 2000-1 Interest  Reserve  Account,  in each case to
the extent of funds  available  therefor,  and apply the sum of such  amounts on
that date in the  following  order of priority  (and only to the extent of funds
remaining after all prior applications) to the following accounts:

         (1)      first, the Class A Interest  Distributable Amount with respect
                  to such Payment  Date shall be deposited in the Series  2000-1
                  Note  Distribution  Account  in  respect  of  the  payment  of
                  interest on the Class A Notes;

         (2)      second, the Class B Interest Distributable Amount with respect
                  to such Payment  Date shall be deposited in the Series  2000-1
                  Note  Distribution  Account  in  respect  of  the  payment  of
                  interest on the Class B Notes;

         (3)      third,  if such  Payment  Date will  occur  before  the Series
                  2000-1 Principal Payment  Commencement Date, the Series 2000-1
                  EFA Deposit  Amount with respect to such Payment Date shall be
                  deposited in the Excess Funding Account;

         (4)      fourth, if such Payment Date will occur on or after the Series
                  2000-1 Principal Payment  Commencement Date, the excess of the
                  outstanding  principal balance of the Series 2000-1 Notes over
                  any  deposits  made or to be made to the  Series  2000-1  Note
                  Distribution  Account  pursuant  to  Section  3.03(b)  on such
                  Business  Day shall be  deposited  in the Series  2000-1  Note
                  Distribution Account in respect of the payment of principal on
                  the Series 2000-1 Notes;

         (5)      fifth,  if such  Payment  Date will  occur  before  the Series
                  2000-1 Principal Payment  Commencement Date, the Series 2000-1
                  Interest  Reserve  Deposit Amount with respect to such Payment
                  Date shall be deposited in the Series 2000-1 Interest  Reserve
                  Account;

         (6)      sixth,  if such  Payment  Date will  occur  before  the Series
                  2000-1 Principal Payment  Commencement Date, the Series 2000-1
                  Loss Reserve  Deposit Amount with respect to such Payment Date
                  shall be deposited in the Series 2000-1 Loss Reserve Account;

         (7)      seventh,   any  remaining   amounts  will  be  deemed  "Excess
                  Collections"  for  purposes  of the  Indenture  and  shall  be
                  applied  to make  payments  on other  Series  as  provided  in
                  Section 8.2(f) of the Indenture; and

         (8)      eighth, any remaining amounts shall  be  paid  to  or  at  the
                  direction of the Issuer.

If the amounts made available to make the deposits and payments described in the
preceding clauses (1), (2), (3) or (4) on the Business Day immediately preceding
any Payment Date are insufficient for such purposes, the Servicer shall instruct
the Indenture  Trustee in writing to withdraw  funds from the Series 2000-1 Loss
Reserve Account,  to the extent of the funds available  therein,  and apply such
funds in the  priority  set forth  above (but only on such  Business  Day to the
extent necessary to make the deposits or payments specified in such clauses (1),
(2), (3) and (4)). If, after the application of the funds as provided in clauses
(1) through (7) above,  the funds on deposit in the Series  2000-1 Loss  Reserve
Account exceed the Series 2000-1 Loss Reserve  Specified Balance or the funds on
deposit in the Series 2000-1  Interest  Reserve Account exceed the Series 2000-1
Interest  Reserve  Specified  Balance,  then the  Servicer  shall  instruct  the
Indenture  Trustee in writing to  withdraw  the amount of such  excess  from the
Series  2000-1  Loss  Reserve  Account or the  Series  2000-1  Interest  Reserve
Account, as applicable, for payment to or at the direction of the Issuer.

If the amounts  available to make the  deposits  and  payments  described in the
preceding  clauses (1) through (7) and the application of funds available in the
Series 2000-1 Loss Reserve Account in the preceding  paragraph are  insufficient
for such  purposes,  the amount of the  shortfall in such  deposits and payments
shall be the  Series  Shortfall  for the  Series  2000-1  Notes  and any  Excess
Collections  allocable to the Series 2000-1 Notes  pursuant to Section 8.2(e) of
the Indenture shall be applied to reduce such Series  Shortfall by the Indenture
Trustee in the priority set forth above.

If the Series 2000-1 Notes have been accelerated or declared immediately due and
payable as provided in Section 5.2 of the Indenture  following the occurrence of
an Event of Default  specified in Section 5.1(a) or (b) of the Indenture,  until
such time as all  outstanding  principal  and  interest on the Class A Notes has
been paid in full, any amounts  deposited in the Series 2000-1 Note Distribution
Account  shall be  distributed  to the Series  2000-1  Holders in the  following
priority:  (1) to the Class A  Holders  for the  payment  of  interest  and then
principal on the Class A Notes and (2) to the Class B Holders for the payment of
interest and then principal on the Class B Notes.

Notwithstanding anything to the contrary herein, in no event shall any amount be
deposited  in the  Series  2000-1  Note  Distribution  Account  with  respect to
principal  in  respect of the Class B Notes  until all  principal  and  interest
payable in respect of the Class A Notes has been  deposited in the Series 2000-1
Note  Distribution  Account  for  payment to the Class A Holders on the  related
Payment  Date and any such  deposits to be made in respect of  principal  of the
Class B Notes shall  instead be made in respect of the  payment of interest  and
principal on the Class A Notes.

         SECTION 3.04.     Establishment of the Series 2000-1 Accounts.

         (a) The Servicer,  for the benefit of the Series 2000-1 Holders,  shall
cause to be established  and maintained in the name of the Indenture  Trustee an
Eligible Deposit Account (the "Series 2000-1 Note  Distribution  Account") which
shall be identified as the "Series  2000-1 Note  Distribution  Account for Truck
Retail Instalment Paper Corp." and shall bear a designation  clearly  indicating
that the funds  deposited  therein are held for the benefit of the Series 2000-1
Holders.  After the Closing Date,  deposits to and  withdrawals  from the Series
2000-1 Note Distribution  Account shall be made as provided in the Indenture and
this Series Supplement.

         (b) The Servicer,  for the benefit of the Series 2000-1 Holders,  shall
cause to be established and maintained in the name of the Indenture Trustee,  an
Eligible Deposit Account (the "Series 2000-1 Loss Reserve  Account") which shall
be  identified  as the "Series  2000-1  Loss  Reserve  Account for Truck  Retail
Instalment Paper Corp." and shall bear a designation clearly indicating that the
funds  deposited  therein are held for the benefit of the Series 2000-1 Holders.
On the Series Issuance Date for the Series 2000-1 Notes,  the Issuer shall cause
to be deposited in the Series  2000-1 Loss Reserve  Account an amount of cash or
Eligible  Investments  equal to 7.0% of the Series  Aggregate  Discounted  Asset
Balance for the Series 2000-1 Notes as of Two Business Days prior to the Closing
Date.  If,  on any  Purchase  Date or Sale  Date,  after  giving  effect  to all
transactions on such date, the amount of funds in the Series 2000-1 Loss Reserve
Account  exceeds the Series  2000-1 Loss  Reserve  Specified  Balance,  then the
Servicer may instruct the Indenture Trustee in writing to withdraw the amount of
such excess for payment to or at the direction of the Issuer.  On any date,  the
Issuer may, at its option,  add funds to the Series 2000-1 Loss Reserve Account.
After the Closing Date,  deposits to and withdrawals from the Series 2000-1 Loss
Reserve  Account  shall be made as  provided  in the  Indenture  and this Series
Supplement.

         (c) The Servicer,  for the benefit of the Series 2000-1 Holders,  shall
cause to be established and maintained in the name of the Indenture Trustee,  an
Eligible  Deposit Account (the "Series 2000-1 Interest  Reserve  Account") which
shall be identified as the "Series  2000-1  Interest  Reserve  Account for Truck
Retail Instalment Paper Corp." and shall bear a designation  clearly  indicating
that the funds  deposited  therein are held for the benefit of the Series 2000-1
Holders.  On the Series  Issuance Date for the Series  2000-1 Notes,  the Issuer
shall cause to be deposited in the Series  2000-1  Interest  Reserve  Account an
amount of cash or  Eligible  Investments  equal to the  Series  2000-1  Interest
Reserve  Specified  Balance on such date. If, on any Purchase Date or Sale Date,
after giving effect to all transactions on such date, the amount of funds in the
Series  2000-1  Interest  Reserve  Account  exceeds the Series  2000-1  Interest
Reserve Specified Balance,  then the Servicer may instruct the Indenture Trustee
in  writing to  withdraw  the  amount of such  excess  for  payment to or at the
direction of the Issuer.  On any date, the Issuer may, at its option,  add funds
to the Series 2000-1 Interest Reserve Account.  After the Closing Date, deposits
to and withdrawals from the Series 2000-1 Interest Reserve Account shall be made
as provided in the Indenture and this Series Supplement.

         (d) Schedule 1, which is hereby incorporated into and made part of this
Series Supplement,  identifies each Series 2000-1 Reserve Account and the Series
2000-1 Note  Distribution  Account by setting  forth the account  number of each
such account,  the account  designation of each such account and the name of the
institution  with which  such  account  has been  established.  If a  substitute
account for any of such accounts is established  pursuant to Section 2.02 of the
Servicing  Agreement,  the Servicer  shall provide to the  Indenture  Trustee an
amended  Schedule 1, setting forth the relevant  information for such substitute
account.

         (e) All Eligible  Investments in the Series 2000-1 Reserve Accounts and
the Series  2000-1  Note  Distribution  Account  shall be held by the  Indenture
Trustee  solely for the benefit of the Series  2000-1  Holders.  Pursuant to the
authority  granted to the Servicer in Section 8.2 of the  Indenture  and Section
2.01 and Section 2.02 of the Servicing  Agreement,  the Servicer  shall have the
power,  revocable by the Indenture  Trustee to instruct the Indenture Trustee in
writing to make withdrawals and payments from the Series 2000-1 Reserve Accounts
for the purposes of carrying out the  Servicer's or Indenture  Trustee's  duties
hereunder.

                                   ARTICLE IV

                            DISTRIBUTIONS AND REPORTS

                            TO SERIES 2000-1 HOLDERS

         SECTION 4.01.     Distributions.

         (a) All deposits to the Series 2000-1 Note  Distribution  Account shall
be held in trust for the benefit of the Series 2000-1 Holders  entitled  thereto
(unless the Paying Agent is the Indenture  Trustee) and all  distributions  from
the Series 2000-1 Note Distribution Account shall be to the holders of the class
of the Series  2000-1  Notes in respect of which such  deposit has been made and
for the purpose for which such deposit has been made,  in each case as specified
in this Series  Supplement,  and no amounts so withdrawn  from the Series 2000-1
Note Distribution  Account for payments on the Series 2000-1 Notes shall be paid
over to the Issuer or to any other Noteholders.

         (b) On each Payment  Date,  the Indenture  Trustee shall  distribute to
each Series 2000-1 Holder of record on the preceding  Record Date (other than as
provided in Section  2.7(c) of the  Indenture  respecting a final  distribution)
such Series  2000-1  Holder's pro rata share (based on the  aggregate  principal
balance of the Series  2000-1  Notes held by such Series  2000-1  Holder) of the
amounts on deposit in the Series  2000-1 Note  Distribution  Account  which have
been deposited in respect of the payment of principal,  interest or otherwise in
respect of the Series  2000-1  Notes held by such Series  2000-1  Holder on such
Payment  Date  pursuant to Section  3.03(b) and (c), in each case in  accordance
with this Series Supplement and the Indenture.

         (c) Except as provided in Section  2.7(c) of the Indenture with respect
to a final distribution,  distributions to Series 2000-1 Holders hereunder shall
be made by check  mailed  to each  Series  2000-1  Holder  at such  Noteholder's
address appearing in the Note Register without  presentation or surrender of any
Series  2000-1 Note or the making of any notation  thereon;  provided,  however,
that,  with respect to Series 2000-1 Notes  registered in the name of a Clearing
Agency,  such distributions shall be made to such Clearing Agency in immediately
available funds.

         SECTION 4.02.     Reports and Statements to Series 2000-1 Holders.

         (a) On or prior  to each  Payment  Date,  commencing  with the  Initial
Payment Date,  the Servicer will provide to the Indenture  Trustee,  and on each
Payment Date,  the Indenture  Trustee shall forward to each Series 2000-1 Holder
(provided the Indenture  Trustee has received such report from the Servicer),  a
statement  prepared  by the  Servicer,  substantially  in the form  attached  as
Exhibit C hereto, setting forth the following information relating to the Issuer
and the Series 2000-1 Notes:

         (1)      the  total  amount  to  be paid to Class A Holders and Class B
                  Holders on such Payment Date;

         (2)      the amount,  if any,  of the payment  allocable  to  principal
                  on the Class A Notes and Class B Notes on such Payment Date;

         (3)      the amount, if any, of the payment  allocable  to interest  on
                  the Class A Notes and Class B Notes on such Payment Date;

         (4)      the  expected  outstanding  principal  balance  of the Class A
                  Notes  and the  Class B  Notes,  after  giving  effect  to all
                  payments reported under (2) above on such Payment Date;

         (5)      the Total Collected Amount for the related Monthly Period, the
                  Total Available Amount for such  Payment  Date and the  Series
                  Allocable Amount for the Series 2000-1  Notes for the  related
                  Monthly Period;

         (6)      the Series  2000-1  Loss  Reserve  Specified  Balance for such
                  Payment Date, the amount to be deposited or withdrawn from the
                  Series  2000-1 Loss  Reserve  Account on such Payment Date and
                  the balance of the Series  2000-1 Loss Reserve  Account  after
                  such deposits and withdrawals;

         (7)      the Series 2000-1 Interest Reserve  Specified Balance for such
                  Payment Date, the amount to be deposited or withdrawn from the
                  Series 2000-1  Interest  Reserve  Account on such Payment Date
                  and the balance of the Series 2000-1 Interest  Reserve Account
                  after such deposits and withdrawals;

         (8)      the amount of the Total Servicing Fee payable to the  Servicer
                  with respect to the related Monthly Period; and

         (9)      the Combined  Three-Month Net Loss Percentage and the Combined
                  Twelve-Month  Net Loss  Percentage for the Reference Date, and
                  the NSP Delinquency  Percentage for the related Monthly Period
                  and, if an Aged Pool Period is then in effect,  the Issuer Net
                  Loss Percentage and the Issuer Delinquency  Percentage for the
                  related Monthly Period.

Each amount set forth pursuant to subclauses  (1), (2) and (3) will be expressed
as a dollar amount per $1,000 of the initial  outstanding  principal  balance of
the Series 2000-1 Notes.

         (b) A copy of each statement provided pursuant to paragraph (a) will be
made  available for  inspection  at the Corporate  Trust Office of the Indenture
Trustee.

         (c) On or  before  April  30 of  each  calendar  year,  beginning  with
calendar year 2001, the Indenture Trustee shall furnish or cause to be furnished
to each Person who at any time during the  preceding  calendar year was a Series
2000-1 Holder,  a report  prepared by the Servicer  containing  the  information
which is required to be contained in the statement to Series  2000-1  Holders as
set forth in  paragraph  (a) above,  aggregated  for such  calendar  year or the
applicable  portion  thereof  during  which  such  Person  was a  Series  2000-1
Noteholder.  The Servicer shall prepare and the Indenture  Trustee shall furnish
to each person who was a Series 2000-1 Noteholder during the preceding  calendar
year in the time and manner required by the Code such information as is required
to be provided by an issuer of indebtedness under the Code, including Forms 1099
and such other customary information as is necessary to enable the Series 2000-1
Holders to prepare their tax returns.  Such obligation of the Indenture  Trustee
shall  be  deemed  to have  been  satisfied  to the  extent  that  substantially
comparable  information  shall be provided by the Indenture  Trustee pursuant to
any requirements of the Code as from time to time in effect.

                                    ARTICLE V

                               AMORTIZATION EVENTS

         SECTION 5.01.     Additional Amortization Events.

         (a) Except as provided in Section 5.01(b), the occurrence of any of the
following events shall,  immediately upon the occurrence  thereof without notice
or other  action  on the part of the  Indenture  Trustee  or the  Series  2000-1
Holders,  be deemed to be an  Amortization  Event,  including  for  purposes  of
Section  5.17(c) of the  Indenture,  solely  with  respect to the Series  2000-1
Notes:

         (1)      the Issuer shall fail to pay any interest on any Series 2000-1
                  Note as and when the same  becomes due and  payable,  and such
                  payment  default shall  continue  unremedied for a period of 5
                  days;

         (2)      the  balance  in  the  Series   2000-1  Loss  Reserve  Account
                  equals zero after the application of funds pursuant to Section
                  3.03(b) and (c)  hereof;

         (3)      at the close of business of any Payment  Date,  the balance in
                  the  Series  2000-1  Interest  Reserve  Account  is less  than
                  one-sixth  of the Series  2000-1  Interest  Reserve  Specified
                  Balance after the  application of funds in Section 3.03(b) and
                  (c) hereof;

         (4)      the   Combined   Twelve-Month  Net  Loss  Percentage  for  any
                  Reference Date exceeds 4.25%;

         (5)      the  Three-Month Delinquency Percentage for any Reference Date
                  exceeds 2.5%;

         (6)      the  Series  2000-1  Holders  are  not  paid  all  outstanding
                  principal  and accrued  interest on the Series 2000-1 Notes on
                  or prior to the  Targeted  Final  Payment  Date for the Series
                  2000-1 Notes;

         (7)      the  occurrence  of a Servicer  Default  that  has  a material
                  adverse  effect on the Series 2000-1 Holders;

         (8)      the  occurrence  of a Receivable  Purchase  Termination  Event
                  under the Receivables  Purchase  Agreement that has a material
                  adverse effect on the Series 2000-1 Holders;

         (9)      the Lien on the Collateral  created in favour of the Indenture
                  Trustee on behalf of the holders of Notes shall become legally
                  unenforceable; and

         (10)     the United States government or any agency or  instrumentality
                  thereof  files a notice of a lien on the  assets of either the
                  Seller or the Issuer  under Code  Section  6323 or any similar
                  statutory  provision which is or may in the future be prior to
                  the lien of the Indenture Trustee on behalf of the Noteholders
                  on the Collateral and such lien shall not have been terminated
                  within 30 days.

         (b) If an  Amortization  Event  of the type  described  in  clause  (1)
through  (6) or  clauses  (9) or (10) of  Section  5.01(b)  should  occur,  such
Amortization Event shall be deemed to have occurred on the day such Amortization
Event occurs.  If an Amortization  Event of the type described in clauses (7) or
(8) of Section  5.01(b) should occur and be  continuing,  then and in every such
case,  unless the principal amount of the Series 2000-1 Notes shall have already
become  due and  payable  or an  Amortization  Event  has been  declared  or has
occurred  with respect to a Series  other than the Series  2000-1 or pursuant to
the  Indenture,  either  the  Indenture  Trustee or the  Series  2000-1  Holders
representing  not less than a majority of the outstanding  principal  balance of
the  Controlling  Class  for the  Series  2000-1  Notes  must  declare  that the
Amortization Event has occurred by a notice in writing to the Issuer (and to the
Indenture  Trustee  if given by the Series  2000-1  Holders)  setting  forth the
Amortization Event, and until such declaration, such Amortization Event shall be
deemed not to have occurred.

                                   ARTICLE VI

          OPTIONAL REDEMPTION, TRANSFER RESTRICTIONS AND CERTAIN TERMS

         SECTION 6.01.     Optional Redemption.

         (a) The Series  2000-1 Notes will be subject to optional  redemption in
full pursuant to Section  10.1(b) of the Indenture and Section  6.01(b) upon the
terms and conditions set forth in this Section 6.01.

         (b) On any date selected by the Issuer (the "Redemption Date") which is
a Payment Date  occurring  on or after  August 15, 2005,  the Issuer may, at its
option, without premium or penalty,  redeem the Series 2000-1 Notes in whole but
not in part at a purchase price equal to the  Redemption  Price for such Payment
Date; provided an amount at least equal to the aggregate  Redemption Price shall
be on  deposit  in the  Excess  Funding  Account on or prior the date upon which
notice of such  redemption is given to the Indenture  Trustee as provided in the
following  sentence.  If the  Redemption  Date  occurs on a date  other than the
Targeted  Final Payment Date for the Series 2000-1 Notes,  then the Issuer shall
give the Indenture  Trustee not more than 60 nor less than 10 days prior written
notice of the  Redemption  Date.  The  Indenture  Trustee  shall give  notice of
redemption by first-class  mail,  postage  prepaid,  mailed not more than 60 nor
less than 10 days prior to the  Redemption  Date to each Series 2000-1 Holder as
of the close of business on the Record Date related to such Payment Date at such
Series 2000-1 Holder's  address  appearing in the note register to be maintained
by the  Indenture  Trustee.  The notice of redemption of the Series 2000-1 Notes
shall be given by the  Indenture  Trustee in the name and at the  expense of the
Issuer. The failure to give notice of redemption, or any defect, therein, to any
Series 2000-1 Holder will not impair or affect the validity of the redemption of
any other Series  2000-1  Note.  The Issuer  shall  furnish the Rating  Agencies
notice of any such  redemption  concurrently  with  notice to the Series  2000-1
Holders.

         (c) The Series  2000-1 Notes  shall,  following  notice of  redemption,
become  due  and  payable  on  the  Redemption  Date  at a  price  equal  to the
outstanding principal amount of the Series 2000-1 Notes, plus accrued and unpaid
interest thereon at the Class A Rate or Class B Rate, as the case may be, to but
excluding the Redemption  Date (the  "Redemption  Price") and (unless the Issuer
defaults in the payment of the Redemption  Price) no interest will accrue on the
Redemption  Price for any period  after the date to which  accrued  interest  is
calculated for purpose of calculating the Redemption Price.

         (d) On the Business Day immediately  preceding the Redemption Date, the
Issuer shall instruct the Indenture  Trustee in writing to withdraw on that date
an amount equal to the EFA  Allocable  Amount with respect to the Series  2000-1
Notes for the Payment Date on which such  Redemption Date occurs from the Excess
Funding  Account,  to the extent of funds  available  therefor,  and deposit the
lesser of such amount or the principal  portion of the  Redemption  Price in the
Series  2000-1  Note  Distribution  Account  in  respect  of the  payment of the
Redemption Price.

         (e) On the Business Day immediately  preceding the Redemption Date, the
Issuer shall instruct the Indenture  Trustee in writing to deposit in the Series
2000-1 Note Distribution  Account,  to the extent required such that the amounts
on deposit  therein,  after the deposit  pursuant to Section 3.03(d) shall equal
the  Redemption  Price,  all amounts on deposits  in the Series  2000-1  Reserve
Accounts and the amounts  permitted to be withdrawn from the Collection  Account
on such Business Day pursuant to Section 3.03(c) hereof.

         SECTION 6.02.     Transfer Restrictions.

         (a) During the period  commencing  on the Series  Issuance Date for the
Series  2000-1 Notes and ending on the 40th day  thereafter  (the  "Distribution
Compliance  Period"), a beneficial interest in any Temporary Regulation S Global
Note may not be transferred to a U.S. Person,  unless the beneficial interest in
the Temporary Regulation S Global Note is exchanged for a beneficial interest in
the Rule 144A Global Note,  and then only if such exchange  occurs in connection
with a  transfer  pursuant  to  Rule  144A  under  the  Securities  Act  and the
transferor first delivers to the Indenture Trustee a written  certificate to the
effect  that  such  transfer  is  being  made to a Person  that  the  transferor
reasonably  believes is a QIB purchasing for its own account or the account of a
"qualified  institutional  buyer" (as defined in Rule 144A under the  Securities
Act) (a "QIB") in a transaction  meeting the requirements of Rule 144A under the
Securities Act and in accordance with all applicable securities laws of all U.S.
states and other jurisdictions.

         (b) Beneficial  interests in a Rule 144A Global Note may be transferred
to a Person  that  takes  delivery  in the form of an  interest  in a  Temporary
Regulation S Global Note, prior to the expiration of the Distribution Compliance
Period, only if the transferor first delivers to the Indenture Trustee a written
certificate  to the effect that such transfer is being made in  accordance  with
Rule 903 or 904 of Regulation S under the Securities Act.

         (c)  Any  beneficial  interest  in one  of the  Global  Notes  that  is
transferred  to a Person  that  takes  delivery  in the form of an  interest  in
another Global Note will,  upon  transfer,  cease to be an interest in the first
such  Global  Note and will  become an  interest  in the other  Global Note and,
accordingly,  will thereafter be subject to all transfer  restrictions and other
procedures  applicable to such beneficial interest in such other Global Note for
so long as it remains such an interest.

         (d) In  addition to the  foregoing  restrictions,  the  transfer of the
Series 2000-1 Notes, or beneficial  interests  therein,  shall be subject to the
restrictions set forth in the respective Global Notes attached hereto.

         SECTION 6.03.     Certain Terms Used in Basic  Documents. The following
terms used in the Basic Documents shall have the indicated meanings with respect
to the Series 2000-1 Notes:

         (a)      The Series Issuance Date for the Series 2000-1 Notes  shall be
October 16, 2000.

         (b)      The Stated Final Maturity Date for  the  Series  2000-1  Notes
shall be May 15, 2013.

         (c)      The Targeted Final Maturity Date for the Series  2000-1  Notes
shall be October 17, 2005.

         (d)      The   Cutoff  Date  for  the  Series  2000-1  Notes  shall  be
August 31, 2000.

         (e)      The Principal Payment  Commencement Date for the Series 2000-1
Notes shall be the Series 2000-1 Principal Payment Commencement Date.

         (f)      The  Specified  Balance  for  the  Series  2000-1 Loss Reserve
Account  shall be the Series  2000-1 Loss Reserve Specified Balance.

         (g)      The Specified  Balance for the Series 2000-1 Interest  Reserve
Account shall be the Series 2000-1 Interest Reserve Specified Balance.

         (h) The Series  Shortfall  for the  Series  2000-1  Notes  shall be the
amount described as such in the last paragraph of Section 3.03 hereof.

         (i) The  Principal  Distributable  Amount for the Series  2000-1  Notes
shall be the outstanding principal balance of the Series 2000-1 Notes.

         (j) Excess  Collections  for the  Series  2000-1  Notes  shall have the
meaning given to such term in clause (7) of Section 3.03(c) hereof.

         (k)      The Note  Distribution  Account  for the Series  2000-1  Notes
shall be the Series  2000-1  Note Distribution Account.

         (l)      The Rating Agencies rating the Series 2000-1  Notes  shall  be
S&P and Moody's.


                                   ARTICLE VII

                            MISCELLANEOUS PROVISIONS

         SECTION 7.01. Ratification of Agreement. As supplemented by this Series
Supplement,  the  Indenture is in all respects  ratified and  confirmed  and the
Indenture as so supplemented by this Series  Supplement shall be read, taken and
construed as one and the same instrument.

         SECTION 7.02. Counterparts.  This Series  Supplement may be executed in
two or more  counterparts  (and by different  parties on separate  counterparts)
each of which shall be an original,  but all of which together shall  constitute
one and the same instrument.

         SECTION 7.03.  GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS,  WITHOUT  REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, EXCEPT THAT THE OBLIGATIONS,  RIGHTS AND REMEDIES OF
THE INDENTURE  TRUSTEE  HEREUNDER  SHALL BE  DETERMINED  IN ACCORDANCE  WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS.


<PAGE>




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

                             TRUCK RETAIL INSTALMENT PAPER CORP.


                             By:      Navistar Financial Corporation

                             By:________________________________________
                                      Name:
                                      Title:


                             THE BANK OF NEW YORK,
                             as Indenture Trustee

                             By:________________________________________
                                      Name:    Erwin Soriano
                                      Title:   Assistant Treasurer


Acknowledged and Accepted:

NAVISTAR FINANCIAL CORPORATION,
Servicer

By:_____________________________
Name:
Title:


<PAGE>




                                      A1-7

                                                                     EXHIBIT A-1
REGISTERED
No. R-1


                                       [Form of Class A Rule 144A Global Note]


THIS NOTE (OR ITS  PREDECESSOR)  WAS ORIGINALLY  ISSUED IN A TRANSACTION  EXEMPT
FROM  REGISTRATION  UNDER THE UNITED STATES  SECURITIES  ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH  REGISTRATION  OR AN APPLICABLE  EXEMPTION  THEREFROM.  EACH
PURCHASER  OF THIS NOTE (OR AN  INTEREST  HEREIN)  IS HEREBY  NOTIFIED  THAT THE
SELLER OF THIS NOTE (OR SUCH  INTEREST) MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES  ACT PROVIDED BY RULE 144A  THEREUNDER
("RULE 144A").

THE HOLDER OF THIS NOTE  AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE
MAY BE OFFERED,  RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY INSIDE THE UNITED
STATES  TO  A  PERSON  WHOM  THE  SELLER  REASONABLY  BELIEVES  IS  A  QUALIFIED
INSTITUTIONAL  BUYER (AS  DEFINED  IN RULE 144A UNDER THE  SECURITIES  ACT) IN A
TRANSACTION  MEETING  THE  REQUIREMENTS  OF RULE 144A,  (II)  OUTSIDE THE UNITED
STATES  IN AN OFF  SHORE  TRANSACTION  IN  ACCORDANCE  WITH  RULE 904  UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EFFECTIVE  REGISTRATION STATEMENT UNDER THE
SECURITIES  ACT, AND, IN EACH OF CASES (I) THROUGH (III), IN ACCORDANCE WITH ANY
APPLICABLE  SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND (B) THE HOLDER
WILL,  AND EACH  SUBSEQUENT  HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

                       SEE REVERSE FOR CERTAIN DEFINITIONS

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

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

TRUCK RETAIL INSTALMENT PAPER CORP.
(A Delaware Corporation)

SERIES 2000-1 FLOATING RATE ASSET BACKED NOTES, CLASS A

RULE 144A GLOBAL NOTE

Evidencing an indebtedness of the Issuer, the assets of which consists of retail
note receivables and an interest in retail lease  receivables  (collectively the
"Receivables") generated from time to time in the ordinary course of business by
Navistar Financial Corporation,  a Delaware corporation ("Navistar  Financial"),
and its  affiliates.  This Note (the "Note") does not represent any interest in,
or recourse  obligation of, Navistar  Financial or any of its affiliates  (other
than the Issuer).

         Truck Retail  Instalment  Paper Corp., a Delaware  corporation  (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or registered assigns (the "Noteholder"),  the principal sum set forth on
Schedule 1 to this Note (as  maintained as described on the reverse side of this
Note), at the times specified and in the amounts  specified in the Indenture (as
defined on the  reverse  side of this Note) and the  Series  2000-1  Supplement;
provided that the entire outstanding  principal amount of this Note shall be due
and payable on May 15, 2013 (the "Stated Final Payment Date").  The Issuer shall
pay  interest  on this Note on the dates,  in the  amounts and in the manner set
forth in the Indenture and the Series 2000-1 Supplement.

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


<PAGE>




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

         IN  WITNESS  WHEREOF,  the  Issuer  has  caused  this  Note  to be duly
executed.

Dated: October 16, 2000                      TRUCK RETAIL INSTALMENT PAPER CORP.


                           By: ________________________________________
                                 Name:
                                 Title:


                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Dated: October 16, 2000                             THE BANK OF NEW YORK,
                                  not in its individual capacity but solely as
                                  Indenture Trustee

                                  By: ______________________
                                      Name:

                                     Title:


<PAGE>




                                 REVERSE OF NOTE

                  This  Note is one of a duly  authorized  issue of Notes of the
Issuer,  designated as its Series 2000-1 Floating Rate Asset Backed Notes, Class
A (herein called the "Class A Notes"),  all issued under an Indenture,  dated as
of October  16, 2000 (the  "Indenture"),  between the Issuer and The Bank of New
York,  a New York banking  corporation,  as  indenture  trustee (the  "Indenture
Trustee",  which term  includes any successor  trustee  under the  Indenture) as
supplemented  by the Series  2000-1  Supplement,  dated as of October 16,  2000,
between the Issuer and the Indenture  Trustee (the "Series 2000-1  Supplement"),
to which Indenture and Series 2000-1  Supplement  reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture  Trustee  and the  Noteholders.  The Class A Notes are one of the duly
authorized  series of Notes of the Issuer  issued and to be issued  from time to
time  pursuant  to the  Indenture  (collectively,  as to all  Notes  of all such
series, the "Notes").  The Notes are governed by and subject to all terms of the
Indenture (which terms are incorporated herein and made a part hereof), to which
Indenture  the Holder of this Note (and each  related  Note  Owner) by virtue of
acceptance  hereof (or of any interest  herein) assents and by which such Person
is bound. All capitalized terms used and not otherwise defined in this Note that
are  defined in the  Indenture  shall have the  meanings  assigned to them in or
pursuant to the Indenture.

                  Principal Amount. Upon initial issuance, this Rule 144A Global
Note shall have an initial  principal  balance equal to the principal balance of
the Class A Notes which were sold to the initial purchasers and initially resold
in reliance on the exemption from registration under the Securities Act provided
by Rule 144A. Such initial principal balance shall be indicated on Schedule 1 to
this Rule 144A Global  Note.  Concurrently  with the  issuance of this Rule 144A
Global  Note,  the  Issuer  will  issue  another  Global  Note  (the  "Temporary
Regulation S Global Note"),  the initial  principal balance of which shall equal
the principal amount of the Class A Notes which were sold to non-U.S. Persons in
reliance on the exemption from registration under the Securities Act provided by
Regulation S. Under certain  circumstances,  all or part of the interests in the
Temporary Regulation S Global Note may be exchanged for interests in a permanent
Global Note (the  "Permanent  Regulation S Global Note" and,  together  with the
Temporary Regulation S Global Note, the "Regulation S Global Notes").

                  Upon a transfer in  compliance  with the  requirements  of the
Indenture  by any Note Owner  holding a  beneficial  interest  in this Rule 144A
Global Note of all or a portion of such beneficial interest to a non-U.S. Person
who will hold such beneficial  interest through either Regulation S Global Note,
the principal amount represented by such transferred  beneficial  interest shall
cease to be an  interest  in this Rule  144A  Global  Note and  shall  become an
interest in the applicable Regulation S Global Note. Similarly,  upon a transfer
in compliance with the requirements of the Series 2000-1  Supplement by any Note
Owner  holding a  beneficial  interest in a Regulation S Global Note of all or a
portion of such  beneficial  interest to a Person who will hold such  beneficial
interest through this Rule 144A Global Note, the principal amount represented by
such  transferred  beneficial  interest  shall  cease to be an  interest in such
Regulation  S Global Note and shall  become an interest in this Rule 144A Global
Note. In either such case, the Issuer shall procure that the principal amount of
this Rule 144A Global Note and of the  Regulation  S Global Note is increased or
decreased  appropriately  and that the remaining  principal balance of this Rule
144A Global Note is noted on Schedule 1 hereto,  whereupon the principal  amount
of this Rule 144A Global Note shall be as most recently so noted.

                  Equally and Ratably  Secured.  The Class A Notes and all other
series of Notes issued pursuant to the Indenture,  except as otherwise  provided
thereunder,  are and shall be equally and ratably  secured by the  Collateral as
provided in the Indenture.  The sole source of funds for payments on the Class A
Notes and any  other  series or class of Notes  will be the  Collateral  and the
Holders of such Notes will not otherwise  have recourse to the Issuer,  Navistar
Financial Corporation, their affiliates or any other person.

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

                  No Petition Covenant. Each Holder or Note Owner, by acceptance
of a Note or, in the case of a Note  Owner,  a  beneficial  interest  in a Note,
covenants and agrees that by accepting the benefits of the Indenture such Holder
will not, prior to the date which is one year and one day after the  termination
of such Indenture with respect to the Issuer,  acquiesce,  petition or otherwise
invoke or cause the  Issuer to invoke  the  process  of any court or  government
authority  for the purpose of commencing or sustaining a case against the Issuer
under any federal or state bankruptcy, insolvency or similar law or appointing a
receiver,  liquidator,  assignee,  trustee,  custodian,  sequestrator  or  other
similar  official  of the Issuer or any  substantial  part of its  property,  or
ordering the winding up or liquidation of the affairs of the Issuer.

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

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

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

                  Miscellaneous.

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

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

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

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

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

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


<PAGE>



                                   ASSIGNMENT

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




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


                         (name and address of assignee)
the within Note and all rights thereunder,  and hereby  irrevocably  constitutes
and  appoints  , as  attorney,  to  transfer  said  Note on the  books  kept for
registration thereof, with full power of substitution in the premises
Dated:
                                                           Signature Guaranteed:


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



<PAGE>



                                   Schedule 1

         Payments and Transfers of Interests to Regulation S Global Note

<TABLE>
<CAPTION>
<S>                    <C>                       <C>                     <C>                    <C>

Date of payment,       Principal amount of       Principal amount of     Remaining principal    Authorised
delivery or            Rule 144A Global Note     Reg. S Global Note      amount of Rule 144A    Signatory
cancellation           transferred to Reg. S     transferred to Rule     Global Note
                       Global Note               144A Global Note

</TABLE>

<PAGE>




                                      A2-3

                                                                     EXHIBIT A-2
REGISTERED
No. R-1


              [Form of Class A Temporary Regulation S Global Note]


THIS NOTE (OR ITS  PREDECESSOR)  WAS ORIGINALLY  ISSUED IN A TRANSACTION  EXEMPT
FROM  REGISTRATION  UNDER THE UNITED STATES  SECURITIES  ACT OF 1933, AS AMENDED
(THE " SECURITIES ACT"), AND MAY NOT BE OFFERED,  SOLD OR OTHERWISE  TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION  THEREFROM.  EACH
PURCHASER  OF THIS NOTE IS HEREBY  NOTIFIED  THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE U.S. SECURITIES
ACT PROVIDED BY REGULATION S THEREUNDER ("REGULATION S").

THE HOLDER OF THIS NOTE  AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE
MAY BE OFFERED,  RESOLD,  PLEDGED OR OTHERWISE  TRANSFERRED  ONLY (I) INSIDE THE
UNITED  STATES TO A PERSON  WHOM THE SELLER  REASONABLY  BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT) IN A
TRANSACTION  MEETING  THE  REQUIREMENTS  OF RULE 144A,  (II)  OUTSIDE THE UNITED
STATES IN AN OFF-SHORE  TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S,
OR  (III)  PURSUANT  TO AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE  U.S.
SECURITIES  ACT, AND, IN EACH OF CASES (I) THROUGH (III), IN ACCORDANCE WITH ANY
APPLICABLE  SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND (B) THE HOLDER
WILL,  AND EACH  SUBSEQUENT  HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN CLAUSE (A) ABOVE.

                       SEE REVERSE FOR CERTAIN DEFINITIONS

         Unless this Note is presented by an  authorized  representative  of The
         Depository Trust Company, a New York corporation ("DTC"), to the Issuer
         or its agent for registration of transfer, exchange or payment, and any
         Note  issued is  registered  in the name of Cede & Co. or in such other
         name as is requested by an  authorized  representative  of DTC (and any
         payment is made to Cede & Co. or to such other  entity as is  requested
         by an authorized  representative of DTC, ANY TRANSFER,  PLEDGE OR OTHER
         USE  HEREOF  FOR VALUE OR  OTHERWISE  BY OR TO ANY  PERSON IS  WRONGFUL
         inasmuch as the  registered  owner hereof,  Cede & Co., has an interest
         herein.  THE  PRINCIPAL  OF THIS NOTE IS PAYABLE  AS SET FORTH  HEREIN.
         ACCORDINGLY,  THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
         MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

TRUCK RETAIL INSTALMENT PAPER CORP.
(A Delaware Corporation)

SERIES 2000-1 FLOATING RATE ASSET BACKED NOTES, CLASS A

                  Evidencing an indebtedness of the Issuer,  the assets of which
consists of retail note receivables and an interest in retail lease  receivables
(collectively  the  "Receivables")  generated  from time to time in the ordinary
course of business by Navistar  Financial  Corporation,  a Delaware  corporation
("Navistar  Financial"),  and its  affiliates.  This Note (the  "Note") does not
represent any interest in, or recourse  obligation of, Navistar Financial or any
of its affiliates (other than the Issuer).

                  Truck Retail  Instalment  Paper Corp., a Delaware  corporation
(herein referred to as the "Issuer"), for value received, hereby promises to pay
to Cede & Co., or registered assigns (the  "Noteholder"),  the principal sum set
forth on Schedule 1 to this Note (as maintained as described on the reverse side
of this  Note),  at the times  specified  and in the  amounts  specified  in the
Indenture  (as defined on the reverse  side of this Note) and the Series  2000-1
Supplement;  provided that the entire outstanding  principal amount of this Note
shall be due and payable on May 15, 2013 (the "Stated Final Payment Date").  The
Issuer shall pay  interest on this Note on the dates,  in the amounts and in the
manner set forth in the Indenture and the Series 2000-1 Supplement.

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

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

         IN  WITNESS  WHEREOF,  the  Issuer  has  caused  this  Note  to be duly
executed.

Dated: October 16, 2000                      TRUCK RETAIL INSTALMENT PAPER CORP.


                                                     By: ______________________
                                      Name:

                                     Title:

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Dated: October 16, 2000                               THE BANK OF NEW YORK,
                                    not in its individual capacity but solely as
                                    Indenture Trustee

                                    By: ______________________
                                    Name:

                                     Title:


<PAGE>





                                 REVERSE OF NOTE

                  This  Note is one of a duly  authorized  issue of Notes of the
Issuer,  designated as its Series 2000-1 Floating Rate Asset Backed Notes, Class
A (herein called the "Class A Notes"),  all issued under an Indenture,  dated as
of October  16, 2000 (the  "Indenture"),  between the Issuer and The Bank of New
York,  a New York banking  corporation,  as  indenture  trustee (the  "Indenture
Trustee",  which term  includes any successor  trustee  under the  Indenture) as
supplemented  by the Series  2000-1  Supplement,  dated as of October 16,  2000,
between the Issuer and the Indenture Trustee (the "Series 2000-1 Supplement") to
which  Indenture  and Series  2000-1  Supplement  reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture  Trustee  and the  Noteholders.  The Class A Notes are one of the duly
authorized  series of Notes of the Issuer  issued and to be issued  from time to
time  pursuant  to the  Indenture  (collectively,  as to all  Notes  of all such
series, the "Notes").  The Notes are governed by and subject to all terms of the
Indenture (which terms are incorporated herein and made a part hereof), to which
Indenture  the Holder of this Note (and each  related  Note  Owner) by virtue of
acceptance  hereof (or of any interest  herein) assents and by which such Person
is bound. All capitalized terms used and not otherwise defined in this Note that
are  defined in the  Indenture  shall have the  meanings  assigned to them in or
pursuant to the Indenture.

                  Exchange for  Permanent  Regulation S Global Note. On or after
40 days after the date of issue of this Temporary  Regulation S Global Note (the
"Exchange  Date"),  the Issuer shall procure the delivery of a permanent  global
note (the "Permanent Regulation S Global Note"), in full or partial exchange for
this Temporary Regulation S Global Note against:

         (a) presentation  and surrender of this  Temporary  Regulation S Global
Note at the specified  office of the Indenture Trustee; and

         (b) receipt by the Indenture  Trustee of a certificate or  certificates
issued by each  Clearing  Agency dated not earlier than the Exchange Date and in
substantially  the form set out in Exhibit A-3 to this  Temporary  Regulation  S
Global Note.

The  principal  amount of the  Permanent  Regulation  S Global Note on such date
shall  be equal to the  aggregate  of the  principal  amounts  specified  in the
certificates  issued by the  Clearing  Agencies  and  received by the  Indenture
Trustee.

                  Any person who would, but for the provisions of this Temporary
Regulation S Global Note, the Permanent Global Note and the Indenture, otherwise
be  entitled  to receive a  definitive  Note or  definitive  Notes  shall not be
entitled  to require  the  exchange  of an  appropriate  part of this  Temporary
Regulation  S Global Note for a like part of the  Permanent  Regulation S Global
Note  unless  and until he shall have  delivered  or caused to be  delivered  to
Euroclear  or  Cedelbank  a  certificate   substantially  in  the  form  of  the
certificate attached as Exhibit A-4 (copies of which form of certificate will be
available at the offices of Euroclear  in Brussels and  Cedelbank in  Luxembourg
and the specified office of each of the Paying Agents).

                  Principal  Amount.  Upon  initial  issuance,   this  Temporary
Regulation S Global Note shall have an initial  principal  balance  equal to the
principal balance of the Class A Notes which were sold to the Initial Purchasers
and initially  resold in reliance on the exemption from  registration  under the
Securities Act provided by Regulation S. Such initial principal balance shall be
indicated on Schedule 1 to this Temporary Regulation S Global Note. Concurrently
with the issuance of this  Temporary  Regulation S Global Note,  the Issuer will
issue another Global Note (the "Rule 144A Global Note"),  the initial  principal
balance of which  shall  equal the  principal  amount of the Class A Notes which
were sold to the  Initial  Purchasers  and  initially  resold in reliance on the
exemption from registration under the Securities Act provided by Rule 144A.

                  Upon a transfer in  compliance  with the  requirements  of the
Indenture  by any Note Owner  holding a  beneficial  interest in this  Temporary
Regulation  S Global Note of all or a portion of such  beneficial  interest to a
Person who will hold such beneficial interest through the Rule 144A Global Note,
the principal amount represented by such transferred  beneficial  interest shall
cease to be an interest  in this  Temporary  Regulation  S Global Note and shall
become an interest in the Rule 144A Global Note.  Similarly,  upon a transfer in
compliance  with the  requirements  of the Series 2000-1  Supplement by any Note
Owner  holding a  beneficial  interest  in the Rule 144A Global Note of all or a
portion of such  beneficial  interest  to a  non-U.S.  Person who will hold such
beneficial  interest  through  this  Temporary  Regulation  S Global  Note,  the
principal amount represented by such transferred beneficial interest shall cease
to be an interest  in the Rule 144A Global Note and shall  become an interest in
this  Temporary  Regulation S Global Note. In either such case, the Issuer shall
procure that the principal amount of this Temporary Regulation S Global Note and
of the Rule 144A Global Note is increased or  decreased  appropriately  and that
the remaining  principal  balance of this Temporary  Regulation S Global Note is
noted on Schedule 1 hereto,  whereupon  the principal  amount of this  Temporary
Regulation S Global Note shall be as most recently so noted.

                  Equally and Ratably  Secured.  The Class A Notes and all other
Notes issued pursuant to the Indenture, except as otherwise provided thereunder,
are and shall be  equally  and  ratably  secured  by the  Collateral  pledged as
security  therefor as provided  in the  Indenture.  The sole source of funds for
payments on the Class A Notes and any other series or class of Notes will be the
Collateral and the Holders of such Notes will not otherwise have recourse to the
Issuer, Navistar Financial Corporation, their affiliates or any other person.

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

                  No Petition Covenant. Each Holder or Note Owner, by acceptance
of a Note or, in the case of a Note  Owner,  a  beneficial  interest  in a Note,
covenants and agrees that by accepting the benefits of the Indenture such Holder
will not, prior to the date which is one year and one day after the  termination
of such Indenture with respect to the Issuer,  acquiesce,  petition or otherwise
invoke or cause the  Issuer to invoke  the  process  of any court or  government
authority  for the purpose of commencing or sustaining a case against the Issuer
under any federal or state bankruptcy, insolvency or similar law or appointing a
receiver,  liquidator,  assignee,  trustee,  custodian,  sequestrator  or  other
similar  official  of the Issuer or any  substantial  part of its  property,  or
ordering the winding up or liquidation of the affairs of the Issuer.

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

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

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

                  Miscellaneous.

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

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

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

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

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

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


<PAGE>




                                   ASSIGNMENT

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




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


                         (name and address of assignee)
the within Note and all rights thereunder,  and hereby  irrevocably  constitutes
and  appoints  , as  attorney,  to  transfer  said  Note on the  books  kept for
registration thereof, with full power of substitution in the premises
Dated:
                                                           Signature Guaranteed:

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




<PAGE>




                                      A3-2

                                                                     EXHIBIT A-3

                   [Form of Euroclear/Cedelbank Certification]

                       Truck Retail Instalment Paper Corp.

             Series 2000-1 Floating Rate Asset Backed Notes, Class A

                  This is to certify  that,  based solely on  certifications  we
have  received in writing,  by tested telex or by electronic  transmission  from
member  organizations  appearing in our records as persons  being  entitled to a
portion of the  principal  amount set forth below (our  "Member  Organizations")
substantially to the effect set forth in the Temporary  Regulation S Global Note
issued in respect of the Notes,  as of the date  hereof,  $__________  principal
amount  of  the   above-captioned   Notes  (which  are  Notes  of  the  category
contemplated  in Section  230.903(b)(3)  of Regulation S under the United States
Securities Act of 1933, as amended (the "Securities Act")),  certifications that
the  Notes  are  beneficially  owned  by  non-U.S.  person(s).  As  used in this
paragraph  the term "U.S.  person" has the meaning given to it in Rule 902(k) of
Regulation S under the Securities Act. As used herein, "United States" means the
United  States of America  (including  the States and the District of Columbia);
and its  "possessions"  include  Puerto Rico,  the U.S.  Virgin  Islands,  Guam,
American Samoa, Wake Island and the Northern Mariana Islands.

                  We  further  certify  (i)  that  we are not  making  available
herewith for exchange (or, if relevant,  exercise of any rights or collection of
any interest) any portion of the Temporary  Regulation S Global Note excepted in
such certifications and (ii) that as of the date hereof we have not received any
notification  from  any of our  Member  Organisations  to the  effect  that  the
statements made by such Member  Organisations with respect to any portion of the
part submitted herewith for exchange (or, if relevant, exercise of any rights or
collection  of any  interest) are no longer true and cannot be relied upon as of
the date hereof.


<PAGE>



                  We  understand   that  this   certification   is  required  in
connection  with certain  securities  laws of the United  States.  In connection
therewith, if administrative or legal proceedings are commenced or threatened in
connection with which this certification is or would be relevant, we irrevocably
authorise  you to produce this  certification  to any  interested  party in such
proceedings.

Dated:   [                             ]
                                    Morgan Guaranty Trust Company of New York,
                                    Brussels Office,
                                    as operator of the Euroclear System

                                    or

                                    Cedelbank

                                    By: ______________________
                                        Name:
                                        Title:


<PAGE>





                                      A4-2

                                                                     EXHIBIT A-4

                       Truck Retail Instalment Paper Corp.

             Series 2000-1 Floating Rate Asset Backed Notes, Class A

                                  (the "Notes")

                  This is to certify that as of the date  hereof,  and except as
set forth below,  the  above-captioned  Notes held by you for our account (which
Notes are of the category  contemplated in Section 230.903(b)(3) of Regulation S
under the U.S. Securities Act of 1933, as amended (the "Act")), are beneficially
owned by (a) non-U.S. person(s) or (b) U.S. person(s) who purchased the Notes in
transactions  meeting the  requirements  of Section  230.904 of  Regulation S or
which  otherwise  did not  require  registration  under the Act. As used in this
paragraph,  the term "U.S.  person" has the meaning  given to it by Regulation S
under the Act.

                  As used herein,  "United  States"  means the United  States of
America   (including  the  States  and  the  District  of  Columbia);   and  its
"possessions"  include  Puerto Rico, the U.S.  Virgin  Islands,  Guam,  American
Samoa, Wake Island and the Northern Mariana Islands.

                  We  undertake  to advise you  promptly  by tested  telex on or
prior to the date on which you intend to submit your  certification  relating to
the  Notes  held  by you for our  account  in  accordance  with  your  operating
procedures if any applicable statement herein is not correct on such date, an in
the absence of any such  notification it may be assumed that this  certification
applies as of such date.

                  This certification excepts and does not relate to $________ of
such  interest in the above Notes in respect of which we are not able to certify
and as to which we understand  exchange and delivery of definitive Notes (or, if
relevant,  exercise of any rights or collection of any interest)  cannot be made
until we do so certify.

                  We  understand   that  this   certification   is  required  in
connection  with certain  securities  laws of the United  States.  In connection
therewith, if administrative or legal proceedings are commenced or threatened in
connection with which this certification is or would be relevant, we irrevocably
authorise  you to produce this  certification  to any  interested  party in such
proceedings.

Dated:

By: _______________
[Name of person giving certification]
(As, or as agent for, the  beneficial  owner(s)  of  the  Notes  to  which  this
certification relates)


<PAGE>



                                   Schedule 1

          Payments, Exchange for Permanent Regulation S Global Note and

                 Transfers of Interests to Rule 144A Global Note
<TABLE>
<CAPTION>
<S>                <C>                   <C>                  <C>                 <C>               <C>

Date of payment,   Principal amount of   Principal amount     Principal amount    Remaining         Authorised
delivery or        Temp. Reg. S Global   of Rule 144A         of Temp. Reg. S     principal         Signatory
cancellation       Note exchanged for    Global Note          Global Note         amount of this
                   a like part of        transferred to       transferred to      Temp. Reg. S
                   Permanent Reg. S      Temp. Reg. S         Rule 144A Global    Global Note
                   Global Note           Global Note          Note

</TABLE>





<PAGE>




                                      B1-7

                                                                     EXHIBIT B-1
REGISTERED
No. R-1


                     [Form of Class B Rule 144A Global Note]

THIS NOTE (OR ITS  PREDECESSOR)  WAS ORIGINALLY  ISSUED IN A TRANSACTION  EXEMPT
FROM  REGISTRATION  UNDER THE UNITED STATES  SECURITIES  ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH  REGISTRATION  OR AN APPLICABLE  EXEMPTION  THEREFROM.  EACH
PURCHASER  OF THIS NOTE (OR AN  INTEREST  HEREIN)  IS HEREBY  NOTIFIED  THAT THE
SELLER OF THIS NOTE (OR SUCH  INTEREST) MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES  ACT PROVIDED BY RULE 144A  THEREUNDER
("RULE 144A").

THE HOLDER OF THIS NOTE  AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE
MAY BE OFFERED,  RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY INSIDE THE UNITED
STATES  TO  A  PERSON  WHOM  THE  SELLER  REASONABLY  BELIEVES  IS  A  QUALIFIED
INSTITUTIONAL  BUYER (AS  DEFINED  IN RULE 144A UNDER THE  SECURITIES  ACT) IN A
TRANSACTION  MEETING  THE  REQUIREMENTS  OF RULE 144A,  (II)  OUTSIDE THE UNITED
STATES  IN AN OFF  SHORE  TRANSACTION  IN  ACCORDANCE  WITH  RULE 904  UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EFFECTIVE  REGISTRATION STATEMENT UNDER THE
SECURITIES  ACT, AND, IN EACH OF CASES (I) THROUGH (III), IN ACCORDANCE WITH ANY
APPLICABLE  SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND (B) THE HOLDER
WILL,  AND EACH  SUBSEQUENT  HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

                       SEE REVERSE FOR CERTAIN DEFINITIONS

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

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

TRUCK RETAIL INSTALMENT PAPER CORP.
(A Delaware Corporation)

SERIES 2000-1 FLOATING RATE ASSET BACKED NOTES, CLASS A

RULE 144A GLOBAL NOTE

Evidencing an indebtedness of the Issuer, the assets of which consists of retail
note receivables and an interest in retail lease  receivables  (collectively the
"Receivables") generated from time to time in the ordinary course of business by
Navistar Financial Corporation,  a Delaware corporation ("Navistar  Financial"),
and its  affiliates.  This Note (the "Note") does not represent any interest in,
or recourse  obligation of, Navistar  Financial or any of its affiliates  (other
than the Issuer).

         Truck Retail  Instalment  Paper Corp., a Delaware  corporation  (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or registered assigns (the "Noteholder"),  the principal sum set forth on
Schedule 1 to this Note (as  maintained as described on the reverse side of this
Note), at the times specified and in the amounts  specified in the Indenture (as
defined on the  reverse  side of this Note) and the  Series  2000-1  Supplement;
provided that the entire outstanding  principal amount of this Note shall be due
and payable on May 15, 2013 (the "Stated Final Payment Date").  The Issuer shall
pay  interest  on this Note on the dates,  in the  amounts and in the manner set
forth in the Indenture and the Series 2000-1 Supplement.

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


<PAGE>




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

         IN  WITNESS  WHEREOF,  the  Issuer  has  caused  this  Note  to be duly
executed.

Dated: October 16, 2000                     TRUCK RETAIL INSTALMENT PAPER CORP.


                                      By: _____________________________________
                                            Name:
                                            Title:


                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Dated: October 16, 2000                  THE BANK OF NEW YORK,
                                    not in its individual capacity but solely as
                                    Indenture Trustee

                                    By: ______________________
                                    Name:

                                    Title:


<PAGE>




                                 REVERSE OF NOTE

                  This  Note is one of a duly  authorized  issue of Notes of the
Issuer,  designated as its Series 2000-1 Floating Rate Asset Backed Notes, Class
B (herein called the "Class B Notes"),  all issued under an Indenture,  dated as
of October  16, 2000 (the  "Indenture"),  between the Issuer and The Bank of New
York,  a New York banking  corporation,  as  indenture  trustee (the  "Indenture
Trustee",  which term  includes any successor  trustee  under the  Indenture) as
supplemented  by the Series  2000-1  Supplement,  dated as of October 16,  2000,
between the Issuer and the Indenture  Trustee (the "Series 2000-1  Supplement"),
to which Indenture and Series 2000-1  Supplement  reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture  Trustee  and the  Noteholders.  The Class B Notes are one of the duly
authorized  series of Notes of the Issuer  issued and to be issued  from time to
time  pursuant  to the  Indenture  (collectively,  as to all  Notes  of all such
series, the "Notes").  The Notes are governed by and subject to all terms of the
Indenture (which terms are incorporated herein and made a part hereof), to which
Indenture  the Holder of this Note (and each  related  Note  Owner) by virtue of
acceptance  hereof (or of any interest  herein) assents and by which such Person
is bound. All capitalized terms used and not otherwise defined in this Note that
are  defined in the  Indenture  shall have the  meanings  assigned to them in or
pursuant to the Indenture.

                  Principal Amount. Upon initial issuance, this Rule 144A Global
Note shall have an initial  principal  balance equal to the principal balance of
the Class B Notes which were sold to the initial purchasers and initially resold
in reliance on the exemption from registration under the Securities Act provided
by Rule 144A. Such initial principal balance shall be indicated on Schedule 1 to
this Rule 144A Global  Note.  Concurrently  with the  issuance of this Rule 144A
Global  Note,  the  Issuer  will  issue  another  Global  Note  (the  "Temporary
Regulation S Global Note"),  the initial  principal balance of which shall equal
the principal amount of the Class B Notes which were sold to non-U.S. Persons in
reliance on the exemption from registration under the Securities Act provided by
Regulation S. Under certain  circumstances,  all or part of the interests in the
Temporary Regulation S Global Note may be exchanged for interests in a permanent
Global Note (the  "Permanent  Regulation S Global Note" and,  together  with the
Temporary Regulation S Global Note, the "Regulation S Global Notes").

                  Upon a transfer in  compliance  with the  requirements  of the
Indenture  by any Note Owner  holding a  beneficial  interest  in this Rule 144A
Global Note of all or a portion of such beneficial interest to a non-U.S. Person
who will hold such beneficial  interest through either Regulation S Global Note,
the principal amount represented by such transferred  beneficial  interest shall
cease to be an  interest  in this Rule  144A  Global  Note and  shall  become an
interest in the applicable Regulation S Global Note. Similarly,  upon a transfer
in compliance with the requirements of the Series 2000-1  Supplement by any Note
Owner  holding a  beneficial  interest in a Regulation S Global Note of all or a
portion of such  beneficial  interest to a Person who will hold such  beneficial
interest through this Rule 144A Global Note, the principal amount represented by
such  transferred  beneficial  interest  shall  cease to be an  interest in such
Regulation  S Global Note and shall  become an interest in this Rule 144A Global
Note. In either such case, the Issuer shall procure that the principal amount of
this Rule 144A Global Note and of the  Regulation  S Global Note is increased or
decreased  appropriately  and that the remaining  principal balance of this Rule
144A Global Note is noted on Schedule 1 hereto,  whereupon the principal  amount
of this Rule 144A Global Note shall be as most recently so noted.

                  Subordination. The Class B Holder acknowledges and agrees that
its right to receive  payments in respect of this Class B Note are  subordinated
to the  rights of the  Class A Holders  as and to the  extent  described  in the
Indenture and the Series 2000-1 Series Supplement.

                  Equally and Ratably  Secured.  The Class B Notes and all other
series of Notes issued pursuant to the Indenture,  except as otherwise  provided
thereunder,  are and shall be equally and ratably  secured by the  Collateral as
provided in the Indenture.  The sole source of funds for payments on the Class B
Notes and any  other  series or class of Notes  will be the  Collateral  and the
Holders of such Notes will not otherwise  have recourse to the Issuer,  Navistar
Financial Corporation, their affiliates or any other person.

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

                  No Petition Covenant. Each Holder or Note Owner, by acceptance
of a Note or, in the case of a Note  Owner,  a  beneficial  interest  in a Note,
covenants and agrees that by accepting the benefits of the Indenture such Holder
will not, prior to the date which is one year and one day after the  termination
of such Indenture with respect to the Issuer,  acquiesce,  petition or otherwise
invoke or cause the  Issuer to invoke  the  process  of any court or  government
authority  for the purpose of commencing or sustaining a case against the Issuer
under any federal or state bankruptcy, insolvency or similar law or appointing a
receiver,  liquidator,  assignee,  trustee,  custodian,  sequestrator  or  other
similar  official  of the Issuer or any  substantial  part of its  property,  or
ordering the winding up or liquidation of the affairs of the Issuer.

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

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

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

                  Miscellaneous.

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

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

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

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

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

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


<PAGE>



                                   ASSIGNMENT

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




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


                         (name and address of assignee)
the within Note and all rights thereunder,  and hereby  irrevocably  constitutes
and  appoints  , as  attorney,  to  transfer  said  Note on the  books  kept for
registration thereof, with full power of substitution in the premises
Dated:
                                                           Signature Guaranteed:

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




<PAGE>



                                                                      Schedule 1

         Payments and Transfers of Interests to Regulation S Global Note

<TABLE>
<CAPTION>
<S>                    <C>                       <C>                    <C>                     <C>

Date of payment,       Principal amount of       Principal amount of     Remaining principal    Authorised
delivery or            Rule 144A Global Note     Reg. S Global Note      amount of Rule 144A    Signatory
cancellation           transferred to Reg. S     transferred to Rule     Global Note
                       Global Note               144A Global Note
</TABLE>


<PAGE>




                                      B2-7

C:\WINDOWS\TEMP\SERIES SUPPLEMENT - EXECUTION COPY.DOC
                                                                     EXHIBIT B-2
REGISTERED
No. R-1


              [Form of Class B Temporary Regulation S Global Note]


THIS NOTE (OR ITS  PREDECESSOR)  WAS ORIGINALLY  ISSUED IN A TRANSACTION  EXEMPT
FROM  REGISTRATION  UNDER THE UNITED STATES  SECURITIES  ACT OF 1933, AS AMENDED
(THE " SECURITIES ACT"), AND MAY NOT BE OFFERED,  SOLD OR OTHERWISE  TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION  THEREFROM.  EACH
PURCHASER  OF THIS NOTE IS HEREBY  NOTIFIED  THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE U.S. SECURITIES
ACT PROVIDED BY REGULATION S THEREUNDER ("REGULATION S").

THE HOLDER OF THIS NOTE  AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE
MAY BE OFFERED,  RESOLD,  PLEDGED OR OTHERWISE  TRANSFERRED  ONLY (I) INSIDE THE
UNITED  STATES TO A PERSON  WHOM THE SELLER  REASONABLY  BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT) IN A
TRANSACTION  MEETING  THE  REQUIREMENTS  OF RULE 144A,  (II)  OUTSIDE THE UNITED
STATES IN AN OFF-SHORE  TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S,
OR  (III)  PURSUANT  TO AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE  U.S.
SECURITIES  ACT, AND, IN EACH OF CASES (I) THROUGH (III), IN ACCORDANCE WITH ANY
APPLICABLE  SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND (B) THE HOLDER
WILL,  AND EACH  SUBSEQUENT  HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN CLAUSE (A) ABOVE.

                       SEE REVERSE FOR CERTAIN DEFINITIONS

         Unless this Note is presented by an  authorized  representative  of The
         Depository Trust Company, a New York corporation ("DTC"), to the Issuer
         or its agent for registration of transfer, exchange or payment, and any
         Note  issued is  registered  in the name of Cede & Co. or in such other
         name as is requested by an  authorized  representative  of DTC (and any
         payment is made to Cede & Co. or to such other  entity as is  requested
         by an authorized  representative of DTC, ANY TRANSFER,  PLEDGE OR OTHER
         USE  HEREOF  FOR VALUE OR  OTHERWISE  BY OR TO ANY  PERSON IS  WRONGFUL
         inasmuch as the  registered  owner hereof,  Cede & Co., has an interest
         herein.  THE  PRINCIPAL  OF THIS NOTE IS PAYABLE  AS SET FORTH  HEREIN.
         ACCORDINGLY,  THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
         MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

TRUCK RETAIL INSTALMENT PAPER CORP.
(A Delaware Corporation)

SERIES 2000-1 FLOATING RATE ASSET BACKED NOTES, CLASS A

                  Evidencing an indebtedness of the Issuer,  the assets of which
consists of retail note receivables and an interest in retail lease  receivables
(collectively  the  "Receivables")  generated  from time to time in the ordinary
course of business by Navistar  Financial  Corporation,  a Delaware  corporation
("Navistar  Financial"),  and its  affiliates.  This Note (the  "Note") does not
represent any interest in, or recourse  obligation of, Navistar Financial or any
of its affiliates (other than the Issuer).

                  Truck Retail  Instalment  Paper Corp., a Delaware  corporation
(herein referred to as the "Issuer"), for value received, hereby promises to pay
to Cede & Co., or registered assigns (the  "Noteholder"),  the principal sum set
forth on Schedule 1 to this Note (as maintained as described on the reverse side
of this  Note),  at the times  specified  and in the  amounts  specified  in the
Indenture  (as defined on the reverse  side of this Note) and the Series  2000-1
Supplement;  provided that the entire outstanding  principal amount of this Note
shall be due and payable on May 15, 2013 (the "Stated Final Payment Date").  The
Issuer shall pay  interest on this Note on the dates,  in the amounts and in the
manner set forth in the Indenture and the Series 2000-1 Supplement.

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

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

         IN  WITNESS  WHEREOF,  the  Issuer  has  caused  this  Note  to be duly
executed.

Dated: October 16, 2000                      TRUCK RETAIL INSTALMENT PAPER CORP.


                                                     By: ______________________
                                      Name:

                                     Title:

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Dated: October 16, 2000                  THE BANK OF NEW YORK,
                                    not in its individual capacity but solely as
                                    Indenture Trustee

                                    By: ______________________
                                    Name:

                                    Title:


<PAGE>




                                 REVERSE OF NOTE

                  This  Note is one of a duly  authorized  issue of Notes of the
Issuer,  designated as its Series 2000-1 Floating Rate Asset Backed Notes, Class
B (herein called the "Class B Notes"),  all issued under an Indenture,  dated as
of October  16, 2000 (the  "Indenture"),  between the Issuer and The Bank of New
York,  a New York banking  corporation,  as  indenture  trustee (the  "Indenture
Trustee",  which term  includes any successor  trustee  under the  Indenture) as
supplemented  by the Series  2000-1  Supplement,  dated as of October 16,  2000,
between the Issuer and the Indenture Trustee (the "Series 2000-1 Supplement") to
which  Indenture  and Series  2000-1  Supplement  reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture  Trustee  and the  Noteholders.  The Class B Notes are one of the duly
authorized  series of Notes of the Issuer  issued and to be issued  from time to
time  pursuant  to the  Indenture  (collectively,  as to all  Notes  of all such
series, the "Notes").  The Notes are governed by and subject to all terms of the
Indenture (which terms are incorporated herein and made a part hereof), to which
Indenture  the Holder of this Note (and each  related  Note  Owner) by virtue of
acceptance  hereof (or of any interest  herein) assents and by which such Person
is bound. All capitalized terms used and not otherwise defined in this Note that
are  defined in the  Indenture  shall have the  meanings  assigned to them in or
pursuant to the Indenture.

                  Exchange for  Permanent  Regulation S Global Note. On or after
40 days after the date of issue of this Temporary  Regulation S Global Note (the
"Exchange  Date"),  the Issuer shall procure the delivery of a permanent  global
note (the "Permanent Regulation S Global Note"), in full or partial exchange for
this Temporary Regulation S Global Note against:

         (a)      presentation  and  surrender of this  Temporary  Regulation  S
Global Note at the specified  office
of the Indenture Trustee; and

         (b) receipt by the Indenture  Trustee of a certificate or  certificates
issued by each  Clearing  Agency dated not earlier than the Exchange Date and in
substantially  the form set out in Exhibit A-3 to this  Temporary  Regulation  S
Global Note.

The  principal  amount of the  Permanent  Regulation  S Global Note on such date
shall  be equal to the  aggregate  of the  principal  amounts  specified  in the
certificates  issued by the  Clearing  Agencies  and  received by the  Indenture
Trustee.

                  Any person who would, but for the provisions of this Temporary
Regulation S Global Note, the Permanent Global Note and the Indenture, otherwise
be  entitled  to receive a  definitive  Note or  definitive  Notes  shall not be
entitled  to require  the  exchange  of an  appropriate  part of this  Temporary
Regulation  S Global Note for a like part of the  Permanent  Regulation S Global
Note  unless  and until he shall have  delivered  or caused to be  delivered  to
Euroclear  or  Cedelbank  a  certificate   substantially  in  the  form  of  the
certificate attached as Exhibit A-4 (copies of which form of certificate will be
available at the offices of Euroclear  in Brussels and  Cedelbank in  Luxembourg
and the specified office of each of the Paying Agents).

                  Principal  Amount.  Upon  initial  issuance,   this  Temporary
Regulation S Global Note shall have an initial  principal  balance  equal to the
principal balance of the Class B Notes which were sold to the Initial Purchasers
and initially  resold in reliance on the exemption from  registration  under the
Securities Act provided by Regulation S. Such initial principal balance shall be
indicated on Schedule 1 to this Temporary Regulation S Global Note. Concurrently
with the issuance of this  Temporary  Regulation S Global Note,  the Issuer will
issue another Global Note (the "Rule 144A Global Note"),  the initial  principal
balance of which  shall  equal the  principal  amount of the Class B Notes which
were sold to the  Initial  Purchasers  and  initially  resold in reliance on the
exemption from registration under the Securities Act provided by Rule 144A.

                  Upon a transfer in  compliance  with the  requirements  of the
Indenture  by any Note Owner  holding a  beneficial  interest in this  Temporary
Regulation  S Global Note of all or a portion of such  beneficial  interest to a
Person who will hold such beneficial interest through the Rule 144A Global Note,
the principal amount represented by such transferred  beneficial  interest shall
cease to be an interest  in this  Temporary  Regulation  S Global Note and shall
become an interest in the Rule 144A Global Note.  Similarly,  upon a transfer in
compliance  with the  requirements  of the Series 2000-1  Supplement by any Note
Owner  holding a  beneficial  interest  in the Rule 144A Global Note of all or a
portion of such  beneficial  interest  to a  non-U.S.  Person who will hold such
beneficial  interest  through  this  Temporary  Regulation  S Global  Note,  the
principal amount represented by such transferred beneficial interest shall cease
to be an interest  in the Rule 144A Global Note and shall  become an interest in
this  Temporary  Regulation S Global Note. In either such case, the Issuer shall
procure that the principal amount of this Temporary Regulation S Global Note and
of the Rule 144A Global Note is increased or  decreased  appropriately  and that
the remaining  principal  balance of this Temporary  Regulation S Global Note is
noted on Schedule 1 hereto,  whereupon  the principal  amount of this  Temporary
Regulation S Global Note shall be as most recently so noted.

                  Subordination. The Class B Holder acknowledges and agrees that
its right to receive  payments in respect of this Class B Note are  subordinated
to the  rights of the  Class A Holders  as and to the  extent  described  in the
Indenture and the Series 2000-1 Series Supplement.

                  Equally and Ratably  Secured.  The Class B Notes and all other
Notes issued pursuant to the Indenture, except as otherwise provided thereunder,
are and shall be  equally  and  ratably  secured  by the  Collateral  pledged as
security  therefor as provided  in the  Indenture.  The sole source of funds for
payments on the Class B Notes and any other series or class of Notes will be the
Collateral and the Holders of such Notes will not otherwise have recourse to the
Issuer, Navistar Financial Corporation, their affiliates or any other person.

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

                  No Petition Covenant. Each Holder or Note Owner, by acceptance
of a Note or, in the case of a Note  Owner,  a  beneficial  interest  in a Note,
covenants and agrees that by accepting the benefits of the Indenture such Holder
will not, prior to the date which is one year and one day after the  termination
of such Indenture with respect to the Issuer,  acquiesce,  petition or otherwise
invoke or cause the  Issuer to invoke  the  process  of any court or  government
authority  for the purpose of commencing or sustaining a case against the Issuer
under any federal or state bankruptcy, insolvency or similar law or appointing a
receiver,  liquidator,  assignee,  trustee,  custodian,  sequestrator  or  other
similar  official  of the Issuer or any  substantial  part of its  property,  or
ordering the winding up or liquidation of the affairs of the Issuer.

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

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

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

                  Miscellaneous.

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

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

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

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

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

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


<PAGE>



                                   ASSIGNMENT

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




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

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

Dated:
                                                           Signature Guaranteed:

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




<PAGE>



                                                                     EXHIBIT B-3

                   [Form of Euroclear/Cedelbank Certification]

                       Truck Retail Instalment Paper Corp.

             Series 2000-1 Floating Rate Asset Backed Notes, Class B

                  This is to certify  that,  based solely on  certifications  we
have  received in writing,  by tested telex or by electronic  transmission  from
member  organizations  appearing in our records as persons  being  entitled to a
portion of the  principal  amount set forth below (our  "Member  Organizations")
substantially to the effect set forth in the Temporary  Regulation S Global Note
issued in respect of the Notes,  as of the date  hereof,  $__________  principal
amount  of  the   above-captioned   Notes  (which  are  Notes  of  the  category
contemplated  in Section  230.903(b)(3)  of Regulation S under the United States
Securities Act of 1933, as amended (the "Securities Act")),  certifications that
the  Notes  are  beneficially  owned  by  non-U.S.  person(s).  As  used in this
paragraph  the term "U.S.  person" has the meaning given to it in Rule 902(k) of
Regulation S under the Securities Act. As used herein, "United States" means the
United  States of America  (including  the States and the District of Columbia);
and its  "possessions"  include  Puerto Rico,  the U.S.  Virgin  Islands,  Guam,
American Samoa, Wake Island and the Northern Mariana Islands.

                  We  further  certify  (i)  that  we are not  making  available
herewith for exchange (or, if relevant,  exercise of any rights or collection of
any interest) any portion of the Temporary  Regulation S Global Note excepted in
such certifications and (ii) that as of the date hereof we have not received any
notification  from  any of our  Member  Organisations  to the  effect  that  the
statements made by such Member  Organisations with respect to any portion of the
part submitted herewith for exchange (or, if relevant, exercise of any rights or
collection  of any  interest) are no longer true and cannot be relied upon as of
the date hereof.


                  We  understand   that  this   certification   is  required  in
connection  with certain  securities  laws of the United  States.  In connection
therewith, if administrative or legal proceedings are commenced or threatened in
connection with which this certification is or would be relevant, we irrevocably
authorise  you to produce this  certification  to any  interested  party in such
proceedings.

Dated:   [                             ]
                                    Morgan Guaranty Trust Company of New York,
                                    Brussels Office,
                                    as operator of the Euroclear System

                                    or

                                    Cedelbank

                                    By: ______________________
                                        Name:
                                        Title:


<PAGE>




                                      B4-2

C:\WINDOWS\TEMP\SERIES SUPPLEMENT - EXECUTION COPY.DOC

                                                                     EXHIBIT B-4

                       Truck Retail Instalment Paper Corp.

             Series 2000-1 Floating Rate Asset Backed Notes, Class B

                                  (the "Notes")

                  This is to certify that as of the date  hereof,  and except as
set forth below,  the  above-captioned  Notes held by you for our account (which
Notes are of the category  contemplated in Section 230.903(b)(3) of Regulation S
under the U.S. Securities Act of 1933, as amended (the "Act")), are beneficially
owned by (a) non-U.S. person(s) or (b) U.S. person(s) who purchased the Notes in
transactions  meeting the  requirements  of Section  230.904 of  Regulation S or
which  otherwise  did not  require  registration  under the Act. As used in this
paragraph,  the term "U.S.  person" has the meaning  given to it by Regulation S
under the Act.

                  As used herein,  "United  States"  means the United  States of
America   (including  the  States  and  the  District  of  Columbia);   and  its
"possessions"  include  Puerto Rico, the U.S.  Virgin  Islands,  Guam,  American
Samoa, Wake Island and the Northern Mariana Islands.

                  We  undertake  to advise you  promptly  by tested  telex on or
prior to the date on which you intend to submit your  certification  relating to
the  Notes  held  by you for our  account  in  accordance  with  your  operating
procedures if any applicable statement herein is not correct on such date, an in
the absence of any such  notification it may be assumed that this  certification
applies as of such date.

                  This certification excepts and does not relate to $________ of
such  interest in the above Notes in respect of which we are not able to certify
and as to which we understand  exchange and delivery of definitive Notes (or, if
relevant,  exercise of any rights or collection of any interest)  cannot be made
until we do so certify.

                  We  understand   that  this   certification   is  required  in
connection  with certain  securities  laws of the United  States.  In connection
therewith, if administrative or legal proceedings are commenced or threatened in
connection with which this certification is or would be relevant, we irrevocably
authorise  you to produce this  certification  to any  interested  party in such
proceedings.

Dated:

By: _______________
[Name of person giving certification]
(As, or as agent for, the  beneficial  owner(s)  of  the  Notes  to  which  this
certification relates)


<PAGE>



                                                                      Schedule 1

          Payments, Exchange for Permanent Regulation S Global Note and
                 Transfers of Interests to Rule 144A Global Note

<TABLE>
<CAPTION>
<S>                <C>                   <C>                  <C>                 <C>               <C>
Date of payment,   Principal amount of   Principal amount     Principal amount    Remaining         Authorised
delivery or        Temp. Reg. S Global   of Rule 144A         of Temp. Reg. S     principal         Signatory
cancellation       Note exchanged for    Global Note          Global Note         amount of this
                   a like part of        transferred to       transferred to      Temp. Reg. S
                   Permanent Reg. S      Temp. Reg. S         Rule 144A Global    Global Note
                   Global Note           Global Note          Note

</TABLE>







<PAGE>



                                       C-4

C:\WINDOWS\TEMP\SERIES SUPPLEMENT - EXECUTION COPY.DOC
                                                                       Exhibit C

                           Form of TRIP Series 2000-1

                          Monthly Report to Noteholders

For the Monthly Period ending ___________
Payment Date is _______________________
<TABLE>
<CAPTION>
<S>                                                                                     <C>

I.       Payments to Class A Noteholders on the Payment Date

         Class A Note Rate for the Payment Date_________________________________________ _________________%
         Interest payable to Class A Noteholders________________________________________$_________________
                   (Per $1000 Outstanding Class A note principal balance)_______________$_________________

         Principal payable to Class A
                   Noteholders_______________________________________$_________________
                   (Per    $1000    Outstanding    Class   A   note    principal
                   balance)_______________$_________________

         Total Amount payable to Class A
                   Noteholders____________________________________$_________________
                   (Per    $1000    Outstanding    Class   A   note    principal
                   balance)_______________$_________________

         Remaining principal balance of Class A Notes after Distributions_______________$_________________

II.      Payments to Class B Noteholders on the Payment Date

         Class B Note Rate for the Payment Date_________________________________________ _________________%
         Interest payable to Class B Noteholders________________________________________$_________________
                   (Per $1000 Outstanding Class B note principal balance)_______________$_________________

         Principal payable to Class B
                   Noteholders_______________________________________$_________________
                   (Per    $1000    Outstanding    Class   B   note    principal
                   balance)_______________$_________________

         Total Amount payable to Class B
                   Noteholders____________________________________$_________________
                   (Per    $1000    Outstanding    Class   B   note    principal
                   balance)_______________$_________________

         Remaining principal balance of Class B Notes after Distributions_______________$_________________
</TABLE>




<PAGE>


<TABLE>
<CAPTION>
<S>                                                                                      <C>

III.     Collections:

         Collections Received during the Monthly Period_________________________________$_________________

         Monthly Advances made by the Servicer__________________________________________$_________________

         Warranty Purchase Payments_____________________________________________________$_________________

         Administrative Purchase Payments_______________________________________________$_________________

         Investment Earnings:  Collection Acct. Income__________________________$________________
                                    Excess Funding Acct. Inc____________________$________________
                                    Series 2000-1 Loss Reserve Acct. Inc________$________________
                                    Series 2000-1 Int. Reserve Acct. Inc________________$_________________
                                    Series 2000-1 Note Dist. Acct. Inc__________$________________
                                    Hedge Receipts   ___________________________$________________

         Total Collected Amount for the Monthly Period__________________________________$_________________

IV.      Servicing Fee

         Basic Servicing Fee____________________________________________________________$_________________
         Supplemental Servicing Fee_____________________________________________________$_________________

         Total Servicing Fee............................................................$.................

V.       Available Amount

         Total Collected Amount.........................................................$.................
         Less:  Total Servicing Fee Due Servicer........................................$.................
                  Reimbursement of Outstanding Monthly Advances        .........$................
                  Reimbursement of Liquidation Expenses.................................$.................

         Total Available Amount.........................................................$.................

VI.      Series Allocable Amount

         Series 2000-1 Allocation Percentage............................................$.................
         Total Available Amount.........................................................$.................

         Series Allocable Amount - Series 2000-1........................................$.................


VI.      Funds Available for Distribution

         Series 2000-1 Allocable Amount.................................................$.................
         Withdrawal from Interest Reserve Account.......................................$.................
         Withdrawal from Loss Reserve Account...........................................$.................
         Excess Collections from other Series...........................................$.................
         EFA Allocable Amount...........................................................$.................

         Total Funds Available for Distribution.........................................$.................

VII.     Series Aggregate Discounted Asset Balance

         Series 2000-1 Allocation Percentage............................................$.................
         Aggregate Discounted Asset Balance.............................................$.................

         Series 2000-1 Aggregate Discounted Asset Balance...............................$.................

VIII.    Series 2000-1 Loss Reserve Account

         Prior Month's Ending Balance (or Initial Deposit)..............................$.................
         Plus:  Monthly Investment Earnings.............................................$.................
                   Amounts Transferred to/from Loss Reserve Account...................$.................
         Loss Reserve Balance...........................................................$.................

         Series 2000-1 Specified Loss Reserve Balance...................................$.................
         Deposit to/Release from Loss Reserve Account.................................$.................

         Series 2000-1 Loss Reserve Account Ending Balance..............................$.................

IX.      Series 2000-1 Interest Reserve Account

         Prior Month's Ending Balance (or Initial Deposit)..............................$.................
         Plus:  Monthly Investment Earnings.............................................$.................
                   Amounts Transferred to/from Interest Reserve Account...............$.................
         Interest Reserve Balance.......................................................$.................

         Series 2000-1 Specified Interest Reserve Balance...............................$.................
         Deposit to/Release from Interest Reserve Account.............................$.................

         Series 2000-1 Interest Reserve Account Ending Balance..........................$.................



X.       Combined Three Month Loss Percentage

         Combined Net Losses - Prior 3 Months...........................................$.................
         Three Month Liquidations Less 3 Month Net Losses...............................$.................

         Combined Three Month Loss Percentage........................................... .................%

XI.      Combined Twelve Month Loss Percentage

         Combined Net Losses - Prior 12 Months..........................................$.................
         Twelve Month Liquidations Less 12 Month  Net Losses............................$.................

         Combined Twelve Month Loss Percentage.......................................... .................%

XII.     NSP Delinquency Percentage

         Agg. Contract Value - NSP Receivables 61 days or more past due.................$.................
         Aggregate Contract Value of NSP Receivables....................................$.................

         NSP Delinquency Percentage..................................................... .................%

XIII.    (Section Completed During Aged Pool Period Only)

         Issuer Net Loss Percentage..................................................... .................%

         Issuer Delinquency Percentage__________________________________________________ _________________%
</TABLE>



                                 Navistar Financial Corporation, as Servicer

                                 Name: ______________________________

                                 Title:   ______________________________


<PAGE>





C:\WINDOWS\TEMP\SERIES SUPPLEMENT - EXECUTION COPY.DOC
                                                                      SCHEDULE 1

                             SERIES 2000-1 ACCOUNTS

                  Series 2000-1 Note Distribution Account

                           The Bank of New York

                           ABA:
                           Account Number:  266076
                           Attn:  Mr. Erwin Soriano

                  Series 2000-1 Interest Reserve Account

                           The Bank of New York
                           Account Number: 266078
                           Attn: Mr. Erwin Soriano

                  Series 2000-1 Loss Reserve Account

                           The Bank of New York
                           Account Number: 266077
                           Attn:  Mr. Erwin Soriano

                  Excess Funding Account

                           The Bank of New York
                           Account Number: 266079
                           Attn: Mr. Erwin Soriano

                  Collection Account

                           The Bank of New York
                           Account Number: 266080
                           Attn: Mr. Erwin Soriano

<PAGE>

Exhibit 10.05
                               CREDIT AGREEMENT

                                   Dated as of
                                December 8, 2000

                                      among

                         NAVISTAR FINANCIAL CORPORATION,

                 ARRENDADORA FINANCIERA NAVISTAR, S.A. DE C.V.,

                  SERVICIOS FINANCIEROS NAVISTAR, S.A. DE C.V.

                                       and

                        NAVISTAR COMERCIAL, S.A. DE C.V.

                                  as Borrowers

                            The Lenders Party Hereto,

                            THE CHASE MANHATTAN BANK,

                             as Administrative Agent

                             BANK OF AMERICA, N.A.,

                              as Syndication Agent

                                       and

                            THE BANK OF NOVA SCOTIA,

                             as Documentation Agent

         $820,000,000 REVOLVING CREDIT AND COMPETITIVE ADVANCE FACILITY
                             ----------------------
                              CHASE SECURITIES INC.
                                       and
                        BANC OF AMERICA SECURITIES, LLC,
                 as Joint Book Managers and Joint Lead Arrangers



<PAGE>


                                TABLE OF CONTENTS



                                Table of Contents
<TABLE>
<CAPTION>
<S>                                                                                                     <C>
                                                                                                        Page
ARTICLE I Definitions.....................................................................................1

         SECTION 1.01. Defined Terms......................................................................1
         SECTION 1.02.   Classification of Loans and Borrowings..........................................24
         SECTION 1.03.   Terms Generally.................................................................24
         SECTION 1.04.   Accounting Terms; GAAP..........................................................24
         SECTION 1.05. Interpretation....................................................................25

ARTICLE II The US Credit FACILITY........................................................................25

         SECTION 2.01.   Commitments.....................................................................25
         SECTION 2.02.   Loans and Borrowings............................................................25
         SECTION 2.03.   Requests for Revolving Borrowings...............................................26
         SECTION 2.04.   Certain Borrowings of US Revolving Loans and Refunding of Loans.................27
         SECTION 2.05.   Competitive Bid Procedure.......................................................28
         SECTION 2.06.   Swingline Loans.................................................................30
         SECTION 2.07.   Letters of Credit...............................................................31

ARTICLE III THE MEXICAN CREDIT FACILITY..................................................................36

         SECTION 3.01. Commitments.......................................................................36
         SECTION 3.02. Loans and Borrowings..............................................................36
         SECTION 3.03. Requests for Mexican Revolving Borrowings.........................................36

ARTICLE IV terms applicable to us credit facility and mexican credit facility............................37

         SECTION 4.01. Funding of Borrowings.............................................................37
         SECTION 4.02. Interest Elections................................................................38
         SECTION 4.03. Termination and Reduction of Commitments..........................................39
         SECTION 4.04. Repayment of Loans; Evidence of Debt..............................................40
         SECTION 4.05. Prepayment of Loans...............................................................41
         SECTION 4.06. Fees   41
         SECTION 4.07. Interest..........................................................................42
         SECTION 4.08. Alternate Rate of Interest........................................................44
         SECTION 4.09. Increased Costs...................................................................44
         SECTION 4.10. Break Funding Payments............................................................45
         SECTION 4.11. Taxes  46
         SECTION 4.12. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.......................48
         SECTION 4.13. Mitigation Obligations; Replacement of Lenders....................................50

ARTICLE V Representations and Warranties.................................................................51

         SECTION 5.01. Organization; Powers..............................................................51
         SECTION 5.02. Authorization; Enforceability.....................................................51
         SECTION 5.03. Governmental Approvals; No Conflicts..............................................52
         SECTION 5.04. Financial Condition; No Material Adverse Change...................................52
         SECTION 5.05. Litigation........................................................................53
         SECTION 5.06. Compliance with Laws and Agreements...............................................53
         SECTION 5.07. Investment and Holding Company Status.............................................53
         SECTION 5.08. Taxes  53
         SECTION 5.09. ERISA  53
         SECTION 5.10. Subsidiaries......................................................................54
         SECTION 5.11. Foreign Exchange Regulations; Immunity; Enforcement...............................54
         SECTION 5.12. Disclosure........................................................................54

ARTICLE VI Conditions....................................................................................55

         SECTION 6.01. Effective Date....................................................................55
         SECTION 6.02. Each Borrowing Event..............................................................56
         SECTION 6.03. Concurrent Condition for Initial Borrowing........................................57
         SECTION 6.04. Condition Subsequent..............................................................57

ARTICLE VII Affirmative Covenants........................................................................57

         SECTION 7.01. Financial Statements and Other Information........................................57
         SECTION 7.02. Notices of Material Events........................................................59
         SECTION 7.03. Existence; Conduct of Business....................................................59
         SECTION 7.04. Payment of Obligations............................................................60
         SECTION 7.05. Maintenance of Properties; Insurance..............................................60
         SECTION 7.06. Books and Records; Inspection Rights..............................................60
         SECTION 7.07. Compliance with Laws and Material Contractual Obligations.........................60
         SECTION 7.08. Intercompany Agreements...........................................................60
         SECTION 7.09. Federal Regulations...............................................................61
         SECTION 7.10. Use of Proceeds; Repayment of Loans...............................................62
         SECTION 7.11. Grant of Security Interest........................................................62

ARTICLE VIII Negative Covenants..........................................................................62

         SECTION 8.01. Financial Covenants...............................................................62
         SECTION 8.02. Liens  63
         SECTION 8.03. Fundamental Changes...............................................................64
         SECTION 8.04. Investments, Loans, Advances, Guarantees and Acquisitions; Hedging Agreements.....64
         SECTION 8.05. Restricted Payments...............................................................65
         SECTION 8.06. Transactions with Affiliates......................................................66
         SECTION 8.07. Negative Pledge...................................................................66
         SECTION 8.08. Prepayments of Subordinated Debt..................................................67
         SECTION 8.09. Serviced Wholesale Portfolio Quality..............................................67
         SECTION 8.10. Serviced Retail Portfolio Quality.................................................67

ARTICLE IX Events of Default.............................................................................68


ARTICLE X The Administrative Agent.......................................................................71


ARTICLE XI GUARANTEE.....................................................................................73

         SECTION 11.01. Guarantee........................................................................73
         SECTION 11.02. Waiver of Subrogation............................................................73
         SECTION 11.03. Modification of Mexican Obligations..............................................74
         SECTION 11.04. Waiver by the US Borrower........................................................74
         SECTION 11.05. Reinstatement....................................................................75

ARTICLE XII Miscellaneous................................................................................75

         SECTION 12.01. Notices..........................................................................75
         SECTION 12.02. Waivers; Amendments..............................................................76
         SECTION 12.03. Expenses; Indemnity; Damage Waiver...............................................77
         SECTION 12.04. Successors and Assigns...........................................................78
         SECTION 12.05. Survival.........................................................................81
         SECTION 12.06. Counterparts; Integration........................................................82
         SECTION 12.07. Severability.....................................................................82
         SECTION 12.08. Right of Setoff..................................................................82
         SECTION 12.09. GOVERNING LAW....................................................................82
         SECTION 12.10. Submission To Jurisdiction; Waivers..............................................83
         SECTION 12.11. Acknowledgments..................................................................83
         SECTION 12.12. WAIVERS OF JURY TRIAL............................................................84
         SECTION 12.13. Headings.........................................................................84
         SECTION 12.14. Confidentiality..................................................................84
         SECTION 12.15. Interest Rate Limitation.........................................................84
         SECTION 12.16. Waiver of Immunities.............................................................85
         SECTION 12.17. Judgment Currency................................................................85
         SECTION 12.18. Loan Equalization; Loan Conversion...............................................85

</TABLE>

<PAGE>

SCHEDULES:

Schedule 2.01 -- Commitments

Schedule 5.05 -- Disclosed Matters

Schedule 5.10 - Subsidiaries

Schedule 7.11 - Assets Subject to Springing Lien

Schedule 8.02 -- Existing Liens

Schedule 8.04 -- Scheduled Investments

EXHIBITS:

Exhibit A    -- Form of Assignment and Acceptance

Exhibit B-1 -- Form of Opinion of Borrower's New York Counsel

Exhibit B-2 -- Form of Opinion of Borrower's General Counsel

Exhibit B-3 -- Form of Opinion of Borrowers' Mexican Counsel

Exhibit C    -- Form of Parents' Side Agreement

Exhibit D    -- Form of Report of Statistical Information

Exhibit E     -- Form of Borrowing Request

Exhibit F     -- Form of Compliance Certificate

Exhibit G    -- Form of Parent Guarantee


<PAGE>






     CREDIT  AGREEMENT (this  "Agreement"),  dated as of December 8, 2000, among
Navistar  Financial  Corporation,  a Delaware  corporation  (the "US Borrower"),
ARRENDADORA FINANCIERA NAVISTAR, S.A. DE C.V., a Mexican corporation,  SERVICIOS
FINANCIEROS  NAVISTAR,  S.A.  DE  C.V.,  a  Mexican  corporation,  and  NAVISTAR
COMERCIAL,  S.A. DE C.V., a Mexican  corporation (each, a "Mexican Borrower" and
collectively,  the  "Mexican  Borrowers";  together  with the US  Borrower,  the
"Borrowers"),   the  LENDERS  party  hereto,   THE  CHASE   MANHATTAN  BANK,  as
Administrative Agent, BANK OF AMERICA,  N.A., as Syndication Agent, and THE BANK
OF NOVA SCOTIA,  as  Documentation  Agent.  The parties hereto agree as follows:

ARTICLE I ....... Definitions

SECTION 1.01.  ...Defined Terms.  As used in this Agreement, the following terms
have the meanings specified below:

                  "ABR", when used in reference to any Loan or Borrowing, refers
to whether  such Loan,  or the Loans  comprising  such  Borrowing,  are  bearing
interest at a rate determined by reference to the Alternate Base Rate.

                  "Adjusted  LIBO Rate" means,  with  respect to any  Eurodollar
Borrowing for any Interest Period,  an interest rate per annum (rounded upwards,
if  necessary,  to the next  1/16 of 1%)  equal  to (a) the  LIBO  Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.

                  "Administrative  Agent" means The Chase Manhattan Bank, in its
capacity as  administrative  agent for the Lenders  hereunder,  or any successor
agent appointed in accordance with Article X hereof.

                  "Administrative   Questionnaire"   means   an   Administrative
Questionnaire in a form supplied by the Administrative Agent.

                  "Affiliate" means, with respect to a specified Person, another
Person  (other than,  in the case of any Borrower,  such  Borrower's  respective
Subsidiaries) that directly,  or indirectly through one or more  intermediaries,
Controls  or is  Controlled  by or is  under  common  Control  with  the  Person
specified.

                  "Alternate  Base  Rate"  means,  for any day, a rate per annum
equal to the  greatest of (a) the Prime Rate in effect on such day, (b) the Base
CD Rate in effect on such day plus 1% and (c) the Federal Funds  Effective  Rate
in effect on such day plus 1/2 of 1%. Any change in the Alternate  Base Rate due
to a change in the Prime Rate,  the Base CD Rate or the Federal Funds  Effective
Rate shall be effective  from and including the effective date of such change in
the  Prime  Rate,  the  Base  CD  Rate  or the  Federal  Funds  Effective  Rate,
respectively.

                   "Applicable Rate" means, for any day, with respect to any ABR
Loan or Eurodollar  Revolving Loan, or with respect to the facility fees payable
hereunder,  as the case may be, the  applicable  rate per annum set forth  below
under the caption "ABR Spread"  "Eurodollar  Spread" or "Facility Fee Rate",  as
the case  may be,  based  upon the  ratings  by S&P and  Moody's,  respectively,
applicable on such date to the Index Debt of the US Borrower (or the Parent,  in
the circumstance described below):

<TABLE>
<CAPTION>
<S>                                                          <C>         <C>            <C>
                    Index Debt Ratings:                        ABR       Eurodollar     Facility Fee
                                                              Spread       Spread           Rate


Level 1: BBB or higher and Baa2 or higher and A2/P2 or          0%          0.45%          0.125%
           higher for US Borrower's commercial paper
           ratings


Level 2: BBB or higher and Baa2 or higher and Level 1 does      0%          0.60%          0.15%
           not apply


Level 3: BBB- or higher and Baa3 or higher and Levels 1         0%          0.80%          0.20%
           and 2 do not apply


Level 4: BBB- or higher or Baa3 or higher and Levels 1, 2       0%          0.90%          0.225%
           and 3 do not apply


Level 5: BB+ or higher or Ba1 or higher and Levels 1, 2, 3      0%          1.00%          0.25%
           and 4 do not apply


Level 6: Levels 1, 2, 3, 4 and 5 do not apply                 0.125%       1.125%          0.375%
</TABLE>


                  For purposes of the foregoing,  (i) if either (or both) of S&P
or Moody's (or a similar  nationally  recognized  rating agency  satisfactory to
both the US Borrower  and the  Administrative  Agent) shall not have in effect a
rating  for the  Index  Debt of the US  Borrower  (other  than by  reason of the
circumstances referred to in the last sentence of this definition),  then (1) if
either (or both) of S&P or Moody's (or a similar  nationally  recognized  rating
agency satisfactory to both the US Borrower and the Administrative Agent) has in
effect such a rating for the Index Debt of the Parent, then such rating shall be
used as if it were the rating for the Index Debt of the US Borrower to determine
the  Applicable  Rate; and (2) if neither the US Borrower nor the Parent has any
ratings for its  respective  Index Debt,  Level 6 shall be used to determine the
Applicable  Rate;  and (ii) if the  ratings  established  or deemed to have been
established by S&P and Moody's (or a similar nationally recognized rating agency
satisfactory to both the US Borrower and the Administrative Agent) for the Index
Debt of the US Borrower  shall be changed (other than as a result of a change in
the rating system of S&P or Moody's (or a similar  nationally  recognized rating
agency satisfactory to both the US Borrower and the Administrative Agent)), such
change shall be  effective as of the date on which it is first  announced by the
applicable rating agency.  Each change in the Applicable Rate shall apply during
the period  commencing  on the  effective  date of such change and ending on the
date  immediately  preceding the effective date of the next such change.  If the
rating  system of S&P or  Moody's  (or a similar  nationally  recognized  rating
agency satisfactory to both the US Borrower and the Administrative  Agent) shall
change, or if any such rating agency shall cease to be in the business of rating
corporate debt  obligations,  the US Borrower and the Lenders shall negotiate in
good faith to amend this definition to reflect such changed rating system or the
unavailability of ratings from such rating agency and, pending the effectiveness
of any such  amendment,  the Applicable Rate shall be determined by reference to
the rating most recently in effect prior to such change or cessation.

                  "Assessment  Rate" means,  for any day, the annual  assessment
rate in effect  on such day that is  payable  by a member of the Bank  Insurance
Fund classified as "well-capitalized"  and within "supervisory subgroup B" (or a
comparable successor risk  classification)  within the meaning of 12 C.F.R. Part
327 (or any successor  provision) to the Federal Deposit  Insurance  Corporation
for  insurance  by such  Corporation  of time  deposits  made in  dollars at the
offices of such member in the United  States;  provided  that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid,  then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative  Agent to be representative of
the cost of such insurance to the Lenders.

                  "Assignment and Acceptance" means an assignment and acceptance
entered  into by a Lender and an  assignee  (with the consent of any party whose
consent is required by Section 12.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.

                  "Availability  Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.

                  "Available  Mexican  Commitment"  means,  as at  any  date  of
determination  (after giving effect to the making,  and the  application  of the
proceeds, of any US Revolving Loans required to be made on such date pursuant to
Section 2.04), with respect to any Mexican Lender, an amount equal to the lesser
of (a) the excess,  if any, of (i) the amount of such Mexican  Lender's  Mexican
Commitment  in effect on such date  over  (ii)  such  Mexican  Lender's  Mexican
Commitment  Percentage of the aggregate  principal  amount of Mexican  Revolving
Loans  outstanding on such date and (b) the excess, if any, of (i) the amount of
such Mexican  Lender's US Commitment in effect on such date over (ii) the amount
of the Revolving Credit Exposure of such Mexican Lender on such date.

                  "Available   US   Commitment"   means   as  at  any   date  of
determination  with respect to any US Lender (after giving effect to the making,
and the  application of the proceeds,  of any US Revolving  Loans required to be
made on such  date  pursuant  to  Section  2.04  or for  the  prepayment  of any
outstanding  Mexican Revolving Loans), an amount equal to the excess, if any, of
(a) the amount of such  Lender's US  Commitment  in effect on such date over (b)
the Revolving Credit Exposure of such Lender on such date.

                  "Base CD Rate" means the sum of (a) the Three-Month  Secondary
CD Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.

                  "Board"  means the Board of Governors  of the Federal  Reserve
System of the United States of America.

                  "Borrowers" has the meaning set forth in the preamble hereto.

                  "Borrowing"   means,   with   respect  to  each   Borrower  as
applicable,  (a) Revolving Loans of the same Type, made,  converted or continued
on the same  date and,  in the case of  Eurodollar  Loans,  as to which a single
Interest  Period is in effect,  (b) a Competitive  Loan or group of  Competitive
Loans of the same Type  made on the same date and as to which a single  Interest
Period is in effect or (c) a Swingline Loan.

                  "Borrowing Date" has the meaning set forth in Section 2.04.

                  "Borrowing Request" means a request, substantially in the form
of Exhibit E, by the US Borrower for a US Revolving Borrowing in accordance with
Section  2.03 or a request  by any  Mexican  Borrower  for a  Mexican  Revolving
Borrowing in accordance with Section 3.03.

                  "Business Day" means any day that is not a Saturday, Sunday or
other day on which  commercial banks in New York City are authorized or required
by law  to  remain  closed;  provided  that,  when  used  in  connection  with a
Eurodollar  Loan,  the term  "Business  Day" shall also exclude any day on which
banks are not open for  dealings  in dollar  deposits  in the  London  interbank
market.

                  "Capital   Lease   Obligations"   of  any  Person   means  the
obligations  of such Person to pay rent or other  amounts under any lease of (or
other arrangement  conveying the right to use) real or personal  property,  or a
combination  thereof,  which  obligations  are  required  to be  classified  and
accounted  for as capital  leases on a balance  sheet of such Person under GAAP,
and the  amount of such  obligations  shall be the  capitalized  amount  thereof
determined in accordance with GAAP.

                  "Change in Control" means the occurrence of one or more of the
following events:  (i) any Person or group (within the meaning of the Securities
Exchange Act of 1934 (the  "Exchange  Act") and the rules of the  Securities and
Exchange  Commission  thereunder  as in effect on the date  hereof),  other than
employee or retiree  benefit plans or trusts  sponsored or established by the US
Borrower or International,  is or becomes the "beneficial  owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of (A) securities of
the Parent representing 35% or more of the combined voting power of the Parent's
then outstanding voting stock, or (B) securities of the US Borrower representing
50% or more of the combined voting power of the US Borrower's  then  outstanding
voting stock; (ii) the following  individuals cease for any reason to constitute
more than  three-fourths of the number of directors then serving on the Board of
Directors of the Parent:  individuals  who, on the date hereof,  constitute  the
Board of Directors  and any new director  (other than a director  whose  initial
assumption of the office is in connection with an actual or threatened  election
contest,  including but not limited to a consent  solicitation,  relating to the
election of directors of the Parent) whose  appointment or election by the Board
of  Directors  or  nomination  for  election by the  Parent's  stockholders  was
approved  by the vote of a  majority  of the  directors  then still in office or
whose  appointment,  election  or  nomination  was  previously  so  approved  or
recommended;  (iii) the  stockholders  of the Parent  shall  approve any Plan of
Liquidation;  (iv) the US  Borrower  consolidates  with or  merges  with or into
another  Person,  or  the US  Borrower  or any  Subsidiary  of the US  Borrower,
directly or indirectly,  sells, assigns, conveys, transfers, leases or otherwise
disposes  of, in one  transaction  or a series of related  transactions,  all or
substantially  all  of the  property  or  assets  of the  US  Borrower  and  the
Subsidiaries  of the US Borrower  (determined  on a  consolidated  basis) to any
Person,  or any  Person  consolidates  with,  or  merges  with or  into,  the US
Borrower,  in any such event pursuant to a transaction in which the  outstanding
voting  stock of the US  Borrower  is  converted  into or  exchanged  for  cash,
securities or other property,  and, as a result of which, neither the Parent nor
International  has  "beneficial  ownership"  (as set forth  above),  directly or
indirectly, of at least 50% of the combined voting power of the then outstanding
voting stock of the surviving or transferee  corporation,  provided that neither
(A) a merger  permitted  under  Section  8.03 nor (B) a series  of  transactions
involving the sale of Receivables or interests therein in the ordinary course of
business by the US Borrower or a Securitization  Subsidiary in connection with a
Qualified Securitization Transaction, shall be deemed to be a Change of Control;
or (v) so long as any Indebtedness under the Senior  Subordinated Note Indenture
is outstanding, a "Change in Control" as defined in the Senior Subordinated Note
Indenture shall occur.

                  "Change in Law"  means (a) the  adoption  of any law,  rule or
regulation after the date of this Agreement,  (b) any change in any law, rule or
regulation or in the  interpretation or application  thereof by any Governmental
Authority  after the date of this  Agreement or (c)  compliance by any Lender or
the Issuing Bank (or, for purposes of Section 4.09(b),  by any lending office of
such Lender or by such Lender's or the Issuing Bank's holding  company,  if any)
with any request,  guideline  or  directive  (whether or not having the force of
law)  of any  Governmental  Authority  made or  issued  after  the  date of this
Agreement.

                  "Chase"  means The Chase  Manhattan  Bank,  in its  individual
capacity.

                  "Class",  when  used in  reference  to any Loan or  Borrowing,
refers to  whether  such  Loan,  or the Loans  comprising  such  Borrowing,  are
Revolving Loans, Competitive Loans or Swingline Loans.

                  "Code"  means the Internal  Revenue  Code of 1986,  as amended
from time to time, or any successor statute.

                  "Commitments" means, collectively,  the US Commitments and the
Mexican Commitments.

                  "Competitive  Bid"  means  an  offer  by a  Lender  to  make a
Competitive Loan in accordance with Section 2.05.

                  "Competitive Bid Rate" means,  with respect to any Competitive
Bid, the Margin or the Fixed Rate, as  applicable,  offered by the Lender making
such Competitive Bid.

                  "Competitive  Bid Request"  means a request by the US Borrower
for Competitive Bids in accordance with Section 2.05.

                  "Competitive Loan" means a Loan made pursuant to Section 2.05.

                  "Consolidated Leverage Ratio" means, on any date, the ratio of
(a) Consolidated Total Debt on such date to (b) Consolidated  Tangible Net Worth
on such date.

                  "Consolidated  Tangible  Net Worth"  means,  on any date,  the
consolidated  stockholders'  equity  of the US  Borrower  and  its  consolidated
Subsidiaries less, without duplication, (a) their consolidated Intangible Assets
and (b) all Redeemable Preferred Stock (if any), all determined as of such date.
For purposes of this  definition,  "Intangible  Assets" means the amount (to the
extent reflected in determining such consolidated  stockholders'  equity) of (i)
all  investments  in  Subsidiaries  of the US Borrower  other than  consolidated
Subsidiaries  and (ii) all  unamortized  debt discount and expense,  unamortized
deferred charges,  goodwill,  patents,  trademarks,  service marks, trade names,
copyrights, organization or developmental expenses and other intangible items.

                  "Consolidated  Total Debt" means, on any date, the outstanding
Indebtedness of the US Borrower and its consolidated  Subsidiaries determined on
a  consolidated  basis  as of  such  date;  provided  that  the  amount  of such
Indebtedness  shall be (a) increased by all Debt Discount  Adjustments  (if any)
applicable thereto (to the extent not included in determining the amount of such
Indebtedness)  and (b)  decreased by (i) the aggregate  principal  amount of all
Warehousing  Debt  outstanding  on such  date and (ii) the  aggregate  principal
amount of  Indebtedness  incurred in connection  with  Qualified  Securitization
Transactions outstanding on such date.

                  "Control" means the possession, directly or indirectly, of the
power to  direct or cause the  direction  of the  management  or  policies  of a
Person,  whether  through the ability to exercise  voting power,  by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.

                  "Customary Securitization  Undertaking" means, with respect to
any Person, any obligation of such Person under a Permitted Receivables Document
that is of a type  customarily  arising on the part of a seller or  servicer  of
Receivables  in  securitization  transactions  of the same  general  type as the
transaction  contemplated  by such  Permitted  Receivables  Document,  including
without limitation,  any obligation to (A) purchase or repurchase Receivables or
related assets upon the occurrence of certain events, (B) service Receivables or
related assets,  (C) fund a spread or reserve account at the time of the sale of
Receivables, rights to receive income from Receivables or undivided interests in
Receivables or (D) indemnify  other Persons;  provided that the term  "Customary
Securitization  Undertaking" shall not include any obligation to the extent that
it (i) results from credit losses on  receivables  or (ii)  constitutes a direct
obligation  of such Person to repay any  Indebtedness  issued or incurred by any
other Person or to indemnify any Person for losses resulting from the nonpayment
of any such  Indebtedness or to provide  additional  capital to, or maintain the
financial  condition or otherwise  support the credit of, the obligor in respect
of such  Indebtedness  (except any  obligation  to provide  additional  funds to
Subsidiaries  of  the US  Borrower  as  part  of  any  Qualified  Securitization
Transaction).

                  "Debt Discount  Adjustment" means at any time, with respect to
any  interest-bearing  Indebtedness for Borrowed Money of the US Borrower or any
of its  consolidated  Subsidiaries,  the  amount  (if any) by which (a) the full
outstanding principal amount of such Indebtedness for Borrowed Money exceeds (b)
the amount of the  liability  reflected  on the books of the US Borrower or such
consolidated  Subsidiary with respect to such  Indebtedness  for Borrowed Money.
Without  limiting the  generality of the  foregoing,  it is understood  that the
concept of a "Debt Discount  Adjustment" would not apply to non-interest bearing
commercial paper issued at a discount or "zero coupon" bonds.

                  "Default"  means any event or condition  which  constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.

                  "Deloitte & Touche" means Deloitte & Touche LLP.

                  "Disclosed  Matters" means the actions,  suits and proceedings
disclosed in Schedule 5.05.

                  "Dollars",  "dollars"  or "$"  refers to  lawful  money of the
United States of America.

                  "Downgrading"  means the  downgrading of the Index Debt of the
US Borrower to below  either  BBB- by S&P or Baa3 by Moody's;  provided  that if
either  (or both) of S&P or  Moody's  shall not have in effect a rating  for the
Index Debt of the US  Borrower  and  either  (or both) of S&P or Moody's  has in
effect such a rating for the Index Debt of the  Parent,  the rating of the Index
Debt of the Parent  shall be used as if it were the rating of the US Borrower to
determine whether a Downgrading has occurred.

                  "Effective  Date"  means  the  date on  which  the  conditions
specified in Section 6.01 are satisfied  (or waived in  accordance  with Section
12.02).

                  "Equalization  Date"  means  any date on which  either  (a) an
Event of Default  described  in clause (j) or (k) of Article IX has  occurred or
(b) the Commitments shall have been terminated prior to the Maturity Date and/or
the Loans shall have been declared  immediately due and payable,  in either case
pursuant to Article IX.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor statute.

                  "ERISA  Affiliate" means any trade or business (whether or not
incorporated)  that,  together  with the US  Borrower,  is  treated  as a single
employer  under  Section  414(b) or (c) of the Code or,  solely for  purposes of
Section  302 of ERISA  and  Section  412 of the  Code,  is  treated  as a single
employer under Section 414 of the Code.

                  "ERISA Event" means (a) any "reportable  event", as defined in
Section 4043 of ERISA or the  regulations  issued  thereunder  with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an  "accumulated  funding  deficiency" (as
defined in  Section  412 of the Code or  Section  302 of ERISA),  whether or not
waived;  (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an  application  for a waiver of the minimum  funding  standard with
respect to any Plan;  (d) the  incurrence by the US Borrower or any of its ERISA
Affiliates  of any  liability  under  Title  IV of  ERISA  with  respect  to the
termination  of any  Plan;  (e) the  receipt  by the US  Borrower  or any  ERISA
Affiliate  from the PBGC or a plan  administrator  of any notice  relating to an
intention to terminate  any Plan or Plans or to appoint a trustee to  administer
any Plan; (f) the  incurrence by the US Borrower or any of its ERISA  Affiliates
of any liability with respect to the withdrawal or partial  withdrawal  from any
Plan or  Multiemployer  Plan; or (g) the receipt by the US Borrower or any ERISA
Affiliate of any notice,  or the receipt by any  Multiemployer  Plan from the US
Borrower or any ERISA  Affiliate of any notice,  concerning  the  imposition  of
Withdrawal  Liability or a  determination  that a  Multiemployer  Plan is, or is
expected to be, insolvent or in  reorganization,  within the meaning of Title IV
of ERISA.

                  "Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate (or, in the
case of a Competitive Loan, the LIBO Rate).

                  "Event of Default"  has the  meaning  assigned to such term in

                                  Article IX.

                  "Existing  Credit  Agreement"  means the Amended and  Restated
Credit Agreement (as amended,  supplemented or otherwise modified),  dated as of
November  4,  1994,  among  the US  Borrower,  the  banks  listed  therein,  the
co-arrangers  listed  therein and Morgan  Guaranty Trust Company of New York, as
administrative agent.

                  "Existing  Mexican  Credit  Agreements"  means  those  certain
credit agreements between the Mexican Borrowers and Chase, the Mexican Borrowers
and Citibank, N.A. and the Mexican Borrowers and Bank One, NA.

                  "Federal  Funds  Effective  Rate"  means,  for  any  day,  the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on  overnight  Federal  funds  transactions  with  members of the  Federal
Reserve  System  arranged by Federal  funds  brokers,  as  published on the next
succeeding  Business Day by the Federal  Reserve  Bank of New York,  or, if such
rate is not so  published  for  any day  that is a  Business  Day,  the  average
(rounded upwards,  if necessary,  to the next 1/100 of 1%) of the quotations for
such day for such transactions  received by the Administrative  Agent from three
Federal funds brokers of recognized standing selected by it.

                  "Financial  Officer" means, with respect to any Borrower,  the
chief financial officer,  principal accounting officer,  treasurer,  controller,
cash manager, financing manager or treasury reporting manager of such Borrower.

                  "First Lender" has the meaning set forth in Section 12.18(b).

                  "Fixed Charge Coverage Ratio" means, for any period, the ratio
of (a) the sum of (i)  consolidated  interest expense of the US Borrower and its
consolidated  Subsidiaries,  (ii) consolidated income of the US Borrower and its
consolidated  Subsidiaries before income taxes and (iii) dividends on Redeemable
Preferred Stock to (b) the sum of (i)  consolidated  interest  expense of the US
Borrower and its  consolidated  Subsidiaries  and (ii)  dividends on  Redeemable
Preferred Stock.

                  "Fixed  Rate"  means,  with  respect to any  Competitive  Loan
(other than a Eurodollar Competitive Loan), the fixed rate of interest per annum
specified by the Lender making such Competitive Loan in its related  Competitive
Bid.

                  "Fixed Rate Loan" means a Competitive Loan bearing interest at
a Fixed Rate.

                  "Foreign Lender" means, in respect of any Borrower, any Lender
that is organized under the laws of a jurisdiction other than that in which such
Borrower  is located.  For  purposes of this  definition,  the United  States of
America,  each State  thereof and the  District  of Columbia  shall be deemed to
constitute a single jurisdiction.

                  "GAAP" means generally accepted  accounting  principles in the
United States of America.

                  "Governmental  Authority"  means the  government of the United
States of  America,  Mexico,  any  other  nation  or any  political  subdivision
thereof,  whether state or local,  and any agency,  authority,  instrumentality,
regulatory  body,  court,  central  bank or other entity  exercising  executive,
legislative,  judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.

                  "Granting  Lender"  has  the  meaning  set  forth  in  Section
12.04(h).

                  "Guarantee"  of or by any Person (the  "guarantor")  means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of  guaranteeing  any  Indebtedness  or other  obligation of any
other  Person  (the  "primary  obligor")  in any  manner,  whether  directly  or
indirectly,  including an aval and  including any  obligation of the  guarantor,
direct or  indirect,  (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase (or
to advance or supply  funds for the  purchase  of) any  security for the payment
thereof,  (b) to  purchase or lease  property,  securities  or services  for the
purpose of assuring the owner of such  Indebtedness  or other  obligation of the
payment thereof,  (c) to maintain  working capital,  equity capital or any other
financial  statement  condition  or  liquidity  of the primary  obligor so as to
enable the primary obligor to pay such  Indebtedness or other  obligation or (d)
as an account  party in  respect  of any letter of credit or letter of  guaranty
issued to support  such  Indebtedness  or  obligation;  provided,  that the term
Guarantee shall not include (i)  endorsements  for collection or deposit or (ii)
standard  contractual  indemnities,  each in the ordinary  course of business or
(iii) any Customary Securitization  Undertaking.  The amount of any Guarantee of
any  guaranteeing  Person shall be deemed to be the lower of (A) an amount equal
to the stated or  determinable  amount of the primary  obligation  in respect of
which  such  Guarantee  is made  and (B)  the  maximum  amount  for  which  such
guaranteeing  Person  may be  liable  pursuant  to the  terms of the  instrument
embodying such Guarantee,  unless such primary obligation and the maximum amount
for which such guaranteeing Person may be liable are not stated or determinable,
in which case the amount of such Guarantee shall be such  guaranteeing  Person's
maximum reasonably  anticipated  liability  (assuming such Person is required to
perform) in respect thereof as determined by such Person in good faith.

                  "Harco Insurance" means Harco National Insurance Company, an
Illinois corporation.

                  "Harco Leasing" means Harco Leasing Company, Inc., a  Delaware
corporation, and its successors.

                  "Harco  Lease  Purchase  Agreement"  means the Lease  Purchase
Agreement  between  Harco  Leasing and the US Borrower,  dated as of October 16,
2000, as such agreement may be amended or supplemented from time to time.

                  "Hedging   Agreement"   means  any  interest  rate  protection
agreement,  foreign  currency  exchange  agreement,   currency  swap  agreement,
commodity price protection agreement or other interest or currency exchange rate
or commodity price hedging arrangement.

                  "Indebtedness"  of  any  Person  means  on any  date,  without
duplication,  (a) all  obligations  of such Person for borrowed  money,  (b) all
obligations  of such  Person  evidenced  by  bonds,  debentures,  notes or other
similar  instruments,  (c) all  Guarantees  by such  Person of  Indebtedness  of
others,   (d)  all  Capital  Lease  Obligations  of  such  Person  and  (e)  all
obligations,  contingent  or otherwise,  of such Person to reimburse  issuers of
letters of credit,  surety bonds or similar  obligations  for  payments  made to
repay,  purchase  or  otherwise  retire  any  Indebtedness  referred  to in  the
foregoing  clauses  (a)  through  (d),  excluding  trade  payables  and  accrued
expenses.

                  "Indebtedness   for   Borrowed   Money"  means  the  types  of
Indebtedness   referred  to  in  clauses  (a)  and  (b)  of  the  definition  of
"Indebtedness".

                  "Index Debt" means senior,  unsecured,  long-term indebtedness
for borrowed  money that is not guaranteed by any other Person or subject to any
other credit enhancement.

                  "INFONAVIT"  means Instituto del Fondo Nacional de la Vivienda
para los Trabajadores or Workers' Housing Fund Institute.

                  "Intercompany  Loan Agreements" means each agreement from time
to time creating or evidencing any  Indebtedness  owing from time to time to the
US Borrower from one of its Subsidiaries.

                  "Interest Election Request" means a request by any Borrower to
convert or continue a Revolving Borrowing in accordance with Section 4.02.

                  "Interest Payment Date" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March,  June,  September and
December,  (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar  Borrowing  with an Interest  Period of more than three  months'
duration,  each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
(c) with  respect to any Fixed Rate Loan,  the last day of the  Interest  Period
applicable  to the  Borrowing of which such Loan is a part,  and any other dates
that are specified in the applicable Competitive Bid Request as Interest Payment
Dates with respect to such Borrowing and (d) with respect to any Swingline Loan,
the day that such Loan is required to be repaid.

                  "Interest  Period"  means (a) with  respect to any  Eurodollar
Revolving  Borrowing,  the period  commencing on the date of such  Borrowing and
ending on the numerically  corresponding  day in the calendar month that is one,
two, three, six, or nine months (or, if available from the relevant Lenders, two
weeks,  twelve  months  or other  period  requested  by the  relevant  Borrower)
thereafter,  as the  relevant  Borrower  may  elect,  (b)  with  respect  to any
Eurodollar  Competitive  Borrowing,  the period  commencing  on the date of such
Borrowing and ending on the numerically  corresponding day in the calendar month
that is one,  two or three months  thereafter,  as the US Borrower may elect and
(c) with  respect to any Fixed Rate  Borrowing,  the period  (which shall not be
less than seven days or more than ninety  days)  commencing  on the date of such
Borrowing and ending on the date  specified in the  applicable  Competitive  Bid
Request; provided, that (i) if any Interest Period would end on a day other than
a Business Day, such  Interest  Period shall be extended to the next  succeeding
Business  Day unless,  in the case of a  Eurodollar  Borrowing  only,  such next
succeeding  Business Day would fall in the next  calendar  month,  in which case
such Interest  Period shall end on the next preceding  Business Day and (ii) any
Interest Period pertaining to a Eurodollar  Borrowing that commences on the last
Business Day of a calendar  month (or on a day for which there is no numerically
corresponding  day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes  hereof,  the date of a Borrowing  initially shall be the date on which
such  Borrowing  is made and, in the case of a Revolving  Borrowing,  thereafter
shall be the effective  date of the most recent  conversion or  continuation  of
such Borrowing.

                  "International"   means   International   Truck   and   Engine
Corporation, formerly Navistar International Transportation  Corp.,  a  Delaware
corporation.

                  "Investments" has the meaning set forth in Section 8.04.

                  "Issuing Bank" means The Chase Manhattan Bank, in its capacity
as the issuer of Letters of Credit  hereunder (or any  affiliate  thereof in its
capacity as issuer of Letters of Credit  hereunder),  and its successors in such
capacity as provided in Section 2.07(i).

                  "Joint Lead Arrangers" means Chase Securities Inc. and Banc of
America Securities LLC.

                  "LC  Disbursement"  means a payment  made by the Issuing  Bank
pursuant to a Letter of Credit.

                  "LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn  amount of all  outstanding  Letters of Credit at such time plus (b) the
aggregate  amount of all LC  Disbursements  in respect of Letters of Credit that
have not yet been  reimbursed  by or on behalf of the US  Borrower at such time.
The LC Exposure of any US Lender in respect of any Letter of Credit shall be its
US Funding Commitment Percentage (determined on the date of issuance thereof, as
reduced or  increased  by any  assignment  effected in  accordance  with Section
12.04) of the LC Exposure in respect of such Letter of Credit, as reduced by any
reduction of such Letter of Credit or any reimbursed drawings thereunder.

                  "Lenders"  means the Persons  listed on Schedule  2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lender.

                  "Letter of Credit" means any letter of credit issued  pursuant
to Section 2.07.

                  "LIBO Rate" means,  with respect to any  Eurodollar  Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service,  or any successor to or
substitute  for such  Service,  providing  rate  quotations  comparable to those
currently  provided  on  such  page  of  such  Service,  as  determined  by  the
Administrative  Agent from time to time for purposes of providing  quotations of
interest rates applicable to dollar deposits in the London interbank  market) at
approximately   11:00  a.m.,  London  time,  two  Business  Days  prior  to  the
commencement  of such Interest  Period,  as the rate for dollar  deposits with a
maturity  comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar  Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered  by  the  principal  London  office  of  the  Administrative   Agent  in
immediately  available  funds in the London  interbank  market at  approximately
11:00 a.m.,  London time,  two Business Days prior to the  commencement  of such
Interest Period.

                  "Lien"  means,  with respect to any asset,  (a) any  mortgage,
deed of trust,  lien,  pledge,  hypothecation,  encumbrance,  charge or security
interest  in, on or of such asset and (b) the  interest  of a vendor or a lessor
under any  conditional  sale  agreement,  capital lease or other title retention
agreement relating to such asset.

                  "Loans"  means the loans made by the Lenders to the  Borrowers
pursuant to this Agreement.

                  "Margin" means,  with respect to any Competitive  Loan bearing
interest at a rate based on the LIBO Rate,  the marginal  rate of  interest,  if
any, to be added to or  subtracted  from the LIBO Rate to determine  the rate of
interest applicable to such Loan, as specified by the Lender making such Loan in
its related Competitive Bid.

                  "Master Intercompany  Agreement" means the Master Intercompany
Agreement,   dated  as  of  April  26,   1993,   between  the  US  Borrower  and
International, as amended, supplemented or otherwise modified from time to time.

                  "Material  Adverse Effect" means a material  adverse effect on
(a) the business, assets, property or financial condition of the US Borrower and
its Subsidiaries taken as a whole, or (b) the validity or enforceability of this
Agreement  or the  Parents'  Side  Agreement  or the rights and  remedies  of or
benefits  available to the Lenders  under this  Agreement  or the Parents'  Side
Agreement.

                  "Material  Indebtedness"  means  Indebtedness  (other than the
Loans and Letters of Credit),  or  obligations in respect of one or more Hedging
Agreements in an aggregate  principal amount  exceeding (a) $10,000,000,  in the
case  of the US  Borrower,  and (b)  $5,000,000,  in the  case  of each  Mexican
Borrower.  For purposes of  determining  Material  Indebtedness,  the "principal
amount" of the  obligations of any Borrower in respect of any Hedging  Agreement
at any time shall be the maximum  aggregate amount (giving effect to any netting
agreements)  that  such  Borrower  would  be  required  to pay if  such  Hedging
Agreement were terminated at such time.

                  "Maturity  Date" means the fifth  anniversary of the Effective
Date.

                  "Mexican",  when used in reference  to any Loan or  Borrowing,
refers to whether such Loan, or the Loans  comprising such Borrowing,  are being
made to a Mexican Borrower.

                  "Mexican  Borrowers" has the meaning set forth in the Preamble
to this Agreement.

                  "Mexican  Change in Control" shall occur in the event that the
Parent ceases to own, directly or indirectly, at least 50% of the voting capital
stock of any Mexican Borrower.

                  "Mexican  Commitment"  means,  with  respect  to each  Mexican
Lender, the commitment of such Lender to make Mexican Revolving Loans hereunder,
in an aggregate  amount not to exceed at any time  outstanding the lesser of (i)
the amount  initially  set forth  opposite  such  Lender's name on Schedule 2.01
under the heading  "Mexican  Commitment"  or in the  Assignment  and  Acceptance
pursuant to which such Lender  shall have  assumed  its Mexican  Commitment,  as
applicable,  and (ii) the US Commitment of such Mexican  Lender,  as either such
commitment may be (a) reduced from time to time pursuant to Section 4.03 and (b)
reduced or increased  from time to time  pursuant to  assignments  by or to such
Lender pursuant to Section 12.04.

                  "Mexican  Commitment  Percentage"  means,  as to  any  Mexican
Lender at any time, the percentage which such Lender's  Mexican  Commitment then
constitutes of the aggregate Mexican  Commitments of all Mexican Lenders (or, if
the Mexican  Commitments  have  terminated or expired,  the percentage  shall be
determined based upon the Mexican  Commitments  most recently in effect,  giving
effect to any assignments).

                  "Mexican  Lender" means each Lender  having an amount  greater
than zero set forth  opposite  such  Lender's  name in  Schedule  2.01 under the
heading "Mexican Commitment" and any other Person that shall have become a party
hereto  pursuant  to an  Assignment  and  Acceptance  with  respect to a Mexican
Commitment.  Any US Lender may cause a branch or  affiliate of such US Lender to
make available its Mexican  Commitment and to make the Mexican Loans thereunder,
and the term  "Mexican  Lender"  shall  include such branch or affiliate in such
capacity where the context permits.

                  "Mexican  Obligations"  means  the  unpaid  principal  of  and
interest on (including, without limitation, interest accruing after the maturity
of the Mexican  Revolving  Loans and interest  accruing  after the filing of any
petition in bankruptcy  ("concurso"),  or the  commencement  of any  insolvency,
reorganization or like proceeding,  relating to any Mexican Borrower, whether or
not a claim  for  post-filing  or  post-petition  interest  is  allowed  in such
proceeding)  the  Mexican   Revolving  Loans  and  all  other   obligations  and
liabilities  of the  Mexican  Borrowers  to the  Administrative  Agent  and  the
Lenders,  whether direct or indirect,  absolute or contingent,  due or to become
due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement and any other document made,  delivered or given
in   connection   therewith,   whether  on  account  of   principal,   interest,
reimbursement  obligations,  fees,  indemnities,   costs,  expenses  (including,
without  limitation,  all reasonable  fees and  disbursements  of counsel to the
Administrative Agent and the Lenders that are required to be paid by the Mexican
Borrowers pursuant to the terms of this Agreement) or otherwise.

                  "Mexico" means the United Mexican States.

                  "Moody's" means Moody's Investors Service, Inc.

                  "Multiemployer  Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA;  provided that the term "Multiemployer  Plan" shall
not include the Wisconsin Steel Arrangements.

                  "Navistar  Leasing"  means  Navistar  Leasing  Corporation,  a
Delaware corporation, and its successors.

                  "NFC  Receivables  Purchase  Agreement"  means the Receivables
Purchase  Agreement  between the US Borrower  and TRIP,  dated as of October 16,
2000, as such agreement may be amended or supplemented from time to time.

                  "NFRRC"   means   Navistar    Financial   Retail   Receivables
Corporation, a Delaware corporation, and its successors.

                  "NFSC" means  Navistar  Financial  Securities  Corporation,  a
Delaware corporation, and its successors.

                  "1999  Annual  Report"  means the US  Borrower's  1999  Annual
Report on Form 10-K for the fiscal  year ended  October  31,  1999,  in the form
delivered to the Lenders prior to the date hereof.

                  "Non-Excluded  Taxes"  has the  meaning  set forth in  Section
4.11(a).

                  "Non-Mexican  Lender"  means  each US  Lender  which  is not a
Mexican Lender.

                  "Note" has the meaning set forth in Section 4.04.

                  "Other Lender" has the meaning set forth in Section 12.18.

                  "Other  Taxes"  means any and all  present or future  stamp or
documentary  taxes or any other  excise or  property  taxes,  charges or similar
levies arising from any payment made  hereunder or from the execution,  delivery
or enforcement of, or otherwise with respect to, this Agreement.

                  "Parent" means Navistar  International Corporation, a Delaware
corporation.

                  "Parent   Guarantee"   means  the  Guarantee  of  the  Parent,
substantially in the form of Exhibit G, as amended,  supplemented,  or otherwise
modified from time to time.

                  "Parents' Side  Agreement"  means the Parents' Side Agreement,
substantially  in the form of  Exhibit C,  dated as of the date  hereof,  by the
Parent  and  International   for  the  benefit  of  the  Lenders,   as  amended,
supplemented or otherwise modified from time to time.

                  "Past Due Serviced Retail Notes" at the end of any month means
the aggregate  Unpaid  Balances at the end of such month of all Serviced  Retail
Notes with respect to which any amount  payable is more than 60 days past due at
the end of such month.

                  "Past Due  Serviced  Wholesale  Notes" at the end of any month
means the  aggregate  Unpaid  Balances at the end of such month of all  Serviced
Wholesale Notes (or installments thereof) which are more than one month past due
at the end of such month.

                  "PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.

                  "Permitted Encumbrances" means:

(a) Liens imposed by law for taxes, assessments or governmental charges that ar
not yet due or are being contested in compliance with Section 7.04;

(b) carriers', warehousemen's,  mechanics', materialmen's, repairmen's and other
like  Liens  imposed by law,  arising in the  ordinary  course of  business  and
securing  obligations  that (i) are not overdue by more than 30 days or (ii) are
being contested in compliance with Section 7.04;

(c) pledges and deposits  made in the ordinary  course of business in compliance
with workers' compensation,  unemployment insurance,  health insurance and other
social security laws or regulations and withholding taxes;

(d)  deposits  to secure  the  performance  of bids,  trade  contracts,  leases,
statutory  obligations,  surety and appeal  bonds,  performance  bonds and other
obligations of a like nature, in each case in the ordinary course of business;

(e) easements,  zoning  restrictions,  rights-of-way and similar encumbrances on
real property  imposed by law or arising in the ordinary course of business that
do not secure any monetary  obligations  and do not materially  detract from the
value of the  affected  property  or  interfere  with the  ordinary  conduct  of
business of the relevant Borrower or any of its Subsidiaries;

(f)  Liens arising from judgments, decrees or attachments that do not constitute
an Event of Default hereunder;

(g)  Liens  arising  from   precautionary   Uniform  Commercial  Code  financing
statements  filed in connection with operating  leases of the US Borrower or its
Subsidiaries;

(h) any interest or title of a licensor,  lessor or sublessor under any license,
lease or  sublease  entered  into by any  Borrower  in the  ordinary  course  of
business and covering only the assets so licensed, leased or subleased; and

(i)  Liens arising in connection with any Qualified Securitization  Transaction;
provided  that the term  "Permitted  Encumbrances"  shall not  include  any Lien
securing Indebtedness.

                  "Permitted Investments" means:

(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America or by any agency
thereof to the extent such  obligations  are backed by the full faith and credit
of the United States of America,  in each case maturing within one year from the
date of acquisition thereof;

(b)  investments in commercial  paper maturing  within 270 days from the date of
acquisition  thereof and having, at such date of acquisition,  the credit rating
of A-2 or higher from S&P or P-2 or higher from Moody's;

(c)  investments  in  certificates  of deposit,  banker's  acceptances  and time
deposits maturing within one year from the date of acquisition thereof issued or
guaranteed  by or placed  with,  and money  market  deposit  accounts  issued or
offered by, any domestic  office of any commercial bank organized under the laws
of the  United  States of America  or any State  thereof  or Canada  which has a
combined   capital  and  surplus  and   undivided   profits  of  not  less  than
$250,000,000;

(d) fully collateralized  repurchase  agreements with a term of not more than 30
days for  securities  described  in clause  (a) above  and  entered  into with a
financial institution satisfying the criteria described in clause (c) above; and

(e) investments in money market funds substantially all of the  assets  of which
are comprised of securities of the type described in  clauses  (a)  through  (d)
above;

                  "Permitted  Receivables  Document" means any document to which
the US Borrower or any  Subsidiary of the US Borrower is a party that relates to
a sale or  transfer  by the US  Borrower  or  such  Subsidiary  of  Receivables,
undivided interests therein or rights to receive income therefrom.

                  "Person"  means  any  natural  person,  corporation,   limited
liability company,  trust,  joint venture,  association,  company,  partnership,
Governmental Authority or other entity.

                  "Plan" means any employee  pension  benefit plan (other than a
Multiemployer  Plan)  subject to the  provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the US Borrower
or any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an  "employer"  as  defined  in  Section  3(5) of
ERISA;  provided  that the term "Plan"  shall not include  the  Wisconsin  Steel
Arrangements.

                  "Plan of  Liquidation"  means,  with respect to the Parent,  a
plan  (including  by operation of law) that provides  for,  contemplates  or the
effectuation   of  which  is  preceded  or   accompanied   by  (whether  or  not
substantially  contemporaneously)  (i) the  sale,  lease,  conveyance  or  other
disposition of all or substantially all of the assets of the Parent and (ii) the
distribution of all or  substantially  all of the proceeds of such sale,  lease,
conveyance or other  disposition and all or  substantially  all of the remaining
assets of the Parent to holders of capital stock of the Parent.

                  "Prime  Rate"  means the rate of interest  per annum  publicly
announced  from time to time by The Chase  Manhattan  Bank as its prime  rate in
effect at its principal  office in New York City;  each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.

                  "Qualified  Securitization  Transaction" means any transaction
or  series of  transactions  that  have  been or may be  entered  into by the US
Borrower or any of its Subsidiaries in connection with or reasonably  related to
a transaction or series of  transactions  in which the US Borrower or any of its
Subsidiaries  may sell,  convey or  otherwise  transfer to (i) a  Securitization
Subsidiary  or (ii) any other Person,  or may grant a security  interest in, any
Receivables  or  interests  therein  secured by the goods or  services  financed
thereby (whether such Receivables are then existing or arising in the future) of
the US  Borrower  or any of its  Subsidiaries,  and any assets  related  thereto
including,  without  limitation,  all  security  interests  in goods or services
financed thereby,  the proceeds of such Receivables,  and other assets which are
customarily  sold or in  respect of which  security  interests  are  customarily
granted in connection with securitization transactions involving such assets.

                  "Receivables"  means,  as the context may require,  either (a)
all assets of the types classified  under the heading  "Finance  Receivables" on
the  statement of  consolidated  financial  condition of the US Borrower and its
consolidated  Subsidiaries as of October 31, 1999 and the related  statements of
consolidated  income and retained  earnings and  consolidated  cash flow for the
fiscal year then ended,  together with the notes  thereto,  included in the 1999
Annual Report and reported on by Deloitte & Touche or (b) the  aggregate  Unpaid
Balances thereof or (c) equipment on operating leases.

                  "Redeemable  Preferred  Stock" means preferred stock of the US
Borrower which is required,  or at the option of the holder may be required,  to
be redeemed or repurchased at any time.

                  "Register" has the meaning set forth in Section 12.04.

                  "Related Parties" means, with respect to any specified Person,
such Person's  Affiliates and the  respective  directors,  officers,  employees,
agents and advisors of such Person and such Person's Affiliates.

                  "Requested Mexican Loans" has the meaning set forth in Section
2.04.

                  "Required  Lenders"  means,  at any  time,  Lenders  having US
Commitments  representing at least 51% of the total US Commitments at such time;
provided  that,  for  purposes  of  declaring  the  Loans to be due and  payable
pursuant  to Article  IX, and for all  purposes  after the Loans  become due and
payable pursuant to Article IX or the Commitments expire or terminate, "Required
Lenders"  means  Lenders  having  Revolving  Credit  Exposures  and  outstanding
Competitive  Loans  representing at least 51% of the aggregate  Revolving Credit
Exposures and outstanding Competitive Loans of all Lenders.

                  "Restricted  Payment" means any dividend or other distribution
(whether in cash,  securities or other  property)  with respect to any shares of
any class of capital stock of any Borrower or any Subsidiary  (except  dividends
payable solely in shares of its capital stock), or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption,  retirement,  acquisition,  cancellation or
termination  of any such shares of capital stock of such Borrower or any option,
warrant or other  right to  acquire  any such  shares of  capital  stock of such
Borrower.

                  "Retail  Accounts" means, as the context may require,  (a) all
assets of the types classified under the heading  "Accounts" in the statement of
consolidated  financial  condition  of  the US  Borrower  and  its  consolidated
Subsidiaries  as of October 31, 1999 and the related  statements of consolidated
income and retained earnings and consolidated cash flow for the fiscal year then
ended,  together with the notes thereto,  included in the 1999 Annual Report and
reported on by Deloitte & Touche  (other than with  respect to which the obligor
is (i) a dealer in or distributor of products manufactured, assembled or sold by
International or any subsidiary of  International  or (ii) a manufacturer  which
incorporates,  in its  products,  products  manufactured  assembled  or  sold by
International  or any subsidiary of  International)  or (b) the aggregate Unpaid
Balances thereof.

                  "Retail Notes" means,  as the context may require,  either (a)
all assets of the types  classified  under the heading  "Retail  notes and lease
financing"  in the  statement  of  consolidated  financial  condition  of the US
Borrower  and its  consolidated  Subsidiaries  as of  October  31,  1999 and the
related statements of consolidated income and retained earnings and consolidated
cash flow for the  fiscal  year then  ended,  together  with the notes  thereto,
included in the 1999 Annual  Report and  reported on by Deloitte & Touche or (b)
the aggregate Unpaid Balances thereof or (c) equipment on operating leases.

                  "Revolving  Credit Exposure" means, with respect to any Lender
at any  time,  the sum of the  outstanding  principal  amount  of such  Lender's
Revolving Loans and its LC Exposure and Swingline Exposure at such time.

                  "Revolving Credit Exposure Percentage" means, on any date with
respect to any Lender,  the percentage  which the Revolving  Credit  Exposure of
such Lender constitutes of the Revolving Credit Exposure of all Lenders.

                  "Revolving Loan" means a Loan made pursuant to Section 2.03 or
Section 3.03.

                  "Revolving  Retail Facility  Documents"  means the Harco Lease
Purchase Agreement, the NFC Receivables Purchase Agreement, the Revolving Retail
Note Indenture and related documents.

                  "Revolving  Retail  Facility  Trustee" means the trustee under
the Revolving Retail Note Indenture.

                  "Revolving  Retail Note Indenture" means an Indenture  between
TRIP and the Revolving Retail Facility Trustee, dated as of October 16, 2000, as
such agreement may be amended or supplemented from time to time.

                  "Revolving Retail Notes" means the medium term notes issued by
TRIP pursuant to the Revolving Retail Note Indenture.

                  "S&P" means Standard & Poor's Ratings Services,  a division of
the McGraw-Hill Companies, Inc.

                  "SAR"  means the  Mexican  Sistema de Ahorro para el Retiro or
Savings for Retirement System.

                  "Securitization Subsidiary" means a wholly owned Subsidiary of
the US  Borrower  which  engages in no  activities  other than those  reasonably
related  to  or  in  connection   with  the  entering  into  of   securitization
transactions  and  which  is  designated  by the  Board of  Directors  of the US
Borrower (as provided  below) as a  Securitization  Subsidiary (a) no portion of
the Indebtedness or any other obligations (contingent or otherwise) of which (i)
is  guaranteed  by the US  Borrower or any other  Subsidiary  of the US Borrower
other than pursuant to Standard Securitization Undertakings, (ii) is recourse to
or obligates  the US Borrower or any other  Subsidiary of the US Borrower in any
way  other  than  pursuant  to  Standard  Securitization  Undertakings  or (iii)
subjects any property or asset of the US Borrower or any other Subsidiary of the
US Borrower,  directly or indirectly,  contingently or otherwise, to any Lien or
to the  satisfaction  thereof,  other than  pursuant to Standard  Securitization
Undertakings, (b) with which neither the US Borrower nor any other Subsidiary of
the US Borrower (i) provides any credit support (for the avoidance of doubt,  no
Intercompany  Loan Agreement shall be deemed to constitute  "credit support") or
(ii) has any contract,  agreement,  arrangement or  understanding  other than on
terms  that are fair and  reasonable  and that are no less  favorable  to the US
Borrower or such  Subsidiary  than could be obtained  from an  unrelated  Person
(other than Standard Securitization Undertakings and intercompany notes relating
to the sale of Receivables to such Securitization Subsidiary) and (c) with which
neither the US Borrower nor any Subsidiary of the US Borrower has any obligation
to maintain or preserve such Subsidiary's  financial  condition or to cause such
Subsidiary to achieve certain levels of operating results.  Any such designation
by the  Board  of  Directors  of the  US  Borrower  shall  be  evidenced  to the
Administrative Agent by filing with the Administrative Agent a certified copy of
the  resolutions  of the Board of Directors of the US Borrower  giving effect to
such designation.

                  "Senior Subordinated Note Indenture":  the Indenture, dated as
of May 30, 1997,  entered into by the US Borrower and The Chase  Manhattan Bank,
as Trustee,  in connection with the issuance of the Senior  Subordinated  Notes,
together  with all  instruments  and  other  agreements  entered  into by the US
Borrower in connection therewith.

                  "Senior Subordinated Notes":  the 9% Senior Subordinated Notes
due 2002 of  the  US  Borrower  issued  pursuant to the Senior Subordinated Note
Indenture.

                  "Serviced  Retail Accounts" means, at any time, as the context
may require,  (a) all  outstanding  Retail Accounts which the US Borrower or any
Subsidiary  of the US Borrower owns at such time or which the US Borrower or any
Subsidiary  of the US Borrower  has  theretofore  sold and  continues to have an
economic  interest in (through a right to receive  payment of deferred  purchase
price,  an undivided  interest in a trust or  otherwise) at such time or (b) the
Unpaid Balances thereof.

                  "Serviced Retail Notes" means, at any time, as the context may
require, (a) all outstanding Retail Notes which the US Borrower,  NFRRC, TRIP or
any  other  Subsidiary  of the US  Borrower  owns at such  time or which  the US
Borrower, NFRRC, TRIP or any other Subsidiary of the US Borrower has theretofore
sold and  continues to have an economic  interest in (through a right to receive
payment  of  deferred  purchase  price,  an  undivided  interest  in a trust  or
otherwise) at such time or (b) the Unpaid Balances thereof.

                  "Serviced Retail Receivables" means Serviced Retail Notes  and
Serviced Retail Accounts.

                  "Serviced  Wholesale Notes" means, at any time, as the context
may require, (a) all outstanding Wholesale Notes which the US Borrower,  NFSC or
any  other  Subsidiary  of the US  Borrower  owns at such  time or which  the US
Borrower,  NFSC or any other  Subsidiary of the US Borrower has theretofore sold
and  continues  to have an economic  interest in (through  ownership of a seller
certificate, a right to receive payment of deferred purchase price, an undivided
interest  in a trust  or  otherwise)  at such  time or (b) the  Unpaid  Balances
thereof.

                  "SPC" has the meaning set forth in Section 12.04(h).

                  "Springing Lien" has the meaning set forth in Section 7.11.

                  "Standard Securitization  Undertakings" means representations,
warranties  and covenants  (including  those  relating to servicing) and entered
into  in the  ordinary  course  of  business  in  connection  with  a  Qualified
Securitization Transaction.

                  "Statutory  Reserve  Rate"  means a fraction  (expressed  as a
decimal),  the numerator of which is the number one and the denominator of which
is the  number  one minus  the  aggregate  of the  maximum  reserve  percentages
(including any marginal,  special, emergency or supplemental reserves) expressed
as a  decimal  established  by the Board to which  the  Administrative  Agent is
subject (a) with  respect to the Base CD Rate,  for new  negotiable  nonpersonal
time deposits in dollars of over $100,000 with maturities approximately equal to
three months and (b) with respect to the Adjusted  LIBO Rate,  for  eurocurrency
funding (currently referred to as "Eurocurrency  liabilities" in Regulation D of
the Board).  Such reserve  percentages  shall include those imposed  pursuant to
such Regulation D. Eurodollar  Loans shall be deemed to constitute  eurocurrency
funding and to be subject to such  reserve  requirements  without  benefit of or
credit for  proration,  exemptions or offsets that may be available from time to
time to any Lender under such  Regulation D or any  comparable  regulation.  The
Statutory  Reserve  Rate  shall  be  adjusted  automatically  on  and  as of the
effective date of any change in any reserve percentage.

                  "Subordinated  Debt" means  indebtedness  (a) under the Senior
Subordinated Notes, including any refinancing thereof on terms and provisions no
less  favorable  than  currently  existing  thereunder  and with a maturity date
occurring  after the  Maturity  Date  hereunder  and (b) that may be  created in
accordance  with this  Agreement and that is  subordinated  to the  Indebtedness
created under this  Agreement in a manner and  containing  terms and  provisions
reasonably satisfactory to the Administrative Agent.

                  "subsidiary"  means, with respect to any Person (the "parent")
at  any  date,  any  corporation,   limited  liability   company,   partnership,
association  or other  entity the accounts of which would be  consolidated  with
those of the parent in the parent's  consolidated  financial  statements if such
financial  statements  were prepared in accordance with GAAP as of such date, as
well  as  any  other  corporation,   limited  liability  company,   partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date,  otherwise  Controlled,  by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.

                  "Subsidiary" means any subsidiary of any Borrower.

                  "Supermajority  Lenders" means, at any time, Lenders having US
Commitments  representing  at least 66-2/3% of the total US  Commitments at such
time;  provided  that,  for all purposes  after the Loans become due and payable
pursuant to Article IX or the  Commitments  expire or terminate,  "Supermajority
Lenders"  means  Lenders  having  Revolving  Credit  Exposures  and  outstanding
Competitive  Loans  representing  at least  66-2/3% of the  aggregate  Revolving
Credit Exposures and outstanding Competitive Loans of all Lenders.

                  "Swingline   Exposure"  means,  at  any  time,  the  aggregate
principal amount of all Swingline Loans  outstanding at such time. The Swingline
Exposure of any Lender in respect of any Swingline  Loan shall be its US Funding
Commitment  Percentage  (determined  on the date such Swingline Loan is made, as
reduced or  increased  by any  assignment  effected in  accordance  with Section
12.04) of the principal amount of such Swingline Loan.

                  "Swingline  Fixed  Rate  Loan"  has the  meaning  set forth in
Section 2.06(b).

                  "Swingline  Interest  Period"  has the  meaning  set  forth in
Section 2.06(b).

                  "Swingline  Lender"  means The Chase  Manhattan  Bank,  in its
capacity as lender of Swingline Loans hereunder.

                  "Swingline Loan" means a Loan made pursuant to Section 2.06.

                  "Tax Allocation Agreement" means the Tax Allocation Agreement,
effective  October 1, 1981,  between and among  International and certain of its
subsidiaries, as amended, supplemented or otherwise modified from time to time.

                  "Taxes"  means any and all  present or future  taxes,  levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.

                  "Three-Month  Secondary  CD  Rate"  means,  for any  day,  the
secondary market rate for three-month  certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information  telephone line of the
Federal Reserve Bank of New York (which rate will,  under the current  practices
of the Board,  be published in Federal  Reserve  Statistical  Release  H.15(519)
during the week  following such day) or, if such rate is not so reported on such
day or such next  preceding  Business Day, the average of the  secondary  market
quotations for  three-month  certificates of deposit of major money center banks
in New York City received at  approximately  10:00 a.m.,  New York City time, on
such day (or, if such day is not a Business Day, on the next preceding  Business
Day) by the  Administrative  Agent from three negotiable  certificate of deposit
dealers of recognized standing selected by it.

                  "(Three-Month  Total)"  means,  when used with  respect to any
type of Receivables  (or portions  thereof) at the end of any month,  the sum of
the aggregate Unpaid Balances of such type of Receivables (or portions  thereof)
at the end of such month and at the end of each of the immediately preceding two
months.

                  "Transactions"  means the execution,  delivery and performance
by the  Borrowers of this  Agreement,  the  borrowing  of Loans,  the use of the
proceeds  thereof  and the  issuance  of  Letters  of Credit  hereunder  and the
execution, delivery and performance by the Parent of the Parent Guarantee and by
the Parent and International of the Parents' Side Agreement.

                  "TRIP" means Truck Retail Instalment Paper Corp.,  a  Delaware
corporation, and its successors.


                  "Type",  when  used in  reference  to any  Loan or  Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans  comprising
such  Borrowing,  is  determined  by reference to the  Adjusted  LIBO Rate,  the
Alternate Base Rate or, in the case of a Competitive Loan or Borrowing, the LIBO
Rate or a Fixed Rate.

                  "Unpaid  Balance"  means at any time (a) with  respect  to any
Serviced  Retail Note,  the unpaid  amount  thereof at such time,  including all
finance  income,  whether or not earned,  and other amounts due or to become due
thereunder,   except  interest   payments  not  already  included  in  scheduled
installments,  late payment  charges,  delinquency  charges,  extension fees and
collection fees, (b) with respect to any Serviced Wholesale Note (or installment
thereof),  the unpaid principal amount thereof at such time and (c) with respect
to any Serviced Retail Account, the net balance of such Account at such time.

                  "US", when used in reference to any Loan or Borrowing,  refers
to whether such Loan, or the Loans comprising such Borrowing,  are being made to
the US Borrower.

                  "US  Borrower"  has the meaning  set forth in the  Preamble to
this Agreement.

                  "US  Commitment"  means,  with respect to each US Lender,  the
commitment   of  such  Lender  to  make  US  Revolving   Loans  and  to  acquire
participations  in  Letters  of Credit  and  Swingline  Loans  hereunder,  in an
aggregate  amount not to exceed at any time outstanding the amount initially set
forth  opposite such  Lender's  name on Schedule  2.01 under the heading  "Total
Commitment" or in the  Assignment  and Acceptance  pursuant to which such Lender
shall have assumed its US Commitment,  as applicable,  as such commitment may be
(a)  reduced  from time to time  pursuant  to  Section  4.03 and (b)  reduced or
increased  from  time to  time  pursuant  to  assignments  by or to such  Lender
pursuant to Section 12.04.

                  "US Commitment  Percentage"  means, as to any US Lender at any
time, the percentage  which such Lender's US Commitment then  constitutes of the
aggregate  US  Commitments  of all US Lenders  (or, if the US  Commitments  have
terminated or expired,  the  percentage  shall be  determined  based upon the US
Commitments most recently in effect, giving effect to any assignments).

                  "US Funding  Commitment  Percentage"  means, as at any date of
determination  (after giving effect to the making,  and application of proceeds,
of any Loans made on such date pursuant to Section 2.04), with respect to any US
Lender,  that  percentage  which the Available US Commitment of such Lender then
constitutes  of the aggregate  Available US  Commitments;  provided that each US
Lender's US Funding Commitment  Percentage of any US Revolving Loan or Swingline
Loan the  proceeds of which are applied to refund any  Swingline  Loan or to pay
reimbursement  obligations  in respect of any Letter of Credit shall be equal to
such US Lender's US Funding  Commitment  Percentage  of such  Swingline  Loan or
reimbursement  obligations (determined on the date on which such Swingline Loans
were made or such  Letter of Credit was  issued,  as the case may be, but giving
effect to any assignments).

                  "US Lenders"  means each Lender having an amount  greater than
zero set forth under the heading "US  Commitment"  opposite its name on Schedule
2.01 and any other Person that shall have become a party  hereto  pursuant to an
Assignment and Acceptance with respect to a US Commitment.

                  "Warehousing   Collateral"   means  the  collateral   securing
Warehousing Debt, including,  without limitation,  any spread account or reserve
required to be established under the Revolving Retail Facility  Documents or any
other relevant securitization documents.

                  "Warehousing  Debt" means as of any date  Indebtedness  of (a)
TRIP owing to holders of the  Revolving  Retail  Notes or (b) the US Borrower or
any of its  Subsidiaries,  in each case with respect to which (i) neither the US
Borrower  nor any of its  Subsidiaries  (other than TRIP,  in the case of clause
(a), or the US Borrower or such  Subsidiary,  in the case of clause (b)) has any
liability,  absolute or  contingent,  direct or  indirect,  provided  that,  for
purposes of the foregoing,  neither the US Borrower nor any of its  Subsidiaries
shall be deemed to have any  liability  with  respect  to any such  Indebtedness
solely  as a  result  of  any  Customary  Securitization  Undertaking  of the US
Borrower or such  Subsidiary,  as the case may be, and (ii) recourse for payment
thereof is expressly limited to the Warehousing Collateral.

                  "Wholesale  Notes" means, as the context may require,  (a) all
assets  of the  types  classified  under the  heading  "Wholesale  notes" in the
statement  of  consolidated  financial  condition  of the US  Borrower  and  its
consolidated  Subsidiaries as of October 31, 1999 and the related  statements of
consolidated  income and retained  earnings and  consolidated  cash flow for the
fiscal year then ended,  together with the notes  thereto,  included in the 1999
Annual Report and reported on by Deloitte & Touche or (b) the  aggregate  Unpaid
Balances thereof.

                  "Wisconsin Steel Arrangements" means any benefits, payments or
other  arrangements  maintained  solely for employees or former employees of the
former Wisconsin Steel Division of International or any successor thereto.

                  "Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.

                  SECTION 1.02.  Classification of  Loans  and  Borrowings.  For
purposes of this  Agreement,  Loans may be  classified  and referred to by Class
(e.g., a "Revolving  Loan"),  by Type (e.g., a "Eurodollar  Loan"),  by Borrower
(e.g.,  a "Mexican  Loan"),  by Class and Type (e.g.,  a  "Eurodollar  Revolving
Loan"),  by Class and Borrower (e.g., a "Mexican  Revolving  Loan"), by Borrower
and Type (e.g.,  a "Mexican  Eurodollar  Loan") or by Class,  Type and  Borrower
(e.g., a "Mexican Eurodollar Revolving Loan"). Borrowings also may be classified
and  referred to by Class  (e.g.,  a  "Revolving  Borrowing")  by Type (e.g.,  a
"Eurodollar Borrowing"), by Borrower (e.g., a "Mexican Borrowing"), by Class and
Type (e.g., a "Eurodollar Revolving Borrowing"),  by Class and Borrower (e.g., a
"Mexican  Revolving  Loan"),  by Borrower and Type (e.g., a "Mexican  Eurodollar
Loan") or by Class,  Type and Borrower  (e.g., a "Mexican  Eurodollar  Revolving
Loan").

                  SECTION 1.03. Terms Generally. The definitions of terms herein
shall  apply  equally to the  singular  and plural  forms of the terms  defined.
Whenever the context may require,  any pronoun shall  include the  corresponding
masculine,  feminine  and neuter  forms.  The words  "include",  "includes"  and
"including"  shall be deemed to be followed by the phrase "without  limitation".
The word "will"  shall be  construed  to have the same meaning and effect as the
word "shall".  Unless the context  requires  otherwise (a) any  definition of or
reference  to any  agreement,  instrument  or  other  document  herein  shall be
construed as referring to such  agreement,  instrument or other document as from
time to  time  amended,  supplemented  or  otherwise  modified  (subject  to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any  reference  herein to any Person  shall be  construed  to  include  such
Person's  successors  and  assigns,   (c)  the  words  "herein",   "hereof"  and
"hereunder",  and words of similar  import,  shall be construed to refer to this
Agreement in its entirety and not to any particular  provision  hereof,  (d) all
references  herein  to  Articles,  Sections,  Exhibits  and  Schedules  shall be
construed to refer to Articles and Sections of, and Exhibits and  Schedules  to,
this  Agreement and (e) the words "asset" and  "property"  shall be construed to
have the same  meaning  and  effect  and to  refer to any and all  tangible  and
intangible  assets and  properties,  including  cash,  securities,  accounts and
contract rights.

                  SECTION  1.04.  Accounting  Terms;  GAAP.  Except as otherwise
expressly  provided herein, all terms of an accounting or financial nature shall
be construed in accordance  with GAAP, as in effect from time to time;  provided
that, if the US Borrower  notifies the  Administrative  Agent that such Borrower
requests an amendment  to any  provision  hereof to eliminate  the effect of any
change  occurring after the date hereof in or in the application  thereof on the
operation of such  provision  (or if the  Administrative  Agent  notifies the US
Borrower that the Required  Lenders request an amendment to any provision hereof
for such  purpose),  regardless  of whether any such  notice is given  before or
after such change in GAAP, or in the  application  thereof,  then such provision
shall be interpreted  on the basis of GAAP as in effect and applied  immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.++

SECTION 1.05. ...Interpretation. References in this Agreement to the term "sale"
with respect to any transfer of Receivables,  rights to receive income therefrom
or undivided interests therein are deemed to include any transfer which purports
to be a sale on the  face of the  agreement  governing  such  transfer,  without
regard to whether such transfer would  constitute a "true sale" under applicable
legal  principles.  The terms  "sell" and "sold",  as used as  described  in the
foregoing sentence, shall have correlative meanings.

                                   ARTICLE II
                             The US Credit FACILITY

                  SECTION 2.01. Commitments. Subject to the terms and conditions
set forth  herein,  each US Lender  agrees to make US Revolving  Loans to the US
Borrower  from  time to time  during  the  Availability  Period so long as after
giving  effect  thereto (a) the  Available  US  Commitment  of each US Lender is
greater than or equal to zero and (b) the sum of the aggregate  Revolving Credit
Exposures of all the Lenders plus the aggregate  principal amount of outstanding
Competitive  Loans does not  exceed the  aggregate  US  Commitments.  Within the
foregoing  limits and subject to the terms and conditions set forth herein,  the
US Borrower may borrow, prepay and reborrow US Revolving Loans.

                  SECTION 2.02. Loans and Borrowings. (a) Each US Revolving Loan
shall be made as part of a US Borrowing consisting of US Revolving Loans made by
the  US  Lenders  ratably  in  accordance  with  their  US  Funding   Commitment
Percentages.  Each  Competitive  Loan  shall  be made  in  accordance  with  the
procedures  set forth in Section 2.05.  The failure of any US Lender to make any
US  Revolving  Loan  required  to be made by it shall not  relieve  any other US
Lender  of its  obligations  hereunder;  provided  that the US  Commitments  and
Competitive  Bids of the US  Lenders  are  several  and no US  Lender  shall  be
responsible  for any other US  Lender's  failure to make US  Revolving  Loans as
required.

                  (b) Subject to Section 4.08,  (i) each US Revolving  Borrowing
shall be comprised  entirely of ABR Loans or Eurodollar Loans as the US Borrower
may request in accordance herewith, and (ii) each Competitive Borrowing shall be
comprised  entirely of  Eurodollar  Loans or Fixed Rate Loans as the US Borrower
may request in  accordance  herewith.  Unless  otherwise  agreed  between the US
Borrower and the Swingline Lender as provided in Section 2.06(a), each Swingline
Loan  shall  be an ABR  Loan.  Each US  Lender  at its  option  may  make any US
Eurodollar  Loan by causing any domestic or foreign  branch or Affiliate of such
Lender to make such Loan;  provided  that any  exercise of such option shall not
affect the  obligation of the US Borrower to repay such Loan in accordance  with
the terms of this Agreement.

                  (c) At the  commencement  of each  Interest  Period for any US
Eurodollar Revolving  Borrowing,  such Borrowing shall be in an aggregate amount
that is an integral multiple of $1,000,000 and not less than $5,000,000.  At the
time that each US ABR Revolving Borrowing is made, such Borrowing shall be in an
aggregate  amount that is an integral  multiple of $1,000,000  and not less than
$5,000,000;  provided that a US ABR  Revolving  Borrowing may be in an aggregate
amount that is equal to (i) the entire unused  balance of the total  Commitments
or (ii) that is required to finance the  reimbursement  of an LC Disbursement as
contemplated  by  Section  2.07(e)  or (iii)  that is  required  to repay any US
Revolving Loans as contemplated by Section 2.04(a).  Each Competitive  Borrowing
shall be in an aggregate  amount that is an integral  multiple of $1,000,000 and
not less than  $5,000,000.  Each Swingline Loan shall be in an amount that is an
integral  multiple of $500,000 and not less than  $1,000,000.  US  Borrowings of
more than one Type and Class may be outstanding at the same time;  provided that
there shall not at any time be more than a total of ten US Eurodollar  Revolving
Borrowings outstanding.

                  (d) Notwithstanding any other provision of this Agreement, the
US  Borrower  shall  not be  entitled  to  request,  or to elect to  convert  or
continue, any US Borrowing if the Interest Period requested with respect thereto
would end after the Maturity Date.

                  SECTION 2.03. Requests for Revolving Borrowings.  To request a
US Revolving Borrowing, the US Borrower shall notify the Administrative Agent of
such  request by telephone  (a) in the case of a US  Eurodollar  Borrowing,  not
later than 11:00 a.m.,  New York City time,  three Business Days before the date
of the proposed  Borrowing or (b) in the case of a US ABR  Borrowing,  not later
than 11:00  a.m.,  New York City time,  on the date of the  proposed  Borrowing;
provided  that any such notice of a US ABR  Revolving  Borrowing  to finance the
reimbursement  of an LC  Disbursement  as contemplated by Section 2.07(e) may be
given not later than 10:00 a.m., New York City time, on the date of the proposed
Borrowing.  Each such telephonic  Borrowing Request shall be irrevocable (except
in the circumstance  where increased costs will result or where it is illegal to
make a US Eurodollar Borrowing) and shall be confirmed promptly by hand delivery
or telecopy to the Administrative Agent of a written Borrowing Request in a form
approved by the  Administrative  Agent and signed by the US Borrower.  Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:

          (i) the aggregate amount of the requested Borrowing;

          (ii) the date of such Borrowing, which shall be a Business Day;

          (iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
          Borrowing;

          (iv) in the  case of a  Eurodollar  Borrowing,  the  initial  Interest
          Period to be applicable thereto,  which shall be a period contemplated
          by the definition of the term "Interest Period"; and

          (v) the  location  and  number of the US  Borrower's  account to which
          funds are to be disbursed, which shall comply with the requirements of
          Section 4.01.

If no election as to the Type of US Revolving  Borrowing is specified,  then the
requested  US  Revolving  Borrowing  shall be an ABR  Borrowing.  If no Interest
Period  is  specified  with  respect  to  any  requested   Eurodollar  Revolving
Borrowing,  then the US  Borrower  shall be deemed to have  selected an Interest
Period of one  month's  duration.  Promptly  following  receipt  of a  Borrowing
Request in accordance with this Section,  the Administrative  Agent shall advise
each US Lender of the details thereof and of the amount of such Lender's Loan to
be made as part of the requested US Borrowing.

                  SECTION 2.04.  Certain  Borrowings  of US Revolving  Loans and
Refunding of Loans.  (a) If on any date (a "Borrowing  Date") on which a Mexican
Borrower has requested the Mexican Lenders to make Mexican  Revolving Loans (the
"Requested  Mexican  Loans"),   (i)  any  Mexican  Lender's  Mexican  Commitment
Percentage  of  the  Requested  Mexican  Loans  exceeds  the  Available  Mexican
Commitment  of such  Mexican  Lender on such date (before  giving  effect to the
making,  and application of proceeds,  of any Loans required to be made pursuant
to this  Section  2.04 on such date) and (ii) the amount of such  excess is less
than or equal to the  aggregate  Available  US  Commitments  of all  Non-Mexican
Lenders (before giving effect to the making, and application of proceeds, of any
Loans pursuant to this Section 2.04 on such date), each Non-Mexican Lender shall
make a US  Revolving  Loan to the US Borrower on such date,  and the proceeds of
such US Revolving Loans shall be simultaneously  applied to repay outstanding US
Revolving  Loans of the Mexican  Lenders,  in amounts  such that,  after  giving
effect to (A) such borrowings and repayments and (B) the making of the Requested
Mexican Loans, the Revolving  Credit Exposure  Percentage of each US Lender will
equal (as nearly as  possible)  its US  Commitment  Percentage.  To effect  such
borrowings and repayments, (1) not later than 12:00 Noon, New York City time, on
such requested  Borrowing Date, the proceeds of such US Revolving Loans shall be
made available by each Non-Mexican  Lender to the account of the  Administrative
Agent most recently  designated by it for such purpose by notice to the Lenders,
in immediately  available  funds, and the  Administrative  Agent shall apply the
proceeds of such US Revolving Loans toward repayment of outstanding US Revolving
Loans of the Mexican  Lenders and (2)  concurrently  with the  repayment of such
Loans on such date,  (x) the  Mexican  Lenders  shall,  in  accordance  with the
applicable  provisions hereof,  make the Requested Mexican Loans in an aggregate
amount equal to the amount so requested by the relevant  Mexican  Borrower  (but
not in any event greater than the aggregate  Available Mexican Commitments after
giving  effect to the making of such  repayment  of US  Revolving  Loans on such
date)  and (y) the US  Borrower  shall pay to the  Administrative  Agent for the
account of the Lenders whose US Revolving Loans are repaid on such date pursuant
to this Section 2.04 all interest  accrued on the amounts  repaid to the date of
repayment,  together  with any  amounts  payable  pursuant  to  Section  4.10 in
connection with such repayment.

(b) If any borrowing of US Revolving Loans is required  pursuant to this Section
2.04,  the US  Borrower  shall  notify  the  Administrative  Agent in the manner
provided  for US  Revolving  Loans in  Section  2.03,  except  that the  minimum
borrowing  amounts and threshold  multiples in excess thereof  applicable to ABR
Loans set forth in Section  2.02(c)  shall not be  applicable to the extent that
such minimum borrowing amounts exceed the amounts of US Revolving Loans required
to be made pursuant to this Section 2.04.

                  SECTION 2.05.  Competitive  Bid Procedure.  (a) Subject to the
terms and conditions set forth herein, from time to time during the Availability
Period the US Borrower may request  Competitive Bids and may (but shall not have
any  obligation  to)  accept  Competitive  Bids and  borrow  Competitive  Loans;
provided that the sum of the  aggregate  Revolving  Credit  Exposures of all the
Lenders plus the aggregate principal amount of outstanding  Competitive Loans at
any time shall not exceed the aggregate US Commitments.  To request  Competitive
Bids, the US Borrower shall notify the  Administrative  Agent of such request by
telephone, in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New
York City time,  four  Business  Days before the date of the proposed  Borrowing
and, in the case of a Fixed Rate Borrowing,  not later than 11:00 a.m., New York
City time, one Business Day before the date of the proposed Borrowing;  provided
that the US Borrower may submit up to (but not more than) five  Competitive  Bid
Requests on the same day, but a Competitive Bid Request shall not be made within
five  Business  Days after the date of any  previous  Competitive  Bid  Request,
unless  any and all such  previous  Competitive  Bid  Requests  shall  have been
withdrawn or all Competitive  Bids received in response thereto  rejected.  Each
such  telephonic  Competitive  Bid Request  shall be confirmed  promptly by hand
delivery or telecopy to the  Administrative  Agent of a written  Competitive Bid
Request  in a form  approved  by the  Administrative  Agent and signed by the US
Borrower. Each such telephonic and written Competitive Bid Request shall specify
the following information in compliance with Section 2.02:

          (i) the aggregate amount of the requested Borrowing;

          (ii) the date of such Borrowing, which shall be a Business Day;

          (iii)  whether such  Borrowing  is to be a  Eurodollar  Borrowing or a
          Fixed Rate Borrowing;

          (iv) the Interest  Period to be  applicable to such  Borrowing,  which
          shall be a period contemplated by the definition of the term "Interest
          Period";

          (v) the maturity date of such Borrowing,  which shall be no later than
          the Maturity Date; and

          (vi) the  location  and number of the US  Borrower's  account to which
          funds are to be disbursed, which shall comply with the requirements of
          Section 4.01.

Promptly  following receipt of a Competitive Bid Request in accordance with this
Section,  the  Administrative  Agent  shall  notify the  Lenders of the  details
thereof by telecopy, inviting the Lenders to submit Competitive Bids.

(b) Each  Lender  may (but  shall not have any  obligation  to) make one or more
Competitive  Bids to the US Borrower in response to a  Competitive  Bid Request.
Each   Competitive  Bid  by  a  Lender  must  be  in  a  form  approved  by  the
Administrative  Agent  and  must be  received  by the  Administrative  Agent  by
telecopy, in the case of a Eurodollar Competitive Borrowing, not later than 9:30
a.m.,  New York City time,  three Business Days before the proposed date of such
Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than
9:30  a.m.,  New  York  City  time,  on the  proposed  date of such  Competitive
Borrowing.  Competitive  Bids  that do not  conform  substantially  to the  form
approved  by the  Administrative  Agent may be  rejected  by the  Administrative
Agent,  and the  Administrative  Agent  shall  notify the  applicable  Lender as
promptly as  practicable.  Each  Competitive Bid shall specify (i) the principal
amount  (which  shall be a minimum of  $5,000,000  and an  integral  multiple of
$1,000,000 and which may equal the entire  principal  amount of the  Competitive
Borrowing  requested by the US Borrower) of the  Competitive  Loan or Loans that
the Lender is willing to make,  (ii) the  Competitive Bid Rate or Rates at which
the Lender is prepared  to make such Loan or Loans  (expressed  as a  percentage
rate per annum in the form of a decimal to no more than four decimal places) and
(iii) the Interest Period applicable to each such Loan and the last day thereof.

(c) The  Administrative  Agent shall promptly notify the US Borrower by telecopy
of the  Competitive  Bid  Rate  and  the  principal  amount  specified  in  each
Competitive  Bid and the  identity  of the  Lender  that  shall  have  made such
Competitive Bid.

(d) Subject only to the provisions of this paragraph, the US Borrower may accept
or reject any Competitive  Bid. The US Borrower shall notify the  Administrative
Agent  by   telephone,   confirmed  by  telecopy  in  a  form  approved  by  the
Administrative  Agent,  whether  and to what  extent it has decided to accept or
reject each Competitive Bid, in the case of a Eurodollar  Competitive Borrowing,
not later than 11:00 a.m.,  New York City time,  three  Business Days before the
date of the  proposed  Competitive  Borrowing,  and in the case of a Fixed  Rate
Borrowing,  not later than 11:00 a.m.,  New York City time, on the proposed date
of the Competitive  Borrowing;  provided that (i) the failure of the US Borrower
to give such notice shall be deemed to be a rejection of each  Competitive  Bid,
(ii) the US Borrower  shall not accept a  Competitive  Bid made at a  particular
Competitive  Bid Rate if the US  Borrower  rejects a  Competitive  Bid made at a
lower  Competitive Bid Rate,  (iii) the aggregate amount of the Competitive Bids
accepted  by the US  Borrower  shall  not  exceed  the  aggregate  amount of the
requested  Competitive  Borrowing  specified  in  the  related  Competitive  Bid
Request,  (iv) to the extent necessary to comply with clause (iii) above, the US
Borrower may accept  Competitive  Bids at the same Competitive Bid Rate in part,
which acceptance,  in the case of multiple  Competitive Bids at such Competitive
Bid  Rate,  shall be made pro rata in  accordance  with the  amount of each such
Competitive  Bid, and (v) except  pursuant to clause (iv) above,  no Competitive
Bid shall be accepted for a Competitive  Loan unless such Competitive Loan is in
a minimum principal amount of $5,000,000 and an integral multiple of $1,000,000;
provided  further  that if a  Competitive  Loan must be in an  amount  less than
$5,000,000 because of the provisions of clause (iv) above, such Competitive Loan
may be for a minimum of  $1,000,000  or any integral  multiple  thereof,  and in
calculating  the pro rata  allocation  of  acceptances  of  portions of multiple
Competitive  Bids at a particular  Competitive  Bid Rate pursuant to clause (iv)
the amounts  shall be rounded to integral  multiples of  $1,000,000  in a manner
determined  by the US Borrower.  A notice  given by the US Borrower  pursuant to
this paragraph shall be irrevocable.

(e) The  Administrative  Agent  shall  promptly  notify each  bidding  Lender by
telecopy  whether or not its  Competitive Bid has been accepted (and, if so, the
amount and  Competitive Bid Rate so accepted),  and each successful  bidder will
thereupon become bound,  subject to the terms and conditions hereof, to make the
Competitive Loan in respect of which its Competitive Bid has been accepted.

(f) If the  Administrative  Agent shall elect to submit a Competitive Bid in its
capacity as a Lender,  it shall submit such  Competitive  Bid directly to the US
Borrower  at least one  quarter  of an hour  earlier  than the time by which the
other   Lenders  are   required  to  submit  their   Competitive   Bids  to  the
Administrative Agent pursuant to paragraph (b) of this Section.

                  SECTION 2.06.  Swingline  Loans.  (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline Loans
to the US  Borrower  from time to time  during the  Availability  Period,  in an
aggregate principal amount at any time outstanding not to exceed $20,000,000, so
long as after giving  effect  thereto (i) the Available US Commitment of each US
Lender  is  greater  than or equal  to zero  and  (ii) the sum of the  aggregate
Revolving  Credit  Exposures  of all the Lenders  plus the  aggregate  principal
amount of  outstanding  Competitive  Loans  does not  exceed  the  aggregate  US
Commitments;  provided that the Swingline Lender shall not be required to make a
Swingline Loan to refinance an outstanding  Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein, the US Borrower
may borrow, prepay and reborrow Swingline Loans.

(b) To request a Swingline Loan, the US Borrower shall notify the Administrative
Agent and the  Swingline  Lender of such  request  by  telephone  (confirmed  by
telecopy),  not  later  than 1:00  p.m.,  New York  City  time,  on the day of a
proposed Swingline Loan. Each such notice shall be irrevocable and shall specify
the  requested  date (which shall be a Business Day) and amount of the requested
Swingline Loan. Each Swingline Loan shall be an ABR Loan; provided,  that the US
Borrower and the Swingline  Lender may agree that the Swingline  Loan shall bear
interest at a fixed rate for a fixed interest period (any such Swingline Loan, a
"Swingline  Fixed Rate Loan";  and any such fixed interest  period, a "Swingline
Interest Period"). The Swingline Lender shall make each Swingline Loan available
to the US Borrower by means of a credit to the general deposit account of the US
Borrower with the Swingline  Lender (or, in the case of a Swingline Loan made to
finance the  reimbursement of an LC Disbursement as provided in Section 2.06(e),
by  remittance  to the Issuing  Bank) by 3:00 p.m.,  New York City time,  on the
requested date of such Swingline Loan.

(c) The  Swingline  Lender may, by written  notice  given to the  Administrative
Agent not later than 10:00 a.m., New York City time on any Business Day, require
the Lenders to acquire  participations  on such Business Day in all or a portion
of the Swingline Loans outstanding; provided, that unless a Default has occurred
and is continuing, the Swingline Lender shall not make such a request in respect
of any Swingline Fixed Rate Loan until the end of the Swingline  Interest Period
applicable thereto.  Such notice shall specify the aggregate amount of Swingline
Loans in which Lenders will  participate.  Promptly upon receipt of such notice,
the Administrative Agent will give notice thereof to each Lender,  specifying in
such notice such Lender's US Funding  Commitment  Percentage  of such  Swingline
Loan or Loans. Each Lender hereby absolutely and  unconditionally  agrees,  upon
receipt of notice as provided above, to pay to the Administrative Agent, for the
account of the Swingline Lender, such Lender's US Funding Commitment  Percentage
of such Swingline Loan or Loans.  Each Lender  acknowledges  and agrees that its
obligation  to  acquire  participations  in  Swingline  Loans  pursuant  to this
paragraph  is  absolute  and  unconditional  and  shall not be  affected  by any
circumstance  whatsoever,  including the occurrence and continuance of a Default
or reduction or  termination of the US  Commitments,  and that each such payment
shall  be  made  without  any  offset,   abatement,   withholding  or  reduction
whatsoever. Each Lender shall comply with its obligation under this paragraph by
wire transfer of immediately  available funds, in the same manner as provided in
Section  4.01 with  respect to Loans made by such Lender (and Section 4.01 shall
apply,  mutatis mutandis,  to the payment  obligations of the Lenders),  and the
Administrative  Agent shall promptly pay to the Swingline  Lender the amounts so
received by it from the Lenders.  The  Administrative  Agent shall notify the US
Borrower of any  participations  in any Swingline Loan acquired pursuant to this
paragraph,  and  thereafter  payments in respect of such Swingline Loan shall be
made to the  Administrative  Agent and not to the Swingline Lender.  Any amounts
received by the Swingline  Lender from the US Borrower (or other party on behalf
of the US  Borrower)  in  respect  of a  Swingline  Loan  after  receipt  by the
Swingline  Lender of the proceeds of a sale of  participations  therein shall be
promptly remitted to the Administrative  Agent; any such amounts received by the
Administrative  Agent shall be promptly remitted by the Administrative  Agent to
the Lenders that shall have made their  payments  pursuant to this paragraph and
to the  Swingline  Lender,  as their  interests  may  appear.  The  purchase  of
participations  in a Swingline Loan pursuant to this paragraph shall not relieve
the US Borrower of any default in the payment thereof.

                  SECTION 2.07. Letters of Credit.  (a) General.  Subject to the
terms and conditions set forth herein,  the US Borrower may request the issuance
of Letters of Credit for its own account, in a form reasonably acceptable to the
Administrative  Agent and the  Issuing  Bank,  at any time and from time to time
during the Availability  Period. In the event of any  inconsistency  between the
terms and  conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement  submitted by the US Borrower
to, or entered into by the US Borrower  with,  the Issuing Bank  relating to any
Letter of Credit, the terms and conditions of this Agreement shall control.

(b) Notice of Issuance,  Amendment,  Renewal, Extension;  Certain Conditions. To
request  the  issuance  of a Letter  of Credit  (or the  amendment,  renewal  or
extension  of an  outstanding  Letter of  Credit),  the US  Borrower  shall hand
deliver or telecopy (or transmit by electronic  communication,  if  arrangements
for doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative  Agent  (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended,  renewed or extended,
the date of issuance,  amendment,  renewal or extension,  the date on which such
Letter of Credit is to expire  (which  shall comply with  paragraph  (c) of this
Section),  the  amount of such  Letter of  Credit,  the name and  address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend,  renew or extend such Letter of Credit. If requested by the Issuing Bank,
the US Borrower also shall submit a letter of credit  application on the Issuing
Bank's  standard form in connection  with any request for a Letter of Credit.  A
Letter of Credit shall be issued, amended, renewed or extended only if (and upon
issuance,  amendment,  renewal  or  extension  of each  Letter of Credit  the US
Borrower shall be deemed to represent and warrant that),  after giving effect to
such  issuance,  amendment,  renewal or extension (i) the LC Exposure  shall not
exceed  $25,000,000,  (ii) the  Available  US  Commitment  of each US  Lender is
greater  than or equal  to zero and  (iii)  the sum of the  aggregate  Revolving
Credit  Exposures  of all the Lenders  plus the  aggregate  principal  amount of
outstanding Competitive Loans shall not exceed the aggregate US Commitments.

(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close
of  business  on the  earlier  of (i) the date one  year  after  the date of the
issuance of such  Letter of Credit (or, in the case of any renewal or  extension
thereof,  one year after such  renewal or  extension)  and (ii) the date that is
five Business Days prior to the Maturity Date.

(d) Participations.  By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit  increasing the amount  thereof) and without any further action
on the part of the Issuing Bank or the Lenders,  the Issuing Bank hereby  grants
to each US Lender,  and each US Lender hereby  acquires from the Issuing Bank, a
participation  in such  Letter of Credit  equal to such US  Lender's  US Funding
Commitment  Percentage of the aggregate  amount available to be drawn under such
Letter of Credit. In consideration and in furtherance of the foregoing,  each US
Lender hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the Issuing Bank, such Lender's US Funding  Commitment
Percentage of each LC Disbursement  made in respect of a Letter of Credit by the
Issuing Bank and not  reimbursed  by the US Borrower on the date due as provided
in paragraph (e) of this Section, or of any reimbursement payment required to be
refunded to the US  Borrower  for any reason.  Each US Lender  acknowledges  and
agrees that its obligation to acquire participations  pursuant to this paragraph
in respect of Letters of Credit is absolute and  unconditional  and shall not be
affected by any  circumstance  whatsoever,  including any amendment,  renewal or
extension of any Letter of Credit or the occurrence and continuance of a Default
or reduction or  termination of the US  Commitments,  and that each such payment
shall  be  made  without  any  offset,   abatement,   withholding  or  reduction
whatsoever.

(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit,  the US Borrower shall  reimburse such LC Disbursement by
paying to the  Administrative  Agent an amount equal to such LC Disbursement not
later than 12:00 noon, New York City time, on the date that such LC Disbursement
is made, if the US Borrower shall have received  notice of such LC  Disbursement
prior to 10:00 a.m.,  New York City time,  on such date,  or, if such notice has
not been received by the US Borrower  prior to such time on such date,  then not
later than 12:00 noon,  New York City time,  on (i) the Business Day that the US
Borrower  receives such notice,  if such notice is received prior to 10:00 a.m.,
New York City time, on the day of receipt,  or (ii) the Business Day immediately
following the day that the US Borrower  receives such notice,  if such notice is
not  received  prior to such time on the day of  receipt;  provided  that the US
Borrower may,  subject to the conditions to borrowing set forth herein,  request
in accordance  with Section 2.03 or 2.06 that such payment be financed with a US
ABR Revolving  Borrowing or Swingline  Loan in an equivalent  amount and, to the
extent so financed,  the US Borrower's  obligation to make such payment shall be
discharged and replaced by the resulting US ABR Revolving Borrowing or Swingline
Loan. If the US Borrower fails to make such payment when due, the Administrative
Agent shall notify each US Lender of the applicable LC Disbursement, the payment
then due from the US Borrower in respect thereof and such US Lender's US Funding
Commitment  Percentage thereof.  Promptly following receipt of such notice, each
US  Lender  shall pay to the  Administrative  Agent  its US  Funding  Commitment
Percentage  of the payment then due from the US Borrower,  in the same manner as
provided in Section  4.01 with respect to Loans made by such Lender (and Section
4.01  shall  apply,  mutatis  mutandis,  to the  payment  obligations  of the US
Lenders),  and the  Administrative  Agent shall promptly pay to the Issuing Bank
the amounts so received by it from the US Lenders. Promptly following receipt by
the  Administrative  Agent of any payment from the US Borrower  pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the  extent  that US Lenders  have made  payments  pursuant  to this
paragraph to reimburse the Issuing Bank, then to such US Lenders and the Issuing
Bank as their interests may appear.  Any payment made by a US Lender pursuant to
this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than
the funding of US ABR Revolving Loans or a Swingline Loan as contemplated above)
shall not  constitute  a Loan and  shall  not  relieve  the US  Borrower  of its
obligation to reimburse such LC Disbursement.

(f)  Obligations  Absolute.   The  US  Borrower's  obligation  to  reimburse  LC
Disbursements  as provided in paragraph  (e) of this Section  shall be absolute,
unconditional  and  irrevocable,  and shall be performed  strictly in accordance
with the terms of this Agreement under any and all circumstances  whatsoever and
irrespective of:

          (i) any lack of validity or  enforceability of any Letter of Credit or
          this Agreement, or any term or provision therein;

          (ii) any  amendment or waiver of or any consent to or  departure  from
          all  or any  of  the  provisions  of any  Letter  of  Credit  or  this
          Agreement;

          (iii) the existence of any claim, setoff,  defense or other right that
          the US Borrower, any other party guaranteeing,  or otherwise obligated
          with, the US Borrower,  any Subsidiary or other  Affiliate  thereof or
          any other  Person may at any time have against the  beneficiary  under
          any Letter of Credit,  the Issuing Bank, the  Administrative  Agent or
          any  Lender or any  other  Person,  whether  in  connection  with this
          Agreement or any other related or unrelated agreement or transaction;

          (iv) any draft or other  document  presented  under a Letter of Credit
          proving to be  forged,  fraudulent  or  invalid in any  respect or any
          statement therein being untrue or inaccurate in any respect;

          (v)  payment  by the  Issuing  Bank  under a Letter of Credit  against
          presentation  of a draft or other  document  that does not comply with
          the terms of such  Letter of  Credit,  so long as such  draft or other
          document  appears on its face to comply  with the terms of such Letter
          of Credit; and

          (vi)  any  other  act or  omission  to act or delay of any kind of the
          Issuing  Bank,  the Lenders or the  Administrative  Agent or any other
          event or circumstance whatsoever, whether or not similar to any of the
          foregoing,  that  might,  but for  the  provisions  of  this  Section,
          constitute  a  legal  or  equitable  discharge  of the  US  Borrower's
          obligations hereunder, so long as such act or omission to act or delay
          has not resulted from the gross  negligence  or willful  misconduct of
          the Issuing Bank, the Lenders or the Administrative Agent.

Neither the  Administrative  Agent, the US Lenders nor the Issuing Bank, nor any
of their Related Parties,  shall have any liability or  responsibility by reason
of or in connection with the issuance or transfer of any Letter of Credit or any
payment  or  failure  to  make  any  payment  thereunder,  including  any of the
circumstances specified in clauses (i) through (vi) above, as well as any error,
omission,  interruption, loss or delay in transmission or delivery of any draft,
notice  or other  communication  under  or  relating  to any  Letter  of  Credit
(including  any document  required to make a drawing  thereunder),  any error in
interpretation of technical terms or any consequence  arising from causes beyond
the  control of the  Issuing  Bank;  provided  that the  foregoing  shall not be
construed  to excuse the Issuing  Bank from  liability to the US Borrower to the
extent of any direct  damages (as opposed to  consequential  damages,  claims in
respect of which are hereby waived by the US Borrower to the extent permitted by
applicable  law)  suffered  by the US  Borrower  that are caused by the  Issuing
Bank's  failure to exercise the agreed  standard of care (as set forth below) in
determining  whether  drafts  and other  documents  presented  under a Letter of
Credit comply with the terms thereof.  The parties hereto  expressly  agree that
the Issuing Bank shall have exercised the agreed standard of care in the absence
of gross  negligence  or willful  misconduct  on the part of the  Issuing  Bank.
Without  limiting the  generality of the  foregoing,  it is understood  that the
Issuing Bank may accept documents that appear on their face to be in substantial
compliance  with the terms of a Letter of  Credit,  without  responsibility  for
further investigation,  regardless of any notice or information to the contrary,
and may make payment upon presentation of documents that appear on their face to
be in substantial  compliance with the terms of such Letter of Credit;  provided
that the Issuing Bank shall have the right, in its sole  discretion,  to decline
to accept such  documents and to make such payment if such  documents are not in
strict compliance with the terms of such Letter of Credit.

(g)  Disbursement  Procedures.  The Issuing Bank shall,  promptly  following its
receipt  thereof,  examine all  documents  purporting  to represent a demand for
payment  under a Letter of Credit.  The Issuing Bank shall  promptly  notify the
Administrative Agent and the US Borrower by telephone (confirmed by telecopy) of
such demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement  thereunder;  provided  that any failure to give or delay in giving
such notice shall not relieve the US Borrower of its obligation to reimburse the
Issuing Bank and the Lenders with respect to any such LC Disbursement.

(h) Interim  Interest.  If the Issuing  Bank shall make any LC  Disbursement  in
respect of a Letter of Credit, then, unless the US Borrower shall reimburse such
LC  Disbursement  in full on the date such LC  Disbursement  is made, the unpaid
amount  thereof  shall bear  interest,  for each day from and including the date
such LC  Disbursement  is made to but  excluding  the date that the US  Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to US ABR
Revolving  Loans;  provided  that, if the US Borrower fails to reimburse such LC
Disbursement  when due pursuant to paragraph (e) of this  Section,  then Section
4.07(e) shall apply.  Interest  accrued  pursuant to this paragraph shall be for
the account of the Issuing Bank,  except that interest  accrued on and after the
date of payment by any US Lender  pursuant to  paragraph  (e) of this Section to
reimburse the Issuing Bank shall be for the account of such Lender to the extent
of such payment.

(i)  Replacement  of the Issuing  Bank.  The Issuing Bank may be replaced at any
time by written agreement among the US Borrower,  the  Administrative  Agent and
the successor Issuing Bank. The Administrative Agent shall notify the Lenders of
any such replacement of the Issuing Bank. At the time any such replacement shall
become  effective,  the US Borrower  shall pay all unpaid  fees  accrued for the
account of the replaced Issuing Bank pursuant to Section 4.06(b). From and after
the effective date of any such replacement, (i) the successor Issuing Bank shall
have all the rights and  obligations  of the Issuing  Bank under this  Agreement
with respect to Letters of Credit to be issued  thereafter  and (ii)  references
herein to the term "Issuing  Bank" shall be deemed to refer to such successor or
to any previous  Issuing  Bank, or to such  successor  and all previous  Issuing
Banks,  as the context shall require.  After the  replacement of an Issuing Bank
hereunder,  the  replaced  Issuing  Bank shall  remain a party  hereto and shall
continue to have all the rights and  obligations  of an Issuing  Bank under this
Agreement  with  respect  to  Letters  of  Credit  issued  by it  prior  to such
replacement, but shall not be required to issue additional Letters of Credit.

(j)  Cash  Collateralization.  If  any  Event  of  Default  shall  occur  and be
continuing,  on the Business Day that the US Borrower  receives  notice from the
Administrative  Agent or the Required  Lenders (or, if the maturity of the Loans
has been accelerated,  US Lenders with LC Exposure representing greater than 50%
of the total LC Exposure)  demanding the deposit of cash collateral  pursuant to
this  paragraph,   the  US  Borrower  shall  deposit  in  an  account  with  the
Administrative  Agent,  in the  name  of the  Administrative  Agent  and for the
benefit of the US Lenders, an amount in cash equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon;  provided that the obligation
to deposit such cash collateral  shall become  effective  immediately,  and such
deposit shall become immediately due and payable, without demand or other notice
of any kind,  upon the  occurrence  of any Event of Default  with respect to any
Borrower  described  in clause (j) or (k) of Article IX. Such  deposit  shall be
held by the  Administrative  Agent as collateral for the payment and performance
of the obligations of the US Borrower under this Agreement.  The  Administrative
Agent shall have exclusive  dominion and control,  including the exclusive right
of  withdrawal,  over such  account,  and the US Borrower  hereby  grants to the
Administrative  Agent,  for the  ratable  benefit  of the  Lenders,  a  security
interest  in such cash  collateral  account  and all cash and  other  investment
property from time to time credited  thereto,  and all proceeds  thereof.  Other
than any interest  earned on the investment of such deposit,  which  investments
shall be made at the option and sole discretion of the Administrative  Agent and
at the US Borrower's  risk and expense,  such deposit  shall not bear  interest.
Interest  or profits,  if any,  on such  investments  shall  accumulate  in such
account.  Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC  Disbursements in respect of Letters of Credit
for which it has not been reimbursed and, to the extent not so applied, shall be
held for the  satisfaction of the  reimbursement  obligations of the US Borrower
for the LC  Exposure  at such  time or,  if the  maturity  of the Loans has been
accelerated  (but  subject  to  the  consent  of US  Lenders  with  LC  Exposure
representing  greater than 50% of the total LC Exposure),  be applied to satisfy
other obligations of the US Borrower under this Agreement. If the US Borrower is
required to provide an amount of cash  collateral  hereunder  as a result of the
occurrence  of an Event of  Default,  such  amount (to the extent not applied as
aforesaid)  shall be returned to the US Borrower  within two Business Days after
all Events of Default have been cured or waived.

                                  ARTICLE III

                           THE MEXICAN CREDIT FACILITY

SECTION 3.01. Commitments. Subject to the terms and conditions set forth herein,
each  Mexican  Lender  agrees to make  Mexican  Revolving  Loans to the  Mexican
Borrowers  from time to time  during  the  Availability  Period so long as after
giving effect thereto (a) the aggregate  principal amount of outstanding Mexican
Revolving  Loans  does  not  exceed  $100,000,000,  (b)  the  Available  Mexican
Commitment  of each Mexican  Lender is greater than or equal to zero and (c) the
sum of the  aggregate  Revolving  Credit  Exposures  of all the Lenders plus the
aggregate principal amount of outstanding  Competitive Loans does not exceed the
aggregate US Commitments.  Within the foregoing  limits and subject to the terms
and conditions set forth herein,  the Mexican  Borrowers may borrow,  prepay and
reborrow Mexican Revolving Loans.

SECTION 3.02.  Loans and  Borrowings.  (a) Each Mexican  Revolving Loan shall be
made as part of a Mexican  Borrowing  consisting of Mexican Revolving Loans made
by the Mexican  Lenders  ratably in  accordance  with their  respective  Mexican
Commitments.  The  failure of any Mexican  Lender to make any Mexican  Revolving
Loan required to be made by it shall not relieve any other Mexican Lender of its
obligations  hereunder;  provided  that the Mexican  Commitments  of the Mexican
Lenders are several and no Mexican  Lender  shall be  responsible  for any other
Mexican Lender's failure to make Mexican Revolving Loans as required.

(b) Subject to Section 4.08, each Mexican Revolving Borrowing shall be comprised
entirely of  Eurodollar  Loans.  Each Mexican  Lender at its option may make any
Mexican  Eurodollar  Loan by causing any domestic or foreign branch or Affiliate
of such  Lender to make such Loan;  provided  that any  exercise  of such option
shall not affect the obligation of the relevant  Mexican  Borrower to repay such
Loan in accordance with the terms of this Agreement.

(c) At the  commencement  of each  Interest  Period for any  Mexican  Eurodollar
Revolving  Borrowing,  such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000. There shall not at
any time be more than a total of ten  Mexican  Eurodollar  Revolving  Borrowings
outstanding.

(d) Notwithstanding any other provision of this Agreement, the Mexican Borrowers
shall not be entitled to request, or to elect to continue, any Mexican Borrowing
having an Interest Period ending after the Maturity Date.

SECTION 3.03.  Requests for Mexican Revolving  Borrowings.  To request a Mexican
Revolving   Borrowing,   the  relevant   Mexican   Borrower   shall  notify  the
Administrative  Agent of such request by  telephone,  not later than 11:00 a.m.,
New York  City  time,  three  Business  Days  before  the  date of the  proposed
Borrowing.  Each such telephonic  Borrowing Request shall be irrevocable (except
in the circumstance  where increased costs will result or where it is illegal to
make a Mexican  Revolving  Borrowing)  and shall be  confirmed  promptly by hand
delivery or telecopy to the Administrative  Agent of a written Borrowing Request
in a form  approved  by the  Administrative  Agent and  signed  by the  relevant
Mexican  Borrower.  Each such  telephonic  and written  Borrowing  Request shall
specify the following information in compliance with Section 3.02:

          (i) the aggregate amount of the requested Borrowing;

          (ii) the date of such Borrowing, which shall be a Business Day;

          (iii) the initial  Interest  Period to be  applicable  thereto,  which
          shall be a period contemplated by the definition of the term "Interest
          Period"; and

          (iv) the  location  and  number  of the  relevant  Mexican  Borrower's
          account to which funds are to be  disbursed,  which shall  comply with
          the requirements of Section 4.01.

If no Interest Period is specified,  then the relevant Mexican Borrower shall be
deemed to have  selected an Interest  Period of one month's  duration.  Promptly
following  receipt of a Borrowing  Request in accordance with this Section,  the
Administrative Agent shall advise each Mexican Lender of the details thereof and
of the amount of such Mexican  Lender's Loan to be made as part of the requested
Borrowing.

                                   ARTICLE IV

       terms applicable to us credit facility and mexican credit facility

SECTION 4.01. Funding of Borrowings.  (a) Each Lender shall make each Loan to be
made  by it  hereunder  on  the  proposed  date  thereof  by  wire  transfer  of
immediately available funds by 12:00 noon, New York City time, to the account of
the  Administrative  Agent most  recently  designated  by it for such purpose by
notice to the Lenders;  provided that Swingline  Loans shall be made as provided
in Section 2.06. The Administrative  Agent will make such Loans available to the
relevant Borrower by promptly crediting the amounts so received,  in like funds,
to an account of such Borrower  maintained with the Administrative  Agent in New
York City and designated by such Borrower in the applicable Borrowing Request or
Competitive  Bid Request;  provided that ABR Revolving Loans made to finance the
reimbursement  of an LC  Disbursement  as provided in Section  2.06(e)  shall be
remitted by the Administrative Agent to the Issuing Bank.

(b) Unless the  Administrative  Agent shall have  received  notice from a Lender
prior to the  proposed  time of any  Borrowing  that such  Lender  will not make
available to the Administrative Agent such Lender's share of such Borrowing, the
Administrative  Agent may assume that such Lender has made such share  available
on such date in  accordance  with  paragraph  (a) of this  Section  and may,  in
reliance  upon such  assumption,  make  available  to the  relevant  Borrower  a
corresponding  amount. In such event, if a Lender has not in fact made its share
of the applicable  Borrowing  available to the  Administrative  Agent,  then the
applicable Lender and such Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding  amount with interest thereon,  for
each day from and  including  the date  such  amount is made  available  to such
Borrower to but excluding the date of payment to the  Administrative  Agent,  at
(i) in the case of such Lender,  the Federal Funds Effective Rate or (ii) in the
case of such Borrower, the interest rate applicable to ABR Loans. If such Lender
pays such amount to the Administrative  Agent, then such amount shall constitute
such Lender's Loan included in such Borrowing.

SECTION 4.02.  Interest  Elections.  (a) Each US Revolving  Borrowing  initially
shall be of the Type specified in the applicable  Borrowing  Request and, in the
case of a Eurodollar Revolving Borrowing,  shall have an initial Interest Period
as specified in such Borrowing Request. Thereafter, the US Borrower may elect to
convert any of its Revolving  Borrowings to a different  Type or to continue any
of such Borrowings  and, in the case of a Eurodollar  Revolving  Borrowing,  may
elect  Interest  Periods  therefor,  all as provided in this Section.  Except as
provided in Section 4.08, all Mexican Revolving Loans shall be Eurodollar Loans,
and the relevant  Mexican Borrower may elect Interest Periods in respect thereof
as provided in this  Section.  Each  Borrower may elect  different  options with
respect to different portions of its respective  affected  Borrowings,  in which
case each such portion shall be allocated  ratably among the Lenders holding the
Loans  comprising  such  Borrowing,  and the Loans  comprising each such portion
shall be  considered  a  separate  Borrowing.  This  Section  shall not apply to
Competitive  Borrowings or Swingline  Borrowings,  which may not be converted or
continued.

(b) To make an election  pursuant to this Section,  the relevant  Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing  Request would be required  under Section 2.03 if the US Borrower,  or
Section  3.03 if a  Mexican  Borrower,  as the case may be,  were  requesting  a
Revolving  Borrowing of the Type  resulting from such election to be made on the
effective date of such election.  Each such telephonic Interest Election Request
shall be irrevocable  (except in the  circumstance  where  increased  costs will
result or where it is illegal to make the proposed  conversion  or  continuance)
and  shall  be  confirmed   promptly  by  hand   delivery  or  telecopy  to  the
Administrative  Agent of a written Interest  Election Request in a form approved
by the Administrative Agent and signed by the relevant Borrower.

(c) Each  telephonic  and written  Interest  Election  Request shall specify the
following information in compliance with Section 2.02 and Section 3.02:

          (i) the Borrowing to which such Interest Election Request applies and,
          if  different  options are being  elected  with  respect to  different
          portions  thereof,  the  portions  thereof  to be  allocated  to  each
          resulting  Borrowing  (in which case the  information  to be specified
          pursuant to clauses  (iii) and (iv) below shall be specified  for each
          resulting Borrowing);

          (ii) the effective date of the election made pursuant to such Interest
          Election Request, which shall be a Business Day;

          (iii) in the case of US Borrowings, whether the resulting Borrowing is
          to be an ABR Borrowing or a Eurodollar Borrowing; and

          (iv)  if  the  resulting  Borrowing  is a  Eurodollar  Borrowing,  the
          Interest  Period to be applicable  thereto after giving effect to such
          election,  which shall be a period  contemplated  by the definition of
          the term "Interest Period".

If any such Interest  Election Request requests a Eurodollar  Borrowing but does
not specify an Interest  Period,  then the relevant  Borrower shall be deemed to
have selected an Interest Period of one month's duration.

(d)  Promptly   following  receipt  of  an  Interest   Election   Request,   the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.

(e) If the US Borrower fails to deliver a timely Interest  Election Request with
respect to a US Eurodollar  Revolving Borrowing prior to the end of the Interest
Period  applicable  thereto,  then,  unless such Borrowing is repaid as provided
herein,  at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing.  If the Mexican  Borrower  fails to deliver a timely  Interest
Election Request with respect to a Mexican Eurodollar  Revolving Borrowing prior
to the  end  of the  Interest  Period  applicable  thereto,  then,  unless  such
Borrowing is repaid as provided herein,  at the end of such Interest Period such
Borrowing  shall  be  continued  as a  Eurodollar  Revolving  Borrowing  with an
Interest Period of one month's duration.  Notwithstanding any contrary provision
hereof,  if an  Event  of  Default  has  occurred  and  is  continuing  and  the
Administrative  Agent, at the request of the Required  Lenders,  so notifies the
Borrowers, then, so long as an Event of Default is continuing (i) no outstanding
US  Revolving  Borrowing  may  be  converted  to or  continued  as a  Eurodollar
Borrowing and (ii) unless repaid,  each US Eurodollar  Revolving Borrowing shall
be converted to an ABR  Borrowing at the end of the Interest  Period  applicable
thereto.

SECTION 4.03.    Termination and Reduction of Commitments. (a) Unless previously
terminated, the Commitments shall terminate on the Maturity Date.

(b) (i) The US Borrower may at any time terminate,  or from time to time reduce,
the US Commitments; provided that (i) each reduction of the US Commitments shall
be in an amount that is an integral  multiple  of  $1,000,000  and not less than
$5,000,000  and (ii) the US  Borrower  shall  not  terminate  or  reduce  the US
Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance  with Section 4.05, the Available US Commitment or Available  Mexican
Commitment of any Lender would be less than zero.

     (ii)  The US  Borrower  may at any  time  terminate,  or from  time to time
reduce, the Mexican Commitments; provided that (i) each reduction of the Mexican
Commitments shall be in an amount that is an integral multiple of $1,000,000 and
not less than  $5,000,000 and (ii) the US Borrower shall not terminate or reduce
the Mexican Commitments if, after giving effect to any concurrent  prepayment of
the Loans in accordance with Section 4.05, the Available  Mexican  Commitment of
any Mexican Lender would be less than zero.

(c) The US Borrower  shall  notify the  Administrative  Agent of any election to
terminate or reduce the US Commitments or the Mexican  Commitments,  as the case
may be, under  paragraph (b) of this Section at least three  Business Days prior
to the effective date of such termination or reduction, specifying such election
and the effective date thereof.  Promptly  following receipt of any notice,  the
Administrative  Agent shall  advise the Lenders of the  contents  thereof.  Each
notice  delivered  by  the  US  Borrower  pursuant  to  this  Section  shall  be
irrevocable;  provided that a notice of termination of the Commitments delivered
by  the US  Borrower  may  state  that  such  notice  is  conditioned  upon  the
effectiveness  of other  credit  facilities,  in which  case such  notice may be
revoked by the US Borrower (by notice to the Administrative Agent on or prior to
the  specified  effective  date)  if  such  condition  is  not  satisfied.   Any
termination or reduction of the US Commitments  or the Mexican  Commitments,  as
the case may be, shall be permanent.

SECTION 4.04.  Repayment of Loans;  Evidence of Debt. (a) The US Borrower hereby
unconditionally  promises to pay (i) to the Administrative Agent for the account
of each US Lender, the then unpaid principal amount of each US Revolving Loan on
the Maturity Date, (ii) to the  Administrative  Agent for the account of each US
Lender,  the then unpaid  principal  amount of each Competitive Loan on the last
day of the  Interest  Period  applicable  to such Loan,  (iii) to the  Swingline
Lender,  the then unpaid principal amount of each Swingline Loan (other than any
Swingline  Fixed  Rate  Loan) on the  Maturity  Date  and (iv) to the  Swingline
Lender,  the then unpaid  principal  amount of each Swingline Fixed Rate Loan on
the last day of the Swingline Interest Period applicable  thereto.  Each Mexican
Borrower hereby unconditionally  promises to pay to the Administrative Agent for
the account of each Mexican Lender the then unpaid  principal  amount of each of
its respective Mexican Revolving Loans on the Maturity Date.

(b) Each Lender shall maintain in accordance  with its usual practice an account
or  accounts  evidencing  the  indebtedness  of each  Borrower  to  such  Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

(c) The  Administrative  Agent shall maintain  accounts in which it shall record
(i) the amount of each Loan made hereunder, the Borrower, Class and Type thereof
and the Interest Period applicable thereto,  (ii) the amount of any principal or
interest due and payable or to become due and payable from each Borrower to each
Lender hereunder and (iii) the amount of any sum received by the  Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.

(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c)
of this Section  shall be prima facie  evidence of the  existence and amounts of
the obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any  manner  affect  the  obligation  of the  Borrowers  to repay  the  Loans in
accordance with the terms of this Agreement.

(e) Any Lender may request  that Loans made by it be  evidenced  by a promissory
note (a "Note"). In such event, the relevant Borrower shall prepare, execute and
deliver  to such  Lender a Note  payable  to the order of such  Lender  (or,  if
requested by such Lender,  to such Lender and its  registered  assigns) and in a
form approved by the Administrative  Agent.  Thereafter,  the Loans evidenced by
such Note and interest  thereon shall at all times  (including  after assignment
pursuant  to  Section  12.04) be  represented  by one or more Notes in such form
payable  to the  order  of the  payee  named  therein  (or,  if  such  Note is a
registered Note, to such payee and its registered assigns).

SECTION 4.05. Prepayment of Loans. (a) Each Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part,  subject
to prior notice in accordance with paragraph (b) of this Section;  provided that
the US Borrower shall not have the right to prepay any Competitive  Loan without
the prior consent of the Lender thereof.

(b) The US Borrower or a Mexican Borrower,  as the case may be, shall notify the
Administrative  Agent (and, in the case of prepayment of a Swingline  Loan,  the
Swingline  Lender)  by  telephone  (confirmed  by  telecopy)  of any  prepayment
hereunder (i) in the case of prepayment of a Eurodollar Revolving Borrowing, not
later than 11:00 a.m.,  New York City time,  three Business Days before the date
of prepayment, (ii) in the case of prepayment of an ABR Revolving Borrowing, not
later than 11:00 a.m.,  New York City time,  one Business Day before the date of
prepayment  or (iii) in the case of prepayment  of a Swingline  Loan,  not later
than 12:00 noon, New York City time, on the date of prepayment. Each such notice
shall be  irrevocable  and shall specify the  prepayment  date and the principal
amount of each Borrowing or portion  thereof to be prepaid;  provided that, if a
notice  of  prepayment  is given in  connection  with a  conditional  notice  of
termination  of the US Commitments or Mexican  Commitments  as  contemplated  by
Section 4.03,  then such notice of  prepayment  may be revoked if such notice of
termination  is revoked in  accordance  with Section  4.03.  Promptly  following
receipt of any such notice relating to a Revolving Borrowing, the Administrative
Agent shall advise the Lenders of the contents thereof.  Each partial prepayment
of any Revolving  Borrowing shall be in an amount that would be permitted in the
case of an advance of a  Revolving  Borrowing  of the same Type as  provided  in
Section  2.02 and Section  3.02.  Prepayments  shall be  accompanied  by accrued
interest to the extent  required by Section 4.07 and any amounts  payable  under
Section 4.10 in connection with such prepayment.

SECTION  4.06.  Fees.  (a) The US Borrower  agrees to pay to the  Administrative
Agent a facility  fee (i) for the account of each US Lender,  which shall accrue
at the  Applicable  Rate on the daily amount of the US Commitment of such Lender
(whether used or unused) during the period from and including the Effective Date
to but excluding the date on which such  Commitment  terminates and (ii) for the
account of each Mexican Lender, which shall accrue at the Applicable Rate on the
daily amount of the Mexican  Commitment of such Lender  (whether used or unused)
during the period from and  including  the  Effective  Date to but excluding the
date on which such Commitment terminates,  which fee, in the case of the Mexican
Lenders,  shall be reimbursed by the Mexican  Borrowers;  provided that, if such
Lender  continues to have any Revolving  Credit Exposure after its US Commitment
or Mexican  Commitment,  as the case may be, terminates,  then such facility fee
shall continue to accrue on the daily amount of such Lender's  Revolving  Credit
Exposure  from and  including  the date on which its US  Commitment  or  Mexican
Commitment,  as the case may be,  terminates  to but excluding the date on which
such Lender ceases to have any Revolving Credit Exposure.  Accrued facility fees
shall be  payable  in  arrears  on the last day of March,  June,  September  and
December of each year and on the date on which the US Commitments or the Mexican
Commitments terminate, commencing on the first such date to occur after the date
hereof;  provided that any facility fees accruing after the date on which the US
Commitments  or  Mexican  Commitments,  as the case may be,  terminate  shall be
payable on demand. All facility fees shall be computed on the basis of a year of
360 days and shall be payable for the actual  number of days elapsed  (including
the first day but excluding the last day).

(b) The US  Borrower  agrees  to pay  (i) to the  Administrative  Agent  for the
account of each Lender, a participation  fee with respect to its  participations
in Letters of Credit issued for the US Borrower's account, which shall accrue at
a rate  per  annum  equal to the  Applicable  Rate  applicable  to  interest  on
Eurodollar  Revolving  Loans on the  average  daily  amount of such  Lender's LC
Exposure  (excluding  any  portion  thereof   attributable  to  unreimbursed  LC
Disbursements)  during the period from and including  the Effective  Date to but
excluding the later of the date on which such Lender's Commitment terminates and
the date on which such Lender  ceases to have any LC  Exposure,  and (ii) to the
Issuing Bank a fronting fee,  which shall accrue at the rate of 0.125% per annum
on the average  daily  amount of the LC Exposure in respect of Letters of Credit
issued for the US Borrower's account (excluding any portion thereof attributable
to  unreimbursed  LC  Disbursements)  during the period from and  including  the
Effective  Date to but  excluding  the later of the date of  termination  of the
Commitments  and the date on which there ceases to be any LC  Exposure,  as well
as, in the case of any Letter of Credit issued for the US Borrower's  account in
the principal  amount of $300,000 or less, the Issuing Bank's standard fees with
respect to the issuance,  amendment,  renewal or extension of any such Letter of
Credit or processing  of drawings  thereunder.  Participation  fees and fronting
fees accrued  through and including the last day of March,  June,  September and
December of each year shall be payable on the third  Business Day following such
last day,  commencing on the first such date to occur after the Effective  Date;
provided  that  all  such  fees  shall  be  payable  on the  date on  which  the
Commitments  terminate  and any such fees  accruing  after the date on which the
Commitments  terminate shall be payable on demand. Any other fees payable to the
Issuing Bank pursuant to this paragraph shall be payable within 10 Business Days
after demand.  All participation fees and fronting fees shall be computed on the
basis of a year of 360 days and shall be payable  for the actual  number of days
elapsed (including the first day but excluding the last day).

(c)  Each  Borrower  agrees  to pay to the  Administrative  Agent,  for  its own
account,  fees  payable in the amounts and at the times  separately  agreed upon
between the Borrowers and the Administrative Agent.

(d) All fees payable  hereunder  shall be paid on the dates due, in  immediately
available  funds,  to the  Administrative  Agent (or to the Issuing Bank, in the
case of fees payable to it) for  distribution,  in the case of facility fees and
participation fees, to the Lenders.  Fees paid shall not be refundable under any
circumstances.

SECTION 4.07.     Interest.  (a)  The Loans comprising each ABR Borrowing
(including  each  Swingline  Loan  other than a Swingline Fixed Rate Loan) shall
bear interest at a rate per annum equal to the  Alternate  Base  Rate  plus  the
Applicable Rate.

                  (b) The Loans comprising each Eurodollar  Borrowing shall bear
interest at a rate per annum equal to (i) in the case of a Eurodollar  Revolving
Loan,  the  Adjusted  LIBO  Rate for the  Interest  Period  in  effect  for such
Borrowing  plus  the  Applicable  Rate,  or  (ii) in the  case  of a  Eurodollar
Competitive  Loan,  the LIBO Rate for the  Interest  Period  in effect  for such
Borrowing plus (or minus, as applicable) the Margin applicable to such Loan.

                  (c) Each  Fixed  Rate  Loan  shall bear interest at a rate per
annum equal to the Fixed Rate applicable to such loan.

                  (d) Each Swingline  Fixed Rate Loan shall bear interest during
the Swingline  Interest Period applicable  thereto at the fixed rate agreed upon
by the US  Borrower  and the  Swingline  Lender  pursuant  to  Section  2.06(b);
provided that, from and after the last day of such Swingline Interest Period (if
such Swingline  Fixed Rate Loan is not repaid on such date),  and from and after
the date of any notice by the  Swingline  Lender with respect to such  Swingline
Fixed  Rate Loan  pursuant  to the  proviso  to the first  sentence  of  Section
2.06(c),  such  Swingline  Fixed Rate Loan shall  constitute an ABR Loan bearing
interest in accordance with Section 4.07(a) or 4.07(e), as applicable.

                  (e)  Notwithstanding  the  foregoing,  if any  principal of or
interest  on any  Loan  or any  fee or  other  amount  payable  by any  Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise,  such  overdue  amount shall bear  interest,  after as well as before
judgment,  at a rate per annum equal to (i) in the case of overdue  principal of
any Loan, 2% plus the rate  otherwise  applicable to such Loan as provided above
or (ii) in the case of any  other  amount,  2% plus the rate  applicable  to ABR
Loans as provided above.

                  (f) Accrued  interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan;  provided that (i) interest accrued
pursuant to paragraph  (e) of this Section  shall be payable on demand,  (ii) in
the event of any repayment or prepayment of any Loan (other than a prepayment of
an ABR  Revolving  Loan prior to the end of the  Availability  Period),  accrued
interest on the principal  amount repaid or prepaid shall be payable on the date
of such  repayment or  prepayment,  (iii) in the event of any  conversion of any
Eurodollar  Revolving  Loan  prior  to the end of the  current  Interest  Period
therefor,  accrued  interest on such Loan shall be payable on the effective date
of such  conversion  and  (iv)  all  accrued  interest  shall  be  payable  upon
termination of the Commitments.

                  (g) All interest hereunder shall be computed on the basis of a
year of 360 days,  except that  interest  computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual  number of days elapsed  (including
the first day but excluding the last day). The  applicable  Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.

SECTION 4.08.     Alternate Rate of Interest.  If prior to the  commencement  of
any Interest Period for a Eurodollar Borrowing:

(a) the Administrative Agent determines (which determination shall be conclusive
absent  manifest  error) that  adequate  and  reasonable  means do not exist for
ascertaining  the Adjusted LIBO Rate or the LIBO Rate, as  applicable,  for such
Interest Period; or

(b) the Administrative Agent is advised by the Required Lenders (or, in the case
of a Eurodollar Competitive Loan, the Lender that is required to make such Loan)
that the Adjusted LIBO Rate or the LIBO Rate, as  applicable,  for such Interest
Period  will not  adequately  and fairly  reflect  the cost to such  Lenders (or
Lender) of making or  maintaining  their  Loans (or its Loan)  included  in such
Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the relevant Borrower
and the Lenders by telephone or telecopy as promptly as  practicable  thereafter
and, until the Administrative  Agent notifies the Borrowers and the Lenders that
the  circumstances  giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving  Borrowing to, or
continuation  of any  Revolving  Borrowing as, a Eurodollar  Borrowing  shall be
revoked,  (ii) if any  Borrowing  Request  requests  a US  Eurodollar  Revolving
Borrowing,  such Borrowing shall be made as an ABR Borrowing,  (iii) any request
for a Mexican Eurodollar  Borrowing shall be revoked and (iv) any request by the
US Borrower for a Eurodollar  Competitive  Borrowing shall be revoked;  provided
that (A) if the  circumstances  giving rise to such notice do not affect all the
Lenders, then requests by the US Borrower for Eurodollar  Competitive Borrowings
may  be  made  to  Lenders  that  are  not  affected  thereby  and  (B)  if  the
circumstances  giving  rise to such notice  affect only one Type of  Borrowings,
then the other Type of Borrowings shall be permitted.

SECTION 4.09.     Increased Costs.  (a)  If any Change in Law shall:

          (i)  subject  any  Lender or the  Issuing  Bank to any tax of any kind
          whatsoever  (other than taxes to which the Lender or the Issuing Bank,
          as the case may be, is subject to as of the date  hereof) with respect
          to this Agreement or Eurodollar Loans or Fixed Rate Loans made by such
          Lender or any Letter of Credit or participation therein, or change the
          basis of taxation  of  payments to such Lender or the Issuing  Bank in
          respect thereto (except for Non-Excluded Taxes and changes in the rate
          of tax on the overall net income of such Lender);

          (ii) impose, modify or deem applicable any reserve, special deposit or
          similar  requirement  against  assets  of,  deposits  with  or for the
          account of, or credit extended by, any Lender (except any such reserve
          requirement  reflected in the Adjusted LIBO Rate) or the Issuing Bank;
          or

          (iii) impose on any Lender or the Issuing Bank or the London interbank
          market any other condition;

and the result of any of the  foregoing  shall be to  increase  the cost to such
Lender of making or maintaining  any  Eurodollar  Loan or Fixed Rate Loan (or of
maintaining  its  obligation  to make any such Loan) or to increase  the cost to
such Lender or the Issuing Bank of participating  in, issuing or maintaining any
Letter of Credit or to reduce the amount of any sum  received or  receivable  by
such Lender or the Issuing Bank  hereunder  (whether of  principal,  interest or
otherwise), then the US Borrower will pay to such Lender or the Issuing Bank, as
the case may be,  such  additional  amount or  amounts as will  compensate  such
Lender  or the  Issuing  Bank,  as the case may be,  for such  additional  costs
incurred or reduction suffered.

(b) If any  Lender  or the  Issuing  Bank  determines  that  any  Change  in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such  Lender's or the Issuing  Bank's  capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's  holding  company  could have achieved but for such Change in Law (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's  holding  company with respect to capital
adequacy), then from time to time the US Borrower will pay to such Lender or the
Issuing  Bank,  as the case may be,  such  additional  amount or amounts as will
compensate  such  Lender or the  Issuing  Bank or such  Lender's  or the Issuing
Bank's holding company for any such reduction suffered.

(c) A  certificate  of a Lender or the Issuing Bank setting  forth the amount or
amounts  necessary to compensate  such Lender or the Issuing Bank or its holding
company,  as the case  may be,  as  specified  in  paragraph  (a) or (b) of this
Section  shall be delivered to the US Borrower  and shall be  conclusive  absent
manifest  error.  The US Borrower  shall pay such Lender or the Issuing Bank, as
the case may be, the amount shown as due on any such certificate  within 10 days
after receipt thereof.

(d)  Failure  or delay on the part of any Lender or the  Issuing  Bank to demand
compensation  pursuant to this  Section  shall not  constitute  a waiver of such
Lender's or the Issuing Bank's right to demand such compensation;  provided that
the US Borrower shall not be required to compensate a Lender or the Issuing Bank
pursuant to this Section for any  increased  costs or  reductions  incurred more
than six months prior to the date that such Lender or the Issuing  Bank,  as the
case may be,  notifies  such  Borrower  of the Change in Law giving rise to such
increased  costs  or  reductions  and of such  Lender's  or the  Issuing  Bank's
intention to claim compensation  therefor;  provided further that, if the Change
in Law giving rise to such increased  costs or reductions is  retroactive,  then
the six-month  period  referred to above shall be extended to include the period
of retroactive effect thereof.

(e) Notwithstanding the foregoing provisions of this Section, a Lender shall not
be  entitled  to  compensation  pursuant  to  this  Section  in  respect  of any
Competitive  Loan if the Change in Law that would  otherwise  entitle it to such
compensation  shall have been  publicly  announced  prior to  submission  of the
Competitive Bid pursuant to which such Loan was made.

SECTION  4.10.  Break Funding  Payments.  In the event of (a) the payment of any
principal of any  Eurodollar  Loan or Fixed Rate Loan other than on the last day
of an Interest  Period  applicable  thereto,  or of a Swingline  Fixed Rate Loan
other than on the last day of the Swingline  Interest Period applicable  thereto
(including,  in  each  case,  as a  result  of an  Event  of  Default),  (b) the
conversion  of any  Eurodollar  Loan other than on the last day of the  Interest
Period  applicable  thereto,  (c) the  failure to borrow,  convert,  continue or
prepay any Revolving Loan on the date specified in any notice delivered pursuant
hereto  (regardless  of whether such notice is  permitted to be revocable  under
Section 2.03,  3.03 or 4.02(b) and is revoked in accordance with Section 4.08(b)
or is  permitted  to be  revocable  under  Section  4.05(b)  and is  revoked  in
accordance  therewith),  (d) the  failure to borrow any  Competitive  Loan after
accepting the  Competitive  Bid to make such Loan, or (e) the  assignment of any
Eurodollar  Loan or Fixed Rate Loan  other than on the last day of the  Interest
Period  applicable  thereto as a result of a request by a Borrower  pursuant  to
Section  4.13,  then,  in any such event,  the  Borrower in respect of such Loan
shall compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurodollar Loan, the loss to any Lender  attributable to
any such event shall be deemed to include an amount determined by such Lender to
be equal to the excess,  if any, of (i) the amount of interest  that such Lender
would  pay for a  deposit  equal to the  principal  amount  of such Loan for the
period from the date of such payment,  conversion,  failure or assignment to the
last day of the then current Interest Period for such Loan (or, in the case of a
failure to borrow, convert or continue, the duration of the Interest Period that
would have resulted from such  borrowing,  conversion  or  continuation)  if the
interest  rate payable on such deposit were equal to the Adjusted  LIBO Rate for
such  Interest  Period,  over (ii) the amount of interest that such Lender would
earn on such principal amount for such period if such Lender were to invest such
principal  amount for such period at the interest rate that would be bid by such
Lender (or an affiliate of such Lender) for dollar  deposits from other banks in
the eurodollar  market at the  commencement of such period. A certificate of any
Lender  setting  forth any amount or amounts  that such  Lender is  entitled  to
receive pursuant to this Section shall be delivered to the relevant Borrower and
shall be conclusive  absent manifest error. The relevant Borrower shall pay such
Lender the amount shown as due on any such  certificate  within 10 Business Days
after receipt thereof.

SECTION 4.11.  Taxes.  (a) Any and all payments made by each Borrower under this
Agreement shall be made free and clear of, and without  deduction or withholding
for or on  account  of,  any  present or future  income,  stamp or other  taxes,
levies,  imposts,  duties,  charges,  fees,  deductions or withholdings,  now or
hereafter imposed, levied,  collected,  withheld or assessed by any Governmental
Authority,  excluding net income taxes and franchise  taxes  (imposed in lieu of
net income taxes) imposed on the Administrative  Agent or any Lender as a result
of a present  or former  connection  between  the  Administrative  Agent or such
Lender and the jurisdiction of the Governmental  Authority  imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative  Agent or such Lender (i)
having  executed,  delivered or performed its  obligations or received a payment
under, or enforced,  this Agreement or (ii) having a representative  office or a
subsidiary in Mexico, provided that any such representative office or subsidiary
is not the lending office).  If any such non-excluded  taxes,  levies,  imposts,
duties,  charges,  fees,  deductions or withholdings  ("Non-Excluded  Taxes") or
Other Taxes are required to be withheld or deducted from any amounts  payable to
the Administrative Agent or any Lender hereunder,  the amounts so payable to the
Administrative  Agent or such Lender shall be increased to the extent  necessary
to yield to the  Administrative  Agent or such Lender (after payment of all such
Non-Excluded  Taxes and Other Taxes)  interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement;  provided,
however,  that no such  additional  amounts  shall be  payable in respect of any
taxes imposed by reason of the  Administrative  Agent or any Lender's failure to
comply with  Section  4.11(c) or (d), in excess of the  additional  amounts that
would have been payable had the Administrative Agent or any Lender complied with
such Section. Whenever any such Non-Excluded Taxes or Other Taxes are payable by
any Borrower,  thereafter such Borrower shall send to the  Administrative  Agent
for its own account or for the account of such  Lender,  as the case may be, the
original official report, or a certified copy thereof, received by such Borrower
showing  payment  thereof.  If any Borrower  fails to pay any such  Non-Excluded
Taxes or Other Taxes when due to the  appropriate  taxing  authority or fails to
remit to the  Administrative  Agent  the  required  receipts  or other  required
documentary evidence, such Borrower shall indemnify the Administrative Agent and
each Lender for any  incremental  taxes,  interest or penalties  that may become
payable  by the  Administrative  Agent or such  Lender  as a result  of any such
failure.

(b) In  addition,  the US  Borrower  shall pay any Other  Taxes to the  relevant
Governmental Authority in accordance with applicable law.

(c) No Mexican  Borrower shall be obligated to pay the  Administrative  Agent or
any Lender any amounts  described in Section  4.11(a) in respect of Non-Excluded
Taxes or Other Taxes that would not have been imposed but for the failure of the
Administrative  Agent  or  such  Lender:  (I) to use its  reasonable  commercial
efforts (consistent with legal and regulatory  restrictions) to (i) maintain its
registration with the Mexican Ministry of Finance and Public Credit as a foreign
financial  institution  or bank for purposes of and in  conformity  with Article
154-I of the Mexican Income Tax Law, the rules thereunder and any administrative
regulations (resoluciones miscelaneas) thereunder, (ii) maintain its status as a
resident (or its principal office to remain as a resident) for tax purposes in a
country  with which  Mexico has entered  into a tax treaty for the  avoidance of
double  taxation  and (iii)  comply with the  requirements  provided in such tax
treaty to apply a reduced  withholding  tax rate on interest or (II) following a
reasonable request of the Mexican Borrowers upon 30 days' written notice (unless
a lesser period is reasonable under the circumstances),  to (x) provide a letter
specifying that such Lender is the effective  beneficiary of interest  hereunder
and under any Note held by such Lender as set forth in, and for so long as it is
requested under, the Mexican Income Tax Law or in the applicable double taxation
treaty to which  Mexico  is a party  and  which is in  effect or any  equivalent
administrative regulations (resoluciones miscelaneas) in effect thereafter while
this  Agreement  shall remain in full force and effect and (y) complete and file
with  the  appropriate  Governmental  Authority,  such  forms,  certificates  or
documents (collectively,  "Forms") prescribed by law, rule or regulation enacted
or issued by Mexico,  or required under the applicable double taxation treaty to
which Mexico is a party and which is in effect,  that are  necessary to avoid or
reduce such Non-Excluded Taxes or Other Taxes pursuant to provisions of any law,
rule or regulation  enacted or issued by Mexico,  or a double taxation treaty to
which Mexico is a party and which is in effect (provided,  that (xx) such Lender
or the  Administrative  Agent  shall be  under  no  obligation  to  provide  any
information of any nature  (including the  information  specified  above) to the
Mexican Borrowers which such Lender or the  Administrative  Agent deems, in such
Lender's or the  Administrative  Agent's  judgment,  to be  confidential  or the
disclosure  of  which  is  not  permitted  by  law,  (yy)  such  Lender  or  the
Administrative  Agent is legally entitled to complete,  execute and deliver such
Forms,  (zz) the  completion,  execution  and  delivery  of such  Forms will not
result,  in the good  faith,  reasonable  determination  of such  Lender  or the
Administrative  Agent,  in the  imposition on such Lender or the  Administrative
Agent of (1) any  additional  material  legal or  regulatory  burden  or (2) any
additional  material  out-of-pocket  costs  or (3) any  other  material  adverse
consequences).  If the registration set forth in subparagraph (c)(I)(i) above is
canceled or not renewed upon expiration during the term of this Agreement, or if
any  Lender or  beneficial  owner of a Note  fails to  provide  the Forms or the
letter mentioned in subparagraph (c)(II)(x) above (other than as excepted in the
prior  proviso),  or any Lender is no longer a resident  for tax  purposes  in a
country  with which  Mexico has entered  into a tax treaty for the  avoidance of
double  taxation  or  due  to  its  own  action  no  longer  complies  with  the
requirements set forth in such tax treaty to apply a reduced Mexican withholding
tax on interest,  the Mexican Borrowers may terminate the Mexican  Commitment of
such  Lender and  prepay  the then  outstanding  Loans of the  affected  Lender,
together with accrued interest  thereon,  additional  amounts payable in respect
thereto and any other amounts payable hereunder.

(d) Any Foreign  Lender that is entitled to an  exemption  from or  reduction of
withholding  tax under the law of the  jurisdiction  in which  any  Borrower  is
located,  or any treaty to which such  jurisdiction is a party,  with respect to
payments  under this  Agreement  shall deliver to the relevant  Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or  reasonably  requested by such  Borrower,  such  properly  completed  and
executed documentation prescribed by applicable law as will permit such payments
to be made without  withholding or at a reduced rate. Unless prejudicial to such
Mexican Lender, each Mexican Lender agrees that it shall file an application for
renewal of its registration with the Ministry of Finance and Public Credit under
Article  154-I of the Mexican  Income Tax Law, the rules  thereunder  and/or any
administrative regulations (resoluciones miscelaneas) thereunder.

(e) If any Lender  receives a refund in  respect  of any  Non-Excluded  Taxes or
Other Taxes paid by any Borrower,  (a "Tax Refund"),  which in the sole judgment
of such Lender is  allocable  to such  payment,  it shall  promptly pay such Tax
Refund  to such  Borrower  net of all  out-of-pocket  expenses  of  such  Lender
incurred in obtaining  such Tax Refund;  provided,  however,  that such Borrower
agrees  to  promptly  return  such Tax  Refund  to the  applicable  Lender if it
receives notice from the applicable Lender that such Lender is required to repay
such Tax Refund.

SECTION 4.12. Payments Generally;  Pro Rata Treatment;  Sharing of Set-offs. (a)
(i) Except as provided in Section 2.04,  each Borrowing of US Revolving Loans by
the US Borrower from the US Lenders  hereunder  shall be made pro rata according
to the US Funding Commitment Percentages of the US Lenders in effect on the date
of such  borrowing.  Any reduction of the US Commitments of the US Lenders shall
be allocated by the Administrative Agent among the US Lenders pro rata according
to the US  Commitment  Percentages  of the US  Lenders.  Except as  provided  in
Section  2.04,  each  payment  (other than any  optional  prepayment)  by the US
Borrower on account of principal of or interest on the US Revolving Loans or the
Competitive  Loans  shall be  allocated  by the  Administrative  Agent  pro rata
according to the respective principal amounts thereof then due and owing to each
US Lender.  Each optional  prepayment by the US Borrower on account of principal
of  or  interest  on  the  US   Revolving   Loans  shall  be  allocated  by  the
Administrative Agent pro rata according to the respective  outstanding principal
amounts thereof.

     (ii) Each borrowing of Mexican Revolving Loans by any Mexican Borrower from
the Mexican  Lenders  hereunder  shall be made, and any reduction of the Mexican
Commitments shall be allocated by the  Administrative  Agent, pro rata according
to the Mexican  Commitment  Percentages  of the Mexican  Lenders.  Each  payment
(including each  prepayment) by any Mexican  Borrower on account of principal of
and interest on Mexican Revolving Loans shall be allocated by the Administrative
Agent pro rata  according  to the  respective  principal  amounts of the Mexican
Loans then due and owing by such Borrower to each Mexican Lender.

(b) Each  Borrower  shall make each payment  required to be made by it hereunder
(whether of principal,  interest, fees or reimbursement of LC Disbursements,  or
under Section 4.09,  4.10 or 4.11, or otherwise)  prior to 12:00 noon,  New York
City time, on the date when due, in immediately available funds, without set-off
or  counterclaim.  Any amounts  received after such time on any date may, in the
discretion of the  Administrative  Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating  interest thereon.  All
such payments  shall be made to the  Administrative  Agent at its offices at 270
Park Avenue,  New York,  New York,  except  payments to be made  directly to the
Issuing Bank or Swingline  Lender as expressly  provided  herein and except that
payments  pursuant to Sections 4.09, 4.10, 4.11 and 12.03 shall be made directly
to the Persons entitled thereto.  The Administrative  Agent shall distribute any
such  payments  received  by it for  the  account  of any  other  Person  to the
appropriate  recipient  promptly  following  receipt  thereof.  If  any  payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next  succeeding  Business Day, and, in the case of any
payment accruing  interest,  interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in Dollars.

(c) If at any time  insufficient  funds are  received  by and  available  to the
Administrative  Agent to pay fully all  amounts of  principal,  unreimbursed  LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i)  first,  to pay  interest  and fees then due  hereunder,  ratably  among the
parties  entitled  thereto in  accordance  with the amounts of interest and fees
then due to such parties,  and (ii) second, to pay principal and unreimbursed LC
Disbursements then due hereunder,  ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements  then
due to such parties.

(d) If any Lender shall,  by exercising any right of set-off or  counterclaim or
otherwise,  obtain  payment in respect of any principal of or interest on any of
its Revolving Loans or  participations  in LC  Disbursements  or Swingline Loans
resulting  in such  Lender  receiving  payment  of a greater  proportion  of the
aggregate amount of its Revolving Loans and  participations  in LC Disbursements
and Swingline Loans and accrued interest thereon than the proportion received by
any other  Lender,  then the Lender  receiving  such  greater  proportion  shall
purchase  (for cash at face value)  participations  in the  Revolving  Loans and
participations  in LC Disbursements  and Swingline Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders  ratably in  accordance  with the  aggregate  amount of principal of and
accrued interest on their respective  Revolving Loans and  participations  in LC
Disbursements and Swingline Loans;  provided that (i) if any such participations
are  purchased  and all or any  portion of the payment  giving  rise  thereto is
recovered,  such  participations  shall  be  rescinded  and the  purchase  price
restored  to the  extent  of such  recovery,  without  interest,  and  (ii)  the
provisions of this paragraph shall not be construed to apply to any payment made
by any Borrower  pursuant to and in  accordance  with the express  terms of this
Agreement  or  any  payment  obtained  by a  Lender  as  consideration  for  the
assignment of or sale of a participation  in any of its Loans or  participations
in LC Disbursements to any assignee or participant,  other than to a Borrower or
any  Subsidiary  or  Affiliate  thereof  (as to  which  the  provisions  of this
paragraph shall apply).  Each Borrower  consents to the foregoing and agrees, to
the  extent it may  effectively  do so under  applicable  law,  that any  Lender
acquiring a participation  pursuant to the foregoing  arrangements  may exercise
against each Borrower  rights of set-off and  counterclaim  with respect to such
participation as fully as if such Lender were a direct creditor of such Borrower
in the amount of such participation.

(e) Unless the Administrative Agent shall have received notice from the relevant
Borrower prior to the date on which any payment is due from such Borrower to the
Administrative  Agent  for  the  account  of the  Lenders  or the  Issuing  Bank
hereunder  that such  Borrower will not make such  payment,  the  Administrative
Agent may  assume  that such  Borrower  has made  such  payment  on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing  Bank, as the case may be, the amount due. In such event,
if the  relevant  Borrower has not in fact made such  payment,  then each of the
Lenders or the Issuing  Bank, as the case may be,  severally  agrees to repay to
the  Administrative  Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with  interest  thereon,  for each day from and including
the date such amount is  distributed  to it to but excluding the date of payment
to the Administrative Agent, at the Federal Funds Effective Rate.

(f) If any  Lender  shall  fail to make any  payment  required  to be made by it
pursuant  to  Section  2.05(c),  2.06(d)  or (e),  3.04 (d) or (e),  4.01(b)  or
4.12(d),  then the Administrative Agent may, in its discretion  (notwithstanding
any contrary  provision hereof),  apply any amounts  thereafter  received by the
Administrative  Agent for the  account of such Lender to satisfy  such  Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.

SECTION 4.13. Mitigation Obligations;  Replacement of Lenders. (a) If any Lender
requests  compensation under Section 4.09, or if any Borrower is required to pay
any  additional  amount to any  Lender  or any  Governmental  Authority  for the
account of any Lender  pursuant  to Section  4.11,  then such  Lender  shall use
reasonable  efforts to  designate  a  different  lending  office for  funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its  offices,  branches or  affiliates,  if, in the  judgment of such
Lender,  such  designation or assignment  (i) would  eliminate or reduce amounts
payable  pursuant to Section 4.09 or 4.11, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender.  Each Borrower hereby agrees to
pay all reasonable costs and expenses  incurred by any Lender in connection with
any such designation or assignment.

(b) If any Lender requests  compensation  under Section 4.09, or if any Borrower
is  required  to pay any  additional  amount to any  Lender or any  Governmental
Authority  for the  account of any Lender  pursuant to Section  4.11,  or if any
Lender  defaults in its obligation to fund Loans  hereunder,  then the Borrowers
may,  at their sole  expense  and  effort,  upon  notice to such  Lender and the
Administrative  Agent,  require  such  Lender to assign  and  delegate,  without
recourse  (in  accordance  with and  subject to the  restrictions  contained  in
Section 12.04),  all its interests,  rights and obligations under this Agreement
(other than any  outstanding  Competitive  Loans held by it) to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such  assignment);  provided that (i) the Borrowers  shall have received
the prior written consent of the  Administrative  Agent (and, if a Commitment is
being assigned,  the Issuing Bank and Swingline Lender), which consent shall not
unreasonably  be withheld,  (ii) such Lender shall have  received  payment of an
amount equal to the outstanding  principal of its Loans (other than  Competitive
Loans) and  participations  in LC  Disbursements  and Swingline  Loans,  accrued
interest  thereon,  accrued fees and all other amounts  payable to it hereunder,
from the  assignee  (to the extent of such  outstanding  principal  and  accrued
interest and fees) or the Borrowers (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section  4.09 or payments  required to be made  pursuant to Section  4.11,  such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required  to make any such  assignment  and  delegation  if,  prior
thereto, as a result of a waiver by such Lender or otherwise,  the circumstances
entitling  the  Borrowers to require such  assignment  and  delegation  cease to
apply.

                                   ARTICLE V

                         Representations and Warranties

                  Each Borrower  represents  and warrants to the  Administrative
Agent and the Lenders that:

SECTION  5.01.   Organization;   Powers.   Each  Borrower  and  its   respective
Subsidiaries  is duly organized,  validly  existing and in good standing (to the
extent such requirement  shall be applicable) under the laws of the jurisdiction
of its  organization,  has all  requisite  power and  authority  to carry on its
business as now conducted and,  except where the failure to do so,  individually
or in the  aggregate,  could not  reasonably be expected to result in a Material
Adverse  Effect,  is qualified  to do business  in, and is in good  standing in,
every jurisdiction where such qualification is required.

SECTION  5.02.  Authorization;   Enforceability.  (a)  The  Transactions  to  be
consummated  by each Borrower are within such  Borrower's  corporate  powers and
have  been  duly  authorized  by  all  necessary  corporate  and,  if  required,
stockholder  action. This Agreement has been duly executed and delivered by each
Borrower and constitutes a legal, valid and binding obligation of each Borrower,
enforceable  in accordance  with its terms,  subject to  applicable  bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally  and subject to general  principles  of equity,  regardless of whether
considered in a proceeding in equity or at law.

(b) Each of the Master Intercompany  Agreement and the Tax Allocation  Agreement
constitutes  a  legal,   valid  and  binding  obligation  of  the  US  Borrower,
enforceable  in accordance  with its terms,  subject to  applicable  bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally  and subject to general  principles  of equity,  regardless of whether
considered in a proceeding in equity or at law.

SECTION 5.03. Governmental Approvals; No Conflicts.  The Transactions (a) do not
require any consent or approval of,  registration  or filing with,  or any other
action by, any Governmental Authority,  except (i) such as have been obtained or
made and are in full  force  and  effect,  (ii)  routine  renewals  of  existing
licenses  and permits of the US Borrower  and its  Subsidiaries  in the ordinary
course of business and (iii) such filings as may be required  under  federal and
state  securities  laws for  purposes  of  disclosure,  (b) will not violate any
applicable law or regulation (including, without limitation, all laws, rules and
regulations  promulgated  by or relating to  INFONAVIT  and SAR) or the charter,
by-laws  or  other  organizational  documents  of  any  Borrower  or  any of its
Subsidiaries or any order of any Governmental Authority, (c) will not violate or
result in a default under any indenture,  agreement or other instrument  binding
upon any Borrower or any of its  Subsidiaries  or its assets,  or give rise to a
right thereunder to require any payment to be made by any Borrower or any of its
Subsidiaries,  and (d) will not result in the creation or imposition of any Lien
on any asset of any  Borrower or any of its  Subsidiaries  except as provided in
Section 7.11.

SECTION  5.04.  Financial  Condition;   No  Material  Adverse  Change.  (a)  The
statements  of  consolidated  financial  condition  of the US  Borrower  and its
Subsidiaries  as at October 31, 1999 and the related  statements of consolidated
income and  retained  earnings and  consolidated  cash flow for such fiscal year
ended on such  date,  reported  on by  Deloitte  & Touche,  copies of which have
heretofore  been  furnished  to the  Lenders,  present  fairly,  in all material
respects,  the  consolidated  financial  condition  of the US  Borrower  and its
Subsidiaries as at such date, and the consolidated results of its operations and
cash flow for such fiscal year then ended.

(b) The  unaudited  statement  of  consolidated  financial  condition  of the US
Borrower  and its  Subsidiaries  as at July 31, 2000 and the  related  unaudited
statements of consolidated  income and retained  earnings and consolidated  cash
flow for the  nine-month  period  ended on such date,  certified  by a Financial
Officer, copies of which have heretofore been furnished to the Lenders,  present
fairly, in all material respects, the consolidated financial condition of the US
Borrower and its Subsidiaries as at such date, and the  consolidated  results of
its operations  and cash flow for the  nine-month  period then ended (subject to
normal year-end audit adjustments and the absence of footnotes).

(c) All the  financial  statements  referred  to in clauses  (a) and (b) of this
Section 5.04,  including  the related  schedules  and notes  thereto,  have been
prepared in accordance with GAAP,  applied  consistently  throughout the periods
involved  (except as approved by such accountants or Financial  Officer,  as the
case may be, and as disclosed therein).

(d) The US Borrower and its  Subsidiaries  do not have, at the date hereof,  any
material  Guarantee  obligations,  contingent  liabilities  and  liabilities for
taxes,  or any  long-term  leases or unusual  forward or long-term  commitments,
including any interest rate or foreign currency swap or exchange  transaction or
other  obligation  in  respect  of  derivatives  that are not  reflected  in the
financial statements referred to in this Section.

(e) Since  October 31, 1999,  there has been no material  adverse  change in the
business,  assets,  property or  financial  condition of the US Borrower and its
Subsidiaries, taken as a whole.

SECTION  5.05.  Litigation.  There are no actions,  suits or  proceedings  by or
before any  arbitrator  or  Governmental  Authority  pending  against or, to the
knowledge of any Borrower,  threatened  against or affecting any Borrower or any
of its  Subsidiaries  (a) which  could  reasonably  be  expected to result in an
adverse  determination  and that, if adversely  determined,  could reasonably be
expected,  individually  or in the  aggregate,  to result in a Material  Adverse
Effect (other than the Disclosed  Matters) or (b) that involve this Agreement or
the Transactions.

SECTION  5.06.  Compliance  with  Laws and  Agreements.  Each  Borrower  and its
Subsidiaries  is in  compliance  with all laws,  regulations  and  orders of any
Governmental  Authority  applicable  to it or its property  and all  indentures,
agreements and other instruments  binding upon it or its property,  except where
the failure to do so, individually or in the aggregate,  could not reasonably be
expected to result in a Material Adverse Effect.  No Default has occurred and is
continuing.

SECTION 5.07.  Investment and Holding Company Status. The US Borrower is not (a)
an  "investment  company" as defined  in, or subject to  regulation  under,  the
Investment  Company  Act of 1940 or (b) a "holding  company"  as defined  in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.

SECTION  5.08.  Taxes.  Each Borrower and its  Subsidiaries  has timely filed or
caused to be filed all Tax returns  and reports  required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it, except
(a) Taxes that are being contested in good faith by appropriate  proceedings and
for which the relevant Borrower or such Subsidiary, as applicable, has set aside
on its books adequate  reserves with respect  thereto in accordance with GAAP or
(b) to the extent that the failure to do so could not  reasonably be expected to
result in a Material Adverse Effect.

SECTION 5.09.  ERISA.  No ERISA Event has occurred or is reasonably  expected to
occur  that,  when taken  together  with all other  such ERISA  Events for which
liability  is  reasonably  expected to occur,  could  reasonably  be expected to
result in a Material  Adverse  Effect.  The liability  under the Wisconsin Steel
Arrangements  could not  reasonably be expected to result in a Material  Adverse
Effect.

SECTION 5.10.     Subsidiaries.   As  of  the Effective Date, Schedule 5.10 sets
forth the name, jurisdiction of incorporation  and  capital  stock  ownership of
each Subsidiary owned by any Borrower.

SECTION 5.11. Foreign Exchange Regulations; Immunity; Enforcement. (a) Under the
laws of Mexico, with respect to the execution,  delivery and performance of this
Agreement or any Note issued  hereunder,  each of the Mexican  Borrowers and its
respective  Subsidiaries  is subject to private  commercial law and to suit, and
neither it nor its  properties  have any immunity from the  jurisdiction  of any
court or any legal process that may be brought in the courts of Mexico  (whether
through  service of notice,  attachment  prior to  notice,  attachment  prior to
judgment, attachment in aid of execution, execution or otherwise).

(b)  It  is  not  necessary,   in  order  to  ensure  the  legality,   validity,
enforceability or admissibility into evidence in Mexico of this Agreement or any
Note issued  hereunder,  that any such  document be filed,  recorded or enrolled
with any  Governmental  Authority,  or that this  Agreement  or any Note  issued
hereunder be stamped with any stamp,  registration or similar  transaction  tax,
except  that in order for this  Agreement  or any Note  issued  hereunder  to be
admissible in evidence in legal proceedings in a court in Mexico, such documents
would  have to be  translated  into the  Spanish  language  by a  court-approved
translator  and would have to be approved by such court after the  defendant had
been given an  opportunity  to be heard  with  respect  to the  accuracy  of the
translation,  and  proceedings  would  thereafter  be based upon the  translated
documents.

SECTION 5.12.     Disclosure.  (a)  Each Borrower has disclosed to  the  Lenders
all matters known to it that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.

(b) None of the reports, financial statements, certificates or other information
furnished by or on behalf of the  Borrowers to the  Administrative  Agent or any
Lender  in  connection  with the  negotiation  of this  Agreement  or  delivered
hereunder  (as  modified or  supplemented  by other  information  so  furnished)
contains any material  misstatement  of fact or omits to state any material fact
necessary  to make the  statements  therein,  in the light of the  circumstances
under which they were made,  not  misleading;  provided  that,  with  respect to
projected  financial  information,   the  Borrowers  represent  only  that  such
information  was  prepared in good faith based upon  assumptions  believed to be
reasonable at the time.

                                   ARTICLE VI

                                   Conditions

SECTION 6.01.  Effective Date.  This Agreement  shall become  effective upon the
execution and delivery  hereof by all parties  hereto.  The  obligations  of the
Lenders  to make  Loans  and of the  Issuing  Bank to issue  Letters  of  Credit
hereunder  shall  not  become  effective  until  the date on  which  each of the
following conditions is satisfied (or waived in accordance with Section 12.02):

(a) The  Administrative  Agent (or its counsel)  shall have  received  from each
party hereto either (i) a counterpart of this Agreement signed on behalf of such
party or (ii) written evidence  satisfactory to the Administrative  Agent (which
may include telecopy  transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement.

(b) The  Administrative  Agent  shall  have  received  an  executed  copy of the
Parents' Side Agreement and the Parent Guarantee, duly executed and delivered by
the parties  thereto,  which shall be in full force and effect on the  Effective
Date.

(c) The  Administrative  Agent shall have received a favorable  written  opinion
(addressed to the  Administrative  Agent and the Lenders and dated the Effective
Date) of (i) Kirkland & Ellis, New York counsel for the Borrowers, substantially
in the form of  Exhibit  B-1,  (ii)  Steven  Covey,  General  Counsel  of the US
Borrower,  substantially  in the form of Exhibit B-2 and (iii) Franck,  Galicia,
Duclaud Y Robles, S.C., Mexican counsel for the Borrowers,  substantially in the
form of Exhibit B-3, and, in each case,  covering such other matters relating to
the Borrowers,  this Agreement or the Transactions as the  Administrative  Agent
shall reasonably request.

(d) The Administrative Agent shall have received a certificate of each Borrower,
dated the Effective  Date, as to (i) the adoption of resolutions  (or equivalent
corporate actions  including,  in the case of each Mexican  Borrower,  notarized
powers  of  attorney  evidencing  authority  to,  among  other  things,  execute
negotiable  instruments),  of the Board of Directors (or other similar governing
body) of each Borrower  authorizing (A) the execution,  delivery and performance
of this  Agreement  and (B) the  borrowings  contemplated  hereunder,  (ii)  the
incumbency  and true  signature of the officers of each Borrower  executing this
Agreement  and  any  Notes  issued   hereunder  and  (iii)  the  certificate  of
incorporation  and  by-laws,  in the case of the US Borrower,  or the  estatutos
sociales,  in the case of each  Mexican  Borrower,  which  certificate  shall be
reasonably  satisfactory in form and substance to the  Administrative  Agent and
its counsel and executed by the secretary or any assistant  secretary or a legal
representative of such Borrower.

(e) The  Administrative  Agent  shall  have  received a  certificate,  dated the
Effective  Date and signed by the  President,  a Vice  President  or a Financial
Officer of the US Borrower,  confirming compliance with the conditions set forth
in paragraphs (a) and (b) of Section 6.02.

(f)  The  Lenders  shall  have  received  (i)  audited  consolidated   financial
statements  of the US Borrower  for the fiscal  year ended  October 31, 1999 and
(ii)  unaudited  consolidated  financial  statements  of the US Borrower for the
quarterly  period ended July 31, 2000, and such financial  statements shall not,
in the reasonable judgment of the Required Lenders, reflect any material adverse
change in the consolidated  financial condition of the US Borrower, as reflected
in the  financial  statements  or  projections  contained  in  the  Confidential
Information Memorandum supplied to the Lenders, dated October 2000.

(g) The  Administrative  Agent,  the Lenders and the Joint Lead Arrangers  shall
have  received  all fees and other  amounts  due and  payable on or prior to the
Effective Date, including,  to the extent invoiced,  reimbursement or payment of
all reasonable  out-of-pocket  expenses required to be reimbursed or paid by the
Borrowers hereunder.

(h) The  Administrative  Agent shall have received evidence that the US Borrower
has  agreed to act as agent for  service  of  process  in New York,  New York on
behalf of each Mexican Borrower under this Agreement  (together with a notarized
power of attorney to that effect).

(i) The Administrative Agent shall have received a Borrowing Request from the US
Borrower,  requesting a US Revolving  Borrowing to be made on the Effective Date
and in an amount, together with available cash of the US Borrower, sufficient to
repay all outstanding amounts due under the Existing Credit Agreement.

The  Administrative  Agent  shall  notify the  Borrowers  and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.

SECTION 6.02. Each Borrowing Event. The obligation of each Lender to make a Loan
on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew
or extend any Letter of Credit,  is subject to the  satisfaction  (or waiver) of
the following conditions:

(a) The  representations  and  warranties  of the  Borrowers  set  forth in this
Agreement (except for, other than in the case of the Loans made on the Effective
Date,  the  representations  and  warranties  set forth in Sections  5.04(e) and
5.12(a))  shall be true and  correct in all  material  respects on and as of the
date of such Borrowing or the date of issuance,  amendment, renewal or extension
of such Letter of Credit, as applicable.

(b) At the time of and immediately  after giving effect to such Borrowing or the
issuance,  amendment,  renewal  or  extension  of  such  Letter  of  Credit,  as
applicable, no Default shall have occurred and be continuing.

(c) In the case of any Borrowing by a Mexican Borrower, the Parent Guarantee and
the  Guarantee  contained  in  Article  XI shall be in full force and effect and
neither the Parent,  nor the US Borrower nor any  Affiliate  thereof  shall have
asserted that either such Guarantee is not in full force and effect.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit  shall be deemed to  constitute  a  representation  and  warranty  by the
relevant  Borrower on the date thereof as to the matters specified in paragraphs
(a), (b) and (c) of this Section.

SECTION 6.03.  Concurrent Condition for Initial Borrowing.  Immediately upon the
satisfaction (or waiver) of all conditions  specified in Sections 6.01 and 6.02,
the US Borrower  shall  repay all  outstanding  amounts  due under the  Existing
Credit Agreement and shall deliver evidence to the Administrative Agent, in form
and substance  reasonably  satisfactory to the  Administrative  Agent,  that the
Existing  Credit  Agreement shall have been terminated on the Effective Date and
all obligations thereunder satisfied in full.

SECTION 6.04.     Condition Subsequent.  Within 45 days of the  Effective  Date,
the US Borrower shall terminate all existing Liens set forth on Schedule 8.02.

                                  ARTICLE VII

                              Affirmative Covenants

           Until the Commitments have expired or been terminated, the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full,  all Letters of Credit shall have expired or  terminated  and
all LC  Disbursements  shall have been reimbursed,  each Borrower  covenants and
agrees with the Lenders that:

SECTION 7.01.     Financial  Statements  and  Other  Information.  Each  of  the
Borrowers and the Parent, as applicable,  will  furnish  to  the  Administrative
Agent, for prompt distribution to each Lender:

(a) (i) within 90 days after the end of each  fiscal  year of each of the Parent
and the US Borrower, its Form 10-K for such fiscal year, which shall include its
audited consolidated  statement of financial condition and related statements of
consolidated  income and retained  earnings and consolidated cash flow as of the
end of and for such year,  setting  forth in each case in  comparative  form the
figures for the previous  fiscal  year,  all reported on by Deloitte & Touche or
other independent  public  accountants of recognized  national standing (without
any qualification or exception as to the scope of such audit) to the effect that
such consolidated  financial  statements present fairly in all material respects
the financial  condition  and results of operations  and cash flow of the Parent
and its  consolidated  Subsidiaries  and the US  Borrower  and its  consolidated
Subsidiaries,  as the case may be, on a  consolidated  basis in accordance  with
GAAP, consistently applied;

          (ii) within 90 days after the end of each fiscal year of each  Mexican
          Borrower,  its audited  statement of financial  condition  and related
          statements   of   consolidated   income  and  retained   earnings  and
          consolidated  cash  flow as of the end of and for such  year,  setting
          forth in each case in  comparative  form the figures for the  previous
          fiscal year, all reported on by Deloitte & Touche or other independent
          public  accountants  of  recognized  national  standing  (without  any
          qualification  or  exception  as to the  scope of such  audit)  to the
          effect that such consolidated  financial  statements present fairly in
          all  material   respects  the  financial   condition  and  results  of
          operations and cash flow of such Mexican Borrower and its consolidated
          Subsidiaries  on  a  consolidated   basis  in  accordance  with  GAAP,
          consistently applied;

(b) (i) within 45 days after the end of each of the first three fiscal  quarters
of each fiscal year of each of the Parent and the US Borrower, its Form 10-Q for
such fiscal quarter, which shall include its consolidated statement of financial
condition and related  statements of consolidated  income and retained  earnings
and consolidated  cash flow as of the end of and for such fiscal quarter and the
then  elapsed  portion  of the  fiscal  year,  setting  forth  in  each  case in
comparative form the figures for the corresponding  period or periods of (or, in
the case of the statement of financial condition, as of the end of) the previous
fiscal year, all certified by one of its Financial Officers as presenting fairly
in all material  respects the financial  condition and results of operations and
cash flow of the Parent and its  consolidated  Subsidiaries  and the US Borrower
and its consolidated  Subsidiaries,  as the case may be, on a consolidated basis
in accordance with GAAP, consistently applied,  subject to normal year-end audit
adjustments and the absence of footnotes;

          (ii)  within 45 days after the end of each of the first  three  fiscal
          quarters  of  each  fiscal  year  of  each   Mexican   Borrower,   its
          consolidated  statement of financial  condition and related statements
          of consolidated  income and retained  earnings and  consolidated  cash
          flow as of the end of and for such fiscal quarter and the then elapsed
          portion of the fiscal year,  setting forth in each case in comparative
          form the  figures for the  corresponding  period or periods of (or, in
          the case of the  statement of financial  condition,  as of the end of)
          the previous  fiscal  year,  all  certified  by one of its  respective
          Financial  Officers as presenting  fairly in all material respects the
          financial  condition and results of  operations  and cash flow of such
          Borrower and its consolidated  Subsidiaries on a consolidated basis in
          accordance with GAAP, consistently applied, subject to normal year-end
          audit  adjustments and the absence of footnotes;(c)  concurrently with
          any delivery of financial  statements under clause (a) or (b) above, a
          certificate of a Financial  Officer of the US Borrower,  substantially
          in the form of Exhibit F (i)  certifying  as to whether a Default  has
          occurred  and,  if a Default  has  occurred,  specifying  the  details
          thereof  and any action  taken or  proposed  to be taken with  respect
          thereto,   (ii)  setting  forth   reasonably   detailed   calculations
          demonstrating  compliance  with  Sections  8.01(a)  and (b) and  (iii)
          stating whether any change in GAAP, or in the application  thereof has
          occurred since the date of the audited financial  statements  referred
          to in Section  5.04 and, if any such change has  occurred,  specifying
          the effect of such  change on the  financial  statements  accompanying
          such certificate;

(d) promptly  following any request therefor,  such other information  regarding
the operations,  business affairs and financial condition of any Borrower or any
Subsidiaries,   or  compliance  with  the  terms  of  this  Agreement,   as  the
Administrative Agent or any Lender may reasonably request; and

(e) (i) within 55 days after the end of the second fiscal quarter of each fiscal
year of the US Borrower,  a report containing  statistical and other information
in respect of all Serviced  Wholesale Notes and Serviced Retail  Receivables for
the period of two  consecutive  fiscal  quarters  then ended and (ii) within 100
days after the end of the fourth  fiscal  quarter of each  fiscal year of the US
Borrower,  a report  containing  statistical and other information in respect of
all Serviced  Wholesale Notes and Serviced Retail  Receivables for the period of
two  consecutive  fiscal  quarters then ended and for the fiscal year then ended
and, in the case of the reports delivered pursuant to subclauses (i) and (ii) of
this clause (e), comparative  information relating to the corresponding  portion
or portions of the previous fiscal year, all  substantially in the same form and
scope (except for the periods covered) as set forth on Exhibit D hereto.

SECTION  7.02.  Notices of Material  Events.  The US Borrower  (or each  Mexican
Borrower, in the case of paragraph (b) below) will furnish to the Administrative
Agent,  for prompt  distribution  to each Lender,  prompt  written notice of the
following:

(a)      the occurrence of any Default;

(b) any  changes in taxes,  duties or other  charges of Mexico or any  political
subdivision or taxing authority thereof or any change in any laws of Mexico that
may  affect  the  amount or timing of  receipt  of any  payment  due under  this
Agreement or any Notes issued hereunder;

(c) the filing or  commencement  of any action,  suit or proceeding by or before
any arbitrator or Governmental  Authority against or affecting any Borrower, any
Subsidiary  or any  Affiliate  thereof  that,  if  adversely  determined,  could
reasonably be expected to result in a Material Adverse Effect;

(d) the  occurrence  of any ERISA Event that,  alone or together  with any other
ERISA Events that have  occurred,  could  reasonably  be expected to result in a
Material Adverse Effect; and

(e) any other development that results in, or could reasonably  be  expected  to
result in, a Material Adverse Effect.

Each notice  delivered under this Section shall be accompanied by a statement of
a Financial  Officer or other executive officer of the relevant Borrower setting
forth the  details of the event or  development  requiring  such  notice and any
action taken or proposed to be taken with respect thereto.

SECTION 7.03. Existence; Conduct of Business. Each Borrower will, and will cause
each of its  respective  Subsidiaries  to,  do or cause  to be done  all  things
necessary  to  preserve,  renew  and keep in full  force  and  effect  its legal
existence and the rights, licenses,  permits, privileges and franchises material
and necessary to the conduct of its business;  provided that the foregoing shall
not prohibit any merger,  consolidation,  liquidation or  dissolution  permitted
under Section 8.03.

SECTION 7.04. Payment of Obligations. Each Borrower will, and will cause each of
its respective Subsidiaries to, pay its obligations,  including Tax liabilities,
that,  if not paid,  could result in a Material  Adverse  Effect before the same
shall become  delinquent or in default,  except where (a) the validity or amount
thereof is being  contested in good faith by  appropriate  proceedings,  (b) the
relevant  Borrower  or such  Subsidiary  has set  aside  on its  books  adequate
reserves with respect  thereto in accordance  with GAAP,  and (c) the failure to
make payment  pending such contest could not reasonably be expected to result in
a Material Adverse Effect; provided,  however, that nothing in this Section 7.04
shall impose an obligation on any Borrower to cause a Securitization  Subsidiary
to repay any  Indebtedness or to repay any  Indebtedness  of any  Securitization
Subsidiary.

SECTION 7.05. Maintenance of Properties; Insurance. Each Borrower will, and will
cause each of its respective Subsidiaries to, (a) keep and maintain all property
material to the conduct of its  business in good  working  order and  condition,
ordinary wear and tear and damage by casualty excepted,  and (b) maintain,  with
financially sound and reputable insurance  companies,  insurance in such amounts
and against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar locations.

SECTION 7.06. Books and Records; Inspection Rights. Each Borrower will, and will
cause each of its  respective  Subsidiaries  to, keep proper books of record and
account in which full,  true and correct  entries are made of all  dealings  and
transactions in relation to its business and activities. Each Borrower will, and
will cause each of its respective  Subsidiaries  to, permit any  representatives
designated by the  Administrative  Agent or any Lender,  upon  reasonable  prior
notice,  to visit and inspect its properties,  to examine and make extracts from
its books and records,  and to discuss its affairs,  finances and condition with
its officers and independent  accountants,  all at such reasonable  times and as
often as reasonably requested.

SECTION 7.07.  Compliance with Laws and Material Contractual  Obligations.  Each
Borrower  will, and will cause each of its  respective  Subsidiaries  to, comply
with (a) all laws, rules,  regulations and orders of any Governmental  Authority
applicable to it or its property (including, without limitation, all laws, rules
and regulations  relating to INFONAVIT and SAR) and (b) all material obligations
under any indenture, agreement or other instrument binding upon such Borrower or
any of its  Subsidiaries,  in each case  except  where (i) the failure to do so,
individually or in the aggregate,  could not reasonably be expected to result in
a Material  Adverse  Effect or (ii) the  necessity  of  compliance  therewith is
contested in good faith by appropriate proceedings.

SECTION 7.08. Intercompany Agreements.  (a) The US Borrower will (i) perform all
of its obligations under the Master Intercompany  Agreement unless International
shall have failed to make any payment payable by it to the US Borrower under the
Master Intercompany Agreement or the Tax Allocation Agreement;  (ii) enforce the
Master  Intercompany  Agreement  against  International  in accordance  with its
terms; (iii) not cancel or terminate,  or permit the cancellation or termination
of, the Master  Intercompany  Agreement,  or Article  II, VI, VII or VIII (other
than  paragraph C) thereof if such  cancellation  or  termination  is materially
adverse  to the US  Borrower,  and (iv) not  agree to any  amendment,  waiver or
modification of the Master Intercompany Agreement which is materially adverse to
the US Borrower; provided that the Master Intercompany agreement may be modified
to modify, amend or eliminate Section II.A of the Master Intercompany  Agreement
insofar  as such  Section  requires  International  to  offer  to sell to the US
Borrower,  or requires the US Borrower to purchase,  "Wholesale  Contracts"  (as
such term is defined in the Master Intercompany Agreement).

(b) The US  Borrower  will (i)  enforce  the Tax  Allocation  Agreement  against
International  in accordance  with its terms,  (ii) not agree to any  amendment,
waiver or modification of the Tax Allocation  Agreement which amends or modifies
the provisions of the Amendment to Tax Allocation  Agreement and Acknowledgement
dated as of April 26, 1993 among the US Borrower,  International  and TRIP or is
in any  manner  adverse  to the US  Borrower  or to  the  US  Borrower  and  its
Subsidiaries taken as a whole.

(c) The US Borrower will (i) enforce each  Intercompany  Loan Agreement  against
the Subsidiary of the US Borrower that is a party thereto in accordance with its
terms;  (ii) cause each of its Subsidiaries to pay promptly all accounts payable
from time to time owing by such Subsidiary to the US Borrower (including without
limitation  amounts  payable  from  time to time  by such  Subsidiary  to the US
Borrower under the Tax Allocation Agreement);  (iii) not cancel or terminate, or
permit the  cancellation  or  termination  of, any  Intercompany  Loan Agreement
without the consent of the  Required  Lenders  (other than the  cancellation  or
termination of any Intercompany Loan Agreement resulting from the termination of
the  Qualified  Securitization  Transaction  to  which  such  Intercompany  Loan
Agreement  relates  and the  repayment  of all  amounts  outstanding  under such
Intercompany  Loan  Agreement);  (iv) not  agree  to any  amendment,  waiver  or
modification of any provision of any  Intercompany  Loan Agreement if there is a
reasonable  possibility that such amendment,  waiver or modification  would have
the effect of (1) reducing the amount owed by any  Subsidiary of the US Borrower
to the US Borrower under any  Intercompany  Loan  Agreement,  (2) postponing the
date that any payment would otherwise be payable to the US Borrower  thereunder,
(3) further  subordinating the US Borrower's right to payment  thereunder to the
rights of any other  creditors,  (4) further  restricting  the Subsidiary  party
thereto  from  applying,  or releasing  to any extent such  Subsidiary  from its
obligation to apply,  cash received by it to pay its allocated share of payments
from  time to time  owing by the US  Borrower  to  International  under  the Tax
Allocation Agreement or (5) changing the transactions contemplated thereunder in
a manner that makes them,  taken as a whole,  less favorable to the US Borrower;
and (v) deliver to the  Administrative  Agent,  promptly upon receipt thereof, a
copy of each  certificate,  notice,  instruction or other  document  received or
delivered by it in connection with each Intercompany Loan Agreement.

SECTION 7.09. Federal Regulations.  No part of the proceeds of any Loans, and no
other  extensions of credit  hereunder,  will be used for "buying" or "carrying"
any "margin  stock" within the  respective  meanings of each of the quoted terms
under Regulation U of the Board as now and from time to time hereafter in effect
or for any purpose that violates the provisions of the Regulations of the Board.
If requested by any Lender or the  Administrative  Agent, the relevant  Borrower
will  furnish to the  Administrative  Agent and each Lender a  statement  to the
foregoing  effect in conformity with the  requirements of FR Form G-3 or FR Form
U-1, as applicable, referred to in Regulation U.

SECTION 7.10. Use of Proceeds; Repayment of Loans. The proceeds of the Loans and
the Letters of Credit shall be used (a) to repay any amounts  outstanding  under
the Existing Credit  Agreement,  (b) to repay any amounts  outstanding under the
Existing Mexican Credit Agreements (and such repayment shall be made by no later
than the date that is thirty  days  following  the  Effective  Date) and (c) for
general corporate purposes.

SECTION 7.11.  Grant of Security  Interest.  The US Borrower will, no later than
thirty days after the occurrence of a Downgrading,  grant to the  Administrative
Agent,  for the benefit of the Lenders,  a first priority  (subject to customary
exceptions) security interest (the "Springing Lien") in substantially all of the
US Borrower's tangible and intangible assets (including, without limitation, the
assets listed on Schedule 7.11 hereto),  except for those assets as to which the
Administrative Agent shall determine in its sole reasonable  discretion that the
costs of obtaining  such a security  interest  are  excessive in relation to the
value of the security to be afforded  thereby;  provided  that (a) the Springing
Lien shall be granted  pursuant to  documentation  (including  legal opinions of
counsel to the US Borrower)  substantially in the form that shall be approved by
the Administrative  Agent and the US Borrower no later than sixty days after the
Effective Date, (b) to the extent that any Subordinated Debt of the US Borrower,
any Hedging Agreement of the US Borrower with any Lender, or any Indebtedness of
the US Borrower now existing or hereafter  issued and sold,  requires  that such
Subordinated  Debt,  Hedging  Agreement or  Indebtedness  be equally and ratably
secured with the Indebtedness  incurred under this Agreement,  such Subordinated
Debt,  Hedging Agreement or other  Indebtedness  shall be so secured and (c) the
Administrative  Agent,  on behalf of the  Lenders,  shall have the  authority to
release the Springing Lien on any assets sold, transferred,  leased or otherwise
disposed of in a transaction permitted under this Agreement;  provided that with
respect to any assets  sold,  transferred,  leased or  otherwise  disposed of in
connection  with a Qualified  Securitization  Transaction,  such  Springing Lien
shall  automatically  be released  without further action by the  Administrative
Agent.

                                  ARTICLE VIII

                               Negative Covenants

                  Until  the  Commitments   have  expired  or  terminated,   the
principal of and interest on each Loan and all fees payable  hereunder have been
paid in full,  all  Letters  of Credit  have  expired or  terminated  and all LC
Disbursements  shall have been  reimbursed,  each Borrower  covenants and agrees
with the Lenders that:

SECTION 8.01.     Financial Covenants.  (a)  The US Borrower will not permit the
Consolidated Leverage Ratio to exceed 7.00 to 1.00 as of the last  Business  Day
of each calendar month.

(b) The US Borrower  will not permit the Fixed Charge  Coverage  Ratio as at the
last  day of any  fiscal  quarter  for the  period  of four  consecutive  fiscal
quarters then ended to be less than 1.25 to 1.00.

SECTION  8.02.  Liens.  The US Borrower will not, and will not permit any of its
Subsidiaries  to,  create,  incur,  assume  or  permit  to exist any Lien on any
property or asset now owned or  hereafter  acquired by it, or assign or sell any
income or revenues (including  accounts  receivable) or rights in respect of any
thereof, except:

(a)      Permitted Encumbrances;

(b)  any  Lien  on any  property  or  asset  of the  US  Borrower  or any of its
Subsidiaries  existing  on the  date  hereof  and set  forth in  Schedule  8.02;
provided  that (i) such Lien shall not apply to any other  property  or asset of
the US Borrower  or any  Subsidiary  and (ii) such Lien shall  secure only those
obligations  which it secures on the date hereof and  extensions,  renewals  and
replacements  thereof  that do not  increase the  outstanding  principal  amount
thereof;

(c) any Lien existing on any property or asset prior to the acquisition  thereof
by the US Borrower  or any of its  Subsidiaries  or existing on any  property or
asset of any Person that becomes a Subsidiary after the date hereof prior to the
time  such  Person  becomes  a  Subsidiary;  provided  that (i) such Lien is not
created in  contemplation  of or in  connection  with such  acquisition  or such
Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply
to any other property or assets of the US Borrower or such  Subsidiary and (iii)
such Lien shall  secure only those  obligations  which it secures on the date of
such  acquisition or the date such Person becomes a Subsidiary,  as the case may
be and extensions,  renewals and  replacements  thereof that do not increase the
outstanding principal amount thereof;

(d) Liens on fixed or capital assets acquired, constructed or improved by the US
Borrower or any of its Subsidiaries;  provided that (i) such security  interests
and the  Indebtedness  secured  thereby are incurred  prior to or within 90 days
after such  acquisition or the completion of such  construction  or improvement,
(ii)  the  Indebtedness  secured  thereby  does not  exceed  100% of the cost of
acquiring, constructing or improving such fixed or capital assets and (iii) such
security  interests  shall not apply to any other  property  or assets of the US
Borrower or such Subsidiary;

(e) any rights of set-off  of financial  institutions holding accounts of the US
Borrower and its Subsidiaries;

(f) any Lien created in accordance with Section 7.11; and

(g) Liens not  otherwise  permitted  by this  Section  so long as the  aggregate
outstanding  principal amount of the obligations secured thereby does not at any
time exceed $7,000,000.

SECTION 8.03.  Fundamental  Changes.  (a) The US Borrower will not, and will not
permit any of its  Subsidiaries  to,  merge into or  consolidate  with any other
Person,  or permit  any other  Person to merge into or  consolidate  with it, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a series
of  transactions)  all or  substantially  all of its assets (other than sales of
Receivables,  operating  leases  through its leasing  Subsidiaries  or interests
therein  in  the   ordinary   course  of  business  by  the  US  Borrower  or  a
Securitization   Subsidiary  in  connection  with  a  Qualified   Securitization
Transaction),  or  all  or  substantially  all  of  the  stock  of  any  of  its
Subsidiaries  other than Harco  Insurance  (in each case,  whether  now owned or
hereafter  acquired),  or  liquidate or dissolve  (other than Harco  Insurance),
except that, if at the time thereof and immediately  after giving effect thereto
no Default shall have  occurred and be continuing  (i) any Person may merge into
any  Borrower  in  a  transaction  in  which  such  Borrower  is  the  surviving
corporation,  (ii) any Person  (other than the US  Borrower)  may merge into any
Subsidiary  in a  transaction  in which  the  surviving  entity  is a direct  or
indirect Subsidiary, (iii) any Subsidiary may sell, transfer, lease or otherwise
dispose of its assets to the US Borrower or to another  Subsidiary  and (iv) any
Subsidiary may liquidate or dissolve if the US Borrower determines in good faith
that such liquidation or dissolution is in the best interests of the US Borrower
and is not  materially  disadvantageous  to the Lenders;  provided that any such
merger  involving a Person  that is not a wholly  owned  Subsidiary  immediately
prior to such merger  shall not be  permitted  unless also  permitted by Section
8.05.

(b) The US Borrower  will not, and will not permit any of its  Subsidiaries  to,
engage to any material  extent in any business other than businesses of the type
conducted  by the US Borrower and its  Subsidiaries  on the date of execution of
this  Agreement  and  businesses  reasonably  related,  similar,  supportive  or
ancillary thereto.

SECTION 8.04. Investments, Loans, Advances, Guarantees and Acquisitions; Hedging
Agreements.  (a) Other than in the  ordinary  course of  business  for a finance
company,  the US Borrower will not, and will not permit any of its  Subsidiaries
to, purchase,  hold or acquire (including pursuant to any merger with any Person
that was not a wholly owned  Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any option,  warrant or
other  right to acquire  any of the  foregoing)  of, make or permit to exist any
loans or  advances  to,  make or  permit to exist  any  investment  or any other
interest  in,  or,  solely  with  respect  to  the US  Borrower's  Subsidiaries,
Guarantee  any  obligations  of , any other  Person,  or purchase  or  otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person  constituting  a business unit (all of the  foregoing,  "Investments")  ,
except:

     (i) Permitted Investments;

     (ii)   Investments  by  the  US  Borrower  in  the  capital  stock  of  its
     Subsidiaries;

     (iii) loans or advances  made by the US Borrower to any  Subsidiary  or any
     Mexican Borrower and made by any Subsidiary to the US Borrower, any Mexican
     Borrower or any other Subsidiary;

     (iv) loans and advances to employees of any Borrower or its Subsidiaries in
     the  ordinary  course of  business  (including  for travel  and  relocation
     expenses);

     (v) loans  made by the US  Borrower  to  International  in an amount not to
     exceed $50,000,000 at any one time outstanding;

     (vi) deposits to secure the performance of bids, trade  contracts,  leases,
     statutory obligations, surety and appeal bonds, performance bonds and other
     obligations  of a like  nature,  in each  case in the  ordinary  course  of
     business;

     (vii) the US  Borrower  and its  Subsidiaries  may  acquire  a  Controlling
     interest in an entity that engages in a business similar to the business of
     the type  conducted  by the US Borrower  and its  Subsidiaries  so long as,
     after giving pro forma  effect  thereto,  the US Borrower is in  compliance
     with Sections 8.01(a) and (b);

     (viii)  Investments  made  in  connection  with  Qualified   Securitization
     Transactions; (ix) Investments set forth on Schedule 8.04;

     (x) the Guarantee contained in Article XI;

     (xi) Guarantees by any Subsidiary, so long as such guarantor simultaneously
     delivers to the  Administrative  Agent a Guarantee,  in form and  substance
     reasonably  satisfactory to the  Administrative  Agent and on terms no less
     favorable  than the terms in such original  Guarantee  entered into by such
     Subsidiary,  for the benefit of the Administrative  Agent, on behalf of the
     Lenders;

     (xii) in addition to  Investments  otherwise  expressly  permitted  by this
     Section,  Investments in an aggregate amount (valued at cost) not to exceed
     $20,000,000 during the term of this Agreement; and

     (xiii)  Investments  (including debt  obligations  and equity)  received in
     connection with the bankruptcy or reorganization of suppliers and customers
     and in settlement of delinquent  obligations  of, and other  disputes with,
     customers and suppliers arising in the ordinary course of business.

(b) The US Borrower  will not, and will not permit any of its  Subsidiaries  to,
enter into any Hedging Agreement,  other than Hedging Agreements entered into in
the  ordinary  course of  business  to hedge or  mitigate  risks to which the US
Borrower or such  Subsidiary  is exposed in the  conduct of its  business or the
management  of  its  liabilities  or as  otherwise  required  by  any  Qualified
Securitization Transaction.

SECTION 8.05. Restricted Payments. The US Borrower will not, and will not permit
any of its Subsidiaries  to, declare or make, or agree to pay or make,  directly
or  indirectly,  any  Restricted  Payment,  except (a) any  Subsidiary  may make
Restricted Payments to the US Borrower,  (b) the US Borrower may make Restricted
Payments  pursuant to and in accordance with stock option plans or other benefit
plans for management or employees of the US Borrower and its  Subsidiaries,  (c)
Harco  Insurance may make  Restricted  Payments and (d) the US Borrower may make
Restricted  Payments  provided  that the  aggregate  amount  of such  Restricted
Payments made while this  Agreement is in effect shall not exceed the sum of (i)
100% of cumulative  positive  consolidated  net income of the US Borrower  since
November 1, 1999 through the period prior to the date of such payment,  (ii) the
aggregate net cash  proceeds of sales of non-core  assets of the US Borrower and
its Subsidiaries  received by the US Borrower and its Subsidiaries after October
31,  2000  through  the period  prior to the date of such  payment and (iii) the
amount  of any  Restricted  Payments  received  by the US  Borrower  from  Harco
Insurance  after  October 31, 2000  through the period prior to the date of such
payment.

SECTION 8.06.  Transactions with Affiliates.  The US Borrower will not, and will
not permit any of its  Subsidiaries  to, sell,  lease or otherwise  transfer any
property or assets to, or purchase,  lease or otherwise  acquire any property or
assets from,  or otherwise  engage in any other  transactions  with,  any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
not less favorable to the US Borrower or such  Subsidiary than could be obtained
on an arm's-length basis from unrelated third parties,  (b) transactions between
or among the US Borrower and its wholly owned  Subsidiaries  not  involving  any
other Affiliate,  (c) any Restricted  Payment  permitted by Section 8.05, (d) in
connection with any Qualified  Securitization  Transaction and (e) in connection
with the Master  Intercompany  Agreement,  the Tax Allocation  Agreement and any
Intercompany Loan Agreement.

SECTION 8.07. Negative Pledge. The US Borrower will not, and will not permit any
of its Subsidiaries  to, directly or indirectly,  enter into, incur or permit to
exist any agreement or other  arrangement  that prohibits,  restricts or imposes
any condition upon (a) the ability of the US Borrower or any of its Subsidiaries
to create, incur or permit to exist any Lien upon any of its property or assets,
or (b) the ability of any  Subsidiary  of the US Borrower  to pay  dividends  or
other  distributions  with respect to any shares of its capital stock or to make
or repay loans or advances  to the US  Borrower  or any other  Subsidiary  or to
Guarantee Indebtedness of the US Borrower or any other Subsidiary; provided that
(i) the foregoing shall not apply to restrictions and conditions  imposed by law
or by this Agreement (including,  but not limited to, Section 8.04(a)(v)),  (ii)
the foregoing  shall not apply to  restrictions  and conditions  existing on the
date hereof,  (iii) the  foregoing  shall not apply to Qualified  Securitization
Transactions,  (iv) the foregoing shall not apply to customary  restrictions and
conditions  contained in agreements relating to the sale of a Subsidiary pending
such  sale,  provided  such  restrictions  and  conditions  apply  only  to  the
Subsidiary that is to be sold and such sale is permitted  hereunder,  (v) clause
(a) of the foregoing shall not apply to  restrictions  or conditions  imposed by
any agreement  relating to secured  Indebtedness  permitted by this Agreement if
such  restrictions  or conditions  apply only to the property or assets securing
such Indebtedness, (vi) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof; and
(vii) clause (a) of the foregoing shall not apply to restrictions and conditions
that  require  that other  Indebtedness  be secured  equally  and  ratably  with
Indebtedness under this Agreement;  and provided,  further,  that so long as any
Event of Default  shall be  continuing,  neither the US Borrower  nor any of its
Subsidiaries  shall  assume  or incur  any  Indebtedness  that is  subject  to a
provision requiring such Indebtedness to be secured equally and ratably with, or
prior to, the Indebtedness hereunder.

SECTION 8.08.  Prepayments of  Subordinated  Debt. The US Borrower will not, and
will not permit any of its Subsidiaries to, prepay, purchase or otherwise retire
any of the Subordinated  Debt prior to the stated maturity thereof unless at the
time  of  such  prepayment,  purchase  or  retirement  or,  in the  case  of any
Subordinated  Debt of the US Borrower  issued  pursuant to an indenture,  at the
time notice of redemption is given to the holders thereof  pursuant to the terms
thereof,  (a)(i) the US Borrower has at least two of the  following  ratings for
its Index Debt: (A) BBB- or higher by S&P, (B) Baa3 or higher by Moody's and (C)
BBB- or higher by Duff & Phelps Credit Rating Co. or (ii) after giving effect to
such prepayment,  purchase or retirement, the sum of (A) the aggregate amount of
all  outstanding  preferred  stock  of the US  Borrower  and (B)  the  aggregate
principal  amount of all  outstanding  Subordinated  Debt,  is at least equal to
$100,000,000  and (b) no Default has occurred and is  continuing or would result
from such prepayment, purchase or retirement.

SECTION 8.09.    Serviced Wholesale Portfolio Quality.  The US Borrower will not
permit:


(a) Past Due  Serviced  Wholesale  Notes  (Three-Month  Total) at the end of any
month (determined substantially in accordance with practices, including policies
as to extensions and rewrites,  in effect as of April 30, 2000),  expressed as a
percentage of Serviced  Wholesale Notes  (Three-Month  Total) at the end of such
month, to exceed 5%; or

(b) net losses of the US Borrower  (determined on the basis of the US Borrower's
normal  practice) on Serviced  Wholesale Notes  recognized  during any period of
four  consecutive  fiscal  quarters to exceed 0.5% of Serviced  Wholesale  Notes
liquidated during the same period.

For purposes of clause (b) of this Section,  Serviced Wholesale Notes liquidated
during  any  period  shall  be  determined  on the  same  basis  as was  used in
determining   the  statistics  as  to  "Percent  net  losses   (recoveries)   to
liquidations"  for  "Wholesale  notes"  included  under  "Five  Year  Summary of
Financial and Operating Data" in the 1999 Annual Report.

SECTION 8.10.     Serviced Retail Portfolio Quality.  The US Borrower  will  not
permit:

(a) Past Due Serviced Retail Notes  (Three-Month  Total) at the end of any month
(determined substantially in accordance with practices, including policies as to
extensions  and  rewrites,  in  effect  as of April 30,  2000),  expressed  as a
percentage  of  Serviced  Retail  Notes  (Three-Month  Total) at the end of such
month, to exceed 3%; or

(b) the  Combined  Retail  Losses  to Liquidations Ratio to exceed 4 1/2% at any
time.

                  For purposes of clause (b) of this Section:

     (i) "Combined  Retail Losses to Liquidations  Ratio" means, as of any date,
     the ratio  (expressed as a percentage)  of (A) the sum of (1) Net Losses on
     Serviced Retail Notes for the period of twelve consecutive months ending on
     the last day of the then most recently ended month, plus (2) the net losses
     of  International  (determined  on  the  basis  of  International's  normal
     practice) on Serviced  Retail Notes for such period to (B) Serviced  Retail
     Liquidations for such period;

     (ii) "Net Losses on Serviced Retail Notes" means,  for any period,  the net
     credit  losses  of the US  Borrower  (determined  on  the  basis  of the US
     Borrower's  normal  practice  with the  benefit  of rights of  recourse  to
     International  and  dealers  and  other  obligors  and to  reserves  the US
     Borrower  maintains  with regard to dealers) on Serviced  Retail  Notes for
     such period; and

     (iii) "Serviced Retail  Liquidations" means liquidations  determined on the
     same basis as in the  supplementary  financial  data  included  in the 1999
     Annual Report.

                                   ARTICLE IX

                                Events of Default

                  If any of the following  events (each,  an "Event of Default")
shall occur:

(a)  any  Borrower  shall  fail  to  pay  any  principal  of  any  Loan  or  any
reimbursement  obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

(b) any  Borrower  shall fail to pay any  interest on any Loan or any fee or any
other amount  (other than an amount  referred to in clause (a) of this  Article)
payable under this Agreement, when and as the same shall become due and payable,
and such failure shall continue unremedied for a period of five Business Days;

(c) any  representation  or warranty  made or deemed made by or on behalf of the
Parent, the US Borrower or any of its Subsidiaries in or in connection with this
Agreement  or  any  amendment  or  modification   hereof,   or  in  any  report,
certificate,  financial  statement or other document furnished pursuant to or in
connection  with this Agreement or any amendment or modification  hereof,  shall
prove to have been  incorrect in any  material  respect when made or deemed made
(for the avoidance of doubt,  the  representations  and  warranties set forth in
Sections  5.04(e)  and  5.12(a)  are made or deemed made solely on and as of the
Effective  Date) and, if the  consequences  of such  representation  or warranty
being  incorrect shall be susceptible of remedy in all material  respects,  such
consequences  shall not be remedied in all material  respects within 10 Business
Days after the Parent,  the US Borrower or its  Subsidiary  becomes  aware or is
advised  that such  representation  or warranty  was  incorrect  in any material
respect;

(d) the US Borrower shall fail to observe or perform any covenant,  condition or
agreement contained in Section 7.02, 7.03, 7.09, 7.10 or 7.11 or in Article VIII
(except as otherwise provided in clause (e) below);

(e) the US Borrower shall fail to observe or perform any covenant,  condition or
agreement  contained in Section 8.01, 8.03 or 8.08 within 10 Business Days after
notice  thereof  from the  Administrative  Agent  (given at the  request  of any
Lender) to the US Borrower;

(f) the US Borrower shall fail to observe or perform any covenant,  condition or
agreement contained in this Agreement (other than those specified in clause (a),
(b), (d) or (e) of this Article), and such failure shall continue unremedied for
a period of 30 days after notice thereof from the Administrative Agent (given at
the request of any Lender) to the US Borrower;

(g) at any  time  when any  Mexican  Obligations  are  outstanding,  the  Parent
Guarantee or the Guarantee  contained in Article XI hereunder  shall cease,  for
any reason, to be in full force and effect or the Parent, the US Borrower or any
Affiliate of the Parent or the US Borrower shall so assert and such matter shall
continue  unremedied  for a period  of 10 days  after  notice  thereof  from the
Administrative  Agent  (given at the request of any Lender) to the Parent or the
US Borrower, as applicable;

(h) any  Borrower  shall  fail to make any  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;

(i) any event or condition occurs that (A) results in any Material  Indebtedness
becoming due prior to its scheduled maturity or (B) solely in the case of the US
Borrower, enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material  Indebtedness or any trustee
or agent on its or their  behalf to cause any  Material  Indebtedness  to become
due, or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its  scheduled  maturity;  provided  that this  paragraph (i) shall not
apply to secured Indebtedness that becomes due as a result of the voluntary sale
or transfer of the property or assets securing such Indebtedness;

(j) an  involuntary  proceeding  shall be commenced or an  involuntary  petition
shall be filed seeking (i) liquidation,  reorganization,  concurso  mercantil or
other relief in respect of the Parent, International, any Borrower or any of its
Subsidiaries  or its debts,  or of a substantial  part of its assets,  under any
Federal,  state or foreign bankruptcy,  insolvency,  receivership or similar law
now or  hereafter  in effect or (ii) the  appointment  of a  receiver,  trustee,
custodian,  sequestrator,  sindico,  conservator  or  similar  official  for the
Parent,  International,  any  Borrower  or  any  of  its  Subsidiaries  or for a
substantial  part of its  assets,  and,  in any such case,  such  proceeding  or
petition shall continue  undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

(k) the Parent, International, any Borrower or any of its Subsidiaries shall (i)
voluntarily  commence any proceeding or file any petition  seeking  liquidation,
reorganization,  concurso mercantil or other relief under any Federal,  state or
foreign bankruptcy, insolvency,  receivership or similar law now or hereafter in
effect,  (ii) consent to the  institution of, or fail to contest in a timely and
appropriate  manner,  any proceeding or petition described in clause (j) of this
Article,  (iii) apply for or consent to the appointment of a receiver,  trustee,
custodian,  sequestrator,  sindico,  conservator  or  similar  official  for the
Parent,  International,  any  Borrower  or  any  of  its  Subsidiaries  or for a
substantial  part of its  assets,  (iv) file an answer  admitting  the  material
allegations  of a petition filed against it in any such  proceeding,  (v) make a
general  assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

(l) the Parent, International, any Borrower or any  of  its  Subsidiaries  shall
become unable, admit  in  writing  or  fail  generally  to pay its debts as they
become due;

(m) one or more  judgments  for the payment of money in an  aggregate  amount in
excess of  $10,000,000  shall be rendered  against the US  Borrower,  any of its
Subsidiaries or any combination  thereof and the same shall remain  undischarged
for a  period  of 30  consecutive  days  during  which  execution  shall  not be
effectively  stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of the US Borrower or any of its  Subsidiaries
to enforce any such judgment;

(n) an ERISA  Event shall have  occurred  that,  in the opinion of the  Required
Lenders,  when taken  together  with all other ERISA Events that have  occurred,
could reasonably be expected to result in a Material Adverse Effect; or

(o) a Change in Control shall occur;

(p)  International  or the Parent  shall  fail to observe or perform  any of its
obligations  contained in the Parents'  Side  Agreement  for a period of 30 days
after  notice  of  such  failure  shall  have  been  given  to the US  Borrower,
International and the Parent by the  Administrative  Agent at the request of any
Lender,  or the  Parents'  Side  Agreement  shall fail,  at any time and for any
reason,  to be in full force and effect or  International or the Parent shall so
assert in writing;

(q)  International  shall  (i)  cancel  or  terminate  the  Master  Intercompany
Agreement, or Article II, VI, VII or VIII (other than paragraph C) thereof, (ii)
fail to make any  payment  payable  by it to the US  Borrower  under the  Master
Intercompany Agreement,  the Tax Allocation Agreement, or otherwise,  within ten
Business  Days after such payment is due or (iii) fail to observe or perform any
of its other covenants or obligations  under the Master  Intercompany  Agreement
for a period of 30 days after  notice of such  failure  shall have been given to
the US Borrower and International by the Administrative  Agent at the request of
any Lender;

(r) either the Parent or International shall fail to pay when due, or within any
applicable  grace period,  any principal of or interest on its  Indebtedness for
Borrowed Money which exceeds  $50,000,000 in aggregate principal or face amount;
or

(s) any  Indebtedness  for Borrowed Money of either the Parent or  International
which exceeds $50,000,000 in aggregate principal or face amount shall become due
prior to its stated  maturity,  or any event or  circumstance  shall occur which
permits one or more Persons other than the Parent or International,  as the case
may be, to cause such Indebtedness for Borrowed Money to become due prior to its
stated maturity;

then,  and in every  such  event  relating  to the US  Borrower,  the  Parent or
International  (other  than an  event  described  in  clause  (j) or (k) of this
Article),  and at any time thereafter  during the continuance of such event, the
Administrative  Agent may, and at the request of the Required  Lenders shall, by
notice to the US Borrower,  take either or both of the following actions, at the
same or different  times:  (i)  terminate  the  Commitments,  and  thereupon the
Commitments  shall  terminate  immediately,  and (ii)  declare  the  Loans  then
outstanding  to be due and  payable  in  whole  (or in part,  in which  case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and  payable,  together  with  accrued  interest  thereon and all fees and other
obligations  of the Borrowers  accrued  hereunder,  shall become due and payable
immediately,  without presentment,  demand, protest or other notice of any kind,
all of which are hereby waived by each  Borrower;  in the case of any event with
respect to the US Borrower, the Parent or International  described in clause (j)
or (k) of this Article,  the Commitments shall  automatically  terminate and the
principal of the Loans then outstanding,  together with accrued interest thereon
and all fees and other  obligations of the Borrowers  accrued  hereunder,  shall
automatically become due and payable,  without presentment,  demand,  protest or
other notice of any kind, all of which are hereby waived by each  Borrower;  and
in  the  case  of  any  such  event  relating  to  any  Mexican  Borrower,   the
Administrative  Agent may, and at the request of the Required  Lenders shall, by
notice to the US  Borrower,  terminate  the  Commitments  with  respect  to such
Mexican Borrower.

                                   ARTICLE X

                            The Administrative Agent

                  Each of the Lenders and the  Issuing  Bank hereby  irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such  actions  on its behalf and to  exercise  such  powers as are
delegated to the  Administrative  Agent by the terms hereof,  together with such
actions and powers as are reasonably incidental thereto.

                  The bank serving as the  Administrative  Agent hereunder shall
have the same rights and powers in its  capacity as a Lender as any other Lender
and may exercise the same as though it were not the  Administrative  Agent,  and
such  bank and its  Affiliates  may  accept  deposits  from,  lend  money to and
generally  engage in any kind of business with any Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.

                  The  Administrative   Agent  shall  not  have  any  duties  or
obligations  except  those  expressly  set forth  herein.  Without  limiting the
generality of the foregoing,  (a) the Administrative  Agent shall not be subject
to any  fiduciary or other implied  duties,  regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary  action or exercise any discretionary  powers,  except
discretionary   rights  and  powers  expressly   contemplated  hereby  that  the
Administrative Agent is required to exercise in writing by the Required Lenders,
and (c) except as expressly set forth herein, the Administrative Agent shall not
have any duty to disclose,  and shall not be liable for the failure to disclose,
any  information  relating to any  Borrower or any of its  Subsidiaries  that is
communicated to or obtained by the bank serving as  Administrative  Agent or any
of its Affiliates in any capacity.  The Administrative Agent shall not be liable
for any action  taken or not taken by it with the  consent or at the  request of
the Required  Lenders or in the absence of its own gross  negligence  or willful
misconduct.  The  Administrative  Agent shall be deemed not to have knowledge of
any  Default   unless  and  until  written   notice  thereof  is  given  to  the
Administrative   Agent  by  the   relevant   Borrower  or  a  Lender,   and  the
Administrative  Agent shall not be responsible for or have any duty to ascertain
or inquire  into (i) any  statement,  warranty or  representation  made in or in
connection with this Agreement, (ii) the contents of any certificate,  report or
other  document  delivered  hereunder  or  in  connection  herewith,  (iii)  the
performance or observance of any of the covenants,  agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement or any other agreement, instrument or document, or
(v) the  satisfaction  of any  condition  set forth in Article  VI or  elsewhere
herein,  other  than to  confirm  receipt  of  items  expressly  required  to be
delivered to the Administrative Agent.

                  The  Administrative  Agent shall be entitled to rely upon, and
shall  not  incur  any  liability  for  relying  upon,   any  notice,   request,
certificate,  consent, statement, instrument, document or other writing believed
by it to be genuine  and to have been signed or sent by the proper  Person.  The
Administrative  Agent also may rely upon any  statement  made to it orally or by
telephone  and  believed  by it to be made by the proper  Person,  and shall not
incur any liability for relying thereon.  The  Administrative  Agent may consult
with  legal  counsel  (who  may  be  counsel  for  the  Borrowers),  independent
accountants  and other  experts  selected by it, and shall not be liable for any
action  taken or not  taken by it in  accordance  with  the  advice  of any such
counsel, accountants or experts.

                  The  Administrative  Agent may  perform any and all its duties
and  exercise  its rights and  powers by or through  any one or more  sub-agents
appointed by the  Administrative  Agent. The  Administrative  Agent and any such
sub-agent  may perform any and all its duties and exercise its rights and powers
through their  respective  Related  Parties.  The exculpatory  provisions of the
preceding  paragraphs  shall  apply to any  such  sub-agent  and to the  Related
Parties of the Administrative  Agent and any such sub-agent,  and shall apply to
their  respective  activities in connection  with the  syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

                  Subject  to the  appointment  and  acceptance  of a  successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Bank and the Borrowers.
Upon any such  resignation,  the Required Lenders shall have the right, with the
consent of the US Borrower,  to appoint a successor.  If no successor shall have
been  so  appointed  by the  Required  Lenders  and  shall  have  accepted  such
appointment within 30 days after the retiring  Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing  Bank,  appoint a successor  Administrative  Agent which
shall be a Lender with an office in New York,  New York,  or an Affiliate of any
such bank.  Upon the  acceptance  of its  appointment  as  Administrative  Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights,  powers,  privileges  and duties of the retiring  Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and  obligations  hereunder.  The fees  payable by the  Borrowers to a successor
Administrative  Agent  shall  be the same as those  payable  to its  predecessor
unless  otherwise  agreed  between the Borrowers and such  successor.  After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 12.03 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.

                  Each  Lender  acknowledges  that  it  has,  independently  and
without reliance upon the Administrative  Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis  and  decision  to  enter  into  this   Agreement.   Each  Lender  also
acknowledges  that  it  will,   independently  and  without  reliance  upon  the
Administrative  Agent  or any  other  Lender  and  based on such  documents  and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.

                                   ARTICLE XI

                                    GUARANTEE

  SECTION 11.01. Guarantee. To induce the Lenders to execute and deliver this
Agreement  and to make  Mexican  Loans,  and in  consideration  thereof,  the US
Borrower hereby unconditionally and irrevocably  guarantees,  as primary obligor
and joint and several co-debtor and not merely as surety, to the  Administrative
Agent, the Lenders and their successors, indorsees, transferees and assigns, the
prompt and  complete  payment and  performance  when due  (whether at the stated
maturity,  by acceleration or otherwise) of the Mexican Obligations,  and the US
Borrower further agrees to pay the expenses which may be paid or incurred by the
Administrative  Agent or the  Lenders in  collecting  any or all of the  Mexican
Obligations  and/or  enforcing  any rights  under  this  Article XI or under the
Mexican  Obligations in accordance with this Article XI. The guarantee contained
in this  Article  XI shall  remain in full force and  effect  until the  Mexican
Obligations are paid in full.  Anything herein to the contrary  notwithstanding,
the maximum liability of the US Borrower under this Article XI shall in no event
exceed the amount which can be  guaranteed by the US Borrower  under  applicable
federal and state laws relating to the insolvency of debtors.

SECTION 11.02.  Waiver of Subrogation.  Notwithstanding  any payment or payments
made by the US Borrower in respect of the Mexican  Obligations  or any setoff or
application  of  funds of the US  Borrower  by the  Administrative  Agent or any
Lender, until payment in full of the Mexican Obligations,  the US Borrower shall
not be  entitled  to be  subrogated  to any of the rights of the  Administrative
Agent or the  Lenders  against  the  Borrowers  or any  collateral  security  or
guarantee or right of offset held by the Administrative  Agent or any Lender for
the  payment of the  Mexican  Obligations,  nor shall the US  Borrower  seek any
reimbursement  from any Mexican  Borrower in respect of payments  made by the US
Borrower hereunder.

SECTION  11.03.  Modification  of Mexican  Obligations.  The US Borrower  hereby
consents that, without the necessity of any reservation of rights against the US
Borrower and without notice to or further  assent by the US Borrower  (except as
otherwise provided in this Agreement), (a) any demand for payment of the Mexican
Obligations made by the  Administrative  Agent or any Lender may be rescinded by
the Administrative Agent or such Lender, and the Mexican Obligations  continued,
(b) the Mexican Obligations, or the liability of any other party upon or for any
part  thereof,  or any  collateral  security or  guarantee  therefor or right of
offset with respect  thereto,  may,  from time to time,  in whole or in part, be
renewed,  extended,  amended,  modified,   accelerated,   compromised,   waived,
surrendered  or released  by the  Administrative  Agent or any Lender,  (c) this
Agreement may be amended,  modified,  supplemented or terminated, in whole or in
part, as the Administrative Agent or the Lenders may deem advisable from time to
time, and (d) to the extent permitted by applicable law, any collateral security
or guarantee or right of offset at any time held by the Administrative  Agent or
any Lender, for the payment of the Mexican  Obligations may be sold,  exchanged,
waived, surrendered or released, all without the necessity of any reservation of
rights against the US Borrower and without notice to or further assent by the US
Borrower,  which will remain bound hereunder  notwithstanding  any such renewal,
extension,  modification,   acceleration,   compromise,  amendment,  supplement,
termination,  sale, exchange,  waiver,  surrender or release. The Administrative
Agent and the Lenders shall not have any obligation to protect,  secure, perfect
or insure any collateral  security  document or property  subject thereto at any
time held as  security  for the  Mexican  Obligations.  When  making  any demand
hereunder against the US Borrower,  the Administrative Agent or the Lenders may,
but shall be under no obligation to, make a similar demand on any other party or
any other guarantor,  and any failure by the Administrative  Agent or any Lender
to make any such demand or to collect any payments from any Borrower or any such
other  guarantor  shall  not  relieve  the US  Borrower  of its  obligations  or
liabilities  hereunder  and shall not impair or affect the rights and  remedies,
express or implied,  or as a matter of law, of the  Administrative  Agent or the
Lenders against the US Borrower. For the purposes of this Section 11.03 "demand"
shall include the commencement and continuance of any legal proceedings.

SECTION 11.04. Waiver by the US Borrower. The US Borrower waives the benefits of
any and all notice of the creation, renewal, extension or accrual of the Mexican
Obligations  and notice of or proof of reliance by the  Administrative  Agent or
the Lenders upon the guarantee contained in this Article XI or acceptance of the
guarantee contained in this Article XI, and the Mexican Obligations,  and any of
them, shall conclusively be deemed to have been created,  contracted,  continued
or incurred in reliance upon the guarantee contained in this Article XI, and all
dealings  between the US Borrower  and the  Administrative  Agent or the Lenders
shall  likewise  be  conclusively  presumed to have been had or  consummated  in
reliance upon the guarantee contained in this Article XI. The US Borrower waives
diligence,  presentment,  protest,  demand for  payment and notice of default or
nonpayment  to or upon any Mexican  Borrower or the US Borrower  with respect to
any  relevant  Mexican  Obligations.  This  guarantee  shall be  construed  as a
continuing,  absolute and  unconditional  guarantee of payment without regard to
the validity,  regularity  or  enforceability  of this  Agreement or the Mexican
Obligations, including, without limitation, any collateral security or guarantee
therefor  or right of offset  with  respect  thereto at any time or from time to
time held by the  Administrative  Agent or any Lender and without  regard to any
defense,  setoff or  counterclaim  which may at any time be  available  to or be
asserted by any Borrower against the Administrative  Agent or any Lender, or any
other Person, or by any other circumstance whatsoever (with or without notice to
or knowledge of any Mexican Borrower or the US Borrower) which  constitutes,  or
might be construed to constitute, an equitable or legal discharge of any Mexican
Borrower  for any of the Mexican  Obligations,  or of the US Borrower  under the
guarantee  contained in this Article XI in bankruptcy or in any other  instance,
and the obligations  and  liabilities of the US Borrower  hereunder shall not be
conditioned or contingent  upon the pursuit by the  Administrative  Agent or any
Lender or any  other  Person  at any time of any  right or  remedy  against  the
relevant  Mexican  Borrower or against any other  Person  which may be or become
liable in respect of any Mexican  Obligations or against any collateral security
or guarantee  therefor or right of offset with respect  thereto.  The  guarantee
contained  in this  Article  XI shall  remain in full  force and  effect  and be
binding in  accordance  with and to the extent of its terms upon the US Borrower
and the  successors and assigns  thereof,  and shall inure to the benefit of the
Lenders and their  successors,  indorsees,  transferees  and assigns,  until the
Mexican Obligations shall have been satisfied in full, notwithstanding that from
time to time during the term of this Agreement the Mexican Borrowers may be free
from any Mexican Obligations.

SECTION 11.05. Reinstatement.  This guarantee shall continue to be effective, or
be reinstated,  as the case may be, if at any time payment, or any part thereof,
of any  Mexican  Obligations  is  rescinded  or must  otherwise  be  restored or
returned  by  the  Administrative  Agent  or any  Lender  upon  the  insolvency,
bankruptcy, dissolution, liquidation or reorganization of the US Borrower or any
Mexican  Borrower  or upon or as a  result  of the  appointment  of a  receiver,
intervenor, sindico or conservator of, or trustee or similar officer for, the US
Borrower,  any Mexican  Borrower  or any  substantial  part of their  respective
property, or otherwise, all as though such payments had not been made.

                                  ARTICLE XII

                                  Miscellaneous

SECTION  12.01.   Notices.   (a)  Except  in  the  case  of  notices  and  other
communications  expressly  permitted  to be given  by  telephone,  all  notices,
requests and demands to or upon the  respective  parties  hereto to be effective
shall be in writing  (including by telecopy),  and, unless  otherwise  expressly
provided herein, shall be deemed to have been duly given or made when delivered,
or three Business Days after being deposited in the mail,  postage prepaid,  or,
in the case of telecopy notice, when received,  addressed as follows in the case
of the Borrowers,  the Administrative  Agent, the Issuing Bank and the Swingline
Lender,  and as set  forth its  Administrative  Questionnaire  delivered  to the
Administrative Agent in the case of the Lenders, or to such other address as may
be hereafter notified by the respective parties hereto:

(i)  if to the Borrowers:                 Navistar Financial Corporation
                                          2850 West Golf Road
                                          Rolling Meadows, Illinois  60008
                                          Attention:  Treasurer
                                          Telecopy:  847-734-4090

(ii)  if to the Administrative Agent:     The Chase Manhattan Bank
                                          270 Park Avenue
                                          New York, New York  10017
                                          Attention:  Loan and Agency Services
                                          Telecopy:  212-552-5650

(iii)  if to the Issuing Bank:            The Chase Manhattan Bank
                                          270 Park Avenue
                                          New York, New York  10017
                                          Attention:  Loan and Agency Services
                                          Telecopy:  212-552-5650

(iv)  if to the Swingline Lender:         The Chase Manhattan Bank
                                          270 Park Avenue
                                          New York, New York  10017
                                          Attention:  Loan and Agency Services
                                          Telecopy:  212-552-5650

(b)  The  Administrative  Agent  and  the  Lenders  are  authorized  to  rely on
instructions received by telephone from persons they believe in good faith to be
authorized to give such instructions hereunder. Neither the Administrative Agent
nor any Lender shall incur any  liability to any Borrower or any other person as
a result of any act or omission by it in accordance with such instructions.

SECTION   12.02.   Waivers;   Amendments.   (a)  No  failure  or  delay  by  the
Administrative  Agent, the Issuing Bank or any Lender in exercising any right or
power  hereunder  shall  operate  as a waiver  thereof,  nor shall any single or
partial   exercise  of  any  such  right  or  power,   or  any   abandonment  or
discontinuance of steps to enforce such a right or power,  preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and  remedies of the  Administrative  Agent,  the  Issuing  Bank and the Lenders
hereunder  are  cumulative  and are not exclusive of any rights or remedies that
they would  otherwise  have.  No waiver of any  provision  of this  Agreement or
consent  to any  departure  by any  Borrower  therefrom  shall  in any  event be
effective  unless the same shall be permitted by paragraph  (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which  given.  Without  limiting the  generality  of the
foregoing,  the making of a Loan or issuance of a Letter of Credit  shall not be
construed as a waiver of any Default,  regardless of whether the  Administrative
Agent,  any Lender or the Issuing  Bank may have had notice or knowledge of such
Default at the time.

(b) Neither this  Agreement nor any provision  hereof may be waived,  amended or
modified  except  pursuant to an agreement or agreements in writing entered into
by  the  Borrowers  and  the  Required  Lenders  or by  the  Borrowers  and  the
Administrative Agent with the consent of the Required Lenders;  provided that no
such  agreement  shall (i) increase  the  Commitment  of any Lender  without the
written consent of such Lender, (ii) forgive the principal amount of any Loan or
LC  Disbursement  or reduce  the rate of  interest  thereon,  or reduce any fees
payable hereunder,  without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement,  or any interest thereon, or any fees payable hereunder,  or
reduce  the  amount  of,  waive or excuse  any such  payment,  or  postpone  the
scheduled date of expiration of any  Commitment,  without the written consent of
each Lender  affected  thereby,  (iv) change  Section  4.12(a),  (b) or (c) in a
manner  that would  alter the pro rata  sharing of  payments  required  thereby,
without the written consent of each Lender,  (v) change any of the provisions of
this Section or the definition of "Required Lenders" or "Supermajority  Lenders"
or any other  provision  hereof  specifying  the number or percentage of Lenders
required  to  waive,   amend  or  modify  any  rights   hereunder  or  make  any
determination  or grant any consent  hereunder,  without the written  consent of
each  Lender,  (vi) change  Section  7.11  without  the written  consent of each
Lender;  (provided that the Administrative  Agent shall be permitted to grant an
extension  of no more than 30 days to the US  Borrower  to fulfill any of the US
Borrower's  obligations under Section 7.11),  (vii) release the US Borrower from
its  Guarantee  obligations  set  forth in  Article  XI or the  Parent  from its
obligations under the Parent Guarantee, in each case without the written consent
of the  Supermajority  Lenders,  (viii) in the event that the Springing  Lien is
created pursuant to Section 7.11, release all or substantially all of the assets
of the US Borrower  subject to such Springing Lien,  without the written consent
of each Lender;  or (ix) amend,  modify or otherwise affect the rights or duties
of the Administrative  Agent, the Issuing Bank or the Swingline Lender hereunder
without the prior written consent of the Administrative  Agent, the Issuing Bank
or the Swingline Lender, as the case may be.

SECTION 12.03. Expenses;  Indemnity;  Damage Waiver. (a) Each Borrower shall pay
(i) all reasonable  out-of-pocket  expenses incurred by the Administrative Agent
and the Joint  Lead  Arrangers,  including  the  reasonable  fees,  charges  and
disbursements of Simpson Thacher & Bartlett and Ritch, Heather y Mueller,  S.C.,
in connection with the syndication of the credit facilities provided for herein,
the  preparation  and  administration  of  this  Agreement  or  any  amendments,
modifications  or  waivers  of  the  provisions   hereof  (whether  or  not  the
transactions  contemplated  hereby or thereby  shall be  consummated),  (ii) all
reasonable  out-of-pocket  expenses  incurred by the Issuing Bank in  connection
with the  issuance,  amendment,  renewal or extension of any Letter of Credit or
any  demand  for  payment  thereunder  and  (iii) all  reasonable  out-of-pocket
expenses incurred by the  Administrative  Agent, the Issuing Bank or any Lender,
including the reasonable fees,  charges and disbursements of one firm of counsel
for the Administrative  Agent, the Issuing Bank and the Lenders in each relevant
jurisdiction,  in connection with the enforcement or protection of its rights in
connection with this Agreement,  including its rights under this Section,  or in
connection with the Loans made or Letters of Credit issued hereunder,  including
in  connection  with any  workout,  restructuring  or  negotiations  in  respect
thereof.

(b) Each Borrower shall indemnify the Administrative Agent, the Issuing Bank and
each Lender,  and each Related Party of any of the foregoing  Persons (each such
Person being called an "Indemnitee")  against, and hold each Indemnitee harmless
from, any and all losses,  claims,  damages,  liabilities and related  expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted  against any  Indemnitee  arising out of, in  connection
with, or as a result of (i) the  execution or delivery of this  Agreement or any
agreement or instrument  contemplated  hereby,  the  performance  by the parties
hereto of their  respective  obligations  hereunder or the  consummation  of the
Transactions or any other  transactions  contemplated  hereby,  (ii) any Loan or
Letter of Credit or the use of the proceeds therefrom  (including any refusal by
the Issuing  Bank to honor a demand for payment  under a Letter of Credit if the
documents  presented in connection  with such demand do not strictly comply with
the terms of such  Letter of Credit) or (iii) any actual or  prospective  claim,
litigation,  investigation  or  proceeding  relating  to any  of the  foregoing,
whether  based on contract,  tort or any other theory and  regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee,  be available to the extent that such losses,  claims,  damages,
liabilities  or related  expenses  have  resulted  from the gross  negligence or
willful misconduct of such Indemnitee.

(c) To the extent that the Borrowers fail to pay any amount  required to be paid
by it to the  Administrative  Agent,  the Issuing Bank or the  Swingline  Lender
under paragraph (a) or (b) of this Section,  each Lender severally agrees to pay
to the  Administrative  Agent, the Issuing Bank or the Swingline  Lender, as the
case may be, such Lender's US Commitment  Percentage  (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid  amount;  provided that the  unreimbursed  expense or  indemnified  loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative  Agent, the Issuing Bank or the Swingline
Lender in its capacity as such.

(d) To the extent  permitted by applicable  law, each Borrower shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special,  indirect,  consequential or punitive damages (as opposed to direct
or actual damages)  arising out of, in connection  with, or as a result of, this
Agreement or any agreement or instrument  contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.

(e) All amounts due under this Section shall be payable promptly  after  written
demand therefor.

(f) No Borrower shall indemnify any Person  for any claim whatsoever against any
Securitization Subsidiary.

SECTION  12.04.  Successors  and Assigns.  (a) The  provisions of this Agreement
shall be binding  upon and inure to the benefit of the parties  hereto and their
respective  successors and assigns permitted  hereby,  except that each Borrower
may not assign or otherwise transfer any of its rights or obligations  hereunder
without the prior written  consent of each Lender (and any attempted  assignment
or transfer  by such  Borrower  without  such  consent  shall be null and void).
Nothing in this  Agreement,  expressed or implied,  shall be construed to confer
upon any Person (other than the parties hereto, their respective  successors and
assigns permitted hereby and, to the extent expressly  contemplated  hereby, the
Related Parties of each of the  Administrative  Agent,  the Issuing Bank and the
Lenders)  any legal or  equitable  right,  remedy or claim under or by reason of
this Agreement.

(b) Any  Lender  may  assign to one or more  assignees  all or a portion  of its
rights and obligations  under this Agreement  (including all or a portion of its
US Commitment and the US Loans at the time owing to it or, if applicable, all or
a portion of its Mexican  Commitment  and the Mexican Loans at the time owing to
it);  provided  that (i) except in the case of an  assignment  to a Lender or an
Affiliate of a Lender,  each Borrower and the Administrative  Agent (and, in the
case of an  assignment  of all or a portion of a US  Commitment  or any Lender's
obligations  in respect of its LC Exposure or  Swingline  Exposure,  the Issuing
Bank and the  Swingline  Lender) must give their prior  written  consent to such
assignment  (which consent shall not be unreasonably  withheld),  (ii) except in
the case of an  assignment  to a Lender or an Affiliate  of a Lender,  if any US
Lender  assigns a part of its rights and  obligations  under this  Agreement  in
respect of its US Revolving  Loans and/or US Commitment to an assignee,  such US
Lender shall assign  proportionate  interests in (A) its  participations  in the
Letters of Credit and other rights and  obligations  hereunder in respect of the
Letters of  Credit,  (B) its  participations  in the  Swingline  Loans and other
rights and  obligations  hereunder in respect of the Swingline Loans and (C) its
Mexican Revolving Loans and Mexican Commitment to such assignee (provided,  that
with the consent of the US Borrower and the  Administrative  Agent,  a US Lender
may assign portions of its US Commitment without assigning a proportionate share
of its Mexican Commitment if either (x) such proportionate share of such Mexican
Commitment  shall be  assumed  by another  Lender or (y) if the US  Borrower  so
agrees,   such   proportionate   share  of  such  Mexican  Commitment  shall  be
terminated),  (iii)  except  in the  case of an  assignment  to a  Lender  or an
Affiliate of a Lender or an  assignment  of the entire  remaining  amount of the
assigning  Lender's  Commitment,  the amount of the  Commitment of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and   Acceptance   with  respect  to  such   assignment   is  delivered  to  the
Administrative  Agent) shall not be less than  $15,000,000  unless each Borrower
and the  Administrative  Agent otherwise  consent,  (iv) each partial assignment
shall be made as an  assignment  of a  proportionate  part of all the  assigning
Lender's  rights and obligations  under this Agreement,  except that clause (iv)
shall not apply to rights in respect of outstanding  Competitive  Loans, (v) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Acceptance,  together with a processing and recordation fee of
$3,500  (except in the case of an  assignment  to a Lender or an  Affiliate of a
Lender),  and (vi) the assignee,  if it shall not be a Lender,  shall deliver to
the Administrative Agent an Administrative Questionnaire;  provided further that
any consent of the Borrowers  otherwise  required under this paragraph shall not
be  required  if an Event of Default  under  clause (j) or (k) of Article IX has
occurred and is continuing.  Upon acceptance and recording pursuant to paragraph
(d) of this  Section,  from and  after  the  effective  date  specified  in each
Assignment and Acceptance,  the assignee thereunder shall be a party hereto and,
to the extent of the interest  assigned by such Assignment and Acceptance,  have
(in  addition to any such  rights and  obligations  theretofore  held by it) the
rights and  obligations  of a Lender  under this  Agreement,  and the  assigning
Lender  thereunder  shall,  to the  extent  of the  interest  assigned  by  such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance  covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall  continue to be entitled to the benefits of Sections
4.09, 4.10, 4.11 and 12.03). Any assignment or transfer by a Lender of rights or
obligations  under this Agreement that does not comply with this paragraph shall
be  treated  for  purposes  of this  Agreement  as a sale by  such  Lender  of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.

(c) The  Administrative  Agent,  acting  for  this  purpose  as an  agent of the
Borrowers,  shall  maintain at one of its offices in The City of New York a copy
of  each  Assignment  and  Acceptance  delivered  to it and a  register  for the
recordation  of the names and addresses of the Lenders,  and the  Commitment of,
and  principal  amount of the Loans and LC  Disbursements  owing to, each Lender
pursuant to the terms hereof from time to time (the "Register").  The entries in
the Register shall be conclusive,  and the Borrowers,  the Administrative Agent,
the Issuing Bank and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary.

(d) Upon its receipt of a duly completed  Assignment and Acceptance  executed by
an assigning  Lender and an assignee,  the assignee's  completed  Administrative
Questionnaire  (unless the assignee  shall already be a Lender  hereunder),  the
processing and  recordation fee referred to in paragraph (b) of this Section and
any  written  consent  to such  assignment  required  by  paragraph  (b) of this
Section,  the  Administrative  Agent shall accept such Assignment and Acceptance
and record the  information  contained  therein in the  Register.  No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.

(e) Any Lender may,  without the consent of the  Borrowers,  the  Administrative
Agent, the Issuing Bank or the Swingline Lender,  sell  participations to one or
more  banks or other  entities  (a  "Participant")  in all or a portion  of such
Lender's rights and obligations under this Agreement (including all or a portion
of its  Commitment  and the Loans owing to it);  provided that (i) such Lender's
obligations under this Agreement shall remain unchanged,  (ii) such Lender shall
remain solely  responsible  to the other parties  hereto for the  performance of
such obligations and (iii) the Borrowers,  the Administrative Agent, the Issuing
Bank and the other Lenders shall  continue to deal solely and directly with such
Lender in  connection  with such  Lender's  rights  and  obligations  under this
Agreement.  Any agreement or instrument  pursuant to which a Lender sells such a
participation  shall  provide  that such Lender  shall  retain the sole right to
enforce this Agreement and to approve any amendment,  modification  or waiver of
any provision of this Agreement;  provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any  amendment,  modification  or waiver  described  in the first  proviso to
Section 12.02(b) that affects such Participant. Subject to paragraph (f) of this
Section,  each Borrower  agrees that each  Participant  shall be entitled to the
benefits  of  Sections  4.09,  4.10 and 4.11 to the same  extent as if it were a
Lender and had acquired its interest by assignment  pursuant to paragraph (b) of
this Section.

(f) A  Participant  shall not be entitled to receive any greater  payment  under
Section  4.09 or 4.11 than the  applicable  Lender  would have been  entitled to
receive with respect to the participation  sold to such Participant,  unless the
sale of the  participation to such Participant is made with the Borrowers' prior
written  consent.  A  Participant  that  would be a Foreign  Lender if it were a
Lender  shall not be  entitled  to the  benefits  of  Section  4.11  unless  the
Borrowers are notified of the  participation  sold to such  Participant and such
Participant  agrees,  for the benefit of the  Borrowers,  to comply with Section
4.11(d) as though it were a Lender.

(g) Any Lender may at any time  pledge or assign a security  interest  in all or
any portion of its rights  under this  Agreement to secure  obligations  of such
Lender,  including any such pledge or assignment to a Federal  Reserve Bank, and
this  Section  shall not apply to any such  pledge or  assignment  of a security
interest;  provided  that no such pledge or  assignment  of a security  interest
shall release a Lender from any of its  obligations  hereunder or substitute any
such assignee for such Lender as a party hereto.

(h)  Notwithstanding  anything to the contrary  contained herein,  any Lender (a
"Granting  Lender") may grant to a special  purpose  funding vehicle (an "SPC"),
identified  as such in writing from time to time by the  Granting  Lender to the
Administrative Agent and the Borrowers, the option to provide to the US Borrower
or the Mexican  Borrowers,  as the case may be, all or any part of any Loan that
such Granting  Lender would otherwise be obligated to make to the US Borrower or
the Mexican Borrowers, as the case may be, pursuant to this Agreement;  provided
that (i) nothing  herein shall  constitute  a commitment  by any SPC to make any
Loan and (ii) if an SPC elects not to exercise such option or otherwise fails to
provide all or any part of such Loan, the Granting  Lender shall be obligated to
make such Loan  pursuant  to the terms  hereof.  The  making of a Loan by an SPC
hereunder shall utilize the US Commitment or the Mexican Commitment, as the case
may be, of the  Granting  Lender to the same  extent,  and as if, such Loan were
made by such Granting Lender.  Each party hereto hereby agrees that no SPC shall
be liable for any indemnity or similar payment  obligation  under this Agreement
(all liability for which shall remain with the Granting Lender).  In furtherance
of the foregoing, each party hereto hereby agrees (which agreement shall survive
the termination of this Agreement)  that, prior to the date that is one year and
one day after the payment in full of all outstanding  commercial  paper or other
senior indebtedness of any SPC, it will not institute against, or join any other
person  in  instituting  against,  such  SPC  any  bankruptcy,   reorganization,
arrangement,  insolvency or liquidation proceedings under the laws of the United
States  or any state  thereof.  In  addition,  notwithstanding  anything  to the
contrary in this Section  12.04(h),  any SPC may (A) with notice to, but without
the prior written  consent of, the Borrowers  and the  Administrative  Agent and
without  paying  any  processing  fee  therefor,  assign all or a portion of its
interests in any Loans to the Granting Lender, or with the prior written consent
of the  Borrowers  and the  Administrative  Agent  (which  consent  shall not be
unreasonably  withheld) to any financial institutions providing liquidity and/or
credit  support  to or for the  account of such SPC to  support  the  funding or
maintenance of Loans,  and (B) disclose on a  confidential  basis any non-public
information relating to its Loans to any rating agency,  commercial paper dealer
or provider of any surety,  guarantee or credit or liquidity enhancement to such
SPC;  provided that non-public  information  with respect to any Borrower may be
disclosed  only with such  Borrower's  consent  which  will not be  unreasonably
withheld.  This paragraph (h) may not be amended  without the written consent of
any SPC with Loans outstanding at the time of such proposed amendment.

SECTION  12.05.  Survival.  All  covenants,   agreements,   representations  and
warranties  made  by the  Borrowers  herein  and in the  certificates  or  other
instruments  delivered in connection with or pursuant to this Agreement shall be
considered  to have been  relied  upon by the  other  parties  hereto  and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit,  regardless of any investigation  made by
any  such  other   party  or  on  its  behalf  and   notwithstanding   that  the
Administrative  Agent,  the  Issuing  Bank or any  Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is  extended  hereunder,  and shall  continue in full force and effect as
long as the  principal of or any accrued  interest on any Loan or any fee or any
other  amount  payable  under this  Agreement is  outstanding  and unpaid or any
Letter of Credit is outstanding and so long as the Commitments  have not expired
or terminated. The provisions of Sections 4.09, 4.10, 4.11 and 12.03 and Article
X  shall  survive  and  remain  in  full  force  and  effect  regardless  of the
consummation  of the  transactions  contemplated  hereby,  the  repayment of the
Loans,  the  expiration  or  termination  of  the  Letters  of  Credit  and  the
Commitments or the termination of this Agreement or any provision hereof.

SECTION  12.06.  Counterparts;  Integration.  This  Agreement may be executed in
counterparts (and by different parties hereto on different  counterparts),  each
of which shall  constitute  an  original,  but all of which when taken  together
shall  constitute a single  contract.  This  Agreement  and any separate  letter
agreements with respect to fees payable to the  Administrative  Agent constitute
the entire contract among the parties  relating to the subject matter hereof and
supersede any and all previous agreements and  understandings,  oral or written,
relating to the subject matter hereof.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed  counterpart of this Agreement.  SECTION 12.07.  Severability.
Any provision of this Agreement held to be invalid,  illegal or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity,  illegality or unenforceability without affecting the validity,
legality  and  enforceability  of  the  remaining  provisions  hereof;  and  the
invalidity  of a particular  provision in a  particular  jurisdiction  shall not
invalidate such provision in any other jurisdiction.

SECTION 12.08.  Right of Setoff.  If an Event of Default shall have occurred and
be  continuing,  each Lender is hereby  authorized  at any time and from time to
time, to the fullest  extent  permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final but excluding
deposits  designated  to payroll  accounts,  any trust  accounts or any accounts
related to any Qualified Securitization  Transaction) at any time held and other
indebtedness  at any  time  owing by such  Lender  to or for the  credit  or the
account of any Borrower  against any of and all the obligations of such Borrower
now or hereafter existing under this Agreement held by such Lender, irrespective
of whether or not such Lender  shall have made any demand  under this  Agreement
and although such obligations may be unmatured.  The rights of each Lender under
this  Section are in  addition to other  rights and  remedies  (including  other
rights of setoff) which such Lender may have.

SECTION 12.09.  GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND  OBLIGATIONS OF
THE  PARTIES  UNDER THIS  AGREEMENT  SHALL BE  GOVERNED  BY, AND  CONSTRUED  AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

SECTION 12.10.    Submission To Jurisdiction; Waivers.  Each party hereto hereby
irrevocably and unconditionally:

(a)  submits  for  itself and its  property  in any legal  action or  proceeding
relating to this  Agreement,  or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive  general  jurisdiction of the courts of
the State of New York in the Borough of Manhattan,  City of New York, the courts
of the United States for the Southern District of New York, and appellate courts
from any thereof and to the courts of its own  corporate  domicile in respect of
any  actions  brought  against it as a  defendant  in any  action or  proceeding
arising out of this Agreement;

(b) consents  that any such action or  proceeding  may be brought in such courts
and waives any objection  that it may now or hereafter  have to the venue of any
such action or  proceeding  in any such court or that such action or  proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees  that  service of process  in any such  action or  proceeding  may be
effected  by mailing a copy  thereof by  registered  or  certified  mail (or any
substantially similar form of mail), postage prepaid, to the US Borrower (in the
case of each Mexican Borrower,  as such Mexican  Borrower's agent for service of
process  in New York  City) or to any other  party at its  address  set forth in
Section 12.01 or at such other address of which the  Administrative  Agent shall
have been notified pursuant thereto;

(d) agrees  that  nothing  herein  shall  affect the right to effect  service of
process in any other manner  permitted by law or shall limit the right to sue in
any other jurisdiction; and

(e) waives,  to the maximum  extent not prohibited by law, any right it may have
to claim or  recover  in any legal  action  or  proceeding  referred  to in this
Section any special, exemplary, punitive or consequential damages.

SECTION 12.11.    Acknowledgments.  Each Borrower hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement;

(b)  neither  the  Administrative   Agent  nor  any  Lender  has  any  fiduciary
relationship  with or duty to any Borrower  arising out of or in connection with
this  Agreement,  and the  relationship  between  the  Administrative  Agent and
Lenders,  on one hand,  and each  Borrower,  on the other  hand,  in  connection
herewith or therewith is solely that of debtor and creditor; and

(c) no joint  venture is  created  hereby or  otherwise  exists by virtue of the
transactions  contemplated  hereby among the Lenders or among the  Borrowers and
the Lenders.

SECTION 12.12.  WAIVERS OF JURY TRIAL. EACH BORROWER,  THE ADMINISTRATIVE  AGENT
AND THE LENDERS HEREBY  IRREVOCABLY AND  UNCONDITIONALLY  WAIVE TRIAL BY JURY IN
ANY  LEGAL  ACTION  OR  PROCEEDING  RELATING  TO  THIS  AGREEMENT  AND  FOR  ANY
COUNTERCLAIM THEREIN.

SECTION 12.13. Headings.  Article and Section headings and the Table of Contents
used  herein  are for  convenience  of  reference  only,  are  not  part of this
Agreement  and  shall  not  affect  the   construction  of,  or  be  taken  into
consideration in interpreting, this Agreement.

SECTION 12.14.  Confidentiality.  Each of the Administrative  Agent, the Issuing
Bank and the Lenders agrees to maintain the  confidentiality  of the Information
(as defined below),  except that Information may be disclosed (a) to its and its
Affiliates' directors,  officers,  employees and agents,  including accountants,
legal  counsel  and  other  advisors  involved  with  this  financing  (it being
understood  that the Persons to whom such disclosure is made will be informed of
the  confidential  nature  of such  Information  and  instructed  to  keep  such
Information  confidential),  (b)  to the  extent  requested  by  any  regulatory
authority,  (c) to the extent  required by applicable  laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in  connection  with the  exercise of any  remedies  hereunder  or any suit,
action or proceeding  relating to this  Agreement or the  enforcement  of rights
hereunder,  (f) subject to an agreement containing provisions  substantially the
same as those of this  Section,  to any  assignee of or  Participant  in, or any
prospective  assignee  of or  Participant  in, any of its rights or  obligations
under this  Agreement,  (g) with the consent of the relevant  Borrower or (h) to
the extent such  Information  (i)  becomes  publicly  available  other than as a
result  of  a  breach  of  this  Section  or  (ii)  becomes   available  to  the
Administrative  Agent, the Issuing Bank or any Lender on a nonconfidential basis
from a source  other  than  the  relevant  Borrower.  For the  purposes  of this
Section,  "Information"  means  all  information  received  from  such  Borrower
relating to such Borrower or its business,  other than any such information that
is available to the  Administrative  Agent,  the Issuing Bank or any Lender on a
nonconfidential  basis prior to disclosure by such  Borrower;  provided that, in
the case of information  received from such Borrower after the date hereof, such
information  is identified at the time of delivery as  confidential.  Any Person
required to maintain  the  confidentiality  of  Information  as provided in this
Section shall be  considered  to have  complied with its  obligation to do so if
such  Person  has   exercised   the  same   degree  of  care  to  maintain   the
confidentiality  of such  Information  as such  Person  would  accord to its own
confidential information.

SECTION 12.15. Interest Rate Limitation.  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees,  charges and other  amounts which are treated as interest on such Loan
under  applicable law  (collectively  the  "Charges"),  shall exceed the maximum
lawful rate (the "Maximum  Rate") which may be contracted for,  charged,  taken,
received  or  reserved  by the  Lender  holding  such  Loan in  accordance  with
applicable law, the rate of interest  payable in respect of such Loan hereunder,
together with all Charges  payable in respect  thereof,  shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been  payable in  respect  of such Loan but were not  payable as a result of the
operation  of this  Section  shall be  cumulated  and the  interest  and Charges
payable to such Lender in respect of other Loans or periods  shall be  increased
(but not above the Maximum Rate therefor) until such cumulated amount,  together
with  interest  thereon  at the  Federal  Funds  Effective  Rate to the  date of
repayment, shall have been received by such Lender.

SECTION 12.16. Waiver of Immunities.  To the extent permitted by applicable law,
if any  Borrower  has or  hereafter  may  acquire  any  immunity  (sovereign  or
otherwise) from any legal action,  suit or proceeding,  from jurisdiction of any
court  or  from  set-off  or any  legal  process  (whether  service  or  notice,
attachment  prior to  judgment,  attachment  in aid of  execution  of  judgment,
execution  of  judgment  or  otherwise)  with  respect  to  itself or any of its
property,  such Borrower  hereby  irrevocably  waives and agrees not to plead or
claim such immunity in respect of its  obligations  under this  Agreement.  Each
Borrower  agrees that the waivers set forth above shall have the fullest  extent
permitted  under the  Foreign  Sovereign  Immunities  Act of 1976 of the  United
States  of  America  and are  intended  to be  irrevocable  and not  subject  to
withdrawal for purposes of such Act.

SECTION 12.17.  Judgment Currency.  The obligation of the Borrowers hereunder to
make  payments in Dollars  shall not be discharged or satisfied by any tender or
recovery  pursuant to any judgment  expressed in or converted  into any currency
other than Dollars  except to the extent to which such tender or recovery  shall
result in the  effective  receipt by the  Lenders of the full  amount of Dollars
expressed to be payable hereunder, and the Borrowers shall indemnify the Lenders
(as an  alternative  or  additional  cause of action) for the amount (if any) by
which such  effective  receipt  shall  fall short of the full  amount of Dollars
expressed to be payable  hereunder and such obligation to indemnify shall not be
affected by judgment being obtained for any other sums due hereunder.

SECTION 12.18. Loan Equalization;  Loan Conversion. (a) On any Equalization Date
each US Lender severally,  unconditionally  and irrevocably agrees that it shall
purchase a participating interest in the Mexican Revolving Loans of each Mexican
Lender  that have not been  assumed by the US  Borrower  pursuant  to clause (c)
below to the extent necessary to cause the Revolving Credit Exposure  Percentage
of  each  US  Lender,   after  giving  effect  to  such  purchase  and  sale  of
participating  interests,  to equal  its US  Commitment  Percentage  (calculated
immediately prior to the termination or expiration of the US Commitments).  Each
US Lender will immediately transfer to the Administrative  Agent, in immediately
available funds, the amounts of its  participation(s),  and the proceeds of such
participation(s) shall be distributed by the Administrative Agent to each Lender
from which a participating interest is being purchased in the amount(s) provided
for in the preceding sentence. Notwithstanding the foregoing, Export Development
Corporation  ("EDC") shall not be required to purchase a participating  interest
in  any  Mexican  Revolving  Loans,  and in  lieu  of  EDC's  purchase  of  such
participating  interest, (i) Chase will purchase the participating interest that
would,  but for this  sentence,  be required to be  purchased  by EDC,  and (ii)
simultaneously  therewith, EDC will purchase from Chase a participating interest
in the US  Revolving  Loans of Chase in an  amount  equal to the  amount  of the
participating interest purchased by Chase in Mexican Revolving Loans pursuant to
clause (i) of this sentence.

                  (b) To the extent any Taxes are  required to be withheld  from
any  amounts  payable by a Lender (the  "First  Lender") to another  Lender (the
"Other  Lender") in connection  with its  participating  interest in any Mexican
Revolving  Loan,  each Borrower,  with respect to the relevant Loans made to it,
shall be required to pay increased  amounts to the Other Lender  receiving  such
payments  from the First Lender to the same extent they would be required  under
Section  4.11  if  such  Borrower  were  making  payments  with  respect  to the
participating  interest directly to the Other Lender. For purposes of receipt by
any Other  Lender of payments  pursuant  to this  Section  12.18(b),  such Other
Lender shall not be required to comply with the requirements of Section 4.11(c).

                  (c) If an Event of Default or a Mexican  Change in Control has
occurred  and is  continuing,  upon the  notice  of any  Mexican  Lender  to the
Borrowers, the US Borrower (through the guarantee contained in Section 11) shall
automatically  be deemed to have  assumed  the Mexican  Revolving  Loans of such
Mexican Lender outstanding on such date.


<PAGE>


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

                         NAVISTAR FINANCIAL CORPORATION

                         By_______________________________
                         Name:
                         Title:


                         ARRENDADORA FINANCIERA NAVISTAR, S.A. DE C.V.

                         By_______________________________
                         Name:
                         Title:


                         SERVICIOS FINANCIEROS NAVISTAR, S.A. DE C.V.

                         By_______________________________
                         Name:
                         Title:

                         NAVISTAR COMERCIAL, S.A. DE C.V.

                         By_______________________________
                         Name:
                         Title:

                         THE CHASE MANHATTAN BANK,
                         as Administrative Agent and a Lender

                         By_______________________________
                         Name:
                         Title:

                         BANK OF AMERICA, N.A.,
                        as Syndication Agent and a Lender

                         By_______________________________
                         Name:
                         Title:

                         THE BANK OF NOVA SCOTIA,
                         as Documentation Agent and a Lender

                         By_______________________________
                         Name:
                         Title:

                         [Lenders]

                         By_______________________________
                         Name:
                         Title:

<PAGE>

Exhibit 10.06
                             PARENTS' SIDE AGREEMENT

                  AGREEMENT,   dated  as  of  December  8,  2000,   by  Navistar
International   Corporation,   a  Delaware   corporation  (the  "Parent"),   and
International   Truck   and   Engine   Corporation,   a   Delaware   corporation
("International"), for the benefit of the Lenders from time to time party to the
Credit Agreement referred to below.

                    WHEREAS,   Navistar   Financial   Corporation,   a  Delaware
corporation (the "US Borrower"),  has entered into a Credit Agreement,  dated as
of December 8, 2000 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"),  with ARRENDADORA  FINANCIERA  NAVISTAR,  S.A. DE
C.V., a Mexican corporation,  SERVICIOS  FINANCIEROS  NAVISTAR,  S.A. DE C.V., a
Mexican  corporation,   and,  NAVISTAR  COMERCIAL,   S.A.  DE  C.V.,  a  Mexican
corporation  (each,  a  "Mexican   Borrower"  and  collectively,   the  "Mexican
Borrowers";  together with the US Borrower, the "Borrowers"),  the Lenders party
thereto,  Bank of America,  N.A., as Syndication Agent, The Bank of Nova Scotia,
as Documentation Agent, and The Chase Manhattan Bank, as Administrative Agent;

                  WHEREAS,  it is a condition to the effectiveness of the Credit
Agreement  that the Parent and  International  execute and deliver this Parents'
Side Agreement (this "Agreement"); and

                  WHEREAS, unless otherwise defined herein, terms defined in the
Credit  Agreement  and used herein shall have the meanings  given to them in the
Credit Agreement;

                  NOW,  THEREFORE,  in order to induce the Lenders to enter into
the Credit  Agreement and to satisfy a condition to the  effectiveness  thereof,
the Parent and  International  agree for the benefit of the Lenders that,  until
the Commitments and all Letters of Credit under the Credit  Agreement shall have
expired or  terminated,  the principal of and interest on each Loan and all fees
payable  thereunder shall have been paid in full and all LC Disbursements  shall
have been reimbursed:

                  SECTION 1. Ownership of the US Borrower.  Either the Parent or
International  will at all times own and hold the  entire  legal and  beneficial
interest  in all of the  outstanding  stock of the US Borrower  having  ordinary
voting  power for the election of directors  (other than  directors'  qualifying
shares).  Neither the Parent nor  International  will,  directly or  indirectly,
sell, exchange,  transfer, pledge or in any way encumber or otherwise dispose of
any such stock.

                  SECTION  2.  US  Borrower's   Fixed  Charge   Coverage  Ratio.
International  will not  permit  the  ratio  of (i) the sum of (A)  consolidated
interest  expense of the US  Borrower  and its  consolidated  Subsidiaries,  (B)
consolidated income of the US Borrower and its consolidated  Subsidiaries before
income taxes and (C) dividends on Redeemable  Preferred Stock to (ii) the sum of
(A)  consolidated  interest  expense  of the US  Borrower  and its  consolidated
Subsidiaries and (B) dividends on Redeemable Preferred Stock, as at the last day
of any fiscal quarter for the period of four  consecutive  fiscal  quarters then
ended, to be less than 1.25 to 1.00.


<PAGE>



                  SECTION 3. Intercompany Agreements. International will perform
all of its obligations  under the Master  Intercompany  Agreement and, except as
permitted by Section 7.08 of the Credit Agreement,  will not cancel,  terminate,
amend, waive or modify the Master Intercompany Agreement.

                  SECTION 4.  Representations  and  Warranties.  The  execution,
delivery and performance by  International  and the Parent of this Agreement are
within  such  party's  corporate  powers  and have been duly  authorized  by all
necessary  corporate and, if required,  stockholder  action.  This Agreement has
been duly  executed and  delivered by each of  International  and the Parent and
each of this Agreement, the Master Intercompany Agreement and the Tax Allocation
Agreement  constitutes  a  legal,  valid  and  binding  obligation  of  each  of
International and the Parent, as applicable,  enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization,  moratorium
or other laws  affecting  creditors'  rights  generally  and  subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

                  SECTION 5.  Amendments  and  Waivers.  Any  provision  of this
Agreement  may be  amended or waived so long as such  amendment  or waiver is in
writing and is signed by the Parent, International and the Required Lenders.

                  SECTION 6.  Successors and Assigns.  This  Agreement  shall be
binding  upon the Parent,  International  and their  respective  successors  and
assigns,  and shall inure to the  benefit of the  Lenders  and their  respective
successors and permitted assigns.

                  SECTION  7. New York Law.  This  Agreement  and the rights and
obligations  of the  parties  under this  Agreement  shall be  governed  by, and
construed and interpreted in accordance with, the law of the State of New York.


<PAGE>



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

                                 NAVISTAR INTERNATIONAL CORPORATION



                                 By  ______________________________________
                                       Name:
                                       Title:



                                 INTERNATIONAL TRUCK AND ENGINE CORPORATION



                                 By  ______________________________________
                                       Name:
                                       Title:
<PAGE>

Exhibit 10.07
                                PARENT GUARANTEE

                    GUARANTEE,  dated as of December  8, 2000,  made by NAVISTAR
INTERNATIONAL CORPORATION, a Delaware corporation (the "Guarantor"), in favor of
THE  CHASE  MANHATTAN  BANK as  administrative  agent  (in  such  capacity,  the
"Administrative  Agent") for the lenders (the  "Lenders")  parties to the Credit
Agreement,  dated as of December 8, 2000 (as amended,  supplemented or otherwise
modified from time to time, the "Credit  Agreement"),  among Navistar  Financial
Corporation  (the "US Borrower") and Arrendadora  Financiera  Navistar,  S.A. DE
C.V., Servicios Financieros Navistar, S.A. DE C.V. and Navistar Comercial,  S.A.
DE C.V. (collectively,  the "Mexican Borrowers";  together with the US Borrower,
the "Borrowers"),  the Lenders, Bank of America, N.A., as syndication agent, The
Bank of Nova Scotia, as documentation agent, and the Administrative Agent.


                              W I T N E S S E T H:

                  WHEREAS,  pursuant  to the  Credit  Agreement,  certain of the
Lenders have  severally  agreed to make Loans to the Mexican  Borrowers upon the
terms and subject to the conditions set forth therein;

                  WHEREAS,  it is a condition precedent to the obligation of the
Lenders to make their respective Loans to the Mexican Borrowers under the Credit
Agreement that the Guarantor shall have executed and delivered this Guarantee to
the Administrative Agent for the ratable benefit of the Lenders; and

                  WHEREAS,  Guarantor owns,  directly or indirectly,  all of the
capital  stock of each of the Mexican  Borrowers,  and it is to the advantage of
Guarantor that the Lenders make the Loans to the Mexican Borrowers;

                  NOW, THEREFORE, in consideration of the premises and to induce
the Administrative  Agent and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their  respective  loans to the Mexican  Borrowers
under the Credit Agreement,  the Guarantor hereby agrees with the Administrative
Agent, for the ratable benefit of the Lenders, as follows:

1.       Defined Terms. (a)  Unless otherwise defined herein, terms  defined  in
the Credit Agreement and used herein shall have  the  meanings  given to them in
the Credit Agreement.

(b) As used  herein,  "Mexican  Obligations"  means the unpaid  principal of and
interest on (including, without limitation, interest accruing after the maturity
of the Mexican  Revolving  Loans and interest  accruing  after the filing of any
petition in bankruptcy  ("concurso"),  or the  commencement  of any  insolvency,
reorganization or like proceeding,  relating to any Mexican Borrower, whether or
not a claim  for  post-filing  or  post-petition  interest  is  allowed  in such
proceeding)  the  Mexican   Revolving  Loans  and  all  other   obligations  and
liabilities  of the  Mexican  Borrowers  to the  Administrative  Agent  and  the
Lenders,  whether direct or indirect,  absolute or contingent,  due or to become
due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, the Credit Agreement and any other document made,  delivered or
given in  connection  therewith,  whether  on account  of  principal,  interest,
reimbursement  obligations,  fees,  indemnities,   costs,  expenses  (including,
without  limitation,  all reasonable  fees and  disbursements  of counsel to the
Administrative Agent and the Lenders that are required to be paid by the Mexican
Borrowers pursuant to the terms of the Credit Agreement) or otherwise.

(c) The words  "hereof,"  "herein" and  "hereunder"  and words of similar import
when used in this Guarantee  shall refer to this Guarantee as a whole and not to
any particular provision of this Guarantee, and section and paragraph references
are to this Guarantee unless otherwise specified.

(d) The meanings  given to terms defined  herein shall be equally  applicable to
both the singular and plural forms of such terms.

2.  Guarantee.   (a)  The  Guarantor  hereby   unconditionally  and  irrevocably
guarantees to the Administrative  Agent, for its own benefit and for the ratable
benefit of the Lenders and their respective successors,  indorsees,  transferees
and assigns,  the prompt and complete  payment and  performance  by each Mexican
Borrower when due (whether at the stated maturity, by acceleration or otherwise)
of the Mexican Obligations of such Mexican Borrower.

(b) The Guarantor further agrees to pay any and all expenses (including, without
limitation, all fees and disbursements of counsel) which may be paid or incurred
by the Administrative Agent or any Lender in enforcing or collecting, any or all
of the Mexican  Obligations  and/or  enforcing  any rights  with  respect to, or
collecting  against,  the Guarantor under this  Guarantee.  This Guarantee shall
remain in full force and effect until the Mexican  Obligations  are paid in full
and the Commitments are terminated, notwithstanding that from time to time prior
thereto any Mexican Borrower may be free from any Mexican Obligations.

(c) The Guarantor  agrees that  whenever,  at any time, or from time to time, it
shall make any payment to the  Administrative  Agent or any Lender on account of
its liability hereunder,  it will notify the Administrative Agent or such Lender
in writing that such payment is made under this Guarantee for such purpose.

3. No Subrogation. Notwithstanding any payment or payments made by the Guarantor
hereunder,  or any  set-off  or  application  of funds of the  Guarantor  by the
Administrative  Agent or any Lender,  the Guarantor  shall not be entitled to be
subrogated  to any of the  rights  of the  Administrative  Agent  or any  Lender
against any Mexican Borrower or against any collateral  security or guarantee or
right of offset held by the  Administrative  Agent or any Lender for the payment
of the Mexican Obligations,  nor shall the Guarantor seek or be entitled to seek
any  contribution  or  reimbursement  from any  Mexican  Borrower  in respect of
payments  made by the  Guarantor  hereunder,  until  all  amounts  owing  to the
Administrative  Agent and the Lenders by each Mexican Borrower on account of the
Mexican Obligations are paid in full and the Commitments are terminated.

4. Amendments,  etc. with respect to the Mexican Obligations;  Waiver of Rights.
The Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights  against the  Guarantor,  and without notice to or further
assent  by the  Guarantor,  any  demand  for  payment  of  any  of  the  Mexican
Obligations made by the  Administrative  Agent or any Lender may be rescinded by
the  Administrative  Agent or such  Lender,  and any of the Mexican  Obligations
continued, and the Mexican Obligations, or the liability of any other party upon
or for any part  thereof,  or any  collateral  security  or  guarantee  therefor
(including,  without  limitation,  the guarantee of the US Borrower contained in
Article XI of the Credit  Agreement)  or right of offset with  respect  thereto,
may,  from time to time,  in whole or in part,  be renewed,  extended,  amended,
modified,  accelerated,  compromised,  waived,  surrendered  or  released by the
Administrative Agent or any Lender, and the Credit Agreement,  any Notes and any
other documents  executed and delivered in connection  therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Administrative
Agent  (or the  requisite  number  of  Lenders,  as the  case  may be) may  deem
advisable from time to time, and any collateral security,  guarantee or right of
offset  at any  time  held by the  Administrative  Agent or any  Lender  for the
payment of the Mexican Obligations may be sold, exchanged,  waived,  surrendered
or  released.  Neither the  Administrative  Agent nor any Lender  shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Mexican  Obligations  or for this  Guarantee or any property
subject  thereto.  When making any demand hereunder  against the Guarantor,  the
Administrative  Agent or any Lender may,  but shall be under no  obligation  to,
make a similar demand on any Mexican  Borrower or any other  guarantor,  and any
failure by the Administrative  Agent or any Lender to make any such demand or to
collect  any  payments  from any  Borrower  or any such other  guarantor  or any
release of such Borrower or such other guarantor shall not relieve the Guarantor
of its obligations or liabilities hereunder,  and shall not impair or affect the
rights  and  remedies,  express  or  implied,  or as a  matter  of  law,  of the
Administrative  Agent or any Lender  against  the  Guarantor.  For the  purposes
hereof  "demand"  shall include the  commencement  and  continuance of any legal
proceedings.

5. Guarantee Absolute and Unconditional. The Guarantor waives any and all notice
of the creation, renewal, extension or accrual of any of the Mexican Obligations
and notice of or proof of  reliance  by the  Administrative  Agent or any Lender
upon this Guarantee or acceptance of this  Guarantee;  the Mexican  Obligations,
and any of them, shall  conclusively be deemed to have been created,  contracted
or incurred,  or renewed,  extended,  amended or waived,  in reliance  upon this
Guarantee;  and all dealings between the Mexican Borrowers or the Guarantor,  on
the one hand, and the Administrative  Agent and the Lenders, on the other, shall
likewise be  conclusively  presumed to have been had or  consummated in reliance
upon this  Guarantee.  The Guarantor  waives  diligence,  presentment,  protest,
demand for  payment and notice of default or  nonpayment  to or upon the Mexican
Borrowers or any other guarantor with respect to the Mexican  Obligations.  This
Guarantee  shall  be  construed  as a  continuing,  absolute  and  unconditional
guarantee  of  payment  without  regard  to  (a)  the  validity,  regularity  or
enforceability  of the  Credit  Agreement  or  any  Note,  any  of  the  Mexican
Obligations or any other collateral  security  therefor or guarantee or right of
offset  with  respect  thereto  at any  time  or from  time to time  held by the
Administrative  Agent or any Lender,  (b) any defense,  set-off or  counterclaim
(other  than a  defense  of  payment  or  performance)  which may at any time be
available to or be asserted by any Mexican Borrower  against the  Administrative
Agent or any Lender, or (c) any other  circumstance  whatsoever (with or without
notice to or knowledge of the Borrowers or the Guarantor) which constitutes,  or
might be  construed  to  constitute,  an  equitable  or legal  discharge  of the
Borrowers for the Mexican Obligations, or of the Guarantor under this Guarantee,
in  bankruptcy or in any other  instance.  When pursuing its rights and remedies
hereunder against the Guarantor,  the  Administrative  Agent and any Lender may,
but shall be under no  obligation  to, pursue such rights and remedies as it may
have against any Mexican  Borrower or any other Person or against any collateral
security  or  guarantee  for  the  Mexican   Obligations   (including,   without
limitation,  the  guarantee  of the US Borrower  contained  in Article XI of the
Credit  Agreement) or any right of offset with respect thereto,  and any failure
by the  Administrative  Agent or any  Lender  to  pursue  such  other  rights or
remedies or to collect any payments from any Mexican  Borrower or any such other
Person or to  realize  upon any such  collateral  security  or  guarantee  or to
exercise any such right of offset, or any release of any Mexican Borrower or any
such other  Person or of any such  collateral  security,  guarantee  or right of
offset,  shall not relieve the Guarantor of any liability  hereunder,  and shall
not  impair or affect  the  rights and  remedies,  whether  express,  implied or
available as a matter of law, of the Administrative  Agent or any Lender against
the  Guarantor.  This  Guarantee  shall  remain in full  force and effect and be
binding in accordance with and to the extent of its terms upon the Guarantor and
its  successors  and  assigns  thereof,  and shall  inure to the  benefit of the
Administrative  Agent  and  the  Lenders,   and  their  respective   successors,
indorsees,  transferees and assigns,  until all the Mexican  Obligations and the
obligations of the Guarantor  under this Guarantee  shall have been satisfied by
payment in full and the Commitments shall have been terminated,  notwithstanding
that from time to time  during  the term of the  Credit  Agreement  any  Mexican
Borrower may be free from any Mexican Obligations.

6.  Reinstatement.  This  Guarantee  shall  continue  to  be  effective,  or  be
reinstated,  as the case may be, if at any time payment, or any part thereof, of
any of the Mexican  Obligations  is rescinded  or must  otherwise be restored or
returned  by  the  Administrative  Agent  or any  Lender  upon  the  insolvency,
bankruptcy,  dissolution,  liquidation or reorganization of any Borrower or upon
or as a result of the  appointment of a receiver,  intervenor or conservator of,
or trustee or similar officer for, any Borrower or any  substantial  part of its
property, or otherwise, all as though such payments had not been made.

7.       Payments. The Guarantor hereby agrees that the Mexican Obligations will
be paid to the  Administrative  Agent without  set-off or  counterclaim  in U.S.
Dollars at the office of the  Administrative  Agent  located at 270 Park Avenue,
New York, New York 10017.

8.       Representations and Warranties.  In order to induce the Lenders to make
the Loans pursuant to the Credit Agreement,  the Guarantor hereby represents and
warrants to the Administrative Agent and the Lenders that:

(a) Organization.  The Guarantor is duly organized, validly existing and in good
standing (to the extent such requirement  shall be applicable) under the laws of
the jurisdiction of its organization.

(b) Power.  The Guarantor  has the corporate  power and authority to execute and
deliver, and to perform its obligations under, this Guarantee, and has taken all
necessary  corporate  and, if  required,  stockholder  action to  authorize  its
execution, delivery and performance of this Guarantee.

(c) Due  Execution.  This  Guarantee has been duly executed and delivered by the
Guarantor and constitutes a legal, valid and binding obligation of the Guarantor
enforceable  in  accordance  with its terms,  except as affected by  bankruptcy,
insolvency,  fraudulent  conveyance,  reorganization,  moratorium and other laws
affecting  creditors'  rights  generally  and subject to general  principles  of
equity regardless of whether considered in a proceeding in equity or at law.

(d) Governmental Approvals; No Conflicts. The execution, delivery,  performance,
validity or enforceability  of this Guarantee,  (i) does not require any consent
or  approval  of,  registration  or filing  with,  or any other  action  by, any
Governmental Authority, except (A) such as have been obtained or made and are in
full force and effect and (B) such filings as may be required  under federal and
state  securities  laws for  purposes of  disclosure,  (ii) will not violate any
applicable law or regulation (including, without limitation, all laws, rules and
regulations  promulgated  by or relating to  INFONAVIT  and SAR) or the charter,
by-laws or other  organizational  documents of the Guarantor or any order of any
Governmental Authority,  (iii) will not violate or result in a default under any
indenture,  agreement or other  instrument  binding upon the Guarantor or any of
its  Subsidiaries or its assets,  or give rise to a right  thereunder to require
any payment to be made by the  Guarantor  or any of its  Subsidiaries,  and (iv)
will not result in the  creation or  imposition  of any Lien on any asset of the
Guarantor or any of its Subsidiaries.

         The Guarantor agrees that the foregoing  representations and warranties
shall be deemed to have been made by the Guarantor on the date of each borrowing
by any Borrower  under the Credit  Agreement on and as of such date of borrowing
as though made hereunder on and as of such date.

9. Authority of Administrative Agent. The Guarantor acknowledges that the rights
and  responsibilities  of the  Administrative  Agent under this  Guarantee  with
respect to any  action  taken by the  Administrative  Agent or the  exercise  or
non-exercise by the Administrative Agent of any option, right, request, judgment
or other right or remedy provided for herein or resulting or arising out of this
Guarantee  shall,  as  between  the  Administrative  Agent and the  Lenders,  be
governed  by the Credit  Agreement  and by such other  agreements  with  respect
thereto  as may  exist  from  time to time  among  them,  but,  as  between  the
Administrative  Agent  and the  Guarantor,  the  Administrative  Agent  shall be
conclusively  presumed to be acting as Administrative Agent for the Lenders with
full and valid  authority so to act or refrain from  acting,  and the  Guarantor
shall  not be  under  any  obligation,  or  entitlement,  to  make  any  inquiry
respecting such authority.

10.  Notices.  All notices,  requests and demands to or upon the  Administrative
Agent,  any Lender or the  Guarantor to be effective  shall be in writing (or by
telex,  fax or similar  electronic  transfer  confirmed in writing) and shall be
deemed  to have been duly  given or made when  delivered  by hand or if given by
mail, when deposited in the mails by certified mail,  return receipt  requested,
or if by telex, fax or similar  electronic  transfer,  when sent and receipt has
been confirmed, addressed as follows:

(a) if to the Administrative Agent or any Lender, at its address or transmission
number for  notices  provided  in or  pursuant  to  Section  12.01 of the Credit
Agreement; and

(b) if to the Guarantor,  at its address or transmission  number for notices set
forth under its signature below.

                  The  Administrative  Agent,  each Lender and the Guarantor may
change its address and transmission  numbers for notices by notice in the manner
provided in this Section.

11.  Severability.  Any  provision  of this  Guarantee  which 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, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

12. Integration.  This Guarantee  represents the agreement of the Guarantor with
respect  to  the   subject   matter   hereof  and  there  are  no   promises  or
representations  by the  Administrative  Agent  or any  Lender  relative  to the
subject matter hereof not reflected herein.

13. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of the terms
or  provisions  of  this  Guarantee  may be  waived,  amended,  supplemented  or
otherwise modified except by a written instrument  executed by the Guarantor and
the Administrative  Agent,  provided that any provision of this Guarantee may be
waived by the  Administrative  Agent in a letter or  agreement  executed  by the
Administrative   Agent  or  by  telex  or   facsimile   transmission   from  the
Administrative Agent.

(b) Neither the Administrative  Agent nor any Lender shall by any act (except by
a written  instrument  pursuant to paragraph 14(a) hereof),  delay,  indulgence,
omission or otherwise be deemed to have waived any right or remedy  hereunder or
to have acquiesced in any Default or Event of Default or in any breach of any of
the terms and  conditions  hereof.  No  failure  to  exercise,  nor any delay in
exercising,  on the part of the  Administrative  Agent or any Lender, any right,
power or privilege  hereunder  shall operate as a waiver  thereof.  No single or
partial exercise of any right,  power or privilege  hereunder shall preclude any
other or further exercise  thereof or the exercise of any other right,  power or
privilege.  A waiver by the  Administrative  Agent or any Lender of any right or
remedy  hereunder  on any one  occasion  shall not be  construed as a bar to any
right or remedy which the  Administrative  Agent or such Lender would  otherwise
have on any future occasion.

(c) The rights and remedies  herein  provided are  cumulative,  may be exercised
singly or  concurrently  and are not  exclusive  of any other rights or remedies
provided by law.

14.  Section  Headings.  The section  headings  used in this  Guarantee  are for
convenience of reference only and are not to affect the  construction  hereof or
be taken into consideration in the interpretation hereof.

15. Successors and Assigns.  This Guarantee shall be binding upon the successors
and  assigns  of  the   Guarantor   and  shall  inure  to  the  benefit  of  the
Administrative  Agent and the  Lenders and their  successors  and  assigns.  The
Guarantor may not transfer any of its rights or obligations under this Guarantee
without the written consent of each Lender.

16.  Governing  Law.  This  Guarantee  shall be governed by, and  construed  and
interpreted in accordance with, the law of the State of New York.

17. Submission To Jurisdiction;  Waivers.  The Guarantor hereby  irrevocably and
unconditionally:

(a)  submits  for  itself and its  property  in any legal  action or  proceeding
relating to this  Guarantee and any other loan documents to which it is a party,
or for recognition and  enforcement of any judgment in respect  thereof,  to the
non-exclusive  general  jurisdiction of the Courts of the State of New York, the
courts of the United  States of America for the  Southern  District of New York,
and appellate courts from any thereof;

(b) consents  that any such action or  proceeding  may be brought in such courts
and waives any objection  that it may now or hereafter  have to the venue of any
such action or  proceeding  in any such court or that such action or  proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees  that  service of process  in any such  action or  proceeding  may be
effected  by mailing a copy  thereof by  registered  or  certified  mail (or any
substantially  similar form of mail),  postage prepaid,  to the Guarantor at its
address set forth under its  signature  below or at such other  address of which
the Administrative Agent shall have been notified pursuant thereto;

(d) agrees  that  nothing  herein  shall  affect the right to effect  service of
process in any other manner  permitted by law or shall limit the right to sue in
any other jurisdiction; and

(e) waives,  to the maximum  extent not prohibited by law, any right it may have
to claim or  recover  in any legal  action  or  proceeding  referred  to in this
subsection any special, exemplary, punitive or consequential damages.

18.  WAIVERS OF JURY TRIAL.  THE  GUARANTOR,  THE  ADMINISTRATIVE  AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY  WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION  OR  PROCEEDING  RELATING  TO THIS  GUARANTEE  AND  FOR ANY  COUNTERCLAIM
THEREIN.


<PAGE>



                  IN WITNESS WHEREOF,  the undersigned has caused this Guarantee
to be duly executed and delivered by its duly  authorized  officer as of the day
and year first above written.

                                       NAVISTAR INTERNATIONAL CORPORATION


                                       By:
                                            Name:
                                            Title:

                                       Address for Notices:



                       Telex:

                        Fax:

                                       THE CHASE MANHATTAN BANK,
                                         as Administrative Agent

                                       By  ________________________________
                                            Name:
                                            Title:


<PAGE>
                                                                 SCHEDULE 2.01


           LENDERS                TOTAL COMMITMENT     MEXICAN COMMITMENT

     Chase Manhattan Bank           $85,000,000            $5,000,000
       Bank of America              $85,000,000            $5,000,000
     Bank of Nova Scotia            $85,000,000
           Citicorp                 $80,000,000           $50,000,000
  Credit Suisse First Boston        $80,000,000            $5,000,000
         Bank One, NA               $80,000,000            $5,000,000
    Northern Trust Company          $60,000,000            $5,000,000
       Bank of New York             $50,000,000
Export Development Corporation      $50,000,000
         Mellon Bank                $50,000,000            $5,000,000
     Royal Bank of Canada           $50,000,000            $5,000,000
   Bank of Tokyo-Mitsubishi         $25,000,000            $5,000,000
        Comerica Bank               $15,000,000            $5,000,000
         FleetBoston                $15,000,000            $5,000,000
        Bank Hapoalim               $10,000,000
            Total                  $820,000,000          $100,000,000

<PAGE>

Exhibit 10.08
                            364-DAY CREDIT AGREEMENT


                                   Dated as of


                                December 8, 2000


                                      among


                         NAVISTAR FINANCIAL CORPORATION,

                                 as the Borrower


                            The Lenders Party Hereto,


                            THE CHASE MANHATTAN BANK,

                             as Administrative Agent


                             BANK OF AMERICA, N.A.,

                              as Syndication Agent


                                       and


                            THE BANK OF NOVA SCOTIA,

                             as Documentation Agent


                  $80,000,000 364-DAY REVOLVING CREDIT FACILITY


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

                              CHASE SECURITIES INC.

                                       and


                        BANC OF AMERICA SECURITIES, LLC,

                 as Joint Book Managers and Joint Lead Arrangers






<PAGE>







                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>                                                                                                            <C>

                                                                                                               Page

ARTICLE I

         DEFINITIONS..............................................................................................1

         SECTION 1.01. Defined Terms..............................................................................1

         SECTION 1.02.   Classification of Revolving Loans and Borrowings........................................20

         SECTION 1.03.   Terms Generally.........................................................................20

         SECTION 1.04.   Accounting Terms; GAAP..................................................................21

ARTICLE II

THE CREDIT FACILITY..............................................................................................21

         SECTION 2.01.   Commitments.............................................................................21

         SECTION 2.02.   Revolving Loans and Borrowings..........................................................21

         SECTION 2.03.   Requests for Borrowings.................................................................22

ARTICLE III

TERMS APPLICABLE TO CREDIT FACILITY..............................................................................23

         SECTION 3.01. Funding of Borrowings.....................................................................23

         SECTION 3.02. Interest Elections........................................................................23

         SECTION 3.03. Termination and Reduction of Commitments..................................................25

         SECTION 3.04. Repayment of Revolving Loans; Evidence of Debt............................................25

         SECTION 3.05. Prepayment of Revolving Loans.............................................................26

         SECTION 3.06. Fees......................................................................................26

         SECTION 3.07. Interest..................................................................................27

         SECTION 3.08. Alternate Rate of Interest................................................................28

         SECTION 3.09. Increased Costs...........................................................................28

         SECTION 3.10. Break Funding Payments....................................................................29

         SECTION 3.11. Taxes.....................................................................................30

         SECTION 3.12. Payments Generally; Pro Rata Treatment; Sharing of Set-offs...............................31

         SECTION 3.13. Mitigation Obligations; Replacement of Lenders............................................33

ARTICLE IV

         REPRESENTATIONS AND WARRANTIES..........................................................................33

         SECTION 4.01. Organization; Powers......................................................................33

         SECTION 4.02. Authorization; Enforceability.............................................................34

         SECTION 4.03. Governmental Approvals; No Conflicts......................................................34

         SECTION 4.04. Financial Condition; No Material Adverse Change...........................................34

         SECTION 4.05. Litigation................................................................................35

         SECTION 4.06. Compliance with Laws and Agreements.......................................................35

         SECTION 4.07. Investment and Holding Company Status.....................................................35

         SECTION 4.08. Taxes.....................................................................................35

         SECTION 4.09. ERISA.....................................................................................36

         SECTION 4.10. Subsidiaries..............................................................................36

         SECTION 4.11. Disclosure................................................................................36

ARTICLE V

         CONDITIONS..............................................................................................37

         SECTION 5.01. Effective Date............................................................................37

         SECTION 5.02. Each Borrowing Event......................................................................38

         SECTION 5.03.  Condition Subsequent.....................................................................38

ARTICLE VI

         AFFIRMATIVE COVENANTS...................................................................................39

         SECTION 6.01. Financial Statements and Other Information................................................39

         SECTION 6.02. Notices of Material Events................................................................40

         SECTION 6.03. Existence; Conduct of Business............................................................40

         SECTION 6.04. Payment of Obligations....................................................................41

         SECTION 6.05. Maintenance of Properties; Insurance......................................................41

         SECTION 6.06. Books and Records; Inspection Rights......................................................41

         SECTION 6.07. Compliance with Laws and Material Contractual Obligations.................................41

         SECTION 6.08. Intercompany Agreements...................................................................41

         SECTION 6.09. Federal Regulations.......................................................................42

         SECTION 6.10. Use of Proceeds; Repayment of Revolving Loans.............................................43

         SECTION 6.11. Grant of Security Interest................................................................43

ARTICLE VII

         NEGATIVE CONVENANTS.....................................................................................43

         SECTION 7.01. Financial Covenants.......................................................................43

         SECTION 7.02. Liens.....................................................................................44

         SECTION 7.03. Fundamental Changes.......................................................................45

         SECTION 7.04. Investments, Loans, Advances, Guarantees and Acquisitions; Hedging Agreements.............45

         SECTION 7.05. Restricted Payments.......................................................................47

         SECTION 7.06. Transactions with Affiliates..............................................................47

         SECTION 7.07. Negative Pledge...........................................................................47

         SECTION 7.08. Prepayments of Subordinated Debt..........................................................48

         SECTION 7.09. Serviced Wholesale Portfolio Quality......................................................48

         SECTION 7.10. Serviced Retail Portfolio Quality.........................................................48

ARTICLE VIII

         EVENTS OF DEFAULT.......................................................................................49

ARTICLE IX

         THE ADMINISTRATIVE AGENT................................................................................52

ARTICLE X

         MISCELLANEOUS...........................................................................................54

         SECTION 10.01. Notices..................................................................................54

         SECTION 10.02. Waivers; Amendments......................................................................54

         SECTION 10.03. Expenses; Indemnity; Damage Waiver.......................................................55

         SECTION 10.04. Successors and Assigns...................................................................56

         SECTION 10.05. Survival.................................................................................59

         SECTION 10.06. Counterparts; Integration................................................................59

         SECTION 10.07. Severability.............................................................................60

         SECTION 10.08. Right of Setoff..........................................................................60

         SECTION 10.09. GOVERNING LAW............................................................................60

         SECTION 10.10. Submission To Jurisdiction; Waivers......................................................60

         SECTION 10.11. Acknowledgments..........................................................................61

         SECTION 10.12. WAIVERS OF JURY TRIAL....................................................................61

         SECTION 10.13. Headings.................................................................................61

         SECTION 10.14. Confidentiality..........................................................................61

         SECTION 10.15. Interest Rate Limitation.................................................................62

         SECTION 10.16. Waiver of Immunities.....................................................................62


</TABLE>



<PAGE>



SCHEDULES:

Schedule 2.01 -- Commitments

Schedule 4.05 -- Disclosed Matters

Schedule 4.10 -- Subsidiaries

Schedule 6.11 - Assets Subject to Springing Lien

Schedule 7.02 -- Existing Liens

Schedule 7.04 - Scheduled Investments

EXHIBITS:

Exhibit A    -- Form of Assignment and Acceptance

Exhibit B-1 -- Form of Opinion of Borrower's New York Counsel

Exhibit B-2 -- Form of Opinion of Borrowers' General Counsel

Exhibit C    -- Form of Parents' Side Agreement

Exhibit D    -- Form of Report of Statistical Information

Exhibit E     -- Form of Borrowing Request

Exhibit F    --  Form of Compliance Certificate


<PAGE>



                  364-DAY  CREDIT  AGREEMENT  (this  "Agreement"),  dated  as of
December 8, 2000, among Navistar Financial  Corporation,  a Delaware corporation
(the  "Borrower"),  the LENDERS  party  hereto,  THE CHASE  MANHATTAN  BANK,  as
Administrative Agent, BANK OF AMERICA,  N.A., as Syndication Agent, and THE BANK
OF NOVA SCOTIA, as Documentation Agent.

                  The parties hereto agree as follows:
ARTICLE I.........
                                   Definitions

SECTION 1.01. ....Defined Terms.  As used in this Agreement, the following terms
have the meanings specified below:

                  "ABR",  when  used  in  reference  to any  Revolving  Loan  or
Borrowing,  refers to  whether  such  Revolving  Loan,  or the  Revolving  Loans
comprising  such  Borrowing,  are  bearing  interest  at a  rate  determined  by
reference to the Alternate Base Rate.

                  "Adjusted  LIBO Rate" means,  with  respect to any  Eurodollar
Borrowing for any Interest Period,  an interest rate per annum (rounded upwards,
if  necessary,  to the next  1/16 of 1%)  equal  to (a) the  LIBO  Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.

                  "Administrative  Agent" means The Chase Manhattan Bank, in its
capacity as  administrative  agent for the Lenders  hereunder,  or any successor
agent appointed in accordance with Article IX hereof.

                  "Administrative   Questionnaire"   means   an   Administrative
Questionnaire in a form supplied by the Administrative Agent.

                  "Affiliate" means, with respect to a specified Person, another
Person (other than, in the case of the Borrower,  the  Borrower's  Subsidiaries)
that directly, or indirectly through one or more intermediaries,  Controls or is
Controlled by or is under common Control with the Person specified.

                  "Alternate  Base  Rate"  means,  for any day, a rate per annum
equal to the  greatest of (a) the Prime Rate in effect on such day, (b) the Base
CD Rate in effect on such day plus 1% and (c) the Federal Funds  Effective  Rate
in effect on such day plus 1/2 of 1%. Any change in the Alternate  Base Rate due
to a change in the Prime Rate,  the Base CD Rate or the Federal Funds  Effective
Rate shall be effective  from and including the effective date of such change in
the  Prime  Rate,  the  Base  CD  Rate  or the  Federal  Funds  Effective  Rate,
respectively.

                  "Applicable  Rate" means, for any day, with respect to any ABR
Revolving  Loan or  Eurodollar  Revolving  Loan, or with respect to the facility
fees payable  hereunder,  as the case may be, the applicable  rate per annum set
forth below under the caption "ABR Spread"  "Eurodollar Spread" or "Facility Fee
Rate",  as the  case  may  be,  based  upon  the  ratings  by S&P  and  Moody's,
respectively,  applicable on such date to the Index Debt of the Borrower (or the
Parent, in the circumstance described below):

<TABLE>
<CAPTION>
<S>                                                            <C>           <C>            <C>

                    Index Debt Ratings:                        ABR       Eurodollar     Facility Fee
                                                              Spread       Spread           Rate


Level 1: BBB or higher and Baa2 or higher and A2/P2 or          0%         0.475%          0.10%
           higher for Borrower's commercial paper ratings

Level 2: BBB or higher and Baa2 or higher and Level 1 does      0%         0.625%          0.125%
           not apply

Level 3: BBB- or higher and Baa3 or higher and Levels 1         0%         0.825%          0.175%
           and 2 do not apply

Level 4: BBB- or higher or Baa3 or higher and Levels 1, 2       0%         0.925%          0.20%
           and 3 do not apply

Level 5: BB+ or higher or Ba1 or higher and Levels 1, 2, 3    0.025%       1.025%          0.225%
           and 4 do not apply

Level 6: Levels 1, 2, 3, 4 and 5 do not apply                 0.175%       1.175%          0.325%


provided that, effective as of July 1, 2001, the following rates shall apply:

                    Index Debt Ratings:                        ABR       Eurodollar     Facility Fee
                                                              Spread       Spread           Rate


Level 1: BBB or higher and Baa2 or higher and A2/P2 or        0.475%       1.475%          0.10%
           higher for Borrower's commercial paper ratings

Level 2: BBB or higher and Baa2 or higher and Level 1 does    0.625%       1.625%          0.125%
           not apply

Level 3: BBB- or higher and Baa3 or higher and Levels 1       0.825%       1.825%          0.175%
           and 2 do not apply

Level 4: BBB- or higher or Baa3 or higher and Levels 1, 2     0.925%       1.925%          0.20%
           and 3 do not apply

Level 5: BB+ or higher or Ba1 or higher and Levels 1, 2, 3    1.025%       2.025%          0.225%
           and 4 do not apply

Level 6: Levels 1, 2, 3, 4 and 5 do not apply                 1.175%       2.175%          0.325%
</TABLE>
<PAGE>



                  For purposes of the foregoing,  (i) if either (or both) of S&P
or Moody's (or a similar  nationally  recognized  rating agency  satisfactory to
both the  Borrower  and the  Administrative  Agent)  shall  not have in effect a
rating  for the  Index  Debt  of the  Borrower  (other  than  by  reason  of the
circumstances referred to in the last sentence of this definition),  then (1) if
either (or both) of S&P or Moody's (or a similar  nationally  recognized  rating
agency  satisfactory to both the Borrower and the  Administrative  Agent) has in
effect such a rating for the Index Debt of the Parent, then such rating shall be
used as if it were the rating for the Index Debt of the  Borrower  to  determine
the  Applicable  Rate;  and (2) if neither the  Borrower  nor the Parent has any
ratings for its  respective  Index Debt,  Level 6 shall be used to determine the
Applicable  Rate;  and (ii) if the  ratings  established  or deemed to have been
established by S&P and Moody's (or a similar nationally recognized rating agency
satisfactory  to both the Borrower and the  Administrative  Agent) for the Index
Debt of the Borrower shall be changed (other than as a result of a change in the
rating  system of S&P or  Moody's  (or a similar  nationally  recognized  rating
agency  satisfactory to both the Borrower and the Administrative  Agent)),  such
change shall be  effective as of the date on which it is first  announced by the
applicable rating agency.  Each change in the Applicable Rate shall apply during
the period  commencing  on the  effective  date of such change and ending on the
date  immediately  preceding the effective date of the next such change.  If the
rating  system of S&P or  Moody's  (or a similar  nationally  recognized  rating
agency  satisfactory  to both the Borrower and the  Administrative  Agent) shall
change, or if any such rating agency shall cease to be in the business of rating
corporate debt obligations, the Borrower and the Lenders shall negotiate in good
faith to amend this  definition  to reflect  such changed  rating  system or the
unavailability of ratings from such rating agency and, pending the effectiveness
of any such  amendment,  the Applicable Rate shall be determined by reference to
the rating most recently in effect prior to such change or cessation.

                  "Assessment  Rate" means,  for any day, the annual  assessment
rate in effect  on such day that is  payable  by a member of the Bank  Insurance
Fund classified as "well-capitalized"  and within "supervisory subgroup B" (or a
comparable successor risk  classification)  within the meaning of 12 C.F.R. Part
327 (or any successor  provision) to the Federal Deposit  Insurance  Corporation
for  insurance  by such  Corporation  of time  deposits  made in  dollars at the
offices of such member in the United  States;  provided  that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid,  then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative  Agent to be representative of
the cost of such insurance to the Lenders.

                  "Assignment and Acceptance" means an assignment and acceptance
entered  into by a Lender and an  assignee  (with the consent of any party whose
consent is required by Section 10.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.

                  "Availability  Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.

                  "Available  Commitment"  means as at any date of determination
with respect to any Lender,  an amount  equal to the excess,  if any, of (a) the
amount of such Lender's Commitment in effect on such date over (b) the Revolving
Credit Exposure of such Lender on such date.

                  "Base CD Rate" means the sum of (a) the Three-Month  Secondary
CD Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.

                    "Board" means the Board of Governors of the Federal  Reserve
System of the United States of America.

                  "Borrower"  has the meaning set forth in the  Preamble to this
Agreement.

                  "Borrowing"  means  Revolving  Loans of the same  Type,  made,
converted or continued on the same date and, in the case of Eurodollar Revolving
Loans, as to which a single Interest Period is in effect.

                  "Borrowing Request" means a request, substantially in the form
of Exhibit E, by the Borrower for a Borrowing in accordance with Section 2.03.

                  "Business Day" means any day that is not a Saturday, Sunday or
other day on which  commercial banks in New York City are authorized or required
by law  to  remain  closed;  provided  that,  when  used  in  connection  with a
Eurodollar Revolving Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London interbank
market.

                  "Capital   Lease   Obligations"   of  any  Person   means  the
obligations  of such Person to pay rent or other  amounts under any lease of (or
other arrangement  conveying the right to use) real or personal  property,  or a
combination  thereof,  which  obligations  are  required  to be  classified  and
accounted  for as capital  leases on a balance  sheet of such Person under GAAP,
and the  amount of such  obligations  shall be the  capitalized  amount  thereof
determined in accordance with GAAP.

                  "Change in Control" means the occurrence of one or more of the
following events:  (i) any Person or group (within the meaning of the Securities
Exchange Act of 1934 (the  "Exchange  Act") and the rules of the  Securities and
Exchange  Commission  thereunder  as in effect on the date  hereof),  other than
employee or retiree  benefit  plans or trusts  sponsored or  established  by the
Borrower or International,  is or becomes the "beneficial  owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of (A) securities of
the Parent representing 35% or more of the combined voting power of the Parent's
then  outstanding  voting stock, or (B) securities of the Borrower  representing
50% or more of the combined  voting  power of the  Borrower's  then  outstanding
voting stock; (ii) the following  individuals cease for any reason to constitute
more than  three-fourths of the number of directors then serving on the Board of
Directors of the Parent:  individuals  who, on the date hereof,  constitute  the
Board of Directors  and any new director  (other than a director  whose  initial
assumption of the office is in connection with an actual or threatened  election
contest,  including but not limited to a consent  solicitation,  relating to the
election of directors of the Parent) whose  appointment or election by the Board
of  Directors  or  nomination  for  election by the  Parent's  stockholders  was
approved  by the vote of a  majority  of the  directors  then still in office or
whose  appointment,  election  or  nomination  was  previously  so  approved  or
recommended;  (iii) the  stockholders  of the Parent  shall  approve any Plan of
Liquidation;  (iv) the Borrower consolidates with or merges with or into another
Person,  or  the  Borrower  or  any  Subsidiary  of the  Borrower,  directly  or
indirectly, sells, assigns, conveys, transfers, leases or otherwise disposes of,
in one transaction or a series of related transactions, all or substantially all
of the property or assets of the Borrower and the  Subsidiaries  of the Borrower
(determined on a consolidated  basis) to any Person, or any Person  consolidates
with,  or merges with or into,  the  Borrower,  in any such event  pursuant to a
transaction in which the  outstanding  voting stock of the Borrower is converted
into or exchanged for cash,  securities or other  property,  and, as a result of
which,  neither the Parent nor International has "beneficial  ownership" (as set
forth above),  directly or  indirectly,  of at least 50% of the combined  voting
power of the  then  outstanding  voting  stock of the  surviving  or  transferee
corporation, provided that neither (A) a merger permitted under Section 7.03 nor
(B) a series of  transactions  involving  the sale of  Receivables  or interests
therein in the ordinary  course of business by the Borrower or a  Securitization
Subsidiary in connection with a Qualified Securitization  Transaction,  shall be
deemed to be a Change of Control;  or (v) so long as any Indebtedness  under the
Senior  Subordinated  Note  Indenture is  outstanding,  a "Change in Control" as
defined in the Senior Subordinated Note Indenture shall occur.

                  "Change in Law"  means (a) the  adoption  of any law,  rule or
regulation after the date of this Agreement,  (b) any change in any law, rule or
regulation or in the  interpretation or application  thereof by any Governmental
Authority  after the date of this  Agreement or (c)  compliance by any Lender or
the Issuing Bank (or, for purposes of Section 3.09(b),  by any lending office of
such Lender or by such Lender's or the Issuing Bank's holding  company,  if any)
with any request,  guideline  or  directive  (whether or not having the force of
law)  of any  Governmental  Authority  made or  issued  after  the  date of this
Agreement.

                  "Code"  means  the  Internal  Revenue Code of 1986, as amended
from time to time, or any successor statute
 .

                  "Commitment"   means,   with  respect  to  each  Lender,   the
commitment of such Lender to make Revolving Loans, in an aggregate amount not to
exceed at any time  outstanding  the amount  initially  set forth  opposite such
Lender's  name  on  Schedule  2.01  under  the  heading  "Commitment"  or in the
Assignment and  Acceptance  pursuant to which such Lender shall have assumed its
Commitment,  as applicable,  as such  commitment may be (a) reduced from time to
time  pursuant to Section  3.03 and (b) reduced or  increased  from time to time
pursuant to assignments by or to such Lender pursuant to Section 10.04.

                  "Commitment  Percentage"  means, as to any Lender at any time,
the percentage which such Lender's  Commitment then constitutes of the aggregate
Commitments of all Lenders (or, if the  Commitments  have terminated or expired,
the percentage  shall be determined  based upon the Commitments most recently in
effect, giving effect to any assignments).

                  "Consolidated Leverage Ratio" means, on any date, the ratio of
(a) Consolidated Total Debt on such date to (b) Consolidated  Tangible Net Worth
on such date.

                  "Consolidated  Tangible  Net Worth"  means,  on any date,  the
consolidated   stockholders'   equity  of  the  Borrower  and  its  consolidated
Subsidiaries less, without duplication, (a) their consolidated Intangible Assets
and (b) all Redeemable Preferred Stock (if any), all determined as of such date.
For purposes of this  definition,  "Intangible  Assets" means the amount (to the
extent reflected in determining such consolidated  stockholders'  equity) of (i)
all  investments  in  Subsidiaries  of  the  Borrower  other  than  consolidated
Subsidiaries  and (ii) all  unamortized  debt discount and expense,  unamortized
deferred charges,  goodwill,  patents,  trademarks,  service marks, trade names,
copyrights, organization or developmental expenses and other intangible items.

                  "Consolidated  Total Debt" means, on any date, the outstanding
Indebtedness of the Borrower and its consolidated  Subsidiaries  determined on a
consolidated  basis  as  of  such  date;   provided  that  the  amount  of  such
Indebtedness  shall be (a) increased by all Debt Discount  Adjustments  (if any)
applicable thereto (to the extent not included in determining the amount of such
Indebtedness)  and (b)  decreased by (i) the aggregate  principal  amount of all
Warehousing  Debt  outstanding  on such  date and (ii) the  aggregate  principal
amount of  Indebtedness  incurred in connection  with  Qualified  Securitization
Transactions outstanding on such date.

                  "Control" means the possession, directly or indirectly, of the
power to  direct or cause the  direction  of the  management  or  policies  of a
Person,  whether  through the ability to exercise  voting power,  by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.

                  "Customary Securitization  Undertaking" means, with respect to
any Person, any obligation of such Person under a Permitted Receivables Document
that is of a type  customarily  arising on the part of a seller or  servicer  of
Receivables  in  securitization  transactions  of the same  general  type as the
transaction  contemplated  by such  Permitted  Receivables  Document,  including
without limitation,  any obligation to (A) purchase or repurchase Receivables or
related assets upon the occurrence of certain events, (B) service Receivables or
related assets,  (C) fund a spread or reserve account at the time of the sale of
Receivables, rights to receive income from Receivables or undivided interests in
Receivables or (D) indemnify  other Persons;  provided that the term  "Customary
Securitization  Undertaking" shall not include any obligation to the extent that
it (i) results from credit losses on  receivables  or (ii)  constitutes a direct
obligation  of such Person to repay any  Indebtedness  issued or incurred by any
other Person or to indemnify any Person for losses resulting from the nonpayment
of any such  Indebtedness or to provide  additional  capital to, or maintain the
financial  condition or otherwise  support the credit of, the obligor in respect
of such  Indebtedness  (except any  obligation  to provide  additional  funds to
Subsidiaries   of  the  Borrower  as  part  of  any   Qualified   Securitization
Transaction).

                  "Debt Discount  Adjustment" means at any time, with respect to
any  interest-bearing  Indebtedness for Borrowed Money of the Borrower or any of
its  consolidated  Subsidiaries,  the  amount  (if  any) by  which  (a) the full
outstanding principal amount of such Indebtedness for Borrowed Money exceeds (b)
the  amount of the  liability  reflected  on the books of the  Borrower  or such
consolidated  Subsidiary with respect to such  Indebtedness  for Borrowed Money.
Without  limiting the  generality of the  foregoing,  it is understood  that the
concept of a "Debt Discount  Adjustment" would not apply to non-interest bearing
commercial paper issued at a discount or "zero coupon" bonds.

                  "Default"  means any event or condition  which  constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.

                  "Deloitte & Touche" means Deloitte & Touche LLP.

                  "Disclosed  Matters" means the actions,  suits and proceedings
disclosed in Schedule 4.05.

                  "Dollars",  "dollars"  or "$"  refers to  lawful  money of the
United States of America.

                  "Downgrading"  means the  downgrading of the Index Debt of the
Borrower to below either BBB- by S&P or Baa3 by Moody's; provided that if either
(or both) of S&P or Moody's shall not have in effect a rating for the Index Debt
of the  Borrower  and either (or both) of S&P or  Moody's  has in effect  such a
rating  for the Index  Debt of the  Parent,  the rating of the Index Debt of the
Parent  shall be used as if it were the  rating  of the  Borrower  to  determine
whether a Downgrading has occurred.

                  "Effective  Date"  means  the  date on  which  the  conditions
specified in Section 5.01 are satisfied  (or waived in  accordance  with Section
10.02).

                  "ERISA" means the Employee  Retirement  Income Security Act of
1974, as amended from time to time, or any successor statute.

                  "ERISA  Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower,  is treated as a single employer
under  Section  414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and  Section  412 of the Code,  is treated as a single  employer  under
Section 414 of the Code.

                  "ERISA Event" means (a) any "reportable  event", as defined in
Section 4043 of ERISA or the  regulations  issued  thereunder  with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an  "accumulated  funding  deficiency" (as
defined in  Section  412 of the Code or  Section  302 of ERISA),  whether or not
waived;  (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an  application  for a waiver of the minimum  funding  standard with
respect to any Plan;  (d) the  incurrence  by the  Borrower  or any of its ERISA
Affiliates  of any  liability  under  Title  IV of  ERISA  with  respect  to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA  Affiliate
from the PBGC or a plan  administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer  any Plan; (f)
the  incurrence by the Borrower or any of its ERISA  Affiliates of any liability
with  respect  to  the  withdrawal  or  partial  withdrawal  from  any  Plan  or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice,  or the receipt by any  Multiemployer  Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.

                  "Eurodollar",  when used in reference to any Revolving Loan or
Borrowing,  refers to  whether  such  Revolving  Loan,  or the  Revolving  Loans
comprising  such  Borrowing,  are  bearing  interest  at a  rate  determined  by
reference to the Adjusted LIBO Rate.

                  "Event of Default"  has the  meaning  assigned to such term in
Article VIII.

                  "Excess   Utilization   Day"  means  each  day  on  which  the
percentage equivalent of a fraction (a) the numerator of which is the sum of the
aggregate  outstanding  principal  amount  of the  Revolving  Loans  and (b) the
denominator of which is the aggregate  Commitments  (or, if the Commitments have
terminated or expired, the aggregate Commitments most recently in effect, giving
effect to any assignments) exceeds 33%.

                  "Existing  Credit  Agreement"  means the Amended and  Restated
Credit Agreement (as amended,  supplemented or otherwise modified),  dated as of
November 4, 1994, among the Borrower, the banks listed therein, the co-arrangers
listed therein and Morgan Guaranty Trust Company of New York, as  administrative
agent.

                  "Federal  Funds  Effective  Rate"  means,  for  any  day,  the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on  overnight  Federal  funds  transactions  with  members of the  Federal
Reserve  System  arranged by Federal  funds  brokers,  as  published on the next
succeeding  Business Day by the Federal  Reserve  Bank of New York,  or, if such
rate is not so  published  for  any day  that is a  Business  Day,  the  average
(rounded upwards,  if necessary,  to the next 1/100 of 1%) of the quotations for
such day for such transactions  received by the Administrative  Agent from three
Federal funds brokers of recognized standing selected by it.

                  "Financial   Officer"  means  the  chief  financial   officer,
principal accounting officer,  treasurer,  controller,  cash manager,  financing
manager or treasury reporting manager of the Borrower.

                    "Five  Year  Revolving  Credit  Agreement"  means the Credit
Agreement (as amended, supplemented or otherwise modified), dated as of December
8, 2000,  among the Borrower,  Arrendadora  Financiera  Navistar,  S.A. de C.V.,
Servicios Financieros Navistar, S.A. de C.V., Navistar Comercial,  S.A. de C.V.,
the Lenders party thereto,  The Chase Manhattan Bank, as  administrative  agent,
Bank of America,  N.A., as syndication  agent,  and The Bank of Nova Scotia,  as
documentation agent.

                  "Fixed Charge Coverage Ratio" means, for any period, the ratio
of (a) the sum of (i)  consolidated  interest  expense of the  Borrower  and its
consolidated  Subsidiaries,  (ii)  consolidated  income of the  Borrower and its
consolidated  Subsidiaries before income taxes and (iii) dividends on Redeemable
Preferred  Stock  to (b) the sum of (i)  consolidated  interest  expense  of the
Borrower and its  consolidated  Subsidiaries  and (ii)  dividends on  Redeemable
Preferred Stock.

                  "Foreign  Lender" means any Lender that is organized under the
laws of a  jurisdiction  other than that in which the  Borrower is located.  For
purposes of this  definition,  the United States of America,  each State thereof
and  the  District  of  Columbia   shall  be  deemed  to   constitute  a  single
jurisdiction.

                  "GAAP" means generally accepted  accounting  principles in the
United States of America.

                  "Governmental  Authority"  means the  government of the United
States of  America,  any  other  nation or any  political  subdivision  thereof,
whether state or local, and any agency, authority,  instrumentality,  regulatory
body,  court,  central bank or other entity exercising  executive,  legislative,
judicial,  taxing,  regulatory  or  administrative  powers  or  functions  of or
pertaining to government.

                  "Granting  Lender"  has  the  meaning  set  forth  in  Section
10.04(h).

                  "Guarantee"  of or by any Person (the  "guarantor")  means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of  guaranteeing  any  Indebtedness  or other  obligation of any
other  Person  (the  "primary  obligor")  in any  manner,  whether  directly  or
indirectly,  and including any obligation of the guarantor,  direct or indirect,
(a) to purchase or pay (or advance or supply  funds for the  purchase or payment
of) such  Indebtedness  or other  obligation  or to  purchase  (or to advance or
supply funds for the purchase of) any security for the payment  thereof,  (b) to
purchase or lease  property,  securities or services for the purpose of assuring
the owner of such  Indebtedness or other obligation of the payment thereof,  (c)
to maintain  working  capital,  equity capital or any other financial  statement
condition  or  liquidity  of the  primary  obligor so as to enable  the  primary
obligor to pay such  Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty  issued to support such
Indebtedness or obligation;  provided, that the term Guarantee shall not include
(i)  endorsements  for  collection  or  deposit  or  (ii)  standard  contractual
indemnities,  each in the  ordinary  course of business  or (iii) any  Customary
Securitization  Undertaking.  The amount of any  Guarantee  of any  guaranteeing
Person  shall be deemed to be the lower of (A) an amount  equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
is made and (B) the  maximum  amount for which such  guaranteeing  Person may be
liable pursuant to the terms of the instrument embodying such Guarantee,  unless
such  primary  obligation  and the  maximum  amount for which such  guaranteeing
Person may be liable are not stated or determinable, in which case the amount of
such  Guarantee  shall  be  such   guaranteeing   Person's  maximum   reasonably
anticipated  liability  (assuming such Person is required to perform) in respect
thereof as determined by such Person in good faith.

                  "Harco Insurance" means Harco National Insurance  Company,  an
Illinois corporation.

                  "Harco Leasing" means Harco Leasing Company, Inc., a  Delaware
corporation, and its successors.

                  "Harco  Lease  Purchase  Agreement"  means the Lease  Purchase
Agreement between Harco Leasing and the Borrower,  dated as of October 16, 2000,
as such agreement may be amended or supplemented from time to time.

                  "Hedging   Agreement"   means  any  interest  rate  protection
agreement,  foreign  currency  exchange  agreement,   currency  swap  agreement,
commodity price protection agreement or other interest or currency exchange rate
or commodity price hedging arrangement.

                  "Indebtedness"  of  any  Person  means  on any  date,  without
duplication,  (a) all  obligations  of such Person for borrowed  money,  (b) all
obligations  of such  Person  evidenced  by  bonds,  debentures,  notes or other
similar  instruments,  (c) all  Guarantees  by such  Person of  Indebtedness  of
others,   (d)  all  Capital  Lease  Obligations  of  such  Person  and  (e)  all
obligations,  contingent  or otherwise,  of such Person to reimburse  issuers of
letters of credit,  surety bonds or similar  obligations  for  payments  made to
repay,  purchase  or  otherwise  retire  any  Indebtedness  referred  to in  the
foregoing  clauses  (a)  through  (d),  excluding  trade  payables  and  accrued
expenses.

                  "Indebtedness   for   Borrowed   Money"  means  the  types  of
Indebtedness   referred  to  in  clauses  (a)  and  (b)  of  the  definition  of
"Indebtedness".

                  "Index Debt" means senior,  unsecured,  long-term indebtedness
for borrowed  money that is not guaranteed by any other Person or subject to any
other credit enhancement.

                  "Intercompany  Loan Agreements" means each agreement from time
to time creating or evidencing any  Indebtedness  owing from time to time to the
Borrower from one of its Subsidiaries.

                  "Interest Election Request" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 3.02.

                  "Interest  Payment  Date"  means (a) with  respect  to any ABR
Revolving Loan, the last day of each March, June, September and December and (b)
with  respect to any  Eurodollar  Revolving  Loan,  the last day of the Interest
Period  applicable to the Borrowing of which such  Revolving Loan is a part and,
in the case of a Eurodollar Borrowing with an Interest Period of more than three
months'  duration,  each day prior to the last day of such Interest  Period that
occurs  at  intervals  of three  months'  duration  after  the first day of such
Interest Period.

                  "Interest   Period"  means  with  respect  to  any  Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically  corresponding  day in the calendar  month that is one, two,  three,
six, or nine months (or, if  available  from the  relevant  Lenders,  two weeks,
twelve  months or other period  requested by the  Borrower)  thereafter,  as the
Borrower may elect; provided, that (i) if any Interest Period would end on a day
other than a Business Day,  such  Interest  Period shall be extended to the next
succeeding  Business Day unless such next succeeding  Business Day would fall in
the next calendar  month,  in which case such  Interest  Period shall end on the
next  preceding  Business  Day and  (ii) any  Interest  Period  pertaining  to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which  there is no  numerically  corresponding  day in the last
calendar  month of such  Interest  Period) shall end on the last Business Day of
the last calendar month of such Interest Period.  For purposes hereof,  the date
of a Borrowing  initially  shall be the date on which such Borrowing is made and
thereafter  shall  be the  effective  date  of the  most  recent  conversion  or
continuation of such Borrowing.

                  "International"   means   International   Truck   and   Engine
Corporation,  formerly  Navistar  International Transportation Corp., a Delaware
corporation.


                  "Investments" has the meaning set forth in Section 7.04.

                  "Joint Lead Arrangers" means Chase Securities Inc. and Banc of
America Securities LLC.

                  "Lenders"  means the Persons  listed on Schedule  2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.

                  "LIBO Rate" means,  with respect to any  Eurodollar  Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service,  or any successor to or
substitute  for such  Service,  providing  rate  quotations  comparable to those
currently  provided  on  such  page  of  such  Service,  as  determined  by  the
Administrative  Agent from time to time for purposes of providing  quotations of
interest rates applicable to dollar deposits in the London interbank  market) at
approximately   11:00  a.m.,  London  time,  two  Business  Days  prior  to  the
commencement  of such Interest  Period,  as the rate for dollar  deposits with a
maturity  comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar  Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered  by  the  principal  London  office  of  the  Administrative   Agent  in
immediately  available  funds in the London  interbank  market at  approximately
11:00 a.m.,  London time,  two Business Days prior to the  commencement  of such
Interest Period.

                  "Lien"  means,  with respect to any asset,  (a) any  mortgage,
deed of trust,  lien,  pledge,  hypothecation,  encumbrance,  charge or security
interest  in, on or of such asset and (b) the  interest  of a vendor or a lessor
under any  conditional  sale  agreement,  capital lease or other title retention
agreement relating to such asset.

                  "Master Intercompany  Agreement" means the Master Intercompany
Agreement,  dated as of April 26, 1993,  between the Borrower and International,
as amended, supplemented or otherwise modified from time to time.

                  "Material  Adverse Effect" means a material  adverse effect on
(a) the business,  assets,  property or financial  condition of the Borrower and
its Subsidiaries taken as a whole, or (b) the validity or enforceability of this
Agreement  or the  Parents'  Side  Agreement  or the rights and  remedies  of or
benefits  available to the Lenders  under this  Agreement  or the Parents'  Side
Agreement.

                  "Material  Indebtedness"  means  Indebtedness  of the Borrower
(other  than the  Revolving  Loans),  or  obligations  in respect of one or more
Hedging Agreements in an aggregate principal amount exceeding  $10,000,000.  For
purposes of determining  Material  Indebtedness,  the "principal  amount" of the
obligations  of the  Borrower  in respect of any Hedging  Agreement  at any time
shall be the maximum aggregate amount (giving effect to any netting  agreements)
that the  Borrower  would be  required  to pay if such  Hedging  Agreement  were
terminated at such time.

                  "Maturity  Date"  means  the date  that is 364 days  after the
Effective  Date,  or such  earlier  date  that the  Commitments  are  terminated
pursuant to Section 3.03.

                  "Mexican  Affiliate"  means  any  of   Arrendadora  Financiera
Navistar, S.A. de C.V., a Mexican corporation, Servicios Financieros   Navistar,
S.A. de C.V., a Mexican  corporation, or  Navistar  Comercial, S.A.  de  C.V,  a
Mexican corporation.

                  "Moody's" means Moody's Investors Service, Inc.

                  "Multiemployer  Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA;  provided that the term "Multiemployer  Plan" shall
not include the Wisconsin Steel Arrangements.

                  "Navistar  Leasing"  means  Navistar  Leasing  Corporation,  a
Delaware corporation, and its successors.

                  "NFC  Receivables  Purchase  Agreement"  means the Receivables
Purchase  Agreement between the Borrower and TRIP, dated as of October 16, 2000,
as such agreement may be amended or supplemented from time to time.

                  "NFRRC"   means   Navistar    Financial   Retail   Receivables
Corporation, a Delaware corporation, and its successors.

                  "NFSC" means  Navistar  Financial  Securities  Corporation,  a
Delaware corporation, and its successors.

                  "1999 Annual Report" means the  Borrower's  1999 Annual Report
on Form 10-K for the fiscal year ended October 31, 1999,  in the form  delivered
to the Lenders prior to the date hereof.

                  "Note" has the meaning set forth in Section 3.04.

                  "Non-Excluded  Taxes"  has the  meaning  set forth in  Section
3.11(a).

                  "Other  Taxes"  means any and all  present or future  stamp or
documentary  taxes or any other  excise or  property  taxes,  charges or similar
levies arising from any payment made  hereunder or from the execution,  delivery
or enforcement of, or otherwise with respect to, this Agreement.

                  "Parent" means Navistar International Corporation, a  Delaware
corporation.

                  "Parents' Side  Agreement"  means the Parents' Side Agreement,
substantially  in the form of  Exhibit C,  dated as of the date  hereof,  by the
Parent  and  International   for  the  benefit  of  the  Lenders,   as  amended,
supplemented or otherwise modified from time to time.

                  "Past Due Serviced Retail Notes" at the end of any month means
the aggregate  Unpaid  Balances at the end of such month of all Serviced  Retail
Notes with respect to which any amount  payable is more than 60 days past due at
the end of such month.

                  "Past Due  Serviced  Wholesale  Notes" at the end of any month
means the  aggregate  Unpaid  Balances at the end of such month of all  Serviced
Wholesale Notes (or installments thereof) which are more than one month past due
at the end of such month.

                  "PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.

                  "Permitted Encumbrances" means:

(a) Liens imposed by law for taxes, assessments or governmental charges that are
not yet due or are being contested in compliance with Section 6.04;

(b) carriers', warehousemen's,  mechanics', materialmen's, repairmen's and other
like  Liens  imposed by law,  arising in the  ordinary  course of  business  and
securing  obligations  that (i) are not overdue by more than 30 days or (ii) are
being contested in compliance with Section 6.04;

(c) pledges and deposits  made in the ordinary  course of business in compliance
with workers' compensation,  unemployment insurance,  health insurance and other
social security laws or regulations and withholding taxes;

(d)  deposits  to secure  the  performance  of bids,  trade  contracts,  leases,
statutory  obligations,  surety and appeal  bonds,  performance  bonds and other
obligations of a like nature, in each case in the ordinary course of business;

(e) easements,  zoning  restrictions,  rights-of-way and similar encumbrances on
real property  imposed by law or arising in the ordinary course of business that
do not secure any monetary  obligations  and do not materially  detract from the
value of the  affected  property  or  interfere  with the  ordinary  conduct  of
business of the Borrower or any of its Subsidiaries;

(f) Liens arising from judgments, decrees or attachments that do not  constitute
an Event of Default hereunder;

(g) Liens  arising  from  precautionary  Uniform   Commercial   Code   financing
statements  filed  in  connection  with  operating leases of the Borrower or its
Subsidiaries;

(h) any interest or title of a licensor,  lessor or sublessor under any license,
lease or  sublease  entered  into by the  Borrower  in the  ordinary  course  of
business and covering only the assets so licensed, leased or subleased; and

(i) Liens arising  in  connection with any Qualified Securitization Transaction;
provided  that the term  "Permitted  Encumbrances"  shall not  include  any Lien
securing Indebtedness.

                  "Permitted Investments" means:

(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America or by any agency
thereof to the extent such  obligations  are backed by the full faith and credit
of the United States of America,  in each case maturing within one year from the
date of acquisition thereof;

(b)  investments in commercial  paper maturing  within 270 days from the date of
acquisition  thereof and having, at such date of acquisition,  the credit rating
of A-2 or higher from S&P or P-2 or higher from Moody's;

(c)  investments  in  certificates  of deposit,  banker's  acceptances  and time
deposits maturing within one year from the date of acquisition thereof issued or
guaranteed  by or placed  with,  and money  market  deposit  accounts  issued or
offered by, any domestic  office of any commercial bank organized under the laws
of the  United  States of America  or any State  thereof  or Canada  which has a
combined   capital  and  surplus  and   undivided   profits  of  not  less  than
$250,000,000;

(d) fully collateralized  repurchase  agreements with a term of not more than 30
days for  securities  described  in clause  (a) above  and  entered  into with a
financial institution satisfying the criteria described in clause (c) above; and

(e) investments in money market funds substantially all of the assets  of  which
are comprised of securities of the type described in  clauses  (a)  through  (d)
above;

                  "Permitted  Receivables  Document" means any document to which
the Borrower or any Subsidiary of the Borrower is a party that relates to a sale
or  transfer  by the  Borrower  or such  Subsidiary  of  Receivables,  undivided
interests therein or rights to receive income therefrom.

                  "Person"  means  any  natural  person,  corporation,   limited
liability company,  trust,  joint venture,  association,  company,  partnership,
Governmental Authority or other entity.

                  "Plan" means any employee  pension  benefit plan (other than a
Multiemployer  Plan)  subject to the  provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA  Affiliate is (or, if such plan were  terminated,  would under Section
4069 of ERISA be deemed to be) an  "employer"  as  defined  in  Section  3(5) of
ERISA;  provided  that the term "Plan"  shall not include  the  Wisconsin  Steel
Arrangements.

                  "Plan of  Liquidation"  means,  with respect to the Parent,  a
plan  (including  by operation of law) that provides  for,  contemplates  or the
effectuation   of  which  is  preceded  or   accompanied   by  (whether  or  not
substantially  contemporaneously)  (i) the  sale,  lease,  conveyance  or  other
disposition of all or substantially all of the assets of the Parent and (ii) the
distribution of all or  substantially  all of the proceeds of such sale,  lease,
conveyance or other  disposition and all or  substantially  all of the remaining
assets of the Parent to holders of capital stock of the Parent.

                  "Prime  Rate"  means the rate of interest  per annum  publicly
announced  from time to time by The Chase  Manhattan  Bank as its prime  rate in
effect at its principal  office in New York City;  each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.

                  "Qualified  Securitization  Transaction" means any transaction
or series of transactions  that have been or may be entered into by the Borrower
or any of its  Subsidiaries  in  connection  with  or  reasonably  related  to a
transaction  or  series of  transactions  in which  the  Borrower  or any of its
Subsidiaries  may sell,  convey or  otherwise  transfer to (i) a  Securitization
Subsidiary  or (ii) any other Person,  or may grant a security  interest in, any
Receivables  or  interests  therein  secured by the goods or  services  financed
thereby (whether such Receivables are then existing or arising in the future) of
the  Borrower  or  any of its  Subsidiaries,  and  any  assets  related  thereto
including,  without  limitation,  all  security  interests  in goods or services
financed thereby,  the proceeds of such Receivables,  and other assets which are
customarily  sold or in  respect of which  security  interests  are  customarily
granted in connection with securitization transactions involving such assets.

                  "Receivables"  means,  as the context may require,  either (a)
all assets of the types classified  under the heading  "Finance  Receivables" on
the  statement  of  consolidated  financial  condition  of the  Borrower and its
consolidated  Subsidiaries as of October 31, 1999 and the related  statements of
consolidated  income and retained  earnings and  consolidated  cash flow for the
fiscal year then ended,  together with the notes  thereto,  included in the 1999
Annual Report and reported on by Deloitte & Touche or (b) the  aggregate  Unpaid
Balances thereof or (c) equipment on operating leases.

                  "Redeemable  Preferred  Stock"  means  preferred  stock of the
Borrower which is required,  or at the option of the holder may be required,  to
be redeemed or repurchased at any time.

                  "Register" has the meaning set forth in Section 10.04.

                  "Related Parties" means, with respect to any specified Person,
such Person's  Affiliates and the  respective  directors,  officers,  employees,
agents and advisors of such Person and such Person's Affiliates.

                  "Required   Lenders"  means,  at  any  time,   Lenders  having
Commitments representing at least 66-2/3% of the total Commitments at such time.

                  "Restricted  Payment" means any dividend or other distribution
(whether in cash,  securities or other  property)  with respect to any shares of
any class of capital stock of the Borrower or any Subsidiary  (except  dividends
payable solely in shares of its capital stock), or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption,  retirement,  acquisition,  cancellation or
termination  of any such shares of capital  stock of the Borrower or any option,
warrant  or other  right to  acquire  any such  shares of  capital  stock of the
Borrower.

                  "Retail  Accounts" means, as the context may require,  (a) all
assets of the types classified under the heading  "Accounts" in the statement of
consolidated   financial   condition  of  the  Borrower  and  its   consolidated
Subsidiaries  as of October 31, 1999 and the related  statements of consolidated
income and retained earnings and consolidated cash flow for the fiscal year then
ended,  together with the notes thereto,  included in the 1999 Annual Report and
reported on by Deloitte & Touche  (other than with  respect to which the obligor
is (i) a dealer in or distributor of products manufactured, assembled or sold by
International or any subsidiary of  International  or (ii) a manufacturer  which
incorporates,  in its  products,  products  manufactured  assembled  or  sold by
International  or any subsidiary of  International)  or (b) the aggregate Unpaid
Balances thereof.

                  "Retail Notes" means,  as the context may require,  either (a)
all assets of the types  classified  under the heading  "Retail  notes and lease
financing" in the statement of consolidated  financial condition of the Borrower
and its  consolidated  Subsidiaries  as of  October  31,  1999  and the  related
statements of consolidated  income and retained  earnings and consolidated  cash
flow for the fiscal year then ended,  together with the notes thereto,  included
in the 1999  Annual  Report  and  reported  on by  Deloitte  & Touche or (b) the
aggregate Unpaid Balances thereof or (c) equipment on operating leases.

                  "Revolving  Credit Exposure" means, with respect to any Lender
at any  time,  the  aggregate  outstanding  principal  amount  of such  Lender's
Revolving Loans at such time.

                  "Revolving Credit Exposure Percentage" means, on any date with
respect to any Lender,  the percentage  which the Revolving  Credit  Exposure of
such Lender constitutes of the Revolving Credit Exposure of all Lenders.

                  "Revolving Loan" means a loan made by a Lender to the Borrower
pursuant to Section 2.03.

                  "Revolving  Retail Facility  Documents"  means the Harco Lease
Purchase Agreement, the NFC Receivables Purchase Agreement, the Revolving Retail
Note Indenture and related documents.

                  "Revolving  Retail  Facility  Trustee" means the trustee under
the Revolving Retail Note Indenture.

                  "Revolving  Retail Note Indenture" means an Indenture  between
TRIP and the Revolving Retail Facility Trustee, dated as of October 16, 2000, as
such agreement may be amended or supplemented from time to time.

                  "Revolving Retail Notes" means the medium term notes issued by
TRIP pursuant to the Revolving Retail Note Indenture.

                  "S&P" means Standard & Poor's Ratings Services,  a division of
the McGraw-Hill Companies, Inc.

                  "Securitization Subsidiary" means a wholly owned Subsidiary of
the Borrower which engages in no activities other than those reasonably  related
to or in connection with the entering into of  securitization  transactions  and
which is  designated  by the Board of  Directors  of the  Borrower  (as provided
below) as a Securitization  Subsidiary (a) no portion of the Indebtedness or any
other  obligations  (contingent  or otherwise) of which (i) is guaranteed by the
Borrower or any other Subsidiary of the Borrower other than pursuant to Standard
Securitization  Undertakings,  (ii) is recourse to or obligates  the Borrower or
any other  Subsidiary of the Borrower in any way other than pursuant to Standard
Securitization  Undertakings  or (iii)  subjects  any  property  or asset of the
Borrower  or any other  Subsidiary  of the  Borrower,  directly  or  indirectly,
contingently or otherwise,  to any Lien or to the  satisfaction  thereof,  other
than pursuant to Standard  Securitization  Undertakings,  (b) with which neither
the  Borrower nor any other  Subsidiary  of the Borrower (i) provides any credit
support (for the avoidance of doubt,  no  Intercompany  Loan Agreement  shall be
deemed to  constitute  "credit  support") or (ii) has any  contract,  agreement,
arrangement  or  understanding  other than on terms that are fair and reasonable
and that are no less favorable to the Borrower or such  Subsidiary than could be
obtained  from  an  unrelated   Person   (other  than  Standard   Securitization
Undertakings and intercompany  notes relating to the sale of Receivables to such
Securitization  Subsidiary)  and (c) with which  neither  the  Borrower  nor any
Subsidiary  of the  Borrower  has any  obligation  to maintain or preserve  such
Subsidiary's  financial condition or to cause such Subsidiary to achieve certain
levels of operating  results.  Any such designation by the Board of Directors of
the Borrower shall be evidenced to the  Administrative  Agent by filing with the
Administrative  Agent  a  certified  copy of the  resolutions  of the  Board  of
Directors of the Borrower giving effect to such designation.

                  "Senior Subordinated Note Indenture":  the Indenture, dated as
of May 30, 1997,  entered into by the Borrower and The Chase  Manhattan Bank, as
Trustee,  in  connection  with the  issuance of the Senior  Subordinated  Notes,
together with all instruments and other agreements  entered into by the Borrower
in connection therewith.

                  "Senior Subordinated Notes":  the 9% Senior Subordinated Notes
due 2002 of the  Borrower  issued  pursuant  to  the  Senior  Subordinated  Note
Indenture.

                  "Serviced  Retail Accounts" means, at any time, as the context
may  require,  (a) all  outstanding  Retail  Accounts  which the Borrower or any
Subsidiary  of the  Borrower  owns at such  time or which  the  Borrower  or any
Subsidiary  of the  Borrower  has  theretofore  sold  and  continues  to have an
economic  interest in (through a right to receive  payment of deferred  purchase
price,  an undivided  interest in a trust or  otherwise) at such time or (b) the
Unpaid Balances thereof.

                  "Serviced Retail Notes" means, at any time, as the context may
require, (a) all outstanding Retail Notes which the Borrower, NFRRC, TRIP or any
other Subsidiary of the Borrower owns at such time or which the Borrower, NFRRC,
TRIP or any other  Subsidiary of the Borrower has theretofore sold and continues
to have an economic  interest in (through a right to receive payment of deferred
purchase price,  an undivided  interest in a trust or otherwise) at such time or
(b) the Unpaid Balances thereof.

                  "Serviced Retail Receivables" means Serviced Retail Notes  and
Serviced Retail Accounts.

                  "Serviced  Wholesale Notes" means, at any time, as the context
may require, (a) all outstanding Wholesale Notes which the Borrower, NFSC or any
other  Subsidiary of the Borrower owns at such time or which the Borrower,  NFSC
or any other  Subsidiary of the Borrower has  theretofore  sold and continues to
have an economic interest in (through ownership of a seller certificate, a right
to receive payment of deferred purchase price, an undivided  interest in a trust
or otherwise) at such time or (b) the Unpaid Balances thereof.

                  "SPC" has the meaning set forth in Section 10.04(h).

                  "Springing Lien" has the meaning set forth in Section 6.11.

                  "Standard Securitization  Undertakings" means representations,
warranties  and covenants  (including  those  relating to servicing) and entered
into  in the  ordinary  course  of  business  in  connection  with  a  Qualified
Securitization Transaction.

                  "Statutory  Reserve  Rate"  means a fraction  (expressed  as a
decimal),  the numerator of which is the number one and the denominator of which
is the  number  one minus  the  aggregate  of the  maximum  reserve  percentages
(including any marginal,  special, emergency or supplemental reserves) expressed
as a  decimal  established  by the Board to which  the  Administrative  Agent is
subject (a) with  respect to the Base CD Rate,  for new  negotiable  nonpersonal
time deposits in dollars of over $100,000 with maturities approximately equal to
three months and (b) with respect to the Adjusted  LIBO Rate,  for  eurocurrency
funding (currently referred to as "Eurocurrency  liabilities" in Regulation D of
the Board).  Such reserve  percentages  shall include those imposed  pursuant to
such  Regulation  D.  Eurodollar  Revolving  Loans shall be deemed to constitute
eurocurrency funding and be subject to such reserve requirements without benefit
of or credit for  proration,  exemptions  or offsets that may be available  from
time to time to any Lender under such Regulation D or any comparable regulation.
The  Statutory  Reserve  Rate shall be adjusted  automatically  on and as of the
effective date of any change in any reserve percentage.

                  "Subordinated  Debt" means  indebtedness  (a) under the Senior
Subordinated Notes, including any refinancing thereof on terms and provisions no
less  favorable  than  currently  existing  thereunder  and with a maturity date
occurring  after the  Maturity  Date  hereunder  and (b) that may be  created in
accordance  with this  Agreement and that is  subordinated  to the  Indebtedness
created under this  Agreement in a manner and  containing  terms and  provisions
reasonably satisfactory to the Administrative Agent.

                  "subsidiary"  means, with respect to any Person (the "parent")
at  any  date,  any  corporation,   limited  liability   company,   partnership,
association  or other  entity the accounts of which would be  consolidated  with
those of the parent in the parent's  consolidated  financial  statements if such
financial  statements  were prepared in accordance with GAAP as of such date, as
well  as  any  other  corporation,   limited  liability  company,   partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date,  otherwise  Controlled,  by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.

                  "Subsidiary" means any subsidiary of the Borrower.

                  "Tax Allocation Agreement" means the Tax Allocation Agreement,
effective  October 1, 1981,  between and among  International and certain of its
subsidiaries, as amended, supplemented or otherwise modified from time to time.

                  "Taxes"  means any and all  present or future  taxes,  levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.

                  "Three-Month  Secondary  CD  Rate"  means,  for any  day,  the
secondary market rate for three-month  certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information  telephone line of the
Federal Reserve Bank of New York (which rate will,  under the current  practices
of the Board,  be published in Federal  Reserve  Statistical  Release  H.15(519)
during the week  following such day) or, if such rate is not so reported on such
day or such next  preceding  Business Day, the average of the  secondary  market
quotations for  three-month  certificates of deposit of major money center banks
in New York City received at  approximately  10:00 a.m.,  New York City time, on
such day (or, if such day is not a Business Day, on the next preceding  Business
Day) by the  Administrative  Agent from three negotiable  certificate of deposit
dealers of recognized standing selected by it.

                  "(Three-Month  Total)"  means,  when used with  respect to any
type of Receivables  (or portions  thereof) at the end of any month,  the sum of
the aggregate Unpaid Balances of such type of Receivables (or portions  thereof)
at the end of such month and at the end of each of the immediately preceding two
months.

                  "Transactions"  means the execution,  delivery and performance
by the Borrower of this Agreement,  the borrowing of Revolving Loans, the use of
the proceeds  thereof and the execution,  delivery and performance by the Parent
and International of the Parents' Side Agreement.

                  "TRIP" means Truck Retail Instalment Paper Corp.,  a  Delaware
corporation, and its successors.

                  "Type",  when  used  in  reference  to any  Revolving  Loan or
Borrowing,  refers to whether the rate of interest on such Revolving Loan, or on
the Revolving Loans comprising such Borrowing, is determined by reference to the
Adjusted LIBO Rate or the Alternate Base Rate.

                  "Unpaid  Balance"  means at any time (a) with  respect  to any
Serviced  Retail Note,  the unpaid  amount  thereof at such time,  including all
finance  income,  whether or not earned,  and other amounts due or to become due
thereunder,   except  interest   payments  not  already  included  in  scheduled
installments,  late payment  charges,  delinquency  charges,  extension fees and
collection fees, (b) with respect to any Serviced Wholesale Note (or installment
thereof),  the unpaid principal amount thereof at such time and (c) with respect
to any Serviced Retail Account, the net balance of such Account at such time.

                  "Warehousing   Collateral"   means  the  collateral   securing
Warehousing Debt, including,  without limitation,  any spread account or reserve
required to be established under the Revolving Retail Facility  Documents or any
other relevant securitization documents.

                  "Warehousing  Debt" means as of any date  Indebtedness  of (a)
TRIP owing to holders of the  Revolving  Retail Notes or (b) the Borrower or any
of its Subsidiaries, in each case with respect to which (i) neither the Borrower
nor any of its Subsidiaries  (other than TRIP, in the case of clause (a), or the
Borrower  or such  Subsidiary,  in the case of  clause  (b)) has any  liability,
absolute or contingent,  direct or indirect,  provided that, for purposes of the
foregoing,  neither the Borrower nor any of its Subsidiaries  shall be deemed to
have any liability with respect to any such  Indebtedness  solely as a result of
any Customary Securitization  Undertaking of the Borrower or such Subsidiary, as
the case may be, and (ii) recourse for payment  thereof is expressly  limited to
the Warehousing Collateral.

                  "Wholesale  Notes" means, as the context may require,  (a) all
assets  of the  types  classified  under the  heading  "Wholesale  notes" in the
statement  of  consolidated   financial   condition  of  the  Borrower  and  its
consolidated  Subsidiaries as of October 31, 1999 and the related  statements of
consolidated  income and retained  earnings and  consolidated  cash flow for the
fiscal year then ended,  together with the notes  thereto,  included in the 1999
Annual Report and reported on by Deloitte & Touche or (b) the  aggregate  Unpaid
Balances thereof.

                  "Wisconsin Steel Arrangements" means any benefits, payments or
other  arrangements  maintained  solely for employees or former employees of the
former Wisconsin Steel Division of International or any successor thereto.

                  "Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.

                  SECTION 1.02.    Classification   of   Revolving   Loans   and
Borrowings. For purposes of this Agreement, Revolving Loans  may  be  classified
and referred to by Type (e.g., a "Eurodollar Revolving Loan"), as may Borrowings
(e.g., a "Eurodollar Borrowing").


                  SECTION 1.03. Terms Generally. The definitions of terms herein
shall  apply  equally to the  singular  and plural  forms of the terms  defined.
Whenever the context may require,  any pronoun shall  include the  corresponding
masculine,  feminine  and neuter  forms.  The words  "include",  "includes"  and
"including"  shall be deemed to be followed by the phrase "without  limitation".
The word "will"  shall be  construed  to have the same meaning and effect as the
word "shall".  Unless the context  requires  otherwise (a) any  definition of or
reference  to any  agreement,  instrument  or  other  document  herein  shall be
construed as referring to such  agreement,  instrument or other document as from
time to  time  amended,  supplemented  or  otherwise  modified  (subject  to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any  reference  herein to any Person  shall be  construed  to  include  such
Person's  successors  and  assigns,   (c)  the  words  "herein",   "hereof"  and
"hereunder",  and words of similar  import,  shall be construed to refer to this
Agreement in its entirety and not to any particular  provision  hereof,  (d) all
references  herein  to  Articles,  Sections,  Exhibits  and  Schedules  shall be
construed to refer to Articles and Sections of, and Exhibits and  Schedules  to,
this  Agreement and (e) the words "asset" and  "property"  shall be construed to
have the same  meaning  and  effect  and to  refer to any and all  tangible  and
intangible  assets and  properties,  including  cash,  securities,  accounts and
contract rights.

                  SECTION  1.04.  Accounting  Terms;  GAAP.  Except as otherwise
expressly  provided herein, all terms of an accounting or financial nature shall
be construed in accordance  with GAAP, as in effect from time to time;  provided
that,  if the  Borrower  notifies the  Administrative  Agent that it requests an
amendment  to any  provision  hereof  to  eliminate  the  effect  of any  change
occurring  after  the  date  hereof  in or in  the  application  thereof  on the
operation  of  such  provision  (or if the  Administrative  Agent  notifies  the
Borrower that the Required  Lenders request an amendment to any provision hereof
for such  purpose),  regardless  of whether any such  notice is given  before or
after such change in GAAP, or in the  application  thereof,  then such provision
shall be interpreted  on the basis of GAAP as in effect and applied  immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.

                  SECTION 1.05. Interpretation.  References in this Agreement to
the term "sale" with respect to any transfer of  Receivables,  rights to receive
income  therefrom  or  undivided  interests  therein  are deemed to include  any
transfer which purports to be a sale on the face of the agreement governing such
transfer, without regard to whether such transfer would constitute a "true sale"
under  applicable  legal  principles.  The terms  "sell" and "sold",  as used as
described in the foregoing sentence, shall have correlative meanings.

                                   ARTICLE II
                               The Credit FACILITY

                  SECTION 2.01. Commitments. Subject to the terms and conditions
set forth  herein,  each Lender agrees to make  Revolving  Loans to the Borrower
from time to time during the Availability  Period so long as after giving effect
thereto (a) the Available  Commitment of each Lender is greater than or equal to
zero and (b) the aggregate  Revolving  Credit  Exposures of all the Lenders does
not exceed the aggregate Commitments. Within the foregoing limits and subject to
the terms and conditions set forth herein,  the Borrower may borrow,  prepay and
reborrow Revolving Loans.

                  SECTION  2.02.  Revolving  Loans  and  Borrowings.   (a)  Each
Revolving  Loan shall be made as part of a  Borrowing  consisting  of  Revolving
Loans  made  by  the  Lenders  ratably  in  accordance  with  their   Commitment
Percentages. The failure of any Lender to make any Revolving Loan required to be
made by it shall not  relieve  any other  Lender of its  obligations  hereunder;
provided that the  Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Revolving Loans as required.

                  (b) Subject to Section 3.08, each Borrowing shall be comprised
entirely of ABR Revolving  Loans or Eurodollar  Revolving  Loans as the Borrower
may  request  in  accordance  herewith.  Each  Lender at its option may make any
Eurodollar Revolving Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Revolving  Loan;  provided that any exercise of such
option shall not affect the  obligation of the Borrower to repay such  Revolving
Loan in accordance with the terms of this Agreement.

                  (c) At the  commencement  of  each  Interest  Period  for  any
Eurodollar Borrowing,  such Borrowing shall be in an aggregate amount that is an
integral  multiple of $1,000,000 and not less than $5,000,000.  At the time that
each ABR Borrowing is made, such Borrowing shall be in an aggregate  amount that
is an integral  multiple of $1,000,000  and not less than  $5,000,000;  provided
that an ABR Borrowing may be in an aggregate  amount that is equal to the entire
unused balance of the total Commitments. Borrowings of more than one Type may be
outstanding at the same time;  provided that there shall not at any time be more
than a total of ten Eurodollar Borrowings outstanding.

                  (d) Notwithstanding any other provision of this Agreement, the
Borrower  shall not be entitled to request,  or to elect to convert or continue,
any Borrowing if the Interest  Period  requested with respect  thereto would end
after the Maturity Date.

                  SECTION 2.03. Requests for Borrowings. To request a Borrowing,
the Borrower shall notify the Administrative  Agent of such request by telephone
(a) in the case of a Eurodollar  Borrowing,  not later than 11:00 a.m., New York
City time, three Business Days before the date of the proposed  Borrowing or (b)
in the case of an ABR Borrowing,  not later than 11:00 a.m., New York City time,
on the date of the proposed  Borrowing.  Each such telephonic  Borrowing Request
shall be irrevocable  (except in the  circumstance  where  increased  costs will
result  or where it is  illegal  to make a  Eurodollar  Borrowing)  and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of a
written  Borrowing  Request in a form approved by the  Administrative  Agent and
signed by the Borrower. Each such telephonic and written Borrowing Request shall
specify the following information in compliance with Section 2.02:

                    (i) the aggregate amount of the requested Borrowing;

                    (ii) the date of such  Borrowing,  which shall be a Business
               Day;

                    (iii) whether such  Borrowing is to be an ABR Borrowing or a
               Eurodollar Borrowing;

                    (iv) in the  case of a  Eurodollar  Borrowing,  the  initial
               Interest Period to be applicable thereto, which shall be a period
               contemplated by the definition of the term "Interest Period"; and

                    (v) the  location  and number of the  Borrower's  account to
               which  funds are to be  disbursed,  which  shall  comply with the
               requirements of Section 3.01.

If no election as to the Type of  Borrowing  is  specified,  then the  requested
Borrowing  shall be an ABR  Borrowing.  If no Interest  Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration.  Promptly following
receipt  of  a  Borrowing   Request  in  accordance   with  this  Section,   the
Administrative  Agent shall advise each Lender of the details thereof and of the
amount  of such  Lender's  Revolving  Loan  to be made as part of the  requested
Borrowing.

                                  ARTICLE III

                       terms applicable to credit facility

SECTION 3.01.  Funding of Borrowings.  (a) Each Lender shall make each Revolving
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the  Administrative  Agent most  recently  designated  by it for such purpose by
notice to the Lenders.  The Administrative  Agent will make such Revolving Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to the Borrower's account maintained with the Administrative Agent in New
York City and designated by the Borrower in the applicable Borrowing Request.

(b) Unless the  Administrative  Agent shall have  received  notice from a Lender
prior to the  proposed  time of any  Borrowing  that such  Lender  will not make
available to the Administrative Agent such Lender's share of such Borrowing, the
Administrative  Agent may assume that such Lender has made such share  available
on such date in  accordance  with  paragraph  (a) of this  Section  and may,  in
reliance upon such  assumption,  make available to the Borrower a  corresponding
amount.  In such  event,  if a  Lender  has not in fact  made  its  share of the
applicable Borrowing available to the Administrative  Agent, then the applicable
Lender  and the  Borrower  severally  agree to pay to the  Administrative  Agent
forthwith on demand such  corresponding  amount with interest thereon,  for each
day from and including the date such amount is made available to the Borrower to
but excluding  the date of payment to the  Administrative  Agent,  at (i) in the
case of such Lender, the Federal Funds Effective Rate or (ii) in the case of the
Borrower,  the interest rate  applicable to ABR Revolving  Loans. If such Lender
pays such amount to the Administrative  Agent, then such amount shall constitute
such Lender's Revolving Loan included in such Borrowing.

SECTION 3.02. Interest  Elections.  (a) Each Borrowing initially shall be of the
Type  specified  in the  applicable  Borrowing  Request  and,  in the  case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing  Request.  Thereafter,  the  Borrower  may elect to convert any of its
Borrowings to a different Type or to continue any of such Borrowings and, in the
case of a Eurodollar  Borrowing,  may elect Interest  Periods  therefor,  all as
provided in this Section.  The Borrower may elect different options with respect
to different portions of its respective affected Borrowings,  in which case each
such portion shall be allocated  ratably among the Lenders holding the Revolving
Loans  comprising such Borrowing,  and the Revolving Loans  comprising each such
portion shall be considered a separate Borrowing.

(b) To make an election pursuant to this Section,  the Borrower shall notify the
Administrative  Agent of such election by telephone by the time that a Borrowing
Request would be required  under Section 2.03 if the Borrower were  requesting a
Borrowing of the Type  resulting  from such election to be made on the effective
date of such election.  Each such telephonic  Interest Election Request shall be
irrevocable  (except in the  circumstance  where  increased costs will result or
where it is illegal to make the proposed conversion or continuance) and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of a
written Interest Election Request in a form approved by the Administrative Agent
and signed by the Borrower.

(c) Each  telephonic  and written  Interest  Election  Request shall specify the
following information in compliance with Section 2.02:

     (i) the Borrowing to which such Interest  Election  Request applies and, if
     different  options are being  elected with  respect to  different  portions
     thereof,  the portions thereof to be allocated to each resulting  Borrowing
     (in which case the  information  to be specified  pursuant to clauses (iii)
     and (iv) below shall be specified for each resulting Borrowing);

     (ii) the  effective  date of the election  made  pursuant to such  Interest
     Election Request, which shall be a Business Day;

     (iii)  whether  the  resulting  Borrowing  is to be an ABR  Borrowing  or a
     Eurodollar Borrowing; and

     (iv) if the  resulting  Borrowing is a Eurodollar  Borrowing,  the Interest
     Period to be applicable thereto after giving effect to such election, which
     shall be a period  contemplated  by the  definition  of the term  "Interest
     Period".

If any such Interest  Election Request requests a Eurodollar  Borrowing but does
not  specify  an  Interest  Period,  then the  Borrower  shall be deemed to have
selected an Interest Period of one month's duration.

(d)  Promptly   following  receipt  of  an  Interest   Election   Request,   the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.

(e) If the Borrower  fails to deliver a timely  Interest  Election  Request with
respect  to a  Eurodollar  Borrowing  prior  to the end of the  Interest  Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such  Interest  Period such  Borrowing  shall be  converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the  Administrative  Agent, at the request of
the Required  Lenders,  so notifies the  Borrower,  then, so long as an Event of
Default is  continuing  (i) no  outstanding  Borrowing  may be  converted  to or
continued as a Eurodollar  Borrowing  and (ii) unless  repaid,  each  Eurodollar
Borrowing  shall be  converted  to an ABR  Borrowing  at the end of the Interest
Period applicable thereto.

SECTION 3.03.     Termination and Reduction of Commitments.

(a)  Unless  previously  terminated,  the  Commitments  shall  terminate  on the
Maturity Date.

(b) The Borrower  may at any time  terminate,  or from time to time reduce,  the
Commitments;  provided that (i) each reduction of the Commitments shall be in an
amount that is an integral  multiple of $1,000,000 and not less than  $5,000,000
and (ii) the Borrower  shall not terminate or reduce the  Commitments  if, after
giving effect to any concurrent  prepayment of the Revolving Loans in accordance
with Section  3.05,  the  Available  Commitment of any Lender would be less than
zero.

(c) Upon the receipt by the  Borrower  of  proceeds  of any  issuance or sale of
senior unsecured Indebtedness by the Borrower pursuant to a private placement or
a public offering or sale pursuant to Rule 144A (other than in connection with a
Qualified Securitization Transaction),  to the extent of such net cash proceeds,
the  Commitments  shall be  reduced  in an amount  equal to 100% of the net cash
proceeds  received by the Borrower and any Revolving  Loans  outstanding at such
time shall be prepaid in accordance with Section 3.05.

(d) The  Borrower  shall  notify the  Administrative  Agent of any  election  to
terminate or reduce the Commitments under paragraph (b) of this Section at least
three  Business  Days  prior  to the  effective  date  of  such  termination  or
reduction,  specifying  such election and the effective  date thereof.  Promptly
following  receipt of any notice,  the  Administrative  Agent  shall  advise the
Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant
to this Section shall be  irrevocable;  provided that a notice of termination of
the  Commitments  delivered  by the  Borrower  may  state  that  such  notice is
conditioned  upon the  effectiveness of other credit  facilities,  in which case
such  notice  may be revoked by the  Borrower  (by notice to the  Administrative
Agent on or prior to the  specified  effective  date) if such  condition  is not
satisfied. Any termination or reduction of the Commitments shall be permanent.

SECTION 3.04.     Repayment of Revolving Loans; Evidence of Debt.

(a) The Borrower hereby  unconditionally  promises to pay to the  Administrative
Agent for the account of each Lender,  the then unpaid  principal amount of each
Revolving Loan on the Maturity Date.

(b) Each Lender shall maintain in accordance  with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Revolving Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

(c) The  Administrative  Agent shall maintain  accounts in which it shall record

     (i) the amount of each Revolving Loan made hereunder,  the Type thereof and
     the Interest Period applicable thereto, (ii) the amount of any principal or
     interest  due and payable or to become due and payable from the Borrower to
     each  Lender  hereunder  and (iii) the  amount of any sum  received  by the
     Administrative  Agent  hereunder  for the  account of the  Lenders and each
     Lender's share thereof.

(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c)
of this Section  shall be prima facie  evidence of the  existence and amounts of
the obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Revolving Loans in
accordance with the terms of this Agreement.

(e) Any Lender may request  that  Revolving  Loans made by it be  evidenced by a
promissory note (a "Note").  In such event, the Borrower shall prepare,  execute
and  deliver to such  Lender a Note  payable to the order of such Lender (or, if
requested by such Lender,  to such Lender and its  registered  assigns) and in a
form approved by the  Administrative  Agent.  Thereafter,  the  Revolving  Loans
evidenced by such Note and interest  thereon shall at all times (including after
assignment  pursuant to Section  10.04) be  represented  by one or more Notes in
such form payable to the order of the payee named therein (or, if such Note is a
registered Note, to such payee and its registered assigns).

SECTION 3.05.     Prepayment of Revolving Loans.

(a) The  Borrower  shall  have the  right  at any time and from  time to time to
prepay any Borrowing in whole or in part,  subject to prior notice in accordance
with paragraph (b) of this Section.

(b) The Borrower shall notify the Administrative  Agent by telephone  (confirmed
by telecopy) of any  prepayment  hereunder  (i) in the case of  prepayment  of a
Eurodollar  Borrowing,  not later than  11:00  a.m.,  New York City time,  three
Business Days before the date of prepayment or (ii) in the case of prepayment of
an ABR  Borrowing,  not later than 11:00 a.m.,  New York City time, one Business
Day before the date of  prepayment.  Each such notice shall be  irrevocable  and
shall specify the prepayment date and the principal  amount of each Borrowing or
portion thereof to be prepaid; provided that, if a notice of prepayment is given
in connection  with a conditional  notice of termination  of the  Commitments as
contemplated  by Section 3.03,  then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 3.03.  Promptly
following receipt of any such notice relating to a Borrowing, the Administrative
Agent shall advise the Lenders of the contents thereof.  Each partial prepayment
of any Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02. Prepayments
shall be accompanied by accrued  interest to the extent required by Section 3.07
and any amounts payable under Section 3.10 in connection with such prepayment.

SECTION 3.06. Fees. (a) The Borrower agrees to pay to the Administrative Agent a
facility  fee  for the  account  of  each  Lender,  which  shall  accrue  at the
Applicable  Rate on the daily amount of the  Commitment of such Lender  (whether
used or unused)  during the period from and including the Effective  Date to but
excluding the date on which such Commitment  terminates;  provided that, if such
Lender  continues to have any Revolving  Credit  Exposure  after its  Commitment
terminates,  then such facility fee shall continue to accrue on the daily amount
of such Lender's  Revolving Credit Exposure from and including the date on which
its Commitment  terminates to but excluding the date on which such Lender ceases
to have any Revolving Credit Exposure. Accrued facility fees shall be payable in
arrears on the last day of March, June,  September and December of each year and
on the date on which the  Commitments  terminate,  commencing  on the first such
date to occur after the date hereof;  provided  that any facility  fees accruing
after the date on which the  Commitments  terminate  shall be payable on demand.
All facility fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual  number of days elapsed  (including  the first day but
excluding the last day).

(b) The Borrower  agrees to pay to the  Administrative  Agent for the account of
each  Lender a  utilization  fee for each Excess  Utilization  Day at a rate per
annum of 1.00% on the outstanding  Revolving Loans of such Lender on such Excess
Utilization  Day during the period for which payment is made.  Such  utilization
fees shall be payable quarterly in arrears on the last day of each March,  June,
September  and  December  and on the date on which  the  Commitments  terminate,
commencing on the first such date to occur after the date hereof;  provided that
any utilization fees accruing after the date on which the Commitments  terminate
shall be payable on demand.

(c) The Borrower agrees to pay to the Administrative Agent, for its own account,
fees payable in the amounts and at the times separately  agreed upon between the
Borrower and the Administrative Agent.

(d) All fees payable  hereunder  shall be paid on the dates due, in  immediately
available funds, to the  Administrative  Agent for distribution,  in the case of
facility fees and  participation  fees,  to the Lenders.  Fees paid shall not be
refundable under any circumstances.

SECTION 3.07.     Interest.

                    (a) The Revolving Loans  comprising each ABR Borrowing shall
bear  interest  at a rate per annum  equal to the  Alternate  Base Rate plus the
Applicable Rate.

                    (b) The Revolving Loans comprising each Eurodollar Borrowing
shall bear  interest at a rate per annum equal to the Adjusted LIBO Rate for the
Interest Period in effect for such Borrowing plus the Applicable Rate.

                    (c)  Notwithstanding  the foregoing,  if any principal of or
interest  on any  Revolving  Loan  or any fee or  other  amount  payable  by the
Borrower  hereunder  is not paid when due,  whether  at  stated  maturity,  upon
acceleration  or otherwise,  such overdue amount shall bear  interest,  after as
well as before judgment, at a rate per annum equal to (i) in the case of overdue
principal of any Revolving  Loan, 2% plus the rate otherwise  applicable to such
Revolving  Loan as provided  above or (ii) in the case of any other  amount,  2%
plus the rate applicable to ABR Revolving Loans as provided above.

                    (d) Accrued interest on each Revolving Loan shall be payable
in arrears on each Interest Payment Date for such Revolving Loan;  provided that
(i) interest  accrued pursuant to paragraph (c) of this Section shall be payable
on demand,  (ii) in the event of any  repayment or  prepayment  of any Revolving
Loan (other than a prepayment of an ABR  Revolving  Loan prior to the end of the
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment, (iii) in the event
of any  conversion  of any  Eurodollar  Revolving  Loan  prior to the end of the
current Interest Period therefor,  accrued interest on such Revolving Loan shall
be  payable  on the  effective  date of such  conversion  and (iv)  all  accrued
interest shall be payable upon termination of the Commitments.

                    (e) All interest hereunder shall be computed on the basis of
a year of 360 days,  except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual  number of days elapsed  (including
the first day but excluding the last day). The  applicable  Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.

SECTION 3.08.  Alternate Rate of Interest.  If prior to the  commencement of any
Interest Period for a Eurodollar Borrowing:

(a) the Administrative Agent determines (which determination shall be conclusive
absent  manifest  error) that  adequate  and  reasonable  means do not exist for
ascertaining  the Adjusted LIBO Rate or the LIBO Rate, as  applicable,  for such
Interest Period; or

(b) the  Administrative  Agent  is  advised  by the  Required  Lenders  that the
Adjusted LIBO Rate or the LIBO Rate,  as  applicable,  for such Interest  Period
will not  adequately  and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining  their Revolving Loans (or its Revolving Loan) included in
such Borrowing for such Interest  Period;  then the  Administrative  Agent shall
give notice  thereof to the Borrower and the Lenders by telephone or telecopy as
promptly as practicable  thereafter and, until the Administrative Agent notifies
the Borrower and the Lenders that the  circumstances  giving rise to such notice
no longer exist, (i) any Interest  Election Request that requests the conversion
of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing
shall be  revoked  and  (ii) if any  Borrowing  Request  requests  a  Eurodollar
Borrowing,  such Borrowing  shall be made as an ABR Borrowing;  provided that if
the circumstances giving rise to such notice affect only one Type of Borrowings,
then the other Type of Borrowings shall be permitted.

SECTION 3.09.     Increased Costs.  (a)  If any Change in Law shall:
---------------------------------

          (i) subject any Lender to any tax of any kind  whatsoever  (other than
          taxes to which the Lender is subject  to as of the date  hereof)  with
          respect to this Agreement or Eurodollar  Revolving  Loans made by such
          Lender,  or change the basis of taxation of payments to such Lender in
          respect thereto (except for Non-Excluded Taxes and changes in the rate
          of tax on the overall net income of such Lender);

          (ii) impose, modify or deem applicable any reserve, special deposit or
          similar  requirement  against  assets  of,  deposits  with  or for the
          account of, or credit extended by, any Lender (except any such reserve
          requirement reflected in the Adjusted LIBO Rate); or

          (iii)  impose on any Lender or the London  interbank  market any other
          condition;

and the result of any of the  foregoing  shall be to  increase  the cost to such
Lender of making or maintaining any Eurodollar Revolving Loan (or of maintaining
its obligation to make any such  Revolving  Loan) or to reduce the amount of any
sum  received or  receivable  by such Lender  hereunder  (whether of  principal,
interest  or  otherwise),  then  the  Borrower  will  pay to  such  Lender  such
additional  amount or amounts as will compensate such Lender for such additional
costs incurred or reduction suffered.

(b)  If  any  Lender  determines  that  any  Change  in  Law  regarding  capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company,  if any, as
a consequence of this Agreement or the Revolving  Loans made by such Lender to a
level below that which such Lender or such Lender's  holding  company could have
achieved but for such Change in Law (taking  into  consideration  such  Lender's
policies  and the  policies of such  Lender's  holding  company  with respect to
capital  adequacy),  then from time to time the Borrower will pay to such Lender
such  additional  amount  or  amounts  as will  compensate  such  Lender or such
Lender's holding company for any such reduction suffered.

(c) A certificate of a Lender  setting forth the amount or amounts  necessary to
compensate  such Lender or its holding  company as specified in paragraph (a) or
(b) of this Section  shall be delivered to the Borrower and shall be  conclusive
absent  manifest  error.  The Borrower shall pay such Lender the amount shown as
due on any such certificate within 10 days after receipt thereof.

(d) Failure or delay on the part of any Lender to demand  compensation  pursuant
to this Section shall not  constitute a waiver of such Lender's  right to demand
such  compensation;  provided  that  the  Borrower  shall  not  be  required  to
compensate  a  Lender  pursuant  to this  Section  for any  increased  costs  or
reductions  incurred  more than six  months  prior to the date that such  Lender
notifies the Borrower of the Change in Law giving rise to such  increased  costs
or reductions  and of such Lender's  intention to claim  compensation  therefor;
provided  further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive,  then the six-month period referred to above shall
be extended to include the period of retroactive effect thereof.

SECTION  3.10.  Break Funding  Payments.  In the event of (a) the payment of any
principal  of any  Eurodollar  Revolving  Loan  other than on the last day of an
Interest  Period  applicable  thereto  (including  as a  result  of an  Event of
Default),  (b) the conversion of any Eurodollar Revolving Loan other than on the
last day of the Interest Period applicable  thereto,  (c) the failure to borrow,
convert,  continue or prepay any  Revolving  Loan on the date  specified  in any
notice delivered pursuant hereto (regardless of whether such notice is permitted
to be revocable  under Section 2.03,  3.02(b) and is revoked in accordance  with
Section  3.08(b) or is permitted to be revocable  under  Section  3.05(b) and is
revoked  in  accordance  therewith)  or (d)  the  assignment  of any  Eurodollar
Revolving  Loan other  than on the last day of the  Interest  Period  applicable
thereto as a result of a request by the Borrower pursuant to Section 3.13, then,
in any such  event,  the  Borrower  in  respect  of such  Revolving  Loan  shall
compensate  each  Lender for the loss,  cost and  expense  attributable  to such
event.  In the case of a  Eurodollar  Revolving  Loan,  the  loss to any  Lender
attributable  to any such event shall be deemed to include an amount  determined
by such Lender to be equal to the excess,  if any, of (i) the amount of interest
that such Lender would pay for a deposit equal to the  principal  amount of such
Revolving Loan for the period from the date of such payment, conversion, failure
or  assignment  to the last day of the then  current  Interest  Period  for such
Revolving Loan (or, in the case of a failure to borrow, convert or continue, the
duration of the Interest  Period that would have resulted  from such  borrowing,
conversion  or  continuation)  if the interest rate payable on such deposit were
equal to the Adjusted LIBO Rate for such Interest  Period,  over (ii) the amount
of interest that such Lender would earn on such principal amount for such period
if such  Lender  were to invest  such  principal  amount for such  period at the
interest  rate that would be bid by such Lender (or an affiliate of such Lender)
for  dollar  deposits  from  other  banks  in  the  eurodollar   market  at  the
commencement  of such period.  A  certificate  of any Lender  setting  forth any
amount or amounts  that such  Lender is  entitled  to receive  pursuant  to this
Section  shall be  delivered  to the  Borrower  and shall be  conclusive  absent
manifest  error.  The Borrower  shall pay such Lender the amount shown as due on
any such certificate within 10 Business Days after receipt thereof.

SECTION 3.11.  Taxes.  (a) Any and all payments made by the Borrower  under this
Agreement shall be made free and clear of, and without  deduction or withholding
for or on  account  of,  any  present or future  income,  stamp or other  taxes,
levies,  imposts,  duties,  charges,  fees,  deductions or withholdings,  now or
hereafter imposed, levied,  collected,  withheld or assessed by any Governmental
Authority,  excluding net income taxes and franchise  taxes  (imposed in lieu of
net income taxes) imposed on the Administrative  Agent or any Lender as a result
of a present  or former  connection  between  the  Administrative  Agent or such
Lender and the jurisdiction of the Governmental  Authority  imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such  connection  arising  solely from the  Administrative  Agent or such Lender
having  executed,  delivered or performed its  obligations or received a payment
under, or enforced,  this Agreement).  If any such non-excluded  taxes,  levies,
imposts,  duties,  charges,  fees,  deductions  or  withholdings  ("Non-Excluded
Taxes") or Other Taxes are required to be withheld or deducted  from any amounts
payable to the  Administrative  Agent or any Lender  hereunder,  the  amounts so
payable to the  Administrative  Agent or such Lender  shall be  increased to the
extent  necessary  to yield to the  Administrative  Agent or such Lender  (after
payment of all such  Non-Excluded  Taxes and Other  Taxes)  interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement;  provided,  however, that no such additional amounts shall be payable
in respect of any taxes  imposed  by reason of the  Administrative  Agent or any
Lender's  failure to comply with Section  3.11(c),  in excess of the  additional
amounts that would have been payable had the Administrative  Agent or any Lender
complied with such Section.  Whenever any such Non-Excluded Taxes or Other Taxes
are  payable  by  the  Borrower,  thereafter  the  Borrower  shall  send  to the
Administrative  Agent for its own account or for the account of such Lender,  as
the case may be, the original  official  report,  or a certified  copy  thereof,
received by the Borrower showing payment  thereof.  If the Borrower fails to pay
any such  Non-Excluded  Taxes or Other Taxes when due to the appropriate  taxing
authority or fails to remit to the Administrative Agent the required receipts or
other  required   documentary   evidence,   the  Borrower  shall  indemnify  the
Administrative  Agent and each  Lender for any  incremental  taxes,  interest or
penalties that may become payable by the Administrative  Agent or such Lender as
a result of any such failure.

(b) In  addition,  the  Borrower  shall  pay any  Other  Taxes  to the  relevant
Governmental Authority in accordance with applicable law.

(c) Any Foreign  Lender that is entitled to an  exemption  from or  reduction of
withholding  tax under the law of the  jurisdiction  in which  the  Borrower  is
located,  or any treaty to which such  jurisdiction is a party,  with respect to
payments under this Agreement  shall deliver to the Borrower (with a copy to the
Administrative  Agent),  at the time or times  prescribed by  applicable  law or
reasonably  requested by the  Borrower,  such  properly  completed  and executed
documentation  prescribed by  applicable  law as will permit such payments to be
made without withholding or at a reduced rate.

(d) If any Lender  receives a refund in  respect  of any  Non-Excluded  Taxes or
Other Taxes paid by the Borrower,  (a "Tax Refund"),  which in the sole judgment
of such Lender is  allocable  to such  payment,  it shall  promptly pay such Tax
Refund to the Borrower net of all out-of-pocket expenses of such Lender incurred
in obtaining such Tax Refund;  provided,  however,  that the Borrower  agrees to
promptly  return such Tax Refund to the applicable  Lender if it receives notice
from the  applicable  Lender  that such  Lender is  required  to repay  such Tax
Refund.

SECTION 3.12. Payments Generally;  Pro Rata Treatment;  Sharing of Set-offs. (a)
Each  Borrowing of Revolving  Loans by the Borrower  from the Lenders  hereunder
shall be made pro rata according to the Commitment Percentages of the Lenders in
effect on the date of such  borrowing.  Any reduction of the  Commitments of the
Lenders  shall be  allocated by the  Administrative  Agent among the Lenders pro
rata according to the Commitment Percentages of the Lenders. Each payment by the
Borrower on account of principal of or interest on the Revolving  Loans shall be
allocated  by the  Administrative  Agent pro rata  according  to the  respective
outstanding principal amounts thereof then due and owing to each Lender.

(b) The  Borrower  shall make each  payment  required to be made by it hereunder
(whether of principal, interest or fees, or under Section 3.09, 3.10 or 3.11, or
otherwise)  prior to 12:00  noon,  New York City time,  on the date when due, in
immediately  available  funds,  without  set-off or  counterclaim.  Any  amounts
received   after  such  time  on  any  date  may,  in  the   discretion  of  the
Administrative  Agent,  be deemed to have been  received on the next  succeeding
Business Day for purposes of  calculating  interest  thereon.  All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York,  except that payments  pursuant to Sections 3.09, 3.10, 3.11 and
10.03 shall be made directly to the Persons entitled thereto. The Administrative
Agent shall  distribute any such payments  received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof. If
any payment hereunder shall be due on a day that is not a Business Day, the date
for payment shall be extended to the next  succeeding  Business Day, and, in the
case of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder shall be made in Dollars.

(c) If at any time  insufficient  funds are  received  by and  available  to the
Administrative  Agent to pay fully all amounts of  principal,  interest and fees
then due hereunder,  such funds shall be applied (i) first,  to pay interest and
fees  then  due  hereunder,  ratably  among  the  parties  entitled  thereto  in
accordance  with the amounts of interest and fees then due to such parties,  and
(ii) second,  to pay  principal  then due  hereunder,  ratably among the parties
entitled  thereto in accordance  with the amounts of principal  then due to such
parties.

(d) If any Lender shall,  by exercising any right of set-off or  counterclaim or
otherwise,  obtain  payment in respect of any principal of or interest on any of
its  Revolving  Loans  resulting in such Lender  receiving  payment of a greater
proportion of the aggregate  amount of its Revolving Loans and accrued  interest
thereon  than the  proportion  received  by any other  Lender,  then the  Lender
receiving  such  greater  proportion  shall  purchase  (for cash at face  value)
participations  in the Revolving Loans of other Lenders to the extent  necessary
so that the benefit of all such payments shall be shared by the Lenders  ratably
in accordance with the aggregate  amount of principal of and accrued interest on
their respective  Revolving Loans;  provided that (i) if any such participations
are  purchased  and all or any  portion of the payment  giving  rise  thereto is
recovered,  such  participations  shall  be  rescinded  and the  purchase  price
restored  to the  extent  of such  recovery,  without  interest,  and  (ii)  the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower  pursuant to and in  accordance  with the express  terms of this
Agreement  or  any  payment  obtained  by a  Lender  as  consideration  for  the
assignment of or sale of a  participation  in any of its Revolving  Loans to any
assignee  or  participant,  other  than to the  Borrower  or any  Subsidiary  or
Affiliate  thereof (as to which the provisions of this  paragraph  shall apply).
The  Borrower  consents  to the  foregoing  and  agrees,  to the  extent  it may
effectively  do  so  under   applicable   law,  that  any  Lender   acquiring  a
participation  pursuant to the foregoing  arrangements  may exercise against the
Borrower rights of set-off and counterclaim  with respect to such  participation
as fully as if such Lender were a direct  creditor of the Borrower in the amount
of such participation.

(e) Unless the Administrative Agent shall have received notice from the Borrower
prior  to the  date on  which  any  payment  is due  from  the  Borrower  to the
Administrative  Agent for the account of the Lenders hereunder that the Borrower
will not make  such  payment,  the  Administrative  Agent  may  assume  that the
Borrower has made such payment on such date in  accordance  herewith and may, in
reliance upon such assumption, distribute to the Lenders the amount due. In such
event,  if the  Borrower  has not in fact  made such  payment,  then each of the
Lenders  severally  agrees to repay to the  Administrative  Agent  forthwith  on
demand the amount so distributed to such Lender with interest thereon,  for each
day  from and  including  the  date  such  amount  is  distributed  to it to but
excluding the date of payment to the Administrative  Agent, at the Federal Funds
Effective Rate.

(f) If any  Lender  shall  fail to make any  payment  required  to be made by it
pursuant to Section 3.01(b) or 3.12(d),  then the  Administrative  Agent may, in
its  discretion  (notwithstanding  any  contrary  provision  hereof),  apply any
amounts thereafter received by the Administrative  Agent for the account of such
Lender to satisfy such Lender's  obligations  under such Sections until all such
unsatisfied obligations are fully paid.

SECTION 3.13. Mitigation Obligations;  Replacement of Lenders. (a) If any Lender
requests  compensation under Section 3.09, or if the Borrower is required to pay
any  additional  amount to any  Lender  or any  Governmental  Authority  for the
account of any Lender  pursuant  to Section  3.11,  then such  Lender  shall use
reasonable  efforts to  designate  a  different  lending  office for  funding or
booking its Revolving  Loans  hereunder or to assign its rights and  obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender,  such  designation or assignment  (i) would  eliminate or reduce
amounts  payable  pursuant to Section  3.09 or 3.11,  as the case may be, in the
future  and (ii)  would not  subject  such  Lender to any  unreimbursed  cost or
expense and would not otherwise be  disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

(b) If any Lender requests  compensation  under Section 3.09, or if the Borrower
is  required  to pay any  additional  amount to any  Lender or any  Governmental
Authority  for the  account of any Lender  pursuant to Section  3.11,  or if any
Lender  defaults in its obligation to fund Revolving Loans  hereunder,  then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative  Agent,  require  such  Lender to assign  and  delegate,  without
recourse  (in  accordance  with and  subject to the  restrictions  contained  in
Section 10.04),  all its interests,  rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender,  if a Lender  accepts such  assignment);  provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding  principal of its Revolving Loans,
accrued  interest  thereon,  accrued  fees and all other  amounts  payable to it
hereunder,  from the assignee (to the extent of such  outstanding  principal and
accrued  interest and fees) or the  Borrower (in the case of all other  amounts)
and  (iii)  in the  case of any  such  assignment  resulting  from a  claim  for
compensation  under  Section  3.09 or payments  required to be made  pursuant to
Section 3.11, such assignment will result in a reduction in such compensation or
payments.  A Lender  shall  not be  required  to make any  such  assignment  and
delegation  if,  prior  thereto,  as a result  of a  waiver  by such  Lender  or
otherwise,  the circumstances  entitling the Borrower to require such assignment
and delegation cease to apply.

ARTICLE IV

                         Representations and Warranties

                  The Borrower  represents  and  warrants to the  Administrative
Agent and the Lenders that:

SECTION 4.01. Organization; Powers. The Borrower and each of its Subsidiaries is
duly  organized,  validly  existing  and in good  standing  (to the extent  such
requirement  shall be  applicable)  under  the laws of the  jurisdiction  of its
organization,  has all requisite power and authority to carry on its business as
now conducted  and,  except where the failure to do so,  individually  or in the
aggregate,  could not  reasonably  be expected  to result in a Material  Adverse
Effect,  is  qualified  to do business  in, and is in good  standing  in,  every
jurisdiction where such qualification is required.

SECTION  4.02.  Authorization;   Enforceability.  (a)  The  Transactions  to  be
consummated  by the Borrower are within its corporate  powers and have been duly
authorized by all necessary corporate and, if required, stockholder action. This
Agreement has been duly executed and delivered by the Borrower and constitutes a
legal, valid and binding  obligation of the Borrower,  enforceable in accordance
with its terms, subject to applicable  bankruptcy,  insolvency,  reorganization,
moratorium or other laws affecting  creditors'  rights  generally and subject to
general  principles of equity,  regardless of whether considered in a proceeding
in equity or at law.

(b) Each of the Master Intercompany  Agreement and the Tax Allocation  Agreement
constitute a legal, valid and binding obligation of the Borrower, enforceable in
accordance  with  its  terms,  subject  to  applicable  bankruptcy,  insolvency,
reorganization,  moratorium or other laws affecting  creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.

SECTION 4.03. Governmental Approvals; No Conflicts.  The Transactions (a) do not
require any consent or approval of,  registration  or filing with,  or any other
action by, any Governmental Authority,  except (i) such as have been obtained or
made and are in full  force  and  effect,  (ii)  routine  renewals  of  existing
licenses and permits of the Borrower and its Subsidiaries in the ordinary course
of business  and (iii) such filings as may be required  under  federal and state
securities laws for purposes of disclosure,  (b) will not violate any applicable
law or regulation or the charter,  by-laws or other organizational  documents of
the  Borrower  or any of its  Subsidiaries  or  any  order  of any  Governmental
Authority,  (c) will not  violate  or result in a default  under any  indenture,
agreement  or  other  instrument  binding  upon  the  Borrower  or  any  of  its
Subsidiaries  or its assets,  or give rise to a right  thereunder to require any
payment to be made by the Borrower or any of its Subsidiaries,  and (d) will not
result in the creation or imposition of any Lien on any asset of the Borrower or
any of its Subsidiaries except as provided in Section 6.11.

SECTION  4.04.  Financial  Condition;   No  Material  Adverse  Change.  (a)  The
statements  of  consolidated   financial  condition  of  the  Borrower  and  its
Subsidiaries  as at October 31, 1999 and the related  statements of consolidated
income and  retained  earnings and  consolidated  cash flow for such fiscal year
ended on such  date,  reported  on by  Deloitte  & Touche,  copies of which have
heretofore  been  furnished  to the  Lenders,  present  fairly,  in all material
respects,   the  consolidated  financial  condition  of  the  Borrower  and  its
Subsidiaries as at such date, and the consolidated results of its operations and
cash flow for such fiscal year then ended.

(b) The unaudited statement of consolidated  financial condition of the Borrower
and its Subsidiaries as at July 31, 2000 and the related unaudited statements of
consolidated  income and retained  earnings and  consolidated  cash flow for the
nine-month period ended on such date,  certified by a Financial Officer,  copies
of which have heretofore been furnished to the Lenders,  present fairly,  in all
material respects,  the consolidated financial condition of the Borrower and its
Subsidiaries as at such date, and the consolidated results of its operations and
cash flow for the nine-month period then ended (subject to normal year-end audit
adjustments and the absence of footnotes).

(c) All the  financial  statements  referred  to in clauses  (a) and (b) of this
Section 4.04,  including  the related  schedules  and notes  thereto,  have been
prepared in accordance with GAAP,  applied  consistently  throughout the periods
involved  (except as approved by such accountants or Financial  Officer,  as the
case may be, and as disclosed therein).

(d) The  Borrower and its  Subsidiaries  do not have,  at the date  hereof,  any
material  Guarantee  obligations,  contingent  liabilities  and  liabilities for
taxes,  or any  long-term  leases or unusual  forward or long-term  commitments,
including any interest rate or foreign currency swap or exchange  transaction or
other  obligation  in  respect  of  derivatives  that are not  reflected  in the
financial statements referred to in this Section.

(e) Since  October 31, 1999,  there has been no material  adverse  change in the
business,  assets,  property or  financial  condition  of the  Borrower  and its
Subsidiaries, taken as a whole.

SECTION  4.05.  Litigation.  There are no actions,  suits or  proceedings  by or
before any  arbitrator  or  Governmental  Authority  pending  against or, to the
knowledge of the Borrower,  threatened  against or affecting the Borrower or any
of its  Subsidiaries  (a) which  could  reasonably  be  expected to result in an
adverse  determination  and that, if adversely  determined,  could reasonably be
expected,  individually  or in the  aggregate,  to result in a Material  Adverse
Effect (other than the Disclosed  Matters) or (b) that involve this Agreement or
the Transactions.

SECTION  4.06.  Compliance  with  Laws  and  Agreements.  The  Borrower  and its
Subsidiaries  are in  compliance  with all laws,  regulations  and orders of any
Governmental  Authority  applicable  to it or its property  and all  indentures,
agreements and other instruments  binding upon it or its property,  except where
the failure to do so, individually or in the aggregate,  could not reasonably be
expected to result in a Material Adverse Effect.  No Default has occurred and is
continuing.

SECTION 4.07.  Investment and Holding Company Status. The Borrower is not (a) an
"investment  company"  as  defined  in, or  subject  to  regulation  under,  the
Investment  Company  Act of 1940 or (b) a "holding  company"  as defined  in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.

SECTION  4.08.  Taxes.  The Borrower and its  Subsidiaries  have timely filed or
caused to be filed all Tax returns  and reports  required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it, except
(a) Taxes that are being contested in good faith by appropriate  proceedings and
for which the Borrower or such Subsidiary,  as applicable,  has set aside on its
books adequate  reserves with respect  thereto in accordance with GAAP or (b) to
the extent that the failure to do so could not  reasonably be expected to result
in a Material Adverse Effect.

SECTION 4.09.  ERISA.  No ERISA Event has occurred or is reasonably  expected to
occur  that,  when taken  together  with all other  such ERISA  Events for which
liability  is  reasonably  expected to occur,  could  reasonably  be expected to
result in a Material  Adverse  Effect.  The liability  under the Wisconsin Steel
Arrangements  could not  reasonably be expected to result in a Material  Adverse
Effect.

SECTION 4.10.  Subsidiaries.  As of the Effective Date, Schedule 4.10 sets forth
the name,  jurisdiction  of  incorporation  and capital stock  ownership of each
Subsidiary owned by the Borrower.

SECTION  4.11.  Disclosure.  (a) The Borrower  has  disclosed to the Lenders all
matters known to it that, individually or in the aggregate,  could reasonably be
expected to result in a Material Adverse Effect.

(b) None of the reports, financial statements, certificates or other information
furnished  by or on behalf of the  Borrower to the  Administrative  Agent or any
Lender  in  connection  with the  negotiation  of this  Agreement  or  delivered
hereunder  (as  modified or  supplemented  by other  information  so  furnished)
contains any material  misstatement  of fact or omits to state any material fact
necessary  to make the  statements  therein,  in the light of the  circumstances
under which they were made,  not  misleading;  provided  that,  with  respect to
projected  financial  information,   the  Borrower  represents  only  that  such
information  was  prepared in good faith based upon  assumptions  believed to be
reasonable at the time.

                                   ARTICLE V

                                   Conditions

SECTION 5.01.  Effective  Date. The obligations of the Lenders to make Revolving
Loans hereunder  shall not become  effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 10.02):

(a) The  Administrative  Agent (or its counsel)  shall have  received  from each
party hereto either (i) a counterpart of this Agreement signed on behalf of such
party or (ii) written evidence  satisfactory to the Administrative  Agent (which
may include telecopy  transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement.

(b) The  Administrative  Agent  shall  have  received  an  executed  copy of the
Parents'  Side  Agreement,  duly  executed  and  delivered  by  the  Parent  and
International, which shall be in full force and effect on the Effective Date.

(c) The  Administrative  Agent shall have received a favorable  written  opinion
(addressed to the  Administrative  Agent and the Lenders and dated the Effective
Date) of (i) Kirkland & Ellis, New York counsel for the Borrower,  substantially
in the form of  Exhibit  B-1 and  (ii)  Steven  Covey,  General  Counsel  of the
Borrower,  substantially in the form of Exhibit B-2, covering such other matters
relating  to  the  Borrower,   this  Agreement  or  the   Transactions   as  the
Administrative Agent shall reasonably request.

(d) The Administrative  Agent shall have received a certificate of the Borrower,
dated the Effective  Date, as to (i) the adoption of resolutions  (or equivalent
corporate actions),  of the Board of Directors (or other similar governing body)
of the Borrower authorizing (A) the execution,  delivery and performance of this
Agreement and (B) the borrowings contemplated hereunder, (ii) the incumbency and
true signature of the officers of the Borrower  executing this Agreement and any
Notes issued hereunder and (iii) the certificate of incorporation and by-laws of
the Borrower,  which  certificate  shall be reasonably  satisfactory in form and
substance  to the  Administrative  Agent and its  counsel  and  executed  by the
secretary or any assistant secretary or a legal representative of the Borrower.

(e) The  Administrative  Agent  shall  have  received a  certificate,  dated the
Effective  Date and signed by the  President,  a Vice  President  or a Financial
Officer of the Borrower,  confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 5.02.

(f)  The  Lenders  shall  have  received  (i)  audited  consolidated   financial
statements  of the Borrower for the fiscal year ended  October 31, 1999 and (ii)
unaudited  consolidated  financial  statements of the Borrower for the quarterly
period  ended July 31, 2000,  and such  financial  statements  shall not, in the
reasonable judgment of the Required Lenders, reflect any material adverse change
in the  consolidated  financial  condition of the Borrower,  as reflected in the
financial  statements or projections  contained in the Confidential  Information
Memorandum supplied to the Lenders, dated October 2000.

(g) The  Administrative  Agent,  the Lenders and the Joint Lead Arrangers  shall
have  received  all fees and other  amounts  due and  payable on or prior to the
Effective Date, including,  to the extent invoiced,  reimbursement or payment of
all reasonable  out-of-pocket  expenses required to be reimbursed or paid by the
Borrower hereunder.

(h) The  Administrative  Agent shall have  received  evidence  that the Existing
Credit  Agreement  shall  have been  terminated  on the  Effective  Date and all
obligations thereunder have been satisfied in full.

(i) All  conditions in Article VI of the Five Year  Revolving  Credit  Agreement
shall  have  been  satisfied  (or  waived)  and the Five Year  Revolving  Credit
Agreement shall be in full force and effect.

The  Administrative  Agent  shall  notify the  Borrower  and the  Lenders of the
Effective Date, and such notice shall be conclusive and binding.

SECTION 5.02.  Each  Borrowing  Event.  The  obligation of each Lender to make a
Revolving  Loan on the occasion of any Borrowing is subject to the  satisfaction
(or waiver) of the following conditions:

(a) The  aggregate  Revolving  Credit  Exposures  (as  defined  in the Five Year
Revolving  Credit  Agreement) with respect to the US Borrower (as defined in the
Five Year  Revolving  Credit  Agreement)  of the Lenders  party to the Five Year
Revolving Credit Agreement shall be equal to at least $720,000,000.

(b) The  representations  and  warranties  of the  Borrower  set  forth  in this
Agreement (except for, other than in the case of any Revolving Loans made on the
Effective Date, the representations and warranties set forth in Sections 4.04(e)
and 4.11(a)) shall be true and correct in all material respects on and as of the
date of such Borrowing.

(c) At the time of and  immediately  after giving effect to such  Borrowing,  no
Default shall have occurred and be continuing.

Each Borrowing  shall be deemed to constitute a  representation  and warranty by
the Borrower on the date thereof as to the matters  specified in paragraphs (a),
(b) and (c) of this Section.

                  SECTION 5.03.  Condition Subsequent.  Within 45  days  of  the
Effective Date, the  Borrower  shall  terminate  all existing Liens set forth on
Schedule 7.02.


ARTICLE VI

                              Affirmative Covenants

                  Until the Commitments  have expired or been terminated and the
principal of and interest on each Revolving Loan and all fees payable  hereunder
shall have been paid in full, the Borrower covenants and agrees with the Lenders
that:

SECTION 6.01. Financial  Statements and Other Information.  The Borrower and the
Parent,  as applicable,  will furnish to the  Administrative  Agent,  for prompt
distribution to each Lender:

(a) within 90 days after the end of each  fiscal  year of each of the Parent and
the  Borrower,  its Form 10-K for such  fiscal  year,  which  shall  include its
audited consolidated  statement of financial condition and related statements of
consolidated  income and retained  earnings and consolidated cash flow as of the
end of and for such year,  setting  forth in each case in  comparative  form the
figures for the previous  fiscal  year,  all reported on by Deloitte & Touche or
other independent  public  accountants of recognized  national standing (without
any qualification or exception as to the scope of such audit) to the effect that
such consolidated  financial  statements present fairly in all material respects
the financial  condition  and results of operations  and cash flow of the Parent
and  its  consolidated  Subsidiaries  and  the  Borrower  and  its  consolidated
Subsidiaries,  as the case may be, on a  consolidated  basis in accordance  with
GAAP, consistently applied;

(b) within 45 days after the end of each of the first three  fiscal  quarters of
each fiscal year of each of the Parent and the Borrower,  its Form 10-Q for such
fiscal  quarter,  which shall  include its  consolidated  statement of financial
condition and related  statements of consolidated  income and retained  earnings
and consolidated  cash flow as of the end of and for such fiscal quarter and the
then  elapsed  portion  of the  fiscal  year,  setting  forth  in  each  case in
comparative form the figures for the corresponding  period or periods of (or, in
the case of the statement of financial condition, as of the end of) the previous
fiscal year, all certified by one of its Financial Officers as presenting fairly
in all material  respects the financial  condition and results of operations and
cash flow of the Parent and its  consolidated  Subsidiaries and the Borrower and
its consolidated  Subsidiaries,  as the case may be, on a consolidated  basis in
accordance  with GAAP,  consistently  applied,  subject to normal year-end audit
adjustments and the absence of footnotes;

(c) concurrently  with any delivery of financial  statements under clause (a) or
(b) above, a certificate of a Financial  Officer of the Borrower,  substantially
in the form of Exhibit F (i)  certifying  as to whether a Default  has  occurred
and, if a Default has occurred,  specifying  the details  thereof and any action
taken  or  proposed  to be  taken  with  respect  thereto,  (ii)  setting  forth
reasonably detailed calculations  demonstrating compliance with Sections 7.01(a)
and (b) and (iii)  stating  whether  any change in GAAP,  or in the  application
thereof has occurred since the date of the audited financial statements referred
to in Section 4.04 and, if any such change has occurred,  specifying  the effect
of such change on the financial statements accompanying such certificate;

(d) promptly  following any request therefor,  such other information  regarding
the operations,  business affairs and financial condition of the Borrower or any
of its  Subsidiaries,  or compliance  with the terms of this  Agreement,  as the
Administrative Agent or any Lender may reasonably request; and

(e) (i) within 55 days after the end of the second fiscal quarter of each fiscal
year of the Borrower,  a report containing  statistical and other information in
respect of all Serviced  Wholesale Notes and Serviced Retail Receivables for the
period of two  consecutive  fiscal  quarters then ended and (ii) within 100 days
after the end of the fourth fiscal  quarter of each fiscal year of the Borrower,
a report containing statistical and other information in respect of all Serviced
Wholesale  Notes  and  Serviced  Retail   Receivables  for  the  period  of  two
consecutive  fiscal  quarters then ended and for the fiscal year then ended and,
in the case of the reports delivered pursuant to subclauses (i) and (ii) of this
clause (e),  comparative  information  relating to the corresponding  portion or
portions of the previous  fiscal year,  all  substantially  in the same form and
scope (except for the periods covered) as set forth on Exhibit D hereto.

SECTION  6.02.  Notices of Material  Events.  The  Borrower  will furnish to the
Administrative  Agent,  for prompt  distribution to each Lender,  prompt written
notice of the following:

(a) the occurrence of any Default;

(b) the filing or  commencement  of any action,  suit or proceeding by or before
any arbitrator or Governmental  Authority against or affecting the Borrower, any
Subsidiary  or any  Affiliate  thereof  that,  if  adversely  determined,  could
reasonably be expected to result in a Material Adverse Effect;

(c) the  occurrence  of any ERISA Event that,  alone or together  with any other
ERISA Events that have  occurred,  could  reasonably  be expected to result in a
Material Adverse Effect; and

(d) any other development that results in, or  could  reasonably  be expected to
result in, a Material Adverse Effect.

Each notice  delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or  development  requiring such notice and any action taken
or proposed to be taken with respect thereto.

SECTION 6.03. Existence;  Conduct of Business. The Borrower will, and will cause
each of its  Subsidiaries  to, do or cause to be done all  things  necessary  to
preserve,  renew and keep in full force and effect its legal existence,  and the
rights, licenses,  permits,  privileges and franchises material and necessary to
the conduct of its business;  provided that the foregoing shall not prohibit any
merger, consolidation, liquidation or dissolution permitted under Section 7.03.

SECTION 6.04. Payment of Obligations.  The Borrower will, and will cause each of
its Subsidiaries to, pay its  obligations,  including Tax liabilities,  that, if
not paid, could result in a Material Adverse Effect before the same shall become
delinquent  or in default,  except where (a) the  validity or amount  thereof is
being  contested in good faith by appropriate  proceedings,  (b) the Borrower or
such  Subsidiary  has set  aside on its books  adequate  reserves  with  respect
thereto in  accordance  with GAAP,  and (c) the failure to make payment  pending
such contest could not  reasonably  be expected to result in a Material  Adverse
Effect;  provided,  however,  that  nothing in this Section 6.04 shall impose an
obligation  on the Borrower to cause a  Securitization  Subsidiary  to repay any
Indebtedness or to repay any Indebtedness of any Securitization Subsidiary.

SECTION 6.05. Maintenance of Properties;  Insurance. The Borrower will, and will
cause each of its Subsidiaries  to, (a) keep and maintain all property  material
to the conduct of its business in good  working  order and  condition,  ordinary
wear  and  tear  and  damage  by  casualty  excepted,  and  (b)  maintain,  with
financially sound and reputable insurance  companies,  insurance in such amounts
and against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar locations.

SECTION 6.06. Books and Records;  Inspection Rights. The Borrower will, and will
cause each of its  Subsidiaries  to, keep proper  books of record and account in
which full, true and correct  entries are made of all dealings and  transactions
in relation to its business and  activities.  The Borrower  will, and will cause
each of its  Subsidiaries  to,  permit  any  representatives  designated  by the
Administrative  Agent or any Lender,  upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from its books and records,
and to discuss  its  affairs,  finances  and  condition  with its  officers  and
independent accountants, all at such reasonable times and as often as reasonably
requested.

SECTION 6.07.  Compliance with Laws and Material  Contractual  Obligations.  The
Borrower will, and will cause each of its  Subsidiaries  to, comply with (a) all
laws, rules,  regulations and orders of any Governmental Authority applicable to
it or its  property  and (b)  all  material  obligations  under  any  indenture,
agreement  or  other  instrument  binding  upon  the  Borrower  or  any  of  its
Subsidiaries,  in each case except where (i) the failure to do so,  individually
or in the  aggregate,  could not  reasonably be expected to result in a Material
Adverse  Effect or (ii) the  necessity of  compliance  therewith is contested in
good faith by appropriate proceedings.

SECTION 6.08. Intercompany Agreements.  (a) The Borrower will (i) perform all of
its obligations  under the Master  Intercompany  Agreement unless  International
shall have failed to make any payment  payable by it to the  Borrower  under the
Master Intercompany Agreement or the Tax Allocation Agreement;  (ii) enforce the
Master  Intercompany  Agreement  against  International  in accordance  with its
terms; (iii) not cancel or terminate,  or permit the cancellation or termination
of, the Master  Intercompany  Agreement,  or Article  II, VI, VII or VIII (other
than  paragraph C) thereof if such  cancellation  or  termination  is materially
adverse  to the  Borrower,  and  (iv)  not  agree to any  amendment,  waiver  or
modification of the Master Intercompany Agreement which is materially adverse to
the Borrower; provided that the Master Intercompany agreement may be modified to
modify,  amend or eliminate  Section II.A of the Master  Intercompany  Agreement
insofar as such Section requires International to offer to sell to the Borrower,
or requires  the Borrower to purchase,  "Wholesale  Contracts"  (as such term is
defined in the Master Intercompany Agreement).

(b)  The  Borrower  will  (i)  enforce  the  Tax  Allocation  Agreement  against
International  in accordance  with its terms,  (ii) not agree to any  amendment,
waiver or modification of the Tax Allocation  Agreement which amends or modifies
the provisions of the Amendment to Tax Allocation  Agreement and Acknowledgement
dated as of April 26, 1993 among the Borrower,  International  and TRIP or is in
any manner adverse to the Borrower or to the Borrower and its Subsidiaries taken
as a whole.

(c) The Borrower will (i) enforce each  Intercompany  Loan Agreement against the
Subsidiary of the Borrower that is a party thereto in accordance with its terms;
(ii) cause each of its  Subsidiaries  to pay promptly all accounts  payable from
time to time  owing  by  such  Subsidiary  to the  Borrower  (including  without
limitation  amounts payable from time to time by such Subsidiary to the Borrower
under the Tax Allocation  Agreement);  (iii) not cancel or terminate,  or permit
the cancellation or termination of, any Intercompany  Loan Agreement without the
consent of the Required  Lenders (other than the  cancellation or termination of
any Intercompany Loan Agreement  resulting from the termination of the Qualified
Securitization Transaction to which such Intercompany Loan Agreement relates and
the  repayment  of  all  amounts   outstanding   under  such  Intercompany  Loan
Agreement);  (iv) not  agree to any  amendment,  waiver or  modification  of any
provision  of  any  Intercompany   Loan  Agreement  if  there  is  a  reasonable
possibility that such amendment, waiver or modification would have the effect of
(1) reducing the amount owed by any  Subsidiary  of the Borrower to the Borrower
under any Intercompany Loan Agreement,  (2) postponing the date that any payment
would otherwise be payable to the Borrower thereunder, (3) further subordinating
the Borrower's right to payment thereunder to the rights of any other creditors,
(4) further restricting the Subsidiary party thereto from applying, or releasing
to any extent such Subsidiary from its obligation to apply,  cash received by it
to pay its  allocated  share of payments from time to time owing by the Borrower
to  International  under  the  Tax  Allocation  Agreement  or (5)  changing  the
transactions  contemplated  thereunder  in a manner that makes them,  taken as a
whole,  less  favorable to the Borrower;  and (v) deliver to the  Administrative
Agent,  promptly  upon  receipt  thereof,  a copy of each  certificate,  notice,
instruction  or other  document  received or delivered by it in connection  with
each Intercompany Loan Agreement.

SECTION  6.09.  Federal  Regulations.  No part of the proceeds of any  Revolving
Loan, and no other extensions of credit hereunder,  will be used for "buying" or
"carrying"  any "margin  stock"  within the  respective  meanings of each of the
quoted  terms  under  Regulation  U of the  Board as now and  from  time to time
hereafter  in effect or for any purpose  that  violates  the  provisions  of the
Regulations  of the Board.  If  requested  by any  Lender or the  Administrative
Agent, the Borrower will furnish to the  Administrative  Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1, as applicable, referred to in Regulation U.

SECTION 6.10. Use of Proceeds; Repayment of Revolving Loans. The proceeds of the
Revolving  Loans  shall be used (a) to repay any amounts  outstanding  under the
Existing Mexican Credit Agreements (as defined in the Five Year Revolving Credit
Agreement) and (b) for general corporate purposes.

SECTION  6.11.  Grant of Security  Interest.  The Borrower  will,  no later than
thirty days after the occurrence of a Downgrading,  grant to the  Administrative
Agent,  for the benefit of the Lenders,  a first priority  (subject to customary
exceptions) security interest (the "Springing Lien"), which shall be on an equal
and ratable basis with the Springing  Lien granted under the Five Year Revolving
Credit Agreement, in substantially all of the Borrower's tangible and intangible
assets  (including,  without  limitation,  the assets  listed on  Schedule  6.11
hereto),  except for those  assets as to which the  Administrative  Agent  shall
determine in its sole  reasonable  discretion that the costs of obtaining such a
security  interest are  excessive in relation to the value of the security to be
afforded thereby; provided that (a) the Springing Lien shall be granted pursuant
to  documentation   (including  legal  opinions  of  counsel  to  the  Borrower)
substantially in the form that shall be approved by the Administrative Agent and
the  Borrower  no later than sixty days  after the  Effective  Date,  (b) to the
extent that any Subordinated Debt of the Borrower,  any Hedging Agreement of the
Borrower with any Lender,  or any  Indebtedness  of the Borrower now existing or
hereafter  issued  and sold,  requires  that  such  Subordinated  Debt,  Hedging
Agreement or Indebtedness  be equally and ratably secured with the  Indebtedness
incurred under this Agreement,  such  Subordinated  Debt,  Hedging  Agreement or
other  Indebtedness  shall be so secured and (c) the  Administrative  Agent,  on
behalf of the Lenders, shall have the authority to release the Springing Lien on
any assets sold,  transferred,  leased or otherwise disposed of in a transaction
permitted under this  Agreement;  provided that with respect to any assets sold,
transferred,  leased or  otherwise  disposed of in  connection  with a Qualified
Securitization Transaction,  such Springing Lien shall automatically be released
without further action by the Administrative Agent.

                                  ARTICLE VII

                               Negative Covenants

                  Until the  Commitments  have  expired  or  terminated  and the
principal of and interest on each Revolving Loan and all fees payable  hereunder
have been paid in full, the Borrower covenants and agrees with the Lenders that:

SECTION 7.01.  Financial Covenants.

                    (a) The Borrower will not permit the  Consolidated  Leverage
Ratio to exceed 7.00 to 1.00 as of the last Business Day of each calendar month.

                    (b) The Borrower  will not permit the Fixed Charge  Coverage
Ratio  as at the  last  day  of any  fiscal  quarter  for  the  period  of  four
consecutive fiscal quarters then ended to be less than 1.25 to 1.00.

SECTION  7.02.  Liens.  The  Borrower  will not,  and will not permit any of its
Subsidiaries  to,  create,  incur,  assume  or  permit  to exist any Lien on any
property or asset now owned or  hereafter  acquired by it, or assign or sell any
income or revenues (including  accounts  receivable) or rights in respect of any
thereof, except:

(a) Permitted Encumbrances;

(b) any Lien on any property or asset of the Borrower or any of its Subsidiaries
existing on the date hereof and set forth in Schedule  7.02;  provided  that (i)
such Lien shall not apply to any other  property or asset of the Borrower or any
Subsidiary  and (ii) such Lien  shall  secure  only those  obligations  which it
secures on the date hereof and  extensions,  renewals and  replacements  thereof
that do not increase the outstanding principal amount thereof;

(c) any Lien existing on any property or asset prior to the acquisition  thereof
by the Borrower or any of its  Subsidiaries or existing on any property or asset
of any Person that becomes a Subsidiary  after the date hereof prior to the time
such Person becomes a Subsidiary;  provided that (i) such Lien is not created in
contemplation  of or in connection with such acquisition or such Person becoming
a  Subsidiary,  as the case may be,  (ii) such Lien shall not apply to any other
property or assets of the Borrower or such  Subsidiary and (iii) such Lien shall
secure only those  obligations  which it secures on the date of such acquisition
or the date such Person becomes a Subsidiary, as the case may be and extensions,
renewals and replacements thereof that do not increase the outstanding principal
amount thereof;

(d) Liens on fixed or capital  assets  acquired,  constructed or improved by the
Borrower or any of its Subsidiaries;  provided that (i) such security  interests
and the  Indebtedness  secured  thereby are incurred  prior to or within 90 days
after such  acquisition or the completion of such  construction  or improvement,
(ii)  the  Indebtedness  secured  thereby  does not  exceed  100% of the cost of
acquiring, constructing or improving such fixed or capital assets and (iii) such
security  interests  shall  not  apply to any  other  property  or assets of the
Borrower or such Subsidiary;

(e) any  rights  of  set-of  of  financial  institutions holding accounts of the
Borrower and its Subsidiaries;

(f) any Lien  created in  accordance  with  Section 6.11 and any Lien created in
accordance with Section 7.11 of the Five Year Revolving Credit Agreement; and

(g) Liens not  otherwise  permitted  by this  Section  so long as the  aggregate
outstanding  principal amount of the obligations secured thereby does not at any
time exceed $7,000,000.

SECTION  7.03.  Fundamental  Changes.  (a) The  Borrower  will not, and will not
permit any of its  Subsidiaries  to,  merge into or  consolidate  with any other
Person,  or permit  any other  Person to merge into or  consolidate  with it, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a series
of  transactions)  all or  substantially  all of its assets (other than sales of
Receivables,  operating  leases  through its leasing  Subsidiaries  or interests
therein in the ordinary  course of business by the Borrower or a  Securitization
Subsidiary in connection with a Qualified Securitization Transaction), or all or
substantially  all of the  stock of any of its  Subsidiaries  other  than  Harco
Insurance (in each case, whether now owned or hereafter acquired),  or liquidate
or dissolve  (other than Harco  Insurance),  except that, if at the time thereof
and  immediately  after giving effect thereto no Default shall have occurred and
be  continuing  (i) any Person may merge into the Borrower in a  transaction  in
which the Borrower is the surviving corporation, (ii) any Person (other than the
Borrower) may merge into any  Subsidiary in a transaction in which the surviving
entity is a direct  or  indirect  Subsidiary,  (iii)  any  Subsidiary  may sell,
transfer, lease or otherwise dispose of its assets to the Borrower or to another
Subsidiary  and (iv) any  Subsidiary  may  liquidate or dissolve if the Borrower
determines in good faith that such  liquidation  or  dissolution  is in the best
interests of the Borrower and is not materially  disadvantageous to the Lenders;
provided  that any such merger  involving  a Person  that is not a wholly  owned
Subsidiary  immediately  prior to such merger shall not be permitted unless also
permitted by Section 7.05.

(b) The  Borrower  will not,  and will not  permit any of its  Subsidiaries  to,
engage to any material  extent in any business other than businesses of the type
conducted by the Borrower and its  Subsidiaries on the date of execution of this
Agreement and businesses  reasonably related,  similar,  supportive or ancillary
thereto.

SECTION 7.04. Investments, Loans, Advances, Guarantees and Acquisitions; Hedging
Agreements.  (a) Other than in the  ordinary  course of  business  for a finance
company,  the Borrower will not, and will not permit any of its Subsidiaries to,
purchase, hold or acquire (including pursuant to any merger with any Person that
was not a wholly  owned  Subsidiary  prior to such  merger) any  capital  stock,
evidences of indebtedness or other securities (including any option,  warrant or
other  right to acquire  any of the  foregoing)  of, make or permit to exist any
loans or  advances  to,  make or  permit to exist  any  investment  or any other
interest in, or, solely with respect to the Borrower's  Subsidiaries,  Guarantee
any obligations of, any other Person,  or purchase or otherwise  acquire (in one
transaction  or a  series  of  transactions)  any  assets  of any  other  Person
constituting a business unit (all of the foregoing, "Investments"), except:

     (i) Permitted Investments;

     (ii) Investments by the Borrower in the capital stock of its Subsidiaries;

     (iii)  loans or advances  made by the  Borrower  to any  Subsidiary  or any
Mexican  Affiliate  and made by any  Subsidiary  to the  Borrower,  any  Mexican
Affiliate or any other Subsidiary;

     (iv) loans and advances to employees of the Borrower or its Subsidiaries in
the ordinary course of business (including for travel and relocation expenses);

     (v) loans made by the Borrower to  International in an amount not to exceed
$50,000,000 at any one time outstanding;

     (vi) deposits to secure the performance of bids, trade  contracts,  leases,
statutory  obligations,  surety and appeal  bonds,  performance  bonds and other
obligations of a like nature, in each case in the ordinary course of business;

     (vii) the Borrower and its Subsidiaries may acquire a Controlling  interest
in an entity  that  engages in a business  similar to the  business  of the type
conducted  by the  Borrower  and its  Subsidiaries  so long as, after giving pro
forma effect thereto,  the Borrower is in compliance  with Sections  7.01(a) and
(b);

     (viii)  Investments  made  in  connection  with  Qualified   Securitization
Transactions;

     (ix) Investments set forth on Schedule 7.04;

     (x) the Guarantee contained in Article XI of the Five Year Revolving Credit
Agreement;

     (xi) Guarantees by any Subsidiary, so long as such guarantor simultaneously
delivers  to the  Administrative  Agent  a  Guarantee,  in  form  and  substance
reasonably  satisfactory  to the  Administrative  Agent  and on  terms  no  less
favorable  than  the  terms  in such  original  Guarantee  entered  into by such
Subsidiary,  for the  benefit  of the  Administrative  Agent,  on  behalf of the
Lenders;

     (xii) in addition to  Investments  otherwise  expressly  permitted  by this
Section,  Investments  in an  aggregate  amount  (valued  at cost) not to exceed
$20,000,000 during the term of this Agreement; and

     (xiii)  Investments  (including debt  obligations  and equity)  received in
connection with the bankruptcy or  reorganization of suppliers and customers and
in settlement of delinquent  obligations of, and other disputes with,  customers
and suppliers arising in the ordinary course of business.

(b) The Borrower will not, and will not permit any of its Subsidiaries to, enter
into any Hedging  Agreement,  other than Hedging  Agreements entered into in the
ordinary  course of business to hedge or mitigate risks to which the Borrower or
such  Subsidiary is exposed in the conduct of its business or the  management of
its  liabilities  or as  otherwise  required  by  any  Qualified  Securitization
Transaction.

SECTION 7.05.  Restricted  Payments.  The Borrower will not, and will not permit
any of its Subsidiaries  to, declare or make, or agree to pay or make,  directly
or  indirectly,  any  Restricted  Payment,  except (a) any  Subsidiary  may make
Restricted  Payments  to the  Borrower,  (b) the  Borrower  may make  Restricted
Payments  pursuant to and in accordance with stock option plans or other benefit
plans for  management  or employees of the  Borrower and its  Subsidiaries,  (c)
Harco  Insurance  may make  Restricted  Payments  and (d) the  Borrower may make
Restricted  Payments  provided  that the  aggregate  amount  of such  Restricted
Payments made while this  Agreement is in effect shall not exceed the sum of (i)
100% of  cumulative  positive  consolidated  net  income of the  Borrower  since
November 1, 1999 through the period prior to the date of such payment,  (ii) the
aggregate net cash proceeds of sales of non-core  assets of the Borrower and its
Subsidiaries  received by the Borrower and its  Subsidiaries  after  October 31,
2000  through the period  prior to the date of such payment and (iii) the amount
of any Restricted  Payments  received by the Borrower from Harco Insurance after
October 31, 2000 through the period prior to the date of such payment.

SECTION 7.06. Transactions with Affiliates.  The Borrower will not, and will not
permit  any of its  Subsidiaries  to,  sell,  lease or  otherwise  transfer  any
property or assets to, or purchase,  lease or otherwise  acquire any property or
assets from,  or otherwise  engage in any other  transactions  with,  any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
not less favorable to the Borrower or such  Subsidiary than could be obtained on
an arm's-length basis from unrelated third parties,  (b) transactions between or
among the Borrower and its wholly owned  Subsidiaries  not  involving  any other
Affiliate,  (c)  any  Restricted  Payment  permitted  by  Section  7.05,  (d) in
connection with any Qualified  Securitization  Transaction and (e) in connection
with the Master  Intercompany  Agreement,  the Tax Allocation  Agreement and any
Intercompany Loan Agreement.

SECTION 7.07. Negative Pledge. The Borrower will not, and will not permit any of
its  Subsidiaries  to,  directly or indirectly,  enter into,  incur or permit to
exist any agreement or other  arrangement  that prohibits,  restricts or imposes
any condition upon (a) the ability of the Borrower or any of its Subsidiaries to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any  Subsidiary  of the  Borrower to pay  dividends  or other
distributions  with  respect  to any shares of its  capital  stock or to make or
repay loans or advances to the Borrower or any other  Subsidiary or to Guarantee
Indebtedness  of the  Borrower or any other  Subsidiary;  provided  that (i) the
foregoing  shall not apply to restrictions  and conditions  imposed by law or by
this Agreement  (including,  but not limited to, Section  7.04(a)(v)),  (ii) the
foregoing  shall not apply to restrictions  and conditions  existing on the date
hereof,  (iii)  the  foregoing  shall  not  apply  to  Qualified  Securitization
Transactions,  (iv) the foregoing shall not apply to customary  restrictions and
conditions  contained in agreements relating to the sale of a Subsidiary pending
such  sale,  provided  such  restrictions  and  conditions  apply  only  to  the
Subsidiary that is to be sold and such sale is permitted  hereunder,  (v) clause
(a) of the foregoing shall not apply to  restrictions  or conditions  imposed by
any agreement  relating to secured  Indebtedness  permitted by this Agreement if
such  restrictions  or conditions  apply only to the property or assets securing
such Indebtedness, (vi) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof; and
(vii) clause (a) of the foregoing shall not apply to restrictions and conditions
that  require  that other  Indebtedness  be secured  equally  and  ratably  with
Indebtedness under this Agreement;  and provided,  further,  that so long as any
Event of  Default  shall be  continuing,  neither  the  Borrower  nor any of its
Subsidiaries  shall  assume  or incur  any  Indebtedness  that is  subject  to a
provision requiring such Indebtedness to be secured equally and ratably with, or
prior to, the Indebtedness hereunder (except pursuant to the Five Year Revolving
Credit Agreement).

SECTION 7.08.  Prepayments of Subordinated Debt. The Borrower will not, and will
not permit any of its Subsidiaries to, prepay,  purchase or otherwise retire any
of the Subordinated Debt prior to the stated maturity thereof unless at the time
of such  prepayment,  purchase or retirement or, in the case of any Subordinated
Debt of the  Borrower  issued  pursuant to an  indenture,  at the time notice of
redemption is given to the holders thereof pursuant to the terms thereof, (a)(i)
the Borrower has at least two of the following  ratings for its Index Debt:  (A)
BBB- or higher by S&P,  (B) Baa3 or higher by Moody's  and (C) BBB- or higher by
Duff & Phelps Credit Rating Co. or (ii) after giving effect to such  prepayment,
purchase or retirement,  the sum of (A) the aggregate  amount of all outstanding
preferred  stock of the Borrower and (B) the aggregate  principal  amount of all
outstanding  Subordinated  Debt,  is at least equal to  $100,000,000  and (b) no
Default has occurred  and is  continuing  or would result from such  prepayment,
purchase or retirement.

SECTION 7.09.Serviced Wholesale Portfolio Quality. The Borrower will not permit:

(a) Past Due  Serviced  Wholesale  Notes  (Three-Month  Total) at the end of any
month (determined substantially in accordance with practices, including policies
as to extensions  and rewrites,  in effect as of April 30, 2000,  expressed as a
percentage of Serviced  Wholesale Notes  (Three-Month  Total) at the end of such
month, to exceed 5%; or

(b) net losses of the Borrower (determined on the basis of the Borrower's normal
practice)  on  Serviced  Wholesale  Notes  recognized  during any period of four
consecutive   fiscal  quarters  to  exceed  0.5%  of  Serviced  Wholesale  Notes
liquidated during the same period.

For purposes of clause (b) of this Section,  Serviced Wholesale Notes liquidated
during  any  period  shall  be  determined  on the  same  basis  as was  used in
determining   the  statistics  as  to  "Percent  net  losses   (recoveries)   to
liquidations"  for  "Wholesale  notes"  included  under  "Five  Year  Summary of
Financial and Operating Data" in the 1999 Annual Report.

SECTION 7.10.   Serviced Retail Portfolio Quality. The Borrower will not permit:


(a) Past Due Serviced Retail Notes  (Three-Month  Total) at the end of any month
(determined substantially in accordance with practices, including policies as to
extensions  and  rewrites,  in  effect  as of April  30,  2000,  expressed  as a
percentage  of  Serviced  Retail  Notes  (Three-Month  Total) at the end of such
month, to exceed 3%; or

(b) the  Combined  Retail  Losses  to Liquidations Ratio to exceed 4 1/2% at any
time.

                  For purposes of clause (b) of this Section:

          (i) "Combined  Retail Losses to  Liquidations  Ratio" means, as of any
          date, the ratio  (expressed as a percentage) of (A) the sum of (1) Net
          Losses on Serviced  Retail Notes for the period of twelve  consecutive
          months ending on the last day of the then most  recently  ended month,
          plus (2) the net losses of  International  (determined on the basis of
          International's  normal  practice)  on Serviced  Retail Notes for such
          period to (B) Serviced Retail Liquidations for such period;

          (ii) "Net Losses on Serviced Retail Notes" means, for any period,  the
          net losses of the Borrower  (determined on the basis of the Borrower's
          normal   practice   with  the   benefit  of  rights  of   recourse  to
          International  and dealers  and other  obligors  and to  reserves  the
          Borrower  maintains  with regard to dealers) on Serviced  Retail Notes
          for such period; and

          (iii) "Serviced Retail Liquidations" means liquidations  determined on
          the same basis as in the supplementary  financial data included in the
          1999 Annual Report.

                                  ARTICLE VIII

                                Events of Default

                  If any of the following  events (each,  an "Event of Default")
shall occur:

(a) the Borrower  shall fail to pay any principal of any Revolving Loan when and
as the same shall become due and payable,  whether at the due date thereof or at
a date fixed for prepayment thereof or otherwise;

(b) the Borrower shall fail to pay any interest on any Revolving Loan or any fee
or any other  amount  (other  than an amount  referred  to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable,  and such  failure  shall  continue  unremedied  for a  period  of five
Business Days;

(c) any  representation  or warranty  made or deemed made by or on behalf of the
Borrower or any of its  Subsidiaries  in or in connection with this Agreement or
any amendment or modification hereof, or in any report,  certificate,  financial
statement or other  document  furnished  pursuant to or in connection  with this
Agreement or any  amendment  or  modification  hereof,  shall prove to have been
incorrect in any material respect when made or deemed made (for the avoidance of
doubt,  the  representations  and warranties  set forth in Sections  4.04(e) and
4.11(a) are made or deemed made solely on and as of the Effective  Date) and, if
the  consequences  of such  representation  or warranty being incorrect shall be
susceptible of remedy in all material  respects,  such consequences shall not be
remedied in all material  respects within 10 Business Days after the Borrower or
its Subsidiary becomes aware or is advised that such  representation or warranty
was incorrect in any material respect;

(d) the  Borrower  shall fail to observe or perform any  covenant,  condition or
agreement  contained in Section 6.02, 6.03, 6.09, 6.10 or 6.11 or in Article VII
(except as otherwise provided in clause (e) below);

(e) the  Borrower  shall fail to observe or perform any  covenant,  condition or
agreement  contained in Section 7.01, 7.03 or 7.08 within 10 Business Days after
notice  thereof  from the  Administrative  Agent  (given at the  request  of any
Lender) to the Borrower;

(f) the  Borrower  shall fail to observe or perform any  covenant,  condition or
agreement contained in this Agreement (other than those specified in clause (a),
(b), (d) or (e) of this Article), and such failure shall continue unremedied for
a period of 30 days after notice thereof from the Administrative Agent (given at
the request of any Lender) to the Borrower;

(g) the  Borrower  shall  fail to make any  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;

(h) any event or condition occurs that (A) results in any Material  Indebtedness
becoming due prior to its scheduled  maturity or (B) enables or permits (with or
without  the giving of notice,  the lapse of time or both) the holder or holders
of any Material  Indebtedness  or any trustee or agent on its or their behalf to
cause any  Material  Indebtedness  to become due, or to require the  prepayment,
repurchase,  redemption or defeasance thereof,  prior to its scheduled maturity;
provided that this  paragraph (i) shall not apply to secured  Indebtedness  that
becomes due as a result of the  voluntary  sale or  transfer of the  property or
assets securing such Indebtedness;

(i) an  involuntary  proceeding  shall be commenced or an  involuntary  petition
shall be filed  seeking  (i)  liquidation,  reorganization,  or other  relief in
respect of the Parent, International, the Borrower or any of its Subsidiaries or
its debts, or of a substantial part of its assets,  under any Federal,  state or
foreign bankruptcy, insolvency,  receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian,  sequestrator,
conservator or similar official for the Parent,  International,  the Borrower or
any of its  Subsidiaries  or for a substantial  part of its assets,  and, in any
such case, such proceeding or petition shall continue undismissed for 60 days or
an order or decree approving or ordering any of the foregoing shall be entered;

(j) the Parent, International, the Borrower or any of its Subsidiaries shall (i)
voluntarily  commence any proceeding or file any petition  seeking  liquidation,
reorganization,  or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution  of, or fail to contest in a timely and  appropriate  manner,
any proceeding or petition described in clause (j) of this Article,  (iii) apply
for  or  consent  to  the  appointment  of  a  receiver,   trustee,   custodian,
sequestrator, conservator or similar official for the Parent, International, the
Borrower or any of its  Subsidiaries  or for a  substantial  part of its assets,
(iv) file an answer  admitting  the  material  allegations  of a petition  filed
against it in any such proceeding, (v) make a general assignment for the benefit
of  creditors  or (vi) take any action for the purpose of  effecting  any of the
foregoing;

(k) the Parent, International, the Borrower or any  of  its  Subsidiaries  shall
become unable, admit in writing or fail generally  to  pay  its  debts  as  they
become due;

(l) one or more  judgments  for the payment of money in an  aggregate  amount in
excess  of  $10,000,000  shall be  rendered  against  the  Borrower,  any of its
Subsidiaries or any combination  thereof and the same shall remain  undischarged
for a  period  of 30  consecutive  days  during  which  execution  shall  not be
effectively  stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of the Borrower or any of its  Subsidiaries to
enforce any such judgment;

(m) an ERISA  Event shall have  occurred  that,  in the opinion of the  Required
Lenders,  when taken  together  with all other ERISA Events that have  occurred,
could reasonably be expected to result in a Material Adverse Effect;

(n) a Change in Control shall occur;

(o)  International  or the Parent  shall  fail to observe or perform  any of its
obligations  contained in the Parents'  Side  Agreement  for a period of 30 days
after  notice  of  such  failure   shall  have  been  given  to  the   Borrower,
International and the Parent by the  Administrative  Agent at the request of any
Lender,  or the  Parents'  Side  Agreement  shall fail,  at any time and for any
reason,  to be in full force and effect or  International or the Parent shall so
assert in writing;

(p)  International  shall  (i)  cancel  or  terminate  the  Master  Intercompany
Agreement, or Article II, VI, VII or VIII (other than paragraph C) thereof, (ii)
fail  to make  any  payment  payable  by it to the  Borrower  under  the  Master
Intercompany Agreement,  the Tax Allocation Agreement, or otherwise,  within ten
Business  Days after such payment is due or (iii) fail to observe or perform any
of its other covenants or obligations  under the Master  Intercompany  Agreement
for a period of 30 days after  notice of such  failure  shall have been given to
the Borrower and International by the Administrative Agent at the request of any
Lender;

(q) either the Parent or International shall fail to pay when due, or within any
applicable  grace period,  any principal of or interest on its  Indebtedness for
Borrowed Money which exceeds  $50,000,000 in aggregate principal or face amount;
or

(r) any  Indebtedness  for Borrowed Money of either the Parent or  International
which exceeds $50,000,000 in aggregate principal or face amount shall become due
prior to its stated  maturity,  or any event or  circumstance  shall occur which
permits one or more Persons other than the Parent or International,  as the case
may be, to cause such Indebtedness for Borrowed Money to become due prior to its
stated maturity;

then,  and in every such event  (other than an event  described in clause (i) or
(j) of this Article),  and at any time thereafter during the continuance of such
event, the Administrative  Agent may, and at the request of the Required Lenders
shall, by notice to the Borrower,  take either or both of the following actions,
at the same or different times: (i) terminate the Commitments, and thereupon the
Commitments  shall terminate  immediately,  and (ii) declare the Revolving Loans
then  outstanding  to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Revolving Loans so declared
to be due and payable,  together with accrued  interest thereon and all fees and
other  obligations  of the  Borrower  accrued  hereunder,  shall  become due and
payable immediately, without presentment, demand, protest or other notice of any
kind,  all of which are hereby waived by the Borrower;  in the case of any event
described  in  clause  (i)  or  (j)  of  this  Article,  the  Commitments  shall
automatically   terminate  and  the  principal  of  the  Revolving   Loans  then
outstanding,  together  with  accrued  interest  thereon  and all fees and other
obligations of the Borrower accrued hereunder,  shall  automatically  become due
and payable,  without presentment,  demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.

                                   ARTICLE IX

                            The Administrative Agent

                  Each  of  the  Lenders   hereby   irrevocably   appoints   the
Administrative  Agent as its agent and  authorizes the  Administrative  Agent to
take such actions on its behalf and to exercise  such powers as are delegated to
the  Administrative  Agent by the terms  hereof,  together with such actions and
powers as are reasonably incidental thereto.

                  The bank serving as the  Administrative  Agent hereunder shall
have the same rights and powers in its  capacity as a Lender as any other Lender
and may exercise the same as though it were not the  Administrative  Agent,  and
such  bank and its  Affiliates  may  accept  deposits  from,  lend  money to and
generally  engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.

                  The  Administrative   Agent  shall  not  have  any  duties  or
obligations  except  those  expressly  set forth  herein.  Without  limiting the
generality of the foregoing,  (a) the Administrative  Agent shall not be subject
to any  fiduciary or other implied  duties,  regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary  action or exercise any discretionary  powers,  except
discretionary   rights  and  powers  expressly   contemplated  hereby  that  the
Administrative Agent is required to exercise in writing by the Required Lenders,
and (c) except as expressly set forth herein, the Administrative Agent shall not
have any duty to disclose,  and shall not be liable for the failure to disclose,
any  information  relating to the  Borrower or any of its  Subsidiaries  that is
communicated to or obtained by the bank serving as  Administrative  Agent or any
of its Affiliates in any capacity.  The Administrative Agent shall not be liable
for any action  taken or not taken by it with the  consent or at the  request of
the Required  Lenders or in the absence of its own gross  negligence  or willful
misconduct.  The  Administrative  Agent shall be deemed not to have knowledge of
any  Default   unless  and  until  written   notice  thereof  is  given  to  the
Administrative  Agent by the Borrower or a Lender, and the Administrative  Agent
shall not be  responsible  for or have any duty to ascertain or inquire into (i)
any statement,  warranty or  representation  made in or in connection  with this
Agreement,  (ii) the  contents  of any  certificate,  report  or other  document
delivered  hereunder  or  in  connection  herewith,  (iii)  the  performance  or
observance of any of the covenants,  agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this  Agreement  or any other  agreement,  instrument  or  document,  or (v) the
satisfaction of any condition set forth in Article V or elsewhere herein,  other
than to confirm  receipt of items  expressly  required  to be  delivered  to the
Administrative Agent.

                  The  Administrative  Agent shall be entitled to rely upon, and
shall  not  incur  any  liability  for  relying  upon,   any  notice,   request,
certificate,  consent, statement, instrument, document or other writing believed
by it to be genuine  and to have been signed or sent by the proper  Person.  The
Administrative  Agent also may rely upon any  statement  made to it orally or by
telephone  and  believed  by it to be made by the proper  Person,  and shall not
incur any liability for relying thereon.  The  Administrative  Agent may consult
with  legal  counsel  (who  may  be  counsel  for  the  Borrower),   independent
accountants  and other  experts  selected by it, and shall not be liable for any
action  taken or not  taken by it in  accordance  with  the  advice  of any such
counsel, accountants or experts.

                  The  Administrative  Agent may  perform any and all its duties
and  exercise  its rights and  powers by or through  any one or more  sub-agents
appointed by the  Administrative  Agent. The  Administrative  Agent and any such
sub-agent  may perform any and all its duties and exercise its rights and powers
through their  respective  Related  Parties.  The exculpatory  provisions of the
preceding  paragraphs  shall  apply to any  such  sub-agent  and to the  Related
Parties of the Administrative  Agent and any such sub-agent,  and shall apply to
their  respective  activities in connection  with the  syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

                  Subject  to the  appointment  and  acceptance  of a  successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by  notifying  the  Lenders and the  Borrower.  Upon any such
resignation,  the Required Lenders shall have the right, with the consent of the
Borrower,  to appoint a successor.  If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment  within 30 days
after the retiring  Administrative  Agent gives notice of its resignation,  then
the  retiring  Administrative  Agent may,  on behalf of the  Lenders,  appoint a
successor  Administrative  Agent  which  shall be a Lender with an office in New
York,  New York,  or an Affiliate of any such bank.  Upon the  acceptance of its
appointment as  Administrative  Agent  hereunder by a successor,  such successor
shall succeed to and become vested with all the rights,  powers,  privileges and
duties of the retiring  Administrative  Agent,  and the retiring  Administrative
Agent shall be discharged  from its duties and obligations  hereunder.  The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor  unless  otherwise  agreed between the Borrower
and such successor.  After the Administrative Agent's resignation hereunder, the
provisions  of this Article and Section  10.03 shall  continue in effect for its
benefit in respect  of any  actions  taken or omitted to be taken by it while it
was acting as Administrative Agent.

                  Each  Lender  acknowledges  that  it  has,  independently  and
without reliance upon the Administrative  Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis  and  decision  to  enter  into  this   Agreement.   Each  Lender  also
acknowledges  that  it  will,   independently  and  without  reliance  upon  the
Administrative  Agent  or any  other  Lender  and  based on such  documents  and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.

                                   ARTICLE X

                                  Miscellaneous

SECTION  10.01.   Notices.   (a)  Except  in  the  case  of  notices  and  other
communications  expressly  permitted  to be given  by  telephone,  all  notices,
requests and demands to or upon the  respective  parties  hereto to be effective
shall be in writing  (including by telecopy),  and, unless  otherwise  expressly
provided herein, shall be deemed to have been duly given or made when delivered,
or three Business Days after being deposited in the mail,  postage prepaid,  or,
in the case of telecopy notice, when received,  addressed as follows in the case
of  the  Borrower  and  the   Administrative   Agent,   and  as  set  forth  its
Administrative  Questionnaire  delivered to the Administrative Agent in the case
of the Lenders,  or to such other  address as may be  hereafter  notified by the
respective parties hereto:

(i)  if to the Borrower:                 Navistar Financial Corporation
                                         2850 West Golf Road
                                         Rolling Meadows, Illinois  60008
                                         Attention:  Treasurer
                                         Telecopy:  847-734-4090

(ii)  if to the Administrative Agent:    The Chase Manhattan Bank
                                         270 Park Avenue
                                         New York, New York  10017
                                         Attention:  Loan and Agency Services
                                         Telecopy:  212-552-5650



                    (b) The Administrative  Agent and the Lenders are authorized
to rely on instructions  received by telephone from persons they believe in good
faith  to be  authorized  to  give  such  instructions  hereunder.  Neither  the
Administrative Agent nor any Lender shall incur any liability to the Borrower or
any other  person as a result of any act or  omission by it in  accordance  with
such instructions.

SECTION   10.02.   Waivers;   Amendments.   (a)  No  failure  or  delay  by  the
Administrative  Agent or any Lender in exercising  any right or power  hereunder
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any such  right or  power,  or any  abandonment  or  discontinuance  of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the  exercise  of any other  right or power.  The  rights  and  remedies  of the
Administrative  Agent  and the  Lenders  hereunder  are  cumulative  and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any  provision  of this  Agreement  or consent to any  departure by the Borrower
therefrom shall in any event be effective  unless the same shall be permitted by
paragraph  (b) of this  Section,  and  then  such  waiver  or  consent  shall be
effective  only in the  specific  instance  and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Revolving Loan
shall not be  construed as a waiver of any  Default,  regardless  of whether the
Administrative  Agent or any  Lender may have had  notice or  knowledge  of such
Default at the time.

(b) Neither this  Agreement nor any provision  hereof may be waived,  amended or
modified  except  pursuant to an agreement or agreements in writing entered into
by  the  Borrower  and  the  Required   Lenders  or  by  the  Borrower  and  the
Administrative Agent with the consent of the Required Lenders;  provided that no
such  agreement  shall (i) increase  the  Commitment  of any Lender  without the
written  consent  of such  Lender,  (ii)  forgive  the  principal  amount of any
Revolving  Loan or reduce  the rate of  interest  thereon,  or  reduce  any fees
payable hereunder,  without the written consent of each Lender affected thereby,
(iii)  postpone the  scheduled  date of payment of the  principal  amount of any
Revolving  Loan,  or any interest  thereon,  or any fees payable  hereunder,  or
reduce  the  amount  of,  waive or excuse  any such  payment,  or  postpone  the
scheduled date of expiration of any  Commitment,  without the written consent of
each Lender  affected  thereby,  (iv) change  Section  3.12(a),  (b) or (c) in a
manner  that would  alter the pro rata  sharing of  payments  required  thereby,
without the written consent of each Lender,  (v) change any of the provisions of
this  Section or the  definition  of "Required  Lenders" or any other  provision
hereof  specifying the number or percentage of Lenders required to waive,  amend
or modify any rights  hereunder or make any  determination  or grant any consent
hereunder,  without the written consent of each Lender, (vi) change Section 6.11
without the written  consent of each Lender;  provided  that the  Administrative
Agent shall be  permitted  to grant an  extension of no more than 30 days to the
Borrower to fulfill any of the Borrower's  obligations under Section 6.11, (vii)
in the event that the  Springing  Lien is  created  pursuant  to  Section  6.11,
release all or  substantially  all of the assets of the Borrower subject to such
Springing  Lien,  without  the written  consent of each Lender or (viii)  amend,
modify or  otherwise  affect  the rights or duties of the  Administrative  Agent
hereunder without its prior written consent.

SECTION 10.03.  Expenses;  Indemnity;  Damage Waiver. (a) The Borrower shall pay
(i) all reasonable  out-of-pocket  expenses incurred by the Administrative Agent
and the Joint  Lead  Arrangers,  including  the  reasonable  fees,  charges  and
disbursements of Simpson Thacher & Bartlett,  in connection with the syndication
of the credit facility provided for herein,  the preparation and  administration
of this Agreement or any amendments,  modifications or waivers of the provisions
hereof (whether or not the transactions  contemplated hereby or thereby shall be
consummated),  and (ii) all reasonable  out-of-pocket  expenses  incurred by the
Administrative  Agent or any Lender,  including the reasonable fees, charges and
disbursements  of one  firm of  counsel  for the  Administrative  Agent  and the
Lenders in each relevant  jurisdiction,  in connection  with the  enforcement or
protection of its rights in connection with this Agreement, including its rights
under this Section,  or in connection  with the Revolving  Loans made hereunder,
including in  connection  with any workout,  restructuring  or  negotiations  in
respect thereof.

(b) The Borrower shall indemnify the  Administrative  Agent and each Lender, and
each  Related  Party of any of the  foregoing  Persons  (each such Person  being
called an "Indemnitee") against, and hold each Indemnitee harmless from, any and
all losses,  claims,  damages,  liabilities and related expenses,  including the
fees,  charges and disbursements of any counsel for any Indemnitee,  incurred by
or asserted  against any Indemnitee  arising out of, in connection with, or as a
result of (i) the  execution or delivery of this  Agreement or any  agreement or
instrument  contemplated  hereby, the performance by the parties hereto of their
respective  obligations hereunder or the consummation of the Transactions or any
other transactions  contemplated  hereby,  (ii) any Revolving Loan or the use of
the proceeds  therefrom or (iii) any actual or  prospective  claim,  litigation,
investigation or proceeding  relating to any of the foregoing,  whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto;  provided that such indemnity shall not, as to any Indemnitee, be
available  to the extent  that such  losses,  claims,  damages,  liabilities  or
related expenses have resulted from the gross  negligence or willful  misconduct
of such Indemnitee.

(c) To the extent that the Borrower fails to pay any amount  required to be paid
by it to the  Administrative  Agent under  paragraph (a) or (b) of this Section,
each Lender  severally agrees to pay to the  Administrative  Agent such Lender's
Commitment   Percentage   (determined   as  of  the  time  that  the  applicable
unreimbursed  expense or  indemnity  payment is sought) of such  unpaid  amount;
provided that the  unreimbursed  expense or  indemnified  loss,  claim,  damage,
liability  or related  expense,  as the case may be, was incurred by or asserted
against the Administrative Agent in its capacity as such.

(d) To the extent  permitted by applicable  law, the Borrower  shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special,  indirect,  consequential or punitive damages (as opposed to direct
or actual damages)  arising out of, in connection  with, or as a result of, this
Agreement or any agreement or instrument  contemplated  hereby, the Transactions
or any Revolving Loan or the use of the proceeds thereof.

(e) All amounts due under this Section shall  be  payable promptly after written
demand therefor.

(f) No Borrower shall indemnify any Person for any claim whatsoever  against any
Securitization Subsidiary.

SECTION  10.04.  Successors  and Assigns.  (a) The  provisions of this Agreement
shall be binding  upon and inure to the benefit of the parties  hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or  otherwise  transfer  any of its rights or  obligations  hereunder
without the prior written  consent of each Lender (and any attempted  assignment
or  transfer  by the  Borrower  without  such  consent  shall be null and void).
Nothing in this  Agreement,  expressed or implied,  shall be construed to confer
upon any Person (other than the parties hereto, their respective  successors and
assigns permitted hereby and, to the extent expressly  contemplated  hereby, the
Related Parties of each of the  Administrative  Agent and the Lenders) any legal
or equitable right, remedy or claim under or by reason of this Agreement.

(b) Any  Lender  may  assign to one or more  assignees  all or a portion  of its
rights and obligations  under this Agreement  (including all or a portion of its
Commitment and the Revolving  Loans at the time owing to it);  provided that (i)
except in the case of an assignment to a Lender or an Affiliate of a Lender, the
Borrower and the  Administrative  Agent must give their prior written consent to
such assignment (which consent shall not be unreasonably withheld),  (ii) except
in the case of an  assignment  to a Lender  or an  Affiliate  of a Lender  or an
assignment of the entire remaining amount of the assigning Lender's  Commitment,
the  amount of the  Commitment  of the  assigning  Lender  subject  to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the  Administrative  Agent) shall not be less
than  $15,000,000  unless the Borrower and the  Administrative  Agent  otherwise
consent,  (iii) each  partial  assignment  shall be made as an  assignment  of a
proportionate  part of all the assigning  Lender's rights and obligations  under
this Agreement, (iv) the parties to each assignment shall execute and deliver to
the  Administrative  Agent  an  Assignment  and  Acceptance,   together  with  a
processing and recordation fee of $3,500 (except in the case of an assignment to
a Lender or an Affiliate of a Lender) and (v) the assignee, if it shall not be a
Lender,   shall   deliver  to  the   Administrative   Agent  an   Administrative
Questionnaire;  provided  further  that any  consent of the  Borrower  otherwise
required under this paragraph shall not be required if an Event of Default under
clause  (i) or  (j) of  Article  VIII  has  occurred  and  is  continuing.  Upon
acceptance  and recording  pursuant to paragraph  (d) of this Section,  from and
after the  effective  date  specified in each  Assignment  and  Acceptance,  the
assignee  thereunder  shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have (in addition to any such rights
and obligations  theretofore  held by it) the rights and obligations of a Lender
under this Agreement,  and the assigning Lender  thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations  under  this  Agreement  (and,  in the  case  of an  Assignment  and
Acceptance  covering all of the assigning  Lender's rights and obligations under
this Agreement,  such Lender shall cease to be a party hereto but shall continue
to be entitled to the  benefits of Sections  3.09,  3.10,  3.11 and 10.03).  Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this  paragraph  shall be treated for purposes of this
Agreement  as a sale by such  Lender  of a  participation  in  such  rights  and
obligations in accordance with paragraph (e) of this Section.

(c) The  Administrative  Agent,  acting  for  this  purpose  as an  agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy of
each  Assignment  and  Acceptance  delivered  to  it  and  a  register  for  the
recordation  of the names and addresses of the Lenders,  and the  Commitment of,
and principal amount of the Revolving Loans owing to each Lender pursuant to the
terms  hereof from time to time (the  "Register").  The entries in the  Register
shall be conclusive,  and the Borrower, the Administrative Agent and the Lenders
may treat each Person  whose name is recorded  in the  Register  pursuant to the
terms  hereof  as a  Lender  hereunder  for  all  purposes  of  this  Agreement,
notwithstanding notice to the contrary.

(d) Upon its receipt of a duly completed  Assignment and Acceptance  executed by
an assigning  Lender and an assignee,  the assignee's  completed  Administrative
Questionnaire  (unless the assignee  shall already be a Lender  hereunder),  the
processing and  recordation fee referred to in paragraph (b) of this Section and
any  written  consent  to such  assignment  required  by  paragraph  (b) of this
Section,  the  Administrative  Agent shall accept such Assignment and Acceptance
and record the  information  contained  therein in the  Register.  No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.

(e) Any Lender may,  without the consent of the  Borrower or the  Administrative
Agent,  sell   participations  to  one  or  more  banks  or  other  entities  (a
"Participant") in all or a portion of such Lender's rights and obligations under
this Agreement (including all or a portion of its Commitment); provided that (i)
such Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall  remain  solely  responsible  to the other  parties  hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
and the other  Lenders  shall  continue  to deal solely and  directly  with such
Lender in  connection  with such  Lender's  rights  and  obligations  under this
Agreement.  Any agreement or instrument  pursuant to which a Lender sells such a
participation  shall  provide  that such Lender  shall  retain the sole right to
enforce this Agreement and to approve any amendment,  modification  or waiver of
any provision of this Agreement;  provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any  amendment,  modification  or waiver  described  in the first  proviso to
Section 10.02(b) that affects such Participant. Subject to paragraph (f) of this
Section,  the  Borrower  agrees that each  Participant  shall be entitled to the
benefits  of  Sections  3.09,  3.10 and 3.11 to the same  extent as if it were a
Lender and had acquired its interest by assignment  pursuant to paragraph (b) of
this Section.

(f) A  Participant  shall not be entitled to receive any greater  payment  under
Section  3.09 or 3.11 than the  applicable  Lender  would have been  entitled to
receive with respect to the participation  sold to such Participant,  unless the
sale of the  participation to such Participant is made with the Borrower's prior
written  consent.  A  Participant  that  would be a Foreign  Lender if it were a
Lender shall not be entitled to the benefits of Section 3.11 unless the Borrower
is notified of the  participation  sold to such Participant and such Participant
agrees,  for the  benefit of the  Borrower,  to comply with  Section  3.11(c) as
though it were a Lender.

(g) Any Lender may at any time  pledge or assign a security  interest  in all or
any portion of its rights  under this  Agreement to secure  obligations  of such
Lender,  including any such pledge or assignment to a Federal  Reserve Bank, and
this  Section  shall not apply to any such  pledge or  assignment  of a security
interest;  provided  that no such pledge or  assignment  of a security  interest
shall release a Lender from any of its  obligations  hereunder or substitute any
such assignee for such Lender as a party hereto.

(h)  Notwithstanding  anything to the contrary  contained herein,  any Lender (a
"Granting  Lender") may grant to a special  purpose  funding vehicle (an "SPC"),
identified  as such in writing from time to time by the  Granting  Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Revolving Loan that such Granting  Lender would  otherwise be
obligated to make to the Borrower pursuant to this Agreement;  provided that (i)
nothing  herein shall  constitute a commitment  by any SPC to make any Revolving
Loan and (ii) if an SPC elects not to exercise such option or otherwise fails to
provide all or any part of such  Revolving  Loan,  the Granting  Lender shall be
obligated to make such Revolving  Loan pursuant to the terms hereof.  The making
of a Revolving  Loan by an SPC  hereunder  shall  utilize the  Commitment of the
Granting Lender to the same extent,  and as if, such Revolving Loan were made by
such  Granting  Lender.  Each party  hereto  hereby  agrees that no SPC shall be
liable for any indemnity or similar payment obligation under this Agreement (all
liability for which shall remain with the Granting  Lender).  In  furtherance of
the foregoing,  each party hereto hereby agrees (which  agreement  shall survive
the termination of this Agreement)  that, prior to the date that is one year and
one day after the payment in full of all outstanding  commercial  paper or other
senior indebtedness of any SPC, it will not institute against, or join any other
person  in  instituting  against,  such  SPC  any  bankruptcy,   reorganization,
arrangement,  insolvency or liquidation proceedings under the laws of the United
States  or any state  thereof.  In  addition,  notwithstanding  anything  to the
contrary in this Section  10.04(h),  any SPC may (A) with notice to, but without
the prior  written  consent of, the  Borrower and the  Administrative  Agent and
without  paying  any  processing  fee  therefor,  assign all or a portion of its
interests  in any  Revolving  Loans to the  Granting  Lender,  or with the prior
written  consent of the Borrower  and the  Administrative  Agent (which  consent
shall not be  unreasonably  withheld) to any  financial  institutions  providing
liquidity and/or credit support to or for the account of such SPC to support the
funding or  maintenance of Revolving  Loans,  and (B) disclose on a confidential
basis any non-public  information  relating to its Revolving Loans to any rating
agency,  commercial paper dealer or provider of any surety,  guarantee or credit
or liquidity enhancement to such SPC; provided that non-public  information with
respect to the Borrower may be disclosed only with the Borrower's  consent which
will not be unreasonably withheld. This paragraph (h) may not be amended without
the written consent of any SPC with Revolving  Loans  outstanding at the time of
such proposed amendment.

SECTION  10.05.  Survival.  All  covenants,   agreements,   representations  and
warranties  made  by  the  Borrower  herein  and in the  certificates  or  other
instruments  delivered in connection with or pursuant to this Agreement shall be
considered  to have been  relied  upon by the  other  parties  hereto  and shall
survive  the  execution  and  delivery of this  Agreement  and the making of any
Revolving Loans, regardless of any investigation made by any such other party or
on its behalf and  notwithstanding  that the Administrative  Agent or any Lender
may have had notice or knowledge of any Default or incorrect  representation  or
warranty at the time any credit is  extended  hereunder,  and shall  continue in
full force and effect as long as the principal of or any accrued interest on any
Revolving  Loan or any fee or any other amount  payable under this  Agreement is
outstanding and so long as the Commitments  have not expired or terminated.  The
provisions of Sections 3.09,  3.10,  3.11 and 10.03 and Article IX shall survive
and  remain in full  force and  effect  regardless  of the  consummation  of the
transactions  contemplated  hereby,  the repayment of the Revolving  Loans,  the
expiration  or  termination  of the  Commitments  or  the  termination  of  this
Agreement or any provision hereof.

SECTION  10.06.  Counterparts;  Integration.  This  Agreement may be executed in
counterparts (and by different parties hereto on different  counterparts),  each
of which shall  constitute  an  original,  but all of which when taken  together
shall  constitute a single  contract.  This  Agreement  and any separate  letter
agreements with respect to fees payable to the  Administrative  Agent constitute
the entire contract among the parties  relating to the subject matter hereof and
supersede any and all previous agreements and  understandings,  oral or written,
relating to the subject matter hereof.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.

SECTION 10.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction,  be
ineffective  to the extent of such  invalidity,  illegality or  unenforceability
without  affecting the validity,  legality and  enforceability  of the remaining
provisions hereof; and the invalidity of a particular  provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 10.08.  Right of Setoff.  If an Event of Default shall have occurred and
be  continuing,  each Lender is hereby  authorized  at any time and from time to
time, to the fullest  extent  permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final but excluding
deposits  designated  to payroll  accounts,  any trust  accounts or any accounts
related to any Qualified Securitization  Transaction) at any time held and other
indebtedness  at any  time  owing by such  Lender  to or for the  credit  or the
account of the Borrower  against any of and all the  obligations of the Borrower
now or hereafter existing under this Agreement held by such Lender, irrespective
of whether or not such Lender  shall have made any demand  under this  Agreement
and although such obligations may be unmatured.  The rights of each Lender under
this  Section are in  addition to other  rights and  remedies  (including  other
rights of setoff) which such Lender may have.

SECTION 10.09.  GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND  OBLIGATIONS OF
THE  PARTIES  UNDER THIS  AGREEMENT  SHALL BE  GOVERNED  BY, AND  CONSTRUED  AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

SECTION 10.10.    Submission To Jurisdiction; Waivers.  Each party hereto hereby
irrevocably and unconditionally:


(a)  submits  for  itself and its  property  in any legal  action or  proceeding
relating to this  Agreement,  or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive  general  jurisdiction of the courts of
the State of New York in the Borough of Manhattan,  City of New York, the courts
of the United States for the Southern District of New York, and appellate courts
from any thereof and to the courts of its own  corporate  domicile in respect of
any  actions  brought  against it as a  defendant  in any  action or  proceeding
arising out of this Agreement;

(b) consents  that any such action or  proceeding  may be brought in such courts
and waives any objection  that it may now or hereafter  have to the venue of any
such action or  proceeding  in any such court or that such action or  proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees  that  service of process  in any such  action or  proceeding  may be
effected  by mailing a copy  thereof by  registered  or  certified  mail (or any
substantially  similar  form of mail),  postage  prepaid,  to each  party at its
address  set  forth in  Section  10.01 or at such  other  address  of which  the
Administrative Agent shall have been notified pursuant thereto;

(d) agrees  that  nothing  herein  shall  affect the right to effect  service of
process in any other manner  permitted by law or shall limit the right to sue in
any other jurisdiction; and

(e) waives,  to the maximum  extent not prohibited by law, any right it may have
to claim or  recover  in any legal  action  or  proceeding  referred  to in this
Section any special, exemplary, punitive or consequential damages.

SECTION 10.11.    Acknowledgments.  The Borrower hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement;

(b)  neither  the  Administrative   Agent  nor  any  Lender  has  any  fiduciary
relationship  with or duty to the Borrower  arising out of or in connection with
this  Agreement,  and the  relationship  between  the  Administrative  Agent and
Lenders,  on one hand,  and the  Borrower,  on the  other  hand,  in  connection
herewith or therewith is solely that of debtor and creditor; and

(c) no joint  venture is  created  hereby or  otherwise  exists by virtue of the
transactions contemplated hereby among the Lenders or among the Borrower and the
Lenders.

SECTION 10.12. WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY  IRREVOCABLY AND  UNCONDITIONALLY  WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING  RELATING TO THIS AGREEMENT AND FOR ANY  COUNTERCLAIM
THEREIN.

SECTION 10.13. Headings.  Article and Section headings and the Table of Contents
used  herein  are for  convenience  of  reference  only,  are  not  part of this
Agreement  and  shall  not  affect  the   construction  of,  or  be  taken  into
consideration in interpreting, this Agreement.

SECTION 10.14. Confidentiality. Each of the Administrative Agent and the Lenders
agrees to maintain the  confidentiality  of the  Information (as defined below),
except  that  Information  may  be  disclosed  (a) to its  and  its  Affiliates'
directors,  officers, employees and agents, including accountants, legal counsel
and other advisors  involved with this financing (it being  understood  that the
Persons to whom such  disclosure  is made will be informed  of the  confidential
nature  of  such   Information   and   instructed   to  keep  such   Information
confidential),  (b) to the extent requested by any regulatory authority,  (c) to
the extent  required by  applicable  laws or  regulations  or by any subpoena or
similar  legal  process,  (d) to any  other  party  to  this  Agreement,  (e) in
connection  with the exercise of any remedies  hereunder or any suit,  action or
proceeding  relating to this Agreement or the  enforcement of rights  hereunder,
(f) subject to an  agreement  containing  provisions  substantially  the same as
those of this Section,  to any assignee of or Participant in, or any prospective
assignee  of or  Participant  in,  any of its rights or  obligations  under this
Agreement,  (g) with the  consent  of the  Borrower  or (h) to the  extent  such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any Lender
on a  nonconfidential  basis  from a source  other  than the  Borrower.  For the
purposes of this Section,  "Information" means all information received from the
Borrower relating to it or its business, other than any such information that is
available to the Administrative  Agent or any Lender on a nonconfidential  basis
prior to disclosure by the Borrower;  provided  that, in the case of information
received from the Borrower after the date hereof, such information is identified
at the time of delivery as  confidential.  Any Person  required to maintain  the
confidentiality  of  Information as provided in this Section shall be considered
to have complied  with its  obligation to do so if such Person has exercised the
same degree of care to maintain the  confidentiality of such Information as such
Person would accord to its own confidential information.

SECTION 10.15. Interest Rate Limitation.  Notwithstanding anything herein to the
contrary,  if at any time the interest rate  applicable  to any Revolving  Loan,
together with all fees,  charges and other amounts which are treated as interest
on such Revolving Loan under applicable law (collectively the "Charges"),  shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged,  taken,  received or reserved by the Lender holding such Revolving Loan
in accordance with  applicable  law, the rate of interest  payable in respect of
such  Revolving  Loan  hereunder,  together with all Charges  payable in respect
thereof,  shall be limited to the Maximum  Rate and, to the extent  lawful,  the
interest and Charges  that would have been payable in respect of such  Revolving
Loan but were not payable as a result of the  operation of this Section shall be
cumulated  and the  interest  and  Charges  payable to such Lender in respect of
other  Revolving  Loans or periods shall be increased (but not above the Maximum
Rate therefor) until such cumulated  amount,  together with interest  thereon at
the  Federal  Funds  Effective  Rate to the date of  repayment,  shall have been
received by such Lender.

SECTION 10.16. Waiver of Immunities.  To the extent permitted by applicable law,
if the  Borrower  has or  hereafter  may  acquire  any  immunity  (sovereign  or
otherwise) from any legal action,  suit or proceeding,  from jurisdiction of any
court  or  from  set-off  or any  legal  process  (whether  service  or  notice,
attachment  prior to  judgment,  attachment  in aid of  execution  of  judgment,
execution  of  judgment  or  otherwise)  with  respect  to  itself or any of its
property,  the  Borrower  hereby  irrevocably  waives and agrees not to plead or
claim such  immunity in respect of its  obligations  under this  Agreement.  The
Borrower  agrees that the waivers set forth above shall have the fullest  extent
permitted  under the  Foreign  Sovereign  Immunities  Act of 1976 of the  United
States  of  America  and are  intended  to be  irrevocable  and not  subject  to
withdrawal for purposes of such Act.


<PAGE>



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

                                       NAVISTAR FINANCIAL CORPORATION

                                       By_______________________________
                         Name:

                        Title:

                                       THE CHASE MANHATTAN BANK,
                                       as Administrative Agent and a Lender

                                       By_______________________________
                         Name:

                        Title:

                                       BANK OF AMERICA, N.A.
                                       as Syndication Agent and a Lender

                                       By_______________________________
                         Name:

                        Title:

                                       THE BANK OF NOVA SCOTIA,
                                       as Documentation Agent and a Lender

                                       By_______________________________
                         Name:

                        Title:

<PAGE>

Exhibit 10.09
                             PARENTS' SIDE AGREEMENT

                  AGREEMENT,   dated  as  of  December  8,  2000,   by  Navistar
International   Corporation,   a  Delaware   corporation  (the  "Parent"),   and
International   Truck   and   Engine   Corporation,   a   Delaware   corporation
("International"), for the benefit of the Lenders from time to time party to the
364-Day Credit Agreement referred to below.

                  WHEREAS,   Navistar   Financial   Corporation,    a   Delaware
corporation (the "Borrower"), has entered into a 364-Day Credit Agreement, dated
as of December 8, 2000 (as amended, supplemented or otherwise modified from time
to time,  the "Credit  Agreement"),  with the  Lenders  party  thereto,  Bank of
America,  N.A., as Syndication  Agent, The Bank of Nova Scotia, as Documentation
Agent, and The Chase Manhattan Bank, as Administrative Agent;

                  WHEREAS,  it is a condition to the effectiveness of the Credit
Agreement  that the Parent and  International  execute and deliver this Parents'
Side Agreement (this "Agreement"); and

                  WHEREAS, unless otherwise defined herein, terms defined in the
Credit  Agreement  and used herein shall have the meanings  given to them in the
Credit Agreement;

                  NOW,  THEREFORE,  in order to induce the Lenders to enter into
the Credit  Agreement and to satisfy a condition to the  effectiveness  thereof,
the Parent and  International  agree for the benefit of the Lenders that,  until
the Commitments under the Credit Agreement shall have expired or terminated, the
principal  of and interest on each Loan and all fees  payable  thereunder  shall
have been paid in full:

                  SECTION 1.  Ownership  of the  Borrower.  Either the Parent or
International  will at all times own and hold the  entire  legal and  beneficial
interest in all of the outstanding  stock of the Borrower having ordinary voting
power for the election of directors (other than directors'  qualifying  shares).
Neither  the  Parent nor  International  will,  directly  or  indirectly,  sell,
exchange,  transfer,  pledge or in any way encumber or otherwise  dispose of any
such stock.

                  SECTION   2.   Borrower's   Fixed   Charge   Coverage   Ratio.
International  will not  permit  the  ratio  of (i) the sum of (A)  consolidated
interest  expense  of  the  Borrower  and  its  consolidated  Subsidiaries,  (B)
consolidated  income of the Borrower and its  consolidated  Subsidiaries  before
income taxes and (C) dividends on Redeemable  Preferred Stock to (ii) the sum of
(A)  consolidated   interest  expense  of  the  Borrower  and  its  consolidated
Subsidiaries and (B) dividends on Redeemable Preferred Stock, as at the last day
of any fiscal quarter for the period of four  consecutive  fiscal  quarters then
ended, to be less than 1.25 to 1.00.


<PAGE>



                  SECTION 3. Intercompany Agreements. International will perform
all of its obligations  under the Master  Intercompany  Agreement and, except as
permitted by Section 7.08 of the Credit Agreement,  will not cancel,  terminate,
amend, waive or modify the Master Intercompany Agreement.

                  SECTION 4.  Representations  and  Warranties.  The  execution,
delivery and performance by  International  and the Parent of this Agreement are
within  such  party's  corporate  powers  and have been duly  authorized  by all
necessary  corporate and, if required,  stockholder  action.  This Agreement has
been duly  executed and  delivered by each of  International  and the Parent and
each of this Agreement, the Master Intercompany Agreement and the Tax Allocation
Agreement  constitutes  a  legal,  valid  and  binding  obligation  of  each  of
International and the Parent, as applicable,  enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization,  moratorium
or other laws  affecting  creditors'  rights  generally  and  subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

                  SECTION 5.  Amendments  and  Waivers.  Any  provision  of this
Agreement  may be  amended or waived so long as such  amendment  or waiver is in
writing and is signed by the Parent, International and the Required Lenders.

                  SECTION 6.  Successors and Assigns.  This  Agreement  shall be
binding  upon the Parent,  International  and their  respective  successors  and
assigns,  and shall inure to the  benefit of the  Lenders  and their  respective
successors and permitted assigns.

                  SECTION  7. New York Law.  This  Agreement  and the rights and
obligations  of the  parties  under this  Agreement  shall be  governed  by, and
construed and interpreted in accordance with, the law of the State of New York.


<PAGE>



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

                                      NAVISTAR INTERNATIONAL CORPORATION



                                      By  ______________________________________
                                            Name:
                                            Title:



                                      INTERNATIONAL TRUCK AND ENGINE CORPORATION



                                      By  ______________________________________
                                            Name:
                                            Title:

<PAGE>
                                                                   SCHEDULE 2.01

LENDERS                 TOTAL COMMITMENT

Chase Manhattan Bank    $35,000,000
Bank of America         $35,000,000
Bank of Nova Scotia     $10,000,000

Total                   $80,000,000