Document:

Servicing Agreement

 EXHIBIT 10.6 
 EXECUTION COPY 
  

 SERVICING AGREEMENT 
 AMONG 
 NAVISTAR LEASING COMPANY, 
 HARCO
LEASING COMPANY, INC., 
 NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION, 
 THE BANK OF NEW YORK TRUST COMPANY, N.A., 
 AS COLLATERAL AGENT 
 LASALLE BANK NATIONAL ASSOCIATION 
 AS INDENTURE TRUSTEE, 
 J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION

 (AS SUCCESSOR-IN-INTEREST TO BANK ONE, NATIONAL ASSOCIATION), 
 AS PORTFOLIO TRUSTEE, 
 NAVISTAR FINANCIAL 2006-ARC OWNER TRUST,

 AS ISSUER 
 AND

 NAVISTAR FINANCIAL CORPORATION, 
 AS SERVICER 
 DATED AS OF SEPTEMBER 1, 2006 
  

 TABLE OF CONTENTS 
  

							
	 	 	 	 	 	  	Page
	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	  	7
		 	SECTION 2.04	 	    Realization Upon Liquidating Receivables	  	8
		 	SECTION 2.05	 	    Maintenance of Insurance Policies	  	8
		 	SECTION 2.06	 	    Maintenance of Security Interests in Vehicles	  	9
		 	SECTION 2.07	 	    Covenants of the Servicer	  	9
		 	SECTION 2.08	 	    Purchase of Receivables Upon Breach of Covenant	  	10
		 	SECTION 2.09	 	    Servicing Fee	  	10
		 	SECTION 2.10	 	    Servicer Expenses	  	11
		 	SECTION 2.11	 	    Deposits to Collection Account	  	11
		 	SECTION 2.12	 	    Collections	  	11
		 	SECTION 2.13	 	    Application of Collections	  	12
		 	SECTION 2.14	 	    Monthly Advances	  	12
		 	SECTION 2.15	 	    Additional Deposits	  	12
		 	SECTION 2.16	 	    Net Deposits	  	13
		 	SECTION 2.17	 	    Servicer’s Certificate	  	13
		
	ARTICLE III STATEMENTS AND REPORTS	  	14
		 	SECTION 3.01	 	    Annual Statement as to Compliance; Notice of Servicer Default; Tax Reports	  	14
		 	SECTION 3.02	 	    Annual Accountants’ Report	  	14
		 	SECTION 3.03	 	    Access to Certain Documentation and Information Regarding Receivables	  	15
		 	SECTION 3.04	 	    Maintenance of Composite Schedule of Receivables	  	15
		 	SECTION 3.05	 	    Amendments to Composite Schedule of Receivables	  	15
		 	SECTION 3.06	 	    Maintenance of Systems and Receivables List	  	16
		
	ARTICLE IV THE CUSTODIAN	  	16
		 	SECTION 4.01	 	    Custody of Receivable Files	  	16
		 	SECTION 4.02	 	    Duties of Servicer as Custodian	  	17
		 	SECTION 4.03	 	    Custodian’s Indemnification	  	18
		 	SECTION 4.04	 	    Effective Period and Termination	  	18
		
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE SERVICER	  	18
		 	SECTION 5.01	 	    Representations and Warranties of the Servicer	  	18
		
	ARTICLE VI THE SERVICER	  	20

  

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		 	    SECTION 6.01	  	    Merger or Consolidation of, or Assumption of the Obligations of, the Servicer	  	20
		 	    SECTION 6.02	  	    Limitation on Liability of Servicer and Others	  	20
		 	    SECTION 6.03	  	    Delegation of Duties	  	20
		 	    SECTION 6.04	  	    Servicer not to Resign	  	21
		 	    SECTION 6.05	  	    Servicer Indemnification of the Indenture Trustee and the Owner Trustee	  	21
		 	    SECTION 6.06	  	    Backup Servicer	  	22
		 	    SECTION 6.07	  	    Reports of Independent Accountants	  	23
		
	ARTICLE VII DEFAULT	  	23
		 	    SECTION 7.01	  	    Servicer Defaults	  	23
		 	    SECTION 7.02	  	    Consequences of a Servicer Default	  	24
		 	    SECTION 7.03	  	    Indenture Trustee to Act; Appointment of Successor	  	25
		 	    SECTION 7.04	  	    Notification to Securityholders	  	25
		 	    SECTION 7.05	  	    Repayment of Advances	  	26
		 	    SECTION 7.06	  	    Waiver of Past Defaults	  	26
		
	ARTICLE VIII MISCELLANEOUS	  	26
		 	    SECTION 8.01	  	    Amendment	  	26
		 	    SECTION 8.02	  	    Termination	  	26
		 	    SECTION 8.03	  	    Notices	  	26
		 	    SECTION 8.04	  	    Governing Law	  	27
		 	    SECTION 8.05	  	    Severability	  	27
		 	    SECTION 8.06	  	    Assignment	  	27
		 	    SECTION 8.07	  	    Successors and Assigns	  	27
		 	    SECTION 8.08	  	    Counterparts	  	27
		 	    SECTION 8.09	  	    Headings and Cross-References	  	27
		 	    SECTION 8.10	  	    No Petition Covenants	  	27
		 	    SECTION 8.11	  	    Limitation of Liability of the Trustees.	  	28

 APPENDICES 
 Appendix A - Minimum Servicing Standards 
  

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 SERVICING AGREEMENT 
 SERVICING AGREEMENT, dated as of September 1, 2006 (as it may be further amended, supplemented or modified, this “Agreement”), among Navistar Financial Retail Receivables Corporation, a Delaware
corporation (“NFRRC”), Navistar Financial 2006-ARC Owner Trust, a Delaware statutory trust (the “Issuer”), Navistar Leasing Company, a Delaware statutory trust (the “Titling Trust”), Navistar
Financial Corporation, a Delaware corporation (hereinafter, together with its successors and assigns, “NFC” or, in its capacity as servicer hereunder, the “Servicer”), The Bank of New York Trust Company, N.A., a
national banking association (the “Collateral Agent”), LaSalle Bank National Association, a national banking association, acting in its capacity as Indenture Trustee pursuant to the Indenture (the “Indenture Trustee”),
J.P. Morgan Trust Company, National Association (as successor-in-interest to Bank One, National Association), a national banking association, as Portfolio Trustee (the “Series 2006-ARC Portfolio Interest Trustee”), and Harco Leasing
Company, Inc., a wholly owned subsidiary of NFC and a Delaware corporation (hereinafter, together with its successors and assigns, “Harco Leasing”). 
 R E C I T A L S: 
 WHEREAS, NFC 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 have been allocated to the Series 2006-ARC Portfolio Interest; 
 WHEREAS,
NFRRC and NFC are parties to the Purchase Agreement, pursuant to which NFRRC will purchase the Series 2006-ARC Portfolio Interest and the Retail Leases and other Titling Trust Assets allocated thereto and certain Retail Notes and the Related Retail
Note Assets with respect thereto from NFC; 
 WHEREAS, the Issuer will issue Notes pursuant to the Indenture between the Issuer and the
Indenture Trustee, and exchange the Notes and the Certificates for the Series 2006-ARC Portfolio Interest (and the Retail Leases allocated thereto) and certain Retail Notes and the Related Retail Note Assets with respect thereto from NFRRC pursuant
to the Pooling Agreement; 
 WHEREAS, the Servicer is willing to continue its servicing functions as it relates to the Titling Trust Assets
comprising the Series 2006-ARC 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; 

 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; and 
 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 Series 2006-ARC 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: 
 ARTICLE I 
 DEFINITIONS; SERVICING SUPPLEMENT 
 SECTION 1.01 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 Pooling Agreement dated as of the date hereof between the Issuer and NFRRC, unless otherwise defined herein. The rules of
construction set forth in Part II of Appendix A to the Pooling Agreement shall be applicable to this Agreement. 
 SECTION 1.02
Supplement to Titling Trust Servicing Agreement. 
 (a) Pursuant to Section 5.13 of the Titling Trust Agreement, each of
the Titling Trust, Harco Leasing, NFC, NFRRC and the Issuer hereby appoints NFC as the Servicer with respect to the Series 2006-ARC Portfolio Interest and the Series 2006-ARC 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 Series
2006-ARC Portfolio Trustee, the Issuer and the Indenture Trustee with respect to the Series 2006-ARC Portfolio Interest separately from any other Portfolio Interests. 
 (c) This Agreement shall constitute a “Portfolio Servicing Agreement Supplement” under the Titling Trust Servicing Agreement with respect to the Series 2006-ARC Portfolio Interest and the Series
2006-ARC 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 Series 2006-ARC Portfolio Interest and the Series 2006-ARC 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 Series 2006-ARC Portfolio Interest and the Series 2006-ARC Portfolio Assets. However, in the event of any 
  

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 conflict between the provisions of the Titling Trust Servicing Agreement (as expressly amended, supplemented or waived by
this Agreement) and the provisions set forth herein 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 Series 2006-ARC Portfolio Interest and the Series 2006-ARC 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 Series 2006-ARC 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 Series 2006-ARC Portfolio Supplement. 
 (e) The Servicer shall perform the obligations specified for it in the Series 2006-ARC Portfolio Supplement. 
 ARTICLE II 
 ADMINISTRATION AND SERVICING OF RECEIVABLES 
 SECTION 2.01 Duties of the Servicer. The Servicer is hereby appointed and authorized to act as agent for the Owner 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, truck chassis, 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. 
 Without limiting the generality of the foregoing, the Servicer is hereby authorized and empowered by the Owner and the Collateral Agent 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 the Owner 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 Owner and
the Collateral Agent shall thereupon be deemed to have automatically assigned such Receivable to the Servicer solely for purposes of commencing 
  

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 and participating in any such proceeding as a party or claimant, and the Servicer is hereby authorized and empowered by
the Owner and the Collateral Agent, 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 Owner and the Collateral Agent 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 Owner and the Collateral Agent, 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 Owner and the Collateral Agent. 
 SECTION 2.02 Establishment of Accounts.

 (a) (i) The Servicer, for the benefit of the Financial Parties, shall cause the Indenture Trustee to establish and maintain in the
name of the Indenture Trustee an Eligible Deposit Account known as the Navistar Financial 2006-ARC Owner Trust Collection Account (the “Collection Account”), bearing an additional designation clearly indicating that the funds
deposited therein are held for the benefit of the Financial Parties. 
 (ii) The Servicer, for the benefit of the Noteholders, shall cause
the Indenture Trustee to establish and maintain in the name of the Indenture Trustee an Eligible Deposit Account known as the Navistar Financial 2006-ARC Owner Trust Note Distribution Account (the “Note Distribution
Account”), bearing an additional designation clearly indicating that the funds deposited therein are held for the benefit of the Noteholders. 
 (iii) Pursuant to the Trust Agreement, the Servicer, for the benefit of the Certificateholders, shall or shall cause the Owner Trustee to establish and maintain in the name of the Owner Trustee an Eligible Deposit
Account known as the Navistar Financial 2006-ARC Owner Trust Certificate Distribution Account (the “Certificate Distribution Account”), bearing an additional designation clearly indicating that the funds deposited therein are held
for the benefit of the Certificateholders. 
 (iv) The Servicer, for the benefit of the Financial Parties, shall cause the Indenture Trustee
to establish and maintain in the name of the Indenture Trustee an Eligible Deposit Account known as the Navistar Financial 2006-ARC Owner Trust Reserve Account (the “Reserve Account”), bearing an additional designation clearly
indicating that the funds deposited therein are held for the benefit of the Financial Parties. 
 (b) (i) Each of the Designated
Accounts shall be initially established with the Indenture Trustee and shall be maintained with the Indenture Trustee so long as (A) the short-term unsecured debt obligations of the Indenture Trustee have the Required Deposit Rating 

 

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 or (B) each of the Designated Accounts are maintained in the corporate trust department of the Indenture Trustee.
All amounts held in such accounts (including amounts, if any, which the Servicer is required to remit daily to the Collection Account pursuant to Section 2.11) shall, to the extent permitted by applicable laws, rules and regulations, be
invested, at the written direction of the Servicer, by such bank or trust company in Eligible Investments; provided, that funds in the Collection Account in an amount not in excess of 20% of the Aggregate Receivables Balance as of the preceding
Accounting Date may be invested in investments which have a rating from S&P of “A-1” rather than “A-1+,” if such investments otherwise constitute Eligible Investments. Such written direction shall constitute certification by
the Servicer that any such investment is authorized by this Section 2.02. Funds deposited in the Reserve Account shall be invested in Eligible Investments which mature prior to the next Distribution Date; provided, that
such investments may mature on a later date if the Funding Agent consents. Investments in Eligible Investments shall be made in the name of the Indenture Trustee or its nominee, and such investments shall not be sold or disposed of prior to their
maturity. Should the short-term unsecured debt obligations of the Indenture Trustee (or any other bank or trust company with which the Designated Accounts are maintained) no longer have the Required Deposit Rating, then the Servicer shall within 10
Business Days (or such longer period, not to exceed 30 calendar days, without consent of the Funding Agent with respect thereto), with the Indenture Trustee’s assistance as necessary, cause the Designated Accounts (A) to be moved to a bank
or trust company, the short-term unsecured debt obligations of which shall have the Required Deposit Rating, or (B) to be moved to the corporate trust department of the Indenture Trustee. Investment Earnings on funds deposited in the Designated
Accounts shall be deposited into the Collection Account for distribution in accordance with Section 8.2 of the Indenture. The Indenture Trustee or the other Person holding the Designated Accounts as provided in this
Section 2.02(b)(i) shall be the “Securities Intermediary.” If the Securities Intermediary shall be a Person other than the Indenture Trustee, the Servicer shall obtain the express agreement of such Person to the
obligations of the Securities Intermediary set forth in this Section 2.02. 
 (ii) With respect to the Designated Account
Property, the parties hereto agree, by acceptance hereof, that: 
 (A) The Designated Accounts are accounts to which Financial
Assets will be credited. 
 (B) All securities or other property underlying any Financial Assets credited to the Designated
Accounts shall be registered in the name of the Securities Intermediary, indorsed to the Securities Intermediary or in blank or credited to another securities account maintained in the name of the Securities Intermediary and in no case will any
Financial Asset credited to any of the Designated Accounts be registered in the name of the Issuer, the Servicer or the Seller, payable to the order of the Issuer, the Servicer or the Seller or specially endorsed to the Issuer, the Servicer or the
Seller except to the extent the foregoing have been specially indorsed to the Securities Intermediary or in blank. 
 (C) All
property delivered to the Securities Intermediary pursuant to this Agreement will be promptly credited to the appropriate Designated Account. 
  

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 (D) Each item of property (whether investment property, Financial Asset, security,
instrument or cash) credited to a Designated Account shall be treated as a “financial asset” within the meaning of Section 8-102(a)(9) of the Illinois UCC. 
 (E) If at any time the Securities Intermediary shall receive any order from the Indenture Trustee directing transfer or redemption of any
Financial Asset relating to the Designated Accounts, the Securities Intermediary shall comply with such entitlement order without further consent by the Issuer, the Servicer, the Seller or any other Person. 
 (F) The Designated Accounts shall be governed by the laws of the State of Illinois, regardless of any provision in any other agreement.
For purposes of the UCC, Illinois shall be deemed to be the Securities Intermediary’s jurisdiction and the Designated Accounts (as well as the Securities Entitlements related thereto) shall be governed by the laws of the State of Illinois.

 (G) The Securities Intermediary has not entered into, and until the termination of this Agreement will not enter into, any
agreement with any other person relating to the Designated Accounts and/or any Financial Assets credited thereto pursuant to which it has agreed to comply with entitlement orders (as defined in Section 8-102(a)(8) of the Illinois UCC) of such
other person and the Securities Intermediary has not entered into, and until the termination of this Agreement will not enter into, any agreement with the Issuer, the Seller, the Servicer, the Indenture Trustee or the Swap Counterparty purporting to
limit or condition the obligation of the Securities Intermediary to comply with entitlement orders as set forth in Section 2.02(b)(ii)(E). 
 (H) Except for the claims and interest of the Indenture Trustee and of the Issuer in the Designated Accounts, the Securities Intermediary knows of no claim to, or interest in, the Designated Accounts or in any
Financial Asset credited thereto. If any other person asserts any lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Designated Accounts or in any Financial
Asset carried therein, the Securities Intermediary will promptly notify the Indenture Trustee, the Servicer, the Swap Counterparty and the Issuer thereof. 
 (I) The Securities Intermediary will promptly send copies of all statements, confirmations and other correspondence concerning the Designated Accounts and/or any Designated Account Property simultaneously to each of
the Servicer and the Indenture Trustee at the addresses set forth in Appendix B to the Pooling Agreement. 
 (iii) The Servicer shall have
the power, revocable by the Indenture Trustee (or by the Issuer with the consent of the Indenture Trustee) to instruct the Indenture Trustee to make withdrawals and payments from the Designated Accounts for the purpose of permitting the Servicer or
the Issuer to carry out its respective duties hereunder or permitting the Indenture Trustee to carry out its duties under the Indenture. 
  

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 (iv) The Indenture Trustee on behalf of the Secured Parties shall possess all right, title and interest
in and to all funds on deposit from time to time in the Designated Accounts and in all proceeds thereof (except Investment Earnings). Except as otherwise provided herein or in the Indenture, the Designated Accounts shall be under the sole dominion
and control of the Indenture Trustee for the benefit of the Securityholders. 
 (v) The Servicer shall not direct the Indenture Trustee to
make any investment of any funds or to sell any investment held in any of the Designated Accounts unless the security interest granted and perfected in such account shall continue to be perfected in such investment or the proceeds of such sale, in
either case without any further action by any Person, and, in connection with any direction to the Indenture Trustee to make any such investment or sale, if requested by the Indenture Trustee, the Servicer shall deliver to the Indenture Trustee an
Opinion of Counsel, acceptable to the Indenture Trustee, to such effect. 
 (c) Pursuant to the Trust Agreement, the Issuer shall possess all
right, title and interest in and to all funds on deposit from time to time in the Certificate Distribution Account and in all proceeds thereof. Except as otherwise provided herein or in the Trust Agreement, the Certificate Distribution Account shall
be under the sole dominion and control of the Issuer for the benefit of the Certificateholders. If, at any time, the Certificate Distribution Account ceases to be an Eligible Deposit Account, the Servicer shall within 10 Business Days (or such
longer period, not to exceed 30 calendar days, as to which the Certificateholders may consent) establish a new Certificate Distribution Account as an Eligible Deposit Account and shall cause the Issuer to transfer any cash and/or any investments in
the old Certificate Distribution Account to such new Certificate Distribution Account. 
 (d) The Indenture Trustee, the Issuer, the
Securities Intermediary and each other Eligible Deposit Institution with whom a Designated Account or the Certificate Distribution Account is maintained waives any right of set-off, counterclaim, security interest or bankers’ lien to which it
might otherwise be entitled. 
 SECTION 2.03 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, truck chassis, 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 Owner of such Receivable and to rewrite, in the ordinary course of its business, a Receivable to reflect the Full Prepayment of a Receivable with respect to any related Financed Vehicle without the prior consent of the Owner of
such Receivable. 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, truck chassis, bus and
trailer receivables that it services for itself or others. 
  

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 SECTION 2.04 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, truck chassis, 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(b)(i) 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 Series 2006-ARC Portfolio Assets.

 SECTION 2.05 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. 
 (b) 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. 
  

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 (c) With respect to Retail Leases, 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. 
 SECTION 2.06 Maintenance of Security 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. The Owner of each Receivable 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. 
 SECTION 2.07 Covenants of the Servicer. The Servicer hereby makes the following covenants on which
the Issuer is relying in acquiring the Receivables under the Pooling Agreement and issuing the Securities under the Further Transfer and Servicing Agreements: 
 (a) 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; 
 (b) the Servicer shall do nothing to impair the rights of NFRRC, the Issuer, the Securityholders or the Indenture
Trustee in and to such Receivables; 
 (c) the Servicer shall not amend or otherwise modify any Receivable such that the Starting Receivable
Balance, the Annual Percentage Rate or the total number of Scheduled Payments is altered or such that the final scheduled payment on such Receivable will be due any later than December 31, 2013; 
 (d) other than solely for the purpose of collecting or enforcing the Receivables for the benefit of the Owner and the Collateral Agent, (i) 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 and (ii) the entire legal and equitable interest of the Owner of a Receivable in such
Receivable and the Related Assets shall at all times be vested in such Owner; and 
  

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 (e) pursuant to any agreement between the Servicer and a Backup Servicer for backup servicing, the
Servicer shall (i) deliver to the Backup Servicer any materials required under such agreement, (ii) enforce material rights under such backup servicing agreement, (iii) report to the Funding Agent any defaults by either party under
such backup servicing agreement and, (iv) within 90 days of receiving a written instruction from the Funding Agent, replace such Backup Servicer if it materially defaults in its performance under the backup servicing agreement. 
 SECTION 2.08 Purchase of Receivables Upon Breach of Covenant. 
 (a) Upon discovery by the Servicer or a Responsible Officer of any of the Interested Parties or the Collateral Agent 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 second Accounting Date (or, at the Servicer’s election, the first Accounting Date) following notice to or discovery by the
Servicer of a breach of any covenant of the Servicer that materially and adversely affects any Receivable, unless such breach is cured in all material respects, the Servicer shall, with respect to such Receivable (an “Administrative
Receivable”) purchase such Administrative Receivable from the Issuer at a price equal to 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 or the Collateral Agent for any such uncured breach. 
 (b) Upon receipt of the Administrative Purchase Payment with respect to a Receivable which is an Administrative Receivable, the Owner and the Collateral
Agent 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 Person’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 Person with respect thereto. The
Servicer shall contribute any Administrative Receivable that 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 2.09 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 Distribution 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 Aggregate Receivables Balance as of the last day of the preceding Monthly Period; provided, however, that the Servicer shall be entitled to receive on the first Distribution Date a servicing fee equal
to one-sixth of 1% multiplied by the Aggregate Receivables Balance as of the last day of the preceding Monthly Period. On each Distribution Date, the Servicer will be paid the Basic 
  

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 Servicing Fee and any unpaid Basic Servicing Fees from all prior Distribution Dates (collectively, the “Total
Servicing Fee”) pursuant to Section 8.2(c) of the Indenture 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 retain all Supplemental Servicing Fees and shall not be obligated to deposit them into the Collection Account. 
 SECTION 2.10 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 the Issuer, any trustees and independent accountants, taxes imposed on the Servicer and expenses incurred in connection with distributions and reports and all other fees and expenses not expressly stated under
this Agreement to be for the account of the Interested Parties or the Collateral Agent, but excluding federal, state and local income taxes, if any, of the Issuer or any Securityholder. 
 SECTION 2.11 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. However, Collections received during the period from the Cutoff Date to the Closing Date shall be deposited to the Collection Account within 48 hours
after the Closing Date. 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 Distribution Date. 
 SECTION 2.12 Collections. In the event that: 
 (a) NFC is the Servicer, 
 (b) a Servicer Default shall not have occurred and be continuing, 
 (c) (i) the short-term unsecured debt of the Servicer is rated at least A-1 by S&P and P-1 by Moody’s, or 
 (ii) 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 Receivables for the latest Monthly Period ended prior to the next succeeding Distribution 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”), and 
 (d) the Funding Agent provides written
consent 
 then, the Servicer shall not be required to deposit Collections into the Collection Account until the Business Day preceding the Distribution 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.

  

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 SECTION 2.13 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: 
 (a) All payments by or on behalf of
the Obligor or other collections on a Receivable (including Warranty Payments and Administrative Purchase Payments but excluding Supplemental Servicing Fees and Investment Earnings) 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 
 (b) 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. With respect to Retail Leases, Prepayments (not constituting Full Prepayments) received in excess of Scheduled Payments will be held in the Collection Account and applied as Collected Amount in the Monthly Period
during which the applicable prepaid Scheduled Payment is due. 
 SECTION 2.14 Monthly Advances. Subject to the following sentence, as
of each Accounting 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
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. Subject to Section 8.2 of the Indenture, the Servicer shall be reimbursed for
unreimbursed Outstanding 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 Outstanding 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. 
 SECTION
2.15 Additional Deposits. The Servicer shall deposit in the Collection Account the aggregate Monthly Advances pursuant to Section 2.14. The Servicer and the Warranty Purchaser shall deposit in the Collection Account the aggregate
Administrative 
  

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 Purchase Payments and Warranty 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 Transfer Date with respect to the Distribution Date related to such Monthly Period. 
 SECTION 2.16 Net Deposits. At any time that (i) NFC shall be the Servicer and (ii) the Servicer shall be permitted by
Section 2.12 of this Agreement to remit collections on a basis other than a daily basis, the Servicer, the Seller, the Issuer, and each Trustee may make any remittances pursuant to this Article II of this Agreement or Article
VIII of the Indenture net of amounts to be distributed by the applicable recipient to such remitting party. Nonetheless, each such party shall account for all of the above described remittances and distributions as if the amounts were deposited
and/or transferred separately. 
 SECTION 2.17 Servicer’s Certificate 
 (a) Not later than 10:00 a.m. (Chicago, Illinois time) on each Determination Date, the Servicer shall deliver to each Trustee, the Swap Counterparty and
the Funding Agent a Servicer’s Certificate with respect to the immediately preceding Monthly Period executed by the President or any Vice President of the Servicer containing all information necessary to each such party for making the
calculations, withdrawals, deposits, transfers and distributions required by Sections 8.2 and 8.10 of the Indenture, and all information required to be provided to the Interested Parties under Section 8.8 of the Indenture.
Receivables to be purchased by the Servicer under Section 2.08 hereof, by NFC pursuant to Section 5.04 of the Purchase Agreement or by NFRRC under Section 2.06 of the Pooling Agreement as of the last day of any
Monthly Period shall be identified by Receivable number with respect to Retail Notes and by asset number with respect to Retail Leases (in each case, as set forth in the Composite Schedule of Receivables). With respect to any Receivables for which
the Seller is the Owner, the Servicer shall deliver to the Seller such accountings relating to such Receivables and the actions of the Servicer with respect thereto as the Seller may reasonably request. 
 (b) On or before each Determination Date, with respect to the preceding Monthly Period and the related Distribution Date, the Servicer shall calculate
the Collected Amount, the Total Available Amount, the Total Servicing Fee, the Noteholders’ Interest Distributable Amount, the Reserve Account Deposit Amount, the net amount, if any, payable by or to the Trust under the Interest Rate Swap
(including the amount of any termination payments and the amount of any payments that are not termination payments), the Principal Distribution Amount and all other amounts required to determine the amounts to be deposited in or paid from each of
the Collection Account, the Note Distribution Account, the Certificate Distribution Account and the Reserve Account on the next succeeding Distribution Date (or, in the case of payments due under the Interest Rate Swap, if any, on the Business Day
preceding the Distribution Date) and supply such information to the Issuer and the Indenture Trustee. 
 (c) On the Closing Date (with
respect to the remainder of calendar year 2006) and thereafter, within 15 days prior to the end of each calendar year while this Agreement remains in effect (with respect to the next succeeding calendar year), the Servicer shall deliver to either
the Indenture Trustee or the Owner Trustee, following receipt of a written request, an Officers’ Certificate specifying the days on which banking institutions in Chicago, Illinois are authorized or obligated by law or executive order to be
closed. 
  

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 ARTICLE III 
 STATEMENTS AND REPORTS 
 SECTION 3.01 Annual Statement as to Compliance; Notice of Servicer
Default; Tax Reports. 
 (a) The Servicer shall deliver to the Issuer, the Indenture Trustee, the Swap Counterparty, the Funding Agent and
the Collateral Agent, on or before February 1 of each year, beginning February 1, 2007, 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 Servicer’s immediately preceding fiscal year (or, with respect to the first such certificate, such period as
shall have elapsed from the Closing Date to the last day of the Servicer’s immediately preceding fiscal year) 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 or Certificateholder by a request in writing to the
Indenture Trustee or Issuer, respectively, addressed to the Corporate Trust Office of the Indenture Trustee or the Owner Trustee, respectively. 
 (b) The Servicer shall deliver to the Issuer, each Trustee, the Collateral Agent and the Funding Agent, promptly after having obtained knowledge thereof, but in no event later than five Business Days thereafter, written notice in an
Officer’s Certificate of any event which with the giving of notice or lapse of time, or both, would become a Servicer Default under Section 7.01. 
 (c) The Servicer shall prepare and deliver to the Issuer, the Funding Agent and the Indenture Trustee the annual report described in Section 8.8(b) of the Indenture. 
 SECTION 3.02 Annual Accountants’ Report. 
 (a) The Servicer shall cause a firm of independent accountants, who may also render other services to the Servicer or NFRRC, to deliver to the Issuer, the Swap Counterparty, each Trustee, the Collateral Agent and the Funding Agent, on or
before February 1 of each year, beginning with February 1, 2007 with respect to the Servicer’s immediately preceding fiscal year, (or, with respect to the first such report, such period as shall have elapsed from the Closing Date to
the last day of the Servicer’s immediately preceding fiscal year), a copy of the 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 and (ii) included tests relating to Receivables serviced for others in accordance
with the requirements of the Minimum Servicing Standards set forth in Appendix A hereto. 
  

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 (b) The Accountants’ Report shall also indicate that the firm is independent of NFRRC 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 or Certificateholder by a request in writing to the Indenture Trustee or the Issuer, addressed to the Corporate Trust Office of the Indenture Trustee or the Owner Trustee, respectively.

 SECTION 3.03 Access to Certain Documentation and Information Regarding Receivables. The Servicer shall provide to the Issuer, each
Trustee, the Funding Agent and Securityholders reasonable access to the Servicer’s records regarding the Receivables owned by the Issuer. The Servicer shall provide such access to any Securityholder only in such cases where a Securityholder 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. 
 SECTION 3.04 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 Series 2006-ARC Portfolio Interest. The Composite Schedule of Receivables shall be updated to reflect all sales of Receivables as a result of a Receivable
becoming a Warranty Receivable or an Administrative Receivable. The Servicer shall deliver to the Owner Trustee, the Indenture Trustee, the Funding Agent 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) an updated Composite Schedule of Receivables on or before each Distribution Date. 
 SECTION 3.05 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 Distribution 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. 
  

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 SECTION 3.06 Maintenance of Systems and Receivables List. 
 (a) The Servicer shall maintain accounts and records as to each Receivable accurately and in sufficient detail to permit (i) the reader thereof to
know the status of such 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 Receivable and the amounts from time to time deposited in the Collection Account with respect to such 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 Receivable shall indicate clearly that the Receivable is owned
by the Issuer and that such Receivable has been pledged by the Issuer to the Indenture Trustee. Indication of the Issuer’s and the Indenture Trustee’s interest in a Receivable shall be deleted from or modified on the Servicer’s
computer systems when, and only when, the 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 truck, truck chassis, 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 Receivable, indicate clearly that such Receivable has been sold and is owned by the Issuer and has been pledged to the Indenture Trustee on behalf of the Noteholders unless such
Receivable has been paid in full, repurchased by Navistar Financial or purchased by the Servicer. 
 (d) The Servicer will furnish to the
Issuer and the Indenture Trustee at any time upon request a list of all Receivables then held as part of the Owner Trust Estate, together with a reconciliation of such list to the Composite Schedule of Receivables and to each of the Servicer’s
Certificates furnished before such request indicating removal of Receivables from the Owner Trust Estate. Upon request, the Servicer shall furnish a copy of any such list to the Seller. 
 (e) The Servicer shall 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 preserve, maintain and protect the interest of the Issuer under the Pooling Agreement in the Receivables, the Series 2006-ARC Portfolio Interest and the Series 2006-ARC Portfolio Certificate and the
Indenture Trustee’s security interest in the Receivables, the Series 2006-ARC Portfolio Interest and the Series 2006-ARC Portfolio Certificate under the Indenture. The Servicer shall deliver (or cause to be delivered) to the Indenture Trustee
file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing. 
 ARTICLE IV 
 THE CUSTODIAN 
 SECTION 4.01 Custody of Receivable Files. To assure uniform quality in servicing the Receivables and to reduce administrative costs, the Owner of each Receivable hereby appoints the Servicer, and the Servicer
hereby accepts such appointment, to act as agent 
  

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 of the Owner of each Receivable as custodian to maintain custody of the following documents or instruments with respect
to such Receivable (as to each Receivable, the “Receivable File”), which will be hereby constructively delivered to the Owner of the related Receivable and the Indenture Trustee: 
 (a) the fully executed original of the Retail Note or Retail Lease, as the case may be; 
 (b) documents evidencing or related to any related Insurance Policy; 
 (c) 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 NFC 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 NFC as first lienholder or secured party; 
 (d) if such Receivable is a Retail Lease, the original Certificate of Title and such other documents that NFC is required to maintain pursuant to Section 3.6 of the Titling Trust Servicing Agreement; and 
 (e) any and all other documents that NFC keeps on file in accordance with its customary procedures relating to the individual Receivable, Obligor or
Financed Vehicle. 
 SECTION 4.02 Duties of Servicer as Custodian. 
 (a) The Servicer shall hold each Receivable File for the benefit of the Owner of the related Receivable and maintain such accurate and complete accounts,
records and computer systems pertaining to each Receivable File as shall enable NFRRC, the Issuer and the Indenture Trustee to comply with their respective obligations, if any, under the Purchase Agreement and the Further Transfer and Servicing
Agreements. Each Receivable shall be identified as such on the books and records of the Servicer to the extent the Servicer reasonably determines to be necessary to comply with the terms and conditions of the Purchase Agreement and, if applicable,
the Further Transfer and Servicing Agreements. 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 truck, truck chassis, 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 Owner Trustee and the Indenture Trustee to verify the accuracy of the Servicer’s inventory and record keeping. The Servicer shall promptly
report to each Owner 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. 
 (b) The Servicer shall maintain each Receivable File at its principal office at 425 N. Martingale Road, Suite 1800, Schaumburg, Illinois 60173, or at
such other office of the Servicer as shall from time to time be identified to the Owners and the Indenture Trustee upon 60 days’ prior written notice. Subject only to the Custodian’s security requirements applicable to its 
  

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 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 the Owners, the Indenture Trustee or 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 the Owner Trustee generally in the preparation of routine reports to
Securityholders, if any, or to regulatory bodies to the extent necessitated by the Servicer’s custody of the Receivable Files. 
 SECTION 4.03 Custodian’s Indemnification. The Servicer as custodian shall indemnify the 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 the Issuer or the Indenture Trustee, any 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 to the Issuer or the
Indenture Trustee for any portion of any such amount resulting from the willful misfeasance, bad faith or negligence of such Person. 
 SECTION 4.04 Effective Period and Termination. The Servicer’s appointment as Custodian with respect to a Receivable File hereunder shall become effective as of the related 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
Article VII the appointment of such Servicer as custodian shall be terminated. Upon (i) the repurchase of a Warranty Receivable by NFC pursuant to the Purchase Agreement, (ii) purchase of a Warranty Receivable by NFRRC pursuant to
the Pooling Agreement or (iii) purchase of an Administrative Receivable by the Servicer pursuant to Section 2.08(a) of this Agreement, the Servicer shall deliver the related Receivable File to or at the direction of the purchaser.
Upon delivery of such Receivable File, the Servicer’s obligations with respect to such Receivable File shall terminate. 
 ARTICLE V

 REPRESENTATIONS AND WARRANTIES 
 OF THE SERVICER 
 SECTION 5.01 Representations and Warranties of the Servicer. The Servicer
hereby represents and warrants to NFRRC and the Issuer that as of the Purchase Date: 
 (a) 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. 
  

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 (b) 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. 
 (c) Power and Authority. The Servicer has the power and authority
to execute and deliver this Agreement, 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. 
 (d) 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. 
 (e)
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. 
 (f) 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 the issuance of the Securities, or (iii) seeking any determination or ruling that would reasonably be expected to have a Material Adverse Effect with respect to the
Servicer. 
 (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 by or against the Servicer of this Agreement or the Titling Trust Servicing
Agreement. 
  

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 ARTICLE VI 
 THE SERVICER 
 SECTION 6.01 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 NFC’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 Funding Agent, the Owner Trustee and the Indenture Trustee.

 SECTION 6.02 Limitation on Liability of Servicer and Others. 
 (a) 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 any other Further Transfer and Servicing 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 Further Transfer and Servicing Agreements. 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. 
 (b) 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 and the interests of the Securityholders under this Agreement and the Noteholders and (to the extent expressly provided therein)
the Certificateholders under the Indenture and the interests of the Certificateholders under the Trust Agreement. In such event, the legal expenses and costs for such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Issuer and the Servicer shall be entitled to be reimbursed therefor. 
 SECTION 6.03 Delegation of Duties. So long
as NFC 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, truck chassis, 
  

 - 20 - 

 bus and trailer receivables; provided, however, that (i) no such delegation shall relieve the Servicer of its
responsibility with respect to such duties and (ii) the Servicer shall give notice to the Funding Agent prior to such delegation and, with respect to any such delegation of titling and insurance duties, the Servicer shall cause such subservicer
to provide the Funding Agent with reasonable access to the records of such subservicer such that the Funding Agent may make a reasonable evaluation of such delegate’s performance of such duties. 
 SECTION 6.04 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. 
 SECTION 6.05 Servicer Indemnification of the Indenture Trustee and the Owner Trustee. 
 (a) The Servicer (other than the
Indenture Trustee in its capacity as successor Servicer pursuant to Section 7.03 hereof) shall be liable in accordance with this Agreement only to the extent of the obligations in this Agreement specifically undertaken by the Servicer. Such
obligations shall include the following: 
 (i) The Servicer (other than any successor Servicer who is not an affiliate of the initial
Servicer, including the Indenture Trustee in its capacity as successor Servicer pursuant to Section 7.03 hereof it being understood that the removed Servicer shall retain such liability) shall defend, indemnify and hold harmless the
Indenture Trustee (individually and in its capacity as Indenture Trustee), the Owner Trustee, the Issuer, the Collateral Agent and the Interested Parties 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; 
 (ii) The
Servicer (other than any successor Servicer who is not an affiliate of the initial Servicer, including the Indenture Trustee in its capacity as successor Servicer pursuant to Section 7.03 hereof it being understood that the removed
Servicer shall retain such liability) shall indemnify, defend and hold harmless the Issuer, the Owner Trustee and the Indenture Trustee (individually and in its capacity as Indenture Trustee) from and against any taxes that may at any time be
asserted against any such Person with respect to the transactions contemplated in this Agreement and the Pooling Agreement, including any sales, gross receipts, general corporation, Illinois corporate income, tangible personal property, privilege or
license taxes (but not including any taxes asserted with respect to, and as of the date of, the sale of the Receivables to the Owner Trustee or the issuance and original sale of the Securities, or asserted with respect to ownership of the
Receivables, or federal or other income taxes arising out of distributions on the Securities, or any fees or other compensation payable to any such Person) and costs and expenses in defending against the same; 
  

 - 21 - 

 (iii) The Servicer shall indemnify, defend and hold harmless the Issuer, the Owner Trustee, the
Indenture Trustee (individually and in its capacity as Indenture Trustee), the Collateral Agent and the Interested Parties from and against any and all costs, expenses, losses, claims, damages, and liabilities to the extent that such cost, expense,
loss, claim, damage, or liability arose out of, or was imposed upon such Person through the negligence, willful misfeasance or bad faith of the Servicer in the performance of its duties under this Agreement and any other Transfer and Servicing
Agreements or by reason of reckless disregard of its obligations and duties under any of the Transfer and Servicing Agreements; 
 (iv) The
Servicer (other than any successor Servicer who is not an affiliate of the initial Servicer, including the Indenture Trustee in its capacity as successor Servicer pursuant to Section 7.03 hereof it being understood that the removed
Servicer shall retain such liability) shall indemnify, defend and hold harmless each Trustee (individually and in its capacity as Trustee) and their respective agents, officers, directors and servants, from and against all costs, expenses, losses,
claims, damages and liabilities arising out of or incurred in connection with (x) in the case of the Owner Trustee, the Indenture Trustee’s performance of its duties under the Basic Documents, (y) in the case of the Indenture Trustee,
the Owner Trustee’s performance of its duties under the Basic Documents or (z) the acceptance, administration or performance by, or action or inaction of, the applicable Trustee of the trusts and duties contained in this Agreement, the
Basic Documents, the Indenture (in the case of the Indenture Trustee), including the administration of the Collateral, and the Trust Agreement (in the case of the Owner Trustee), including the administration of the Owner Trust Estate, except in each
case to the extent that such cost, expense, loss, claim, damage or liability: (A) is due to the willful misfeasance, bad faith or negligence (except for errors in judgment) of the Person seeking to be indemnified, (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) to the extent otherwise payable to the Owner Trustee,
arises from the Owner Trustee’s breach of any of its representations or warranties set forth in Section 6.6 of the Trust Agreement; and 
 (v) The Servicer (other than any successor Servicer who is not an affiliate of the initial Servicer, including the Indenture Trustee in its capacity as successor Servicer pursuant to Section 7.03 hereof it
being understood that the removed Servicer shall retain such liability) will indemnify the Owner Trustee in accordance with the provisions specified in Section 6.9 of the Trust Agreement. 
 (b) Indemnification under this Section 6.05 shall survive the resignation or removal of the Owner Trustee or the Indenture Trustee or the
termination of this Agreement and shall include reasonable fees and expenses of counsel and expenses of litigation. 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. 
 SECTION 6.06
Backup Servicer. On or prior to the Closing Date, NFC, as Servicer, will enter into a backup servicing agreement (the “Backup Servicing Agreement”) with a Person who meets the criteria specified for a successor Servicer as
set forth in Section 7.03 and who agrees to become a successor servicer if appointed by the Indenture Trustee pursuant to 
  

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 Section 7.03 (the “Backup Servicer”). Prior to each Distribution Date, the Servicer shall
deliver to the Backup Servicer a data tape or other electronic data file compiling data for the previous calendar month relating to the Receivables. The Backup Servicer shall have within 30 days of the Closing Date mapped the Servicer’s data
system as it relates to the Receivables. The costs and expenses associated with the Backup Servicer performing such system data mapping shall be paid for by the Servicer. Unless and until a Servicer Default occurs and the Backup Servicer is
appointed as the successor Servicer, the Backup Servicer shall not have any obligation as Servicer under this Agreement. 
 SECTION 6.07
Reports of Independent Accountants. Within 30 days after the Closing Date, NFC, as Servicer, will execute an engagement letter with a firm of independent accountants, which shall initially be KPMG LLP, pursuant to which such accountants shall
agree to deliver to the Funding Agent and the Servicer on a quarterly basis beginning with the quarter relating to the September, October and November 2006 Payment Dates (and after the first anniversary of the Closing Date if the Servicer is then
current on filing its 10-K and 10-Q reports with the SEC, on an annual basis or, during the occurrence of a Servicer Default, as requested by the Funding Agent, but not more often than on a monthly basis) an agreed upon procedures letter, in form
and substance previously agreed by such accountants and the Funding Agent, verifying (or noting exceptions to) the Ending Principal Balance, Aggregate Losses, Loss Percentage and Delinquency Percentage calculations in the Servicer’s Certificate
which was issued on the last Payment Date of the related period. In the event such letter shall not have been delivered by the last Business Day of the month in which the last Payment Date of the related period shall have occurred, then the
accountants shall deliver to the Funding Agent a report with respect to the status of such letter not later than such last Business Day. 
 ARTICLE VII 
 DEFAULT 
 SECTION 7.01 Servicer Defaults. Each of the following shall constitute a “Servicer Default”: 
 (a) any failure by the Servicer to deliver to the Indenture Trustee for deposit in any of the Designated Accounts or to the Owner Trustee for deposit in the Certificate Distribution Account any required payment or to direct the Indenture
Trustee to make any required distributions therefrom, in each case which failure continues unremedied for three Business Days after the earlier of (i) written notice is received by the Servicer from the applicable Trustee or the Funding Agent
or (ii) the actual knowledge of an officer of the Servicer of such failure; 
 (b) any failure by the Servicer duly to observe or
perform 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 Securityholders and which
continues unremedied for 60 days after (A) the giving of written notice of such failure (i) to the Servicer by either Trustee or the Funding Agent or (ii) to the Servicer and to either Trustee by the holders of not less than 25% of
the Outstanding Amount of the Controlling Class or (B) the actual knowledge of an officer of the Servicer of such failure; 
  

 - 23 - 

 (c) 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 giving of written notice of such failure to the Servicer or the actual knowledge of an officer of the Servicer of such
failure; 
 (d) the occurrence of an Insolvency Event with respect to the Servicer; and 
 (e) the failure of the Servicer to remove and replace the Backup Servicer with a Person reasonably acceptable to the Funding Agent within 90 days after
the Funding Agent gives the Servicer a written instruction to remove and replace such Backup Servicer, which notice is given while the Backup Servicer is failing to perform, in any material respect, its obligations specified in
Section 6.06. 
 SECTION 7.02 Consequences of a Servicer Default. If a Servicer Default shall occur and be continuing, the
Indenture Trustee or holders of Securities evidencing not less than a majority of the Outstanding Amount of the Controlling Class 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, under the Titling Trust Servicing Agreement and under all sub-servicing agreements 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 either 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
either Trustee for administration by it of all cash amounts that shall at the time be held by the Servicer for deposit, or that shall have been deposited by the Servicer in the Collection Account, the Reserve Account, the Note Distribution Account
or the Certificate Distribution Account or thereafter received that shall at any time be held with respect to the Receivables by the Servicer. 
  

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 SECTION 7.03 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 if the Backup Servicer satisfies the criteria for a successor servicer specified below, the Indenture Trustee shall promptly appoint
the Backup Servicer as the successor Servicer; provided, further, 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 NFC 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 or the Backup Servicer 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 including, but not limited to, the Total Servicing Fee and Supplemental Servicing Fees. Notwithstanding the above, if the Indenture Trustee does not appoint the Backup Servicer as
the successor servicer then the Indenture Trustee may, if it is legally unable to so 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 or whose majority
owner is, either directly or indirectly, a Person having a net worth on a consolidated basis of not less than $100,000,000 and (ii) whose regular business includes the servicing of receivables of the type included in the Collateral, 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. Upon termination of the Servicer and after appointment of a successor Servicer, the Servicer shall reasonably cooperate with such successor Servicer to notify all Obligors to cease
remitting payments to bank accounts and lock boxes controlled by the Servicer and to instead remit payment directly to any bank accounts and lock boxes designated by such successor Servicer. If at any time on or after the date on which the Servicer
is terminated the Servicer receives any payment from any Obligor, then the Servicer shall promptly forward the amount of such payment, along with copies of any remittances or other documentation accompanying such payment, to the successor Servicer.

 SECTION 7.04 Notification to Securityholders. Upon any termination of, or appointment of a successor to, the Servicer pursuant to
this Article VII, the Indenture Trustee shall give prompt written notice thereof to the Noteholders and the Funding Agent and the Owner Trustee shall give prompt written notice thereof to the Certificateholders. 
  

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 SECTION 7.05 Repayment of Advances. If a successor Servicer shall be appointed, the predecessor
Servicer shall be entitled to receive, to the extent of available funds, reimbursement for Outstanding Monthly Advances pursuant to Section 2.14 in the manner specified in Section 8.2 of the Indenture with respect to all
Monthly Advances made by such predecessor Servicer. The successor Servicer shall not be entitled to reimbursement for Monthly Advances made by the predecessor Servicer. 
 SECTION 7.06 Waiver of Past Defaults. The Indenture Trustee, at the direction of the holders of not less than a majority of the Outstanding Amount of the Controlling Class, 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 or payments from any of the Designated Accounts 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 Funding Agent. 
 ARTICLE VIII 
 MISCELLANEOUS 
 SECTION 8.01
Amendment. This Agreement may be amended from time to time (subject to any expressly applicable amendment provision of the Further Transfer and Servicing Agreements) by a written amendment duly executed and delivered by the parties hereto
with the consent of the Funding Agent; provided, however, that this Agreement may not be amended unless such amendment is in accordance with the provisions of Section 5.01 of the Pooling Agreement as if such
Section 5.01 were contained herein and were applicable to this Agreement. Notwithstanding any other provision of this Agreement, if the consent of the Swap Counterparty is required pursuant to the Swap Counterparty Rights Agreement, any
such purported amendment shall be null and void ab initio unless the Swap Counterparty consents in writing to such amendment. 
 SECTION 8.02
Termination. The respective obligations and responsibilities of the parties hereto pursuant to this Agreement shall terminate upon the earlier of: 
 (a) the maturity or other liquidation of the last Receivable and the disposition of any amounts received upon liquidation of any such remaining Receivables or 
 (b) the termination of the Pooling Agreement pursuant to Section 4.02 thereof. 
 SECTION 8.03 Notices. All notices, requests and demands to NFRRC, the Servicer, either Trustee or the Funding Agent under this Agreement shall be
delivered as specified in Appendix B to the Pooling Agreement. 
 SECTION 8.04 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. 
  

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 SECTION 8.05 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. 
 SECTION 8.06 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. 
 SECTION 8.07 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 6.03 or in this Article VIII, no other Person shall have any right or obligation
hereunder. 
 SECTION 8.08 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. 
 SECTION 8.09 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. 
 SECTION 8.10 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 final distribution with respect to the Securities to the Note Distribution Account or the Certificate Distribution Account, as applicable, acquiesce, petition or otherwise invoke
or cause the Issuer or NFRRC 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 the Issuer or NFRRC any bankruptcy, reorganization,
arrangement, insolvency, liquidation proceeding, or similar law of the United States or any state of the United States. 
  

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 SECTION 8.11 Limitation of Liability of the Trustees. 
 (a) Notwithstanding anything contained herein to the contrary, this Agreement has been acknowledged and accepted by LaSalle Bank National Association, not
in its individual capacity but solely as Indenture Trustee, and in no event shall LaSalle Bank National Association have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any
of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. 
 (b) Notwithstanding anything contained herein to the contrary, this Agreement has been executed by Chase Bank USA, National Association not in its individual capacity but solely in its capacity as Owner Trustee and in no event shall Chase
Bank USA, National Association in its individual capacity or, except as expressly provided in the Trust Agreement, as Owner Trustee of the Issuer have any liability for the representations, warranties, covenants, agreements or other obligations of
the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. For all purposes of this Agreement, in the performance of its duties or
obligations hereunder, or in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Article VI of the Trust Agreement. 
 [END OF PAGE] 
 [SIGNATURE PAGE FOLLOWS]

  

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 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:	 	 /s/ John V. Mulvaney, Sr.

	Name:	 	John V. Mulvaney, Sr.
	Title:	 	Vice President and Controller
	
	 NAVISTAR FINANCIAL RETAIL RECEIVABLES
 CORPORATION

		
	By:	 	 /s/ John V. Mulvaney, Sr.

	Name:	 	John V. Mulvaney, Sr.
	Title:	 	Vice President and Controller
	
	HARCO LEASING COMPANY, INC.
		
	By:	 	 /s/ John V. Mulvaney, Sr.

	Name:	 	John V. Mulvaney, Sr.
	Title:	 	Vice President and Controller
	
	 THE BANK OF NEW YORK TRUST COMPANY, N.A.,
 not in its individual capacity, but solely
 as Collateral
Agent

		
	By:	 	 /s/ Sally R. Tokich

	Name:	 	Sally R. Tokich
	Title:	 	Assistant Vice President

			
	 J.P. MORGAN TRUST COMPANY, NATIONAL
 ASSOCIATION (AS SUCCESSOR-IN-INTEREST TO
 BANK ONE, NATIONAL ASSOCIATION),
 not in its individual capacity, but solely
 as Portfolio
Trustee

		
	By:	 	 /s/ Janice Ott Rotunno

	Name:	 	Janice Ott Rotunno
	Title:	 	Vice President
	
	NAVISTAR FINANCIAL 2006-ARC OWNER TRUST
	
	By: Chase Bank USA, National Association, not in its individual capacity, but solely as Owner Trustee
		
	By:	 	 /s/ Sarika M. Sheth

	Name:	 	Sarika M. Sheth
	Title:	 	Assistant Vice President
	
	 LASALLE BANK NATIONAL ASSOCIATION,
 not in
its individual capacity, but solely as Indenture Trustee

		
	By:	 	 /s/ Timothy E. Cutsinger

	Name:	 	Timothy E. Cutsinger
	Title:	 	Assistant Vice President

 Servicing Agreement 

			
	The Indenture Trustee, in its role as Securities Intermediary, hereby acknowledges its undertaking as set forth in Section 2.02
		
	By:	 	 /s/ Timothy E. Cutsinger

	Name:	 	Timothy E. Cutsinger
	Title:	 	Assistant Vice President
	
	NAVISTAR LEASING COMPANY
	
	By: J.P. Morgan Trust Company, National Association (as successor-in-interest to Bank One, National Association), as General Interest Trustee
		
	By:	 	 /s/ Janice Ott Rotunno

	Name:	 	Janice Ott Rotunno
	Title:	 	Vice President

 Servicing Agreement 

 APPENDIX A 
 MINIMUM SERVICING STANDARDS 
  

	I.	CUSTODIAL BANK ACCOUNTS 

  

	 	1.	Reconciliations shall be prepared on a monthly basis for all custodial bank accounts and related bank clearing accounts. These reconciliations shall: 

  

	 	a)	be mathematically accurate; 

  

	 	b)	be prepared within forty-five (45) calendar days after the cutoff date; 

  

	 	c)	be reviewed and approved by someone other than the person who prepared the reconciliation; and 

  

	 	d)	document explanations for reconciling items. These reconciling items shall be resolved within ninety (90) calendar days of their original identification. 

 

	 	2.	Each custodial account shall be maintained at a federally insured depository institution in trust for the applicable investor. 

  

	II.	RETAIL CONTRACT PAYMENTS 

  

	 	1.	Retail contract payments shall be deposited into the custodial bank accounts and related bank clearing accounts within two business days of receipt. 

  

	 	2.	Retail contract payments made in accordance with the retail contract documents shall be posted to the applicable retail contract records within two business days of receipt.

  

	 	3.	Retail contract payments shall be allocated to principal, interest, insurance, taxes or other items, as applicable, in accordance with the Servicer’s
customary servicing procedures. 

  

	 	4.	Retail contract payments identified as loan payoffs shall be allocated in accordance with the retail contract documents. 

  

	III.	DISBURSEMENTS 

  

	 	1.	Amounts remitted to the collection accounts per the Servicer’s investor reports shall agree with cancelled checks, or other form of payment, or custodial bank statements.

  

	 	2.	Unused checks shall be safeguarded so as to prevent unauthorized access. 

  

	IV.	INVESTOR ACCOUNTING AND REPORTING 

  

	 	1.	Statements are sent on a monthly basis listing the total unpaid principal balance, pool balance, and other amounts required to be reported by the transaction documents.

	V.	RETAIL INSTALLMENT CONTRACTS ACCOUNTING 

  

	 	1.	The servicing entity’s retail contract loan records shall agree with, or reconcile to, the records of obligors with respect to the unpaid principal balance on a monthly basis.

  

	VI.	DELINQUENCIES 

  

	 	1.	The servicing entity shall maintain and update records documenting collection efforts for retail contracts during the period such loan is in default. 

 Servicing AgreementLease Purchase Agreement

 EXHIBIT 10.7 
 EXECUTION COPY 
  

 LEASE PURCHASE AGREEMENT 
 BETWEEN 
 HARCO LEASING COMPANY, INC. 
 AND

 NAVISTAR FINANCIAL CORPORATION 
 DATED AS OF SEPTEMBER 1, 2006 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	ARTICLE I DEFINITIONS	  	1
		  	 SECTION 1.01 Certain Defined Terms
	  	1
		
	ARTICLE II PURCHASE AND SALE OF SERIES 2006-ARC PORTFOLIO INTEREST AND LEASES; SECURITY INTEREST IN LEASED VEHICLES	  	1
		  	 SECTION 2.01 Transfer
	  	1
		  	 SECTION 2.02 [Reserved]
	  	2
		  	 SECTION 2.03 The Closing
	  	2
		  	 SECTION 2.04 Transfer Intended as a Sale
	  	2
		
	ARTICLE III REPRESENTATIONS AND WARRANTIES	  	3
		  	 SECTION 3.01 Representations and Warranties Regarding Lease Receivables
	  	3
		  	 SECTION 3.02 Representations and Warranties Regarding Harco Leasing
	  	4
		  	 SECTION 3.03 Representations and Warranties Regarding Titling Trust
	  	6
		  	 SECTION 3.04 Representations and Warranties of NFC
	  	7
		
	ARTICLE IV CONDITIONS	  	8
		  	 SECTION 4.01 Conditions Precedent to NFC’s Purchase of Lease Receivables
	  	8
		  	 SECTION 4.02 [Reserved]
	  	9
		  	 SECTION 4.03 Conditions to Obligation of Harco Leasing
	  	9
		
	ARTICLE V ADDITIONAL AGREEMENTS	  	10
		  	 SECTION 5.01 UCC Filings
	  	10
		  	 SECTION 5.02 Computer Files Marked
	  	10
		  	 SECTION 5.03 Protection of Title
	  	10
		  	 SECTION 5.04 Other Liens or Interests
	  	11
		  	 SECTION 5.05 Indemnification
	  	11
		  	 SECTION 5.06 Reserved
	  	11
		  	 SECTION 5.07 Repurchase Events
	  	11
		  	 SECTION 5.08 Further Assignments
	  	12
		  	 SECTION 5.09 Pre-Closing Collections
	  	12
		  	 SECTION 5.10 Limitation on Transfer of International Purchase Obligations
	  	12
		  	 SECTION 5.11 Bankruptcy Proceeding
	  	12
		  	 SECTION 5.12 Sale Treatment
	  	13
		
	ARTICLE VI MISCELLANEOUS PROVISIONS	  	13
		  	 SECTION 6.01 Amendment
	  	13
		  	 SECTION 6.02 Survival
	  	13
		  	 SECTION 6.03 Notices
	  	13
		  	 SECTION 6.04 Governing Law
	  	13
		  	 SECTION 6.05 Waivers
	  	13
		  	 SECTION 6.06 Costs and Expenses
	  	14
		  	 SECTION 6.07 Headings
	  	14

  

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		 	 SECTION 6.08 Counterparts
	  	14
		 	 SECTION 6.09 Severability of Provisions
	  	14
		 	 SECTION 6.10 Further Assurances
	  	14
		 	 SECTION 6.11 No Third-Party Beneficiaries
	  	14
		 	 SECTION 6.12 Merger and Integration
	  	14

 Exhibit A         Form of LPA Assignment 
  

 - ii - 

 LEASE PURCHASE AGREEMENT 
 THIS LEASE PURCHASE AGREEMENT (this “Agreement”) is made as of September 1, 2006 by and between Harco Leasing Company, Inc., a
Delaware corporation (“Harco Leasing”), and Navistar Financial Corporation, a Delaware corporation (“NFC”). 
 RECITALS: 
 WHEREAS, Harco Leasing, as Grantor and Initial Beneficiary, the General Interest Trustee and the Delaware
Trustee have entered into the Titling Trust Agreement, pursuant to which the Titling Trust was formed for the purpose of acquiring, holding and dealing in Titling Trust Assets; 
 WHEREAS, Harco Leasing holds the General Interest in the Titling Trust, representing the beneficial ownership interest in the General Titling Trust
Assets; 
 WHEREAS, pursuant to Section 3.2 of the Titling Trust Agreement a portion of the General Interest Trust Assets have
been allocated to the Series 2006-ARC Portfolio Interest; 
 WHEREAS, NFC desires to purchase the 2006-ARC Portfolio Interest from Harco
Leasing; 
 WHEREAS, Harco Leasing is willing, on the terms and subject to the conditions set forth herein, to sell the Series 2006-ARC
Portfolio Interest to NFC. 
 NOW, THEREFORE, in consideration of the foregoing, the other good and valuable consideration and the mutual
terms and covenants herein contained, the parties hereto agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 SECTION 1.01 Certain
Defined Terms. Capitalized terms used and not otherwise defined in the above recitals and in this Agreement shall have the respective meanings assigned them in Appendix A to the Pooling Agreement dated as of the date hereof between
Navistar Financial Retail Receivables Corporation and Navistar Financial 2006-ARC Owner Trust. 
 ARTICLE II 
 PURCHASE AND SALE OF SERIES 2006-ARC PORTFOLIO INTEREST AND 
 LEASES; SECURITY INTEREST IN LEASED VEHICLES 
 SECTION 2.01 Transfer. On the date hereof (the
“Lease Purchase Date”), Harco Leasing hereby: 
 (a) sells, transfers, assigns, delivers and conveys to NFC, and NFC hereby
purchases from Harco Leasing, all of Harco Leasing’s right, title and interest in and to the Series 2006-ARC Portfolio Interest, the Series 2006-ARC Portfolio Certificate and the beneficial interest in the Series 2006-ARC Portfolio Assets
represented thereby; and 

 (b) directs the General Interest Trustee and the Servicer to identify from the General Titling Trust
Assets allocable to the General Interest, and to allocate to the Series 2006-ARC Portfolio Interest, all of the right, title and interest of Harco Leasing and the Titling Trust in and to the Retail Leases identified on the Schedule of Retail Leases
attached to the assignment, dated the date hereof, and substantially in the form of Exhibit A (the “LPA Assignment”), and the Related Titling Trust Assets with respect to such Retail Leases. 
 SECTION 2.02 [Reserved]. 
 SECTION
2.03 The Closing. The consummation of the purchase and sale contemplated by Section 2.01 (the “Lease Purchase Closing”) shall take place on the Lease Purchase Date, and at such place and at such time as Harco
Leasing and NFC may agree upon. In consideration for the Series 2006-ARC Portfolio Assets sold at the Lease Purchase Closing, NFC shall pay to Harco Leasing on the Lease Purchase Date an amount equal to the aggregate Starting Receivable Balance as
of the Cutoff Date (the “Lease Purchase Price”) of the Retail Leases being so sold (the “Designated Retail Leases”) on the Lease Purchase Date. The Lease Purchase Price shall be paid to Harco Leasing in immediately
available funds. 
 SECTION 2.04 Transfer Intended as a Sale. It is the express intent of Harco Leasing and NFC that the conveyances
and allocations of the Series 2006-ARC Portfolio Interest, the Series 2006-ARC Portfolio Certificate and the Series 2006-ARC Portfolio Assets shall constitute sales of personal property which is absolute and irrevocable and which is without recourse
to Harco Leasing, except as provided herein, and which provides NFC with the full benefits of exclusive legal and beneficial ownership of the Series 2006-ARC Portfolio Interest and the Series 2006-ARC Portfolio Certificate and with exclusive
beneficial ownership of the Series 2006-ARC Portfolio Assets allocated to the Series 2006-ARC Portfolio Interest (collectively, the “Sold Retail Lease Property”). It is, further, not the intention of either Harco Leasing or NFC that
any such sale be deemed a grant of a security interest in such Sold Retail Lease Property by Harco Leasing to NFC to secure a debt or other obligation of Harco Leasing. However, in the event that, notwithstanding the intent of the parties, such
property is held by a court of law to continue to be property of Harco Leasing, then (i) this Agreement shall be deemed to be a security agreement within the meaning of the applicable UCC; and (ii) the transfers and allocations by Harco
Leasing provided for in this Agreement shall be deemed to be, and Harco Leasing hereby grants to NFC, a security interest in and to all of Harco Leasing’s right, title and interest in and to such Sold Retail Lease Property and all proceeds of
such property. Notwithstanding anything else to the contrary contained herein, Harco Leasing shall not be liable to NFC for any failure by any Obligor to make payments owed in respect of Sold Retail Lease Property. 
  

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 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES 
 SECTION 3.01 Representations and Warranties Regarding Lease
Receivables. As of the Lease Purchase Date, Harco Leasing represents and warrants to NFC as follows with respect to the Designated Retail Leases and the other Sold Retail Lease Property transferred on such date: 
 (a) Characteristics of Receivables. Each Designated Retail Lease: 
 (i) was originated or acquired by Harco Leasing, the Titling Trust or one or more of their Affiliates for the retail lease of one or more
Financed Vehicles acquired thereby in the ordinary course of business in accordance with NFC’s underwriting standards, and was fully and properly executed by the parties thereto; 
 (ii) contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for
realization against the collateral and of the benefits of the security; 
 (iii) is a Finance Lease or a TRAC Lease and (A) in
the case of a Finance Lease, 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 annual percentage rate, with a
purchase option price that does not exceed $1,000 and (B) in the case of a TRAC Lease, 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 Receivable Balance over the proceeds from the sale of the related Financed Vehicle; 
 (iv) (A) is owned of record by the Titling Trust, (B) immediately prior to the allocation of the Designated Retail Lease to the Series
2006-ARC Portfolio Interest, Harco Leasing was the beneficial owner of the Retail Lease free of any Lien (except for Permitted Liens and Liens that will be released as of such transfer), and (C) upon execution and delivery of this Agreement and
payment of the Lease Purchase Price, (1) all of Harco Leasing’s right, title and interest in the Designated Retail Lease has been validly sold by Harco Leasing to NFC, and (2) NFC is the owner of all right, title and interest in the Designated
Retail Lease (other than the interest of the Titling Trust) free of any Lien (except for Permitted Liens) and the transfer of the Designated Retail Lease to NFC has been perfected under the UCC; 
 (v) each Financed Vehicle related thereto is owned by the Titling Trust (or its nominee) as record owner and upon issuance of the Series
2006-ARC Portfolio Certificate, NFC will be the beneficial owner through its ownership of the Series 2006-ARC 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; and 
  

 - 3 - 

 (vi) as of the Lease Purchase Date, each Designated Retail Lease has been allocated to
the Series 2006-ARC Portfolio Interest. 
 (b) Schedule of Retail Leases. The information regarding the Designated Retail Leases set
forth in the Schedule of Retail Leases is true and correct in all material respects. 
 (c) Title. The Titling Trust has good title to
each Designated Retail Lease free and clear of all Liens (other than Permitted Liens). On the date hereof, good and valid title to the Series 2006-ARC Portfolio Interest and the Series 2006-ARC Portfolio Certificate and the exclusive beneficial
interest in the Series 2006-ARC Portfolio Assets will be validly and effectively conveyed to, and vested in, NFC, free and clear of all Liens, other than Permitted Liens, and NFC will be entitled to all of the rights and benefits of a holder of a
Portfolio Interest under the Titling Trust Agreements. 
 SECTION 3.02 Representations and Warranties Regarding Harco Leasing. Harco
Leasing represents and warrants to NFC as of the date hereof and as of the Lease Purchase Date (and with respect to the Designated Retail Leases being transferred on such date), that: 
 (a) Organization and Good Standing. Harco Leasing 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 the Designated Retail Leases. 
 (b) Due Qualification. Harco Leasing is duly qualified to do
business as a foreign corporation in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualification. 
 (c) Power and Authority. Harco Leasing has the power and authority to execute and deliver this Agreement, the LPA Assignment and to perform its
obligations hereunder and thereunder and the execution, delivery and performance of this Agreement and the other Basic Documents to which it is a party have been duly authorized by Harco Leasing by all necessary corporate action on the part of Harco
Leasing. Harco Leasing has the corporate power and authority to sell and assign to NFC the Sold Retail Lease Property and has duly authorized such transfers by all necessary corporate action on the part of Harco Leasing. 
 (d) Valid Sales; Binding Obligation. This Agreement, together with the LPA Assignment, when duly executed and delivered, shall constitute a valid
sale, transfer and assignment of the Series 2006-ARC Portfolio Interest, the Series 2006-ARC Portfolio Certificate and the beneficial interest in the Series 2006-ARC Portfolio Assets represented thereby, enforceable against creditors of Harco
Leasing. Furthermore, this Agreement constitutes, and, when duly executed and delivered, the LPA Assignment shall constitute, a legal, valid and binding obligation of Harco Leasing enforceable against Harco Leasing in accordance with its 

 

 - 4 - 

 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 Harco Leasing and the other Basic Documents to which it is a party and its
performance of its obligations hereunder and thereunder will not violate any Requirement of Law or Contractual Obligation of Harco Leasing, 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 Harco Leasing’s knowledge, investigations pending or threatened, before any Governmental Authority (i) asserting the invalidity of this Agreement or any other Basic Document to
which Harco Leasing is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Basic Document to which Harco Leasing is a party, or (iii) seeking any determination or ruling
that would reasonably be expected to have a Material Adverse Effect with respect to Harco Leasing. 
 (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 Harco Leasing of this Agreement or any other Basic Document to which Harco Leasing is a party. 
 (h)
No Default. Harco Leasing 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. Harco Leasing has filed or caused to be filed all tax returns which are required to be filed by Harco Leasing (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 amount the 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 Harco Leasing). 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, Harco Leasing and remains in effect. 
 (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 Harco Leasing. 
 (k) Solvency. Harco Leasing is, and after giving
effect to the transactions contemplated to occur on such date will be, solvent. 
  

 - 5 - 

 (l) Investment Company Act. Harco Leasing is not, and is not controlled by, an “investment
company” within the meaning of, and is not required to register as an “investment company” under, the Investment Company Act. 
 SECTION 3.03 Representations and Warranties Regarding Titling Trust. Harco Leasing represents and warrants to NFC as of the date hereof and as of the Lease Purchase Date, that: 
 (a) Organization and Good Standing. The Titling Trust is a statutory 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. 
 (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 thereunder 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, 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 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 proceedings or, to Harco Leasing’s knowledge, investigations pending or 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. 
  

 - 6 - 

 (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. 
 (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 remains in effect. The Titling Trust has paid all fees and expenses required to be paid by it in connection with the conduct of its business, the maintenance
of its existence and its qualification as a foreign business trust. 
 (i) ERISA. No notice of 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) Series 2006-ARC Portfolio Certificate. The Series 2006-ARC Portfolio Certificate has been
duly executed and delivered by the General Interest Trustee in accordance with the Titling Trust Agreement, has been duly issued in accordance with the Titling Trust Agreement and is entitled to the benefits afforded by the Titling Trust Agreement.

 SECTION 3.04 Representations and Warranties of NFC. NFC hereby represents and warrants to Harco Leasing as of the date hereof and
as of the Lease Purchase Date (and with respect to the Designated Retail Leases transferred on such date), that: 
 (a) Organization and
Good Standing. NFC 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 the Designated Retail Leases. 
 (b) Due Qualification. NFC is duly qualified to do business as a foreign corporation in good standing, and has obtained all necessary licenses and
approvals in all jurisdictions, in which the ownership or lease of property or the conduct of its business requires such qualification. 
  

 - 7 - 

 (c) Power and Authority. NFC 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 NFC. 
 (d) Binding Obligation. This Agreement constitutes a legal, valid and binding obligation of NFC enforceable against NFC in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, or other similar laws affecting the enforcement of creditors’ rights in general and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law. 
 (e) No Violation. The execution and delivery of this Agreement by
NFC and its performance of its obligations hereunder will not violate any Requirement of Law or Contractual Obligation of NFC, 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 proceedings or, to NFC’s knowledge, investigations pending or threatened, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over NFC or its properties
(i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, or (iii) seeking any determination or ruling that might materially and adversely
affect the performance by NFC of its obligations under, or the validity or enforceability of, this Agreement. 
 (g) 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 NFC of this Agreement. 
 ARTICLE IV 
 CONDITIONS 
 SECTION 4.01 Conditions
Precedent to NFC’s Purchase of Lease Receivables. The obligation of NFC to purchase from Harco Leasing any Sold Retail Lease Property on the Lease Purchase Date is subject to the satisfaction of the following conditions: 
 (a) Agreement. NFC shall have received this Agreement, duly executed and delivered by Harco Leasing. In addition, NFC shall have received the
Series 2006-ARC Portfolio Certificate registered in the name of the Indenture Trustee. 
 (b) Certificate of Incorporation; By-laws.
NFC shall have received a true and complete copy of the certificate of incorporation of Harco Leasing, 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
Harco Leasing, certified as a true and correct copy thereof by the Secretary or an Assistant Secretary of Harco Leasing. 
  

 - 8 - 

 (c) Resolutions. NFC shall have received copies of duly adopted resolutions of the Board of
Directors of Harco Leasing as in effect on the Closing Date and in form and substance reasonably satisfactory to NFC, authorizing the execution, delivery and performance of this Agreement and the other Basic Documents to which Harco Leasing is a
party, the documents to be delivered by Harco Leasing hereunder and the transactions contemplated hereby and thereby, certified by the Secretary or an Assistant Secretary of Harco Leasing. 
 (d) Incumbency Certificate. NFC shall have received a certificate as to the incumbency and signature of the officers of Harco Leasing authorized
to sign this Agreement, on behalf of Harco Leasing, together with evidence of the incumbency of such Secretary or Assistant Secretary, certified by the Secretary or Assistant Secretary of Harco Leasing. 
 (e) Representations and Warranties. NFC shall have received a certificate of a Responsible Officer of Harco Leasing to the effect that all
representations and warranties of Harco Leasing contained in Sections 3.01, 3.02 and 3.03, or in any certificate delivered in connection with this 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. 
 (f)
Representations and Warranties True. The representations and warranties of Harco Leasing hereunder with respect to the Designated Retail Leases in Section 3.01 and in Sections 3.02 and 3.03 shall be true and correct
on and as of the Lease Purchase Date, and Harco Leasing shall have performed all obligations with respect to the Designated Retail Leases to be performed by it hereunder on or prior to such date. 
 (g) Documents to be Delivered By Harco Leasing at or Prior to the Lease Receivables Closing. 
 (i) Lease Purchase Date Schedule of Retail Leases. Harco Leasing shall have delivered to NFC, the General Interest Trustee and the
Indenture Trustee the LPA Assignment and the related Schedule of Retail Leases. 
 (ii) Other Documents. Harco Leasing
shall have provided such other documents as NFC may reasonably request. 
 SECTION 4.02 [Reserved]. 
 SECTION 4.03 Conditions to Obligation of Harco Leasing. The obligation of Harco Leasing to sell to NFC the Sold Retail Lease Property to be sold
hereunder on the Lease Purchase Date is subject to the satisfaction of the following conditions: 
 (a) Representations and Warranties
True. The representations and warranties of NFC hereunder with respect to the Sold Retail Lease Property shall be true and correct on the Lease Purchase Date, and NFC shall have performed all obligations with respect to the Sold Retail Lease
Property to be performed by it hereunder on or prior to such date. 
 (b) Lease Receivable Purchase Price. NFC shall have paid to
Harco Leasing the Lease Purchase Price as provided in Section 2.03 of this Agreement. 
  

 - 9 - 

 ARTICLE V 
 ADDITIONAL AGREEMENTS 
 SECTION 5.01 UCC Filings. On or prior to the Closing Date, Harco
Leasing shall record and file, at its own expense, a UCC-l financing statement in each jurisdiction in which required by applicable law, naming NFC as purchaser or secured party, naming as collateral the Sold Retail Lease Property 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 NFC of the Sold Retail Lease Property
(to the extent constituting UCC Collateral) and hereby authorizes NFC to file any such financing statements relating to all or any part thereof. Harco Leasing shall deliver a file-stamped copy, or other evidence satisfactory to NFC of such filing,
to NFC on or prior to the Closing Date. 
 SECTION 5.02 Computer Files Marked. Harco Leasing shall, at its own expense, on or prior to
the Lease Purchase Date, indicate in its computer files that the beneficial interest in the Designated Retail Leases being allocated on such date has been sold to NFC pursuant to this Agreement. 
 SECTION 5.03 Protection of Title. (a) Harco Leasing shall prepare and file such financing statements, and cause to be prepared and filed such
continuation and other statements, all in such manner and in such places as may be required by law fully to perfect and preserve the sale hereunder to NFC of the Sold Retail Lease Property, the Series 2006-ARC Portfolio Interest and the Series
2006-ARC Portfolio Certificate, and hereby authorizes NFC to file financing statements and amendments thereto and continuation statements relative to all or any part thereof; provided however that, except as otherwise provided in the Titling Trust
Agreement, Harco Leasing shall not be obligated to transfer the title to any Financed Vehicle. Harco Leasing shall deliver (or cause to be delivered) to NFC file-stamped copies of, or filing receipts for, any document filed as provided above, as
soon as available following such filing. 
 (b) Harco Leasing 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 Harco Leasing in accordance with Section 5.01 or 5.03(a) seriously misleading within the meaning of Section 9-506 of the UCC, unless it
shall have given NFC 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 NFC’s interest in all Sold Retail Lease Property sold hereunder, the
Series 2006-ARC Portfolio Interest and the Series 2006-ARC Portfolio Certificate. 
 (c) Harco Leasing hereby represents and warrants that
its jurisdiction of formation is the State of Delaware, and the place where its principal records pertaining to the Sold Retail Lease Property and the Series 2006-ARC Portfolio Interest are kept is located at 425 N. Martingale Road, Suite 1800,
Schaumburg, Illinois 60173. Harco Leasing shall give NFC at least 60 days prior written notice of any change in its jurisdiction of formation or place where such records are kept. Harco Leasing shall at all times maintain each office where it keeps
Retail Leases and its jurisdiction of formation within the United States of America. 
  

 - 10 - 

 SECTION 5.04 Other Liens or Interests. Except for the conveyances hereunder and as contemplated by
the Basic Documents, Harco Leasing shall not sell, pledge, assign or transfer any Sold Retail Lease Property, the Series 2006-ARC Portfolio Interest or the Series 2006-ARC Portfolio Certificate to any other Person, or grant, create, incur, assume or
suffer to exist any Lien thereon (except Permitted Liens) and Harco Leasing shall defend the right, title and interest of NFC in, to and under all Sold Retail Lease Property sold hereunder, the Series 2006-ARC Portfolio Interest and the Series
2006-ARC Portfolio Certificate against all claims of third parties (other than Permitted Liens) claiming through or under Harco Leasing. 
 SECTION 5.05 Indemnification. Harco Leasing shall indemnify NFC for any liability as a result of the failure of a Designated Retail Lease 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 Harco Leasing may otherwise
have. 
 SECTION 5.06 Reserved. 
 SECTION 5.07 Repurchase Events. (a) Harco Leasing hereby covenants and agrees with NFC for the benefit of NFC, NFRRC, the Issuer and the Indenture Trustee that in the event of (i) a breach of any of Harco Leasing’s
representations and warranties contained in Section 3.01 hereof with respect to any Designated Lease Receivable, or (ii) a breach by Harco Leasing of Section 5.04 hereof with respect to any Designated Retail Lease, the
Series 2006-ARC Portfolio Interest or the Series 2006-ARC Portfolio Certificate, which breach has a material adverse effect on NFC’s interest in the Designated Retail Lease, the Series 2006-ARC Portfolio Interest or the Series 2006-ARC
Portfolio Certificate, Harco Leasing will, unless such breach shall have been cured in all material respects, as of the Second Accounting Date (or at the option of Harco Leasing, the first Accounting Date) after Harco Leasing discovered or received
notice of such breach, repurchase the Designated Retail Lease (or, in the case of the Series 2006-ARC Portfolio Interest or the Series 2006-ARC Portfolio Certificate, all Designated Retail Leases which are then included in the Series 2006-ARC
Portfolio Interest), as applicable, from NFC, by delivering to the Indenture Trustee for deposit in the Collection Account on the Business Day preceding the related Distribution Date immediately following such Accounting Date an amount equal to the
Warranty Payment for any the Designated Retail Lease. It is understood and agreed that the obligation of Harco Leasing to repurchase any Designated Retail Lease as to which a breach has occurred and is continuing shall, if such obligation is
fulfilled, constitute the sole remedy against Harco Leasing for such breach available to NFC or any of its assignees. 
 (b) Upon receipt of
the Warranty Payment with respect to a Designated Retail Lease which is a Warranty Receivable, NFC shall assign, without recourse, representation or warranty, to Harco Leasing all of NFC’s right, title and interest in, to and under
(i) such Warranty Receivable and the Related Titling Trust Assets, such assignment being an assignment outright and not for security. Upon the assignment of such Warranty Receivable and Related Titling Trust Assets, Harco Leasing shall own such
Warranty Receivable and all such Related Titling Trust Assets, free of any further obligations to NFC with respect thereto. If in any proceeding it is held that Harco Leasing 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, NFC shall, at Harco Leasing’s expense, take such steps as Harco Leasing deems necessary to enforce the Warranty Receivable, including bringing suit in the name of such
Person. 
  

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 SECTION 5.08 Further Assignments. Harco Leasing acknowledges that (i) NFC shall sell, pledge,
assign or transfer all of its right, title and interest in the Designated Retail Leases, the Related Titling Trust Assets, the Series 2006-ARC Portfolio Interest, the Series 2006-ARC Portfolio Certificate and its rights hereunder to NFRCC pursuant
to the Purchase Agreement, (ii) NFRRC shall sell, pledge, assign or transfer all of its right, title and interest in the Designated Retail Leases, the Related Titling Trust Assets, the Series 2006-ARC Portfolio Interest, the Series 2006-ARC
Portfolio Certificate and its rights hereunder to the Issuer pursuant to the Pooling Agreement and (iii) that the Issuer shall in turn further pledge, assign or transfer its rights in the Designated Retail Leases, the Related Titling Trust
Assets, the Series 2006-ARC Portfolio Interest, the Series 2006-ARC Portfolio Certificate and this Agreement to the Indenture Trustee, on behalf of the Noteholders, pursuant to the Indenture. Harco Leasing consents to such assignments 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 NFC directly against Harco Leasing.
Harco Leasing 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 earlier
of (i) the Notes are repaid in full and (ii) the Indenture shall cease to be effective pursuant to Section 4.1 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. Harco Leasing shall deliver copies of all notices, requests, demands and other documents to be delivered by it to NFC pursuant to the terms hereof to NFRRC, the Issuer and the Indenture
Trustee. 
 SECTION 5.09 Pre-Closing Collections. Within two Business Days after the Lease Purchase Date, Harco Leasing shall transfer
to the Indenture Trustee for deposit in the Collection Account all collections (from whatever source) on or with respect to the Designated Retail Leases and Related Titling Trust Assets held by Harco Leasing on the Lease Purchase Date and conveyed
to NFC pursuant to Section 2.01. 
 SECTION 5.10 Limitation on Transfer of International Purchase Obligations. NFC
acknowledges and agrees that the rights pursuant to the International Purchase Obligations are personal to Harco Leasing, and only the proceeds of such rights have been assigned to NFC. NFC is not and is not intended to be a third-party beneficiary
of such rights and, accordingly, such rights will not be exercisable by, enforceable by or for the benefit of, or preserved for the benefit of, NFC, NFRRC, the Issuer or the Indenture Trustee. 
 SECTION 5.11 Bankruptcy Proceeding. (a) NFC by accepting the Series 2006-ARC Portfolio Certificate, 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, 
  

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 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. 
 (b) Except as otherwise provided in the Titling Trust Agreement, NFC, by accepting the Series 2006-ARC Portfolio Certificate hereby releases all Claims to the General Titling Trust Assets (other than Claims to other Portfolio Interests
obtained under other purchase agreements) and to each Portfolio Interest other than the Series 2006-ARC 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 the General Titling Trust Assets (other than Claims to other Portfolio Interests obtained under other purchase agreements) and each Portfolio Interest other than the Series 2006-ARC Portfolio Interest whether then or
thereafter created. 
 SECTION 5.12 Sale Treatment. Harco Leasing intends to treat the transfer and assignment described herein as a
sale for accounting and tax purposes. 
 ARTICLE VI 
 MISCELLANEOUS PROVISIONS 
 SECTION 6.01 Amendment. This Agreement may be amended from time to
time (subject to any expressly applicable amendment provision of the Further Transfer and Servicing Agreements) by a written amendment duly executed and delivered by Harco Leasing and NFC with the consent of the Funding Agent; provided, however that
this Agreement may not be amended unless such amendment is in accordance with the provisions of Section 5.01 of the Pooling Agreement as if such Section 5.01 were contained herein and were applicable to this Agreement.

 SECTION 6.02 Survival. The representations, warranties and covenants of Harco Leasing set forth in this Agreement shall remain in
full force and effect and shall survive the Lease Purchase Closing under Section 2.03 hereof and any related transfer under the Further Transfer and Servicing Agreements. 
 SECTION 6.03 Notices. All demands, notices and communications upon or to Harco Leasing, NFC, the Servicer, the Indenture Trustee or the Funding
Agent under this Agreement shall be delivered as specified in Appendix B to the Pooling Agreement. 
 SECTION 6.04 Governing
Law. All questions concerning the construction, validity and interpretation of this Agreement and the LPA 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 6.05 Waivers. No failure or delay on the part of any party in exercising any power, right or remedy under this Agreement 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. 
  

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 SECTION 6.06 Costs and Expenses. Harco Leasing agrees to pay all reasonable out-of-pocket costs
and expenses of NFC, including fees and expenses of counsel, in connection with the perfection as against third parties of NFC’s right, title and interest in, to and under the Series 2006-ARC Portfolio Interest, the Series 2006-ARC Portfolio
Certificate and all Sold Retail Lease Property a security interest in which may be perfected under the UCC purchased hereunder and the enforcement of any obligation of Harco Leasing hereunder. 
 SECTION 6.07 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 6.08 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 6.09 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. 
 SECTION 6.10 Further Assurances. Harco Leasing and NFC agree to do and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the other more fully to effect the purposes of this Agreement, including the preparation of any financing statements or continuation statements relating to the Series 2006-ARC Portfolio
Interest, the Series 2006-ARC Portfolio Certificate and any Sold Retail Lease Property purchased hereunder for filing under the provisions of the UCC of any applicable jurisdiction. 
 SECTION 6.11 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 6.12 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. 
 *     *     *     *     * 
  

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

			
	HARCO LEASING COMPANY, INC.
		
	By:	 	 /s/ John V. Mulvaney, Sr.

	Name:	 	John V. Mulvaney, Sr.
	Title:	 	Vice President and Controller
	
	NAVISTAR FINANCIAL CORPORATION
		
	By:	 	 /s/ John V. Mulvaney, Sr.

	Name:	 	John V. Mulvaney, Sr.
	Title:	 	Vice President and Controller

 Exhibit A to             
 Lease Purchase Agreement 
 FORM OF LPA
ASSIGNMENT 
 Reference is hereby made to the Series 2006-ARC Portfolio Supplement to the Titling Trust Agreement, dated as of
September 1, 2006, among Harco Leasing Company, Inc, a Delaware corporation (“Harco Leasing”), J.P. Morgan Trust Company, National Association (as successor-in-interest to Bank One, National Association), a national banking
association, as General Interest Trustee (“General Interest Trustee”) and as Series 2006-ARC Portfolio Trustee (“Series 2006-ARC Portfolio Trustee”), Chase Bank USA, National Association (as successor-in-interest to
Bank One Delaware, Inc.), a national banking association, as Delaware Trustee (the “Series 2006-ARC Portfolio Supplement”), pursuant to which the General Interest Trustee has created a Portfolio Interest known as the “Series
2006-ARC Portfolio Interest.” Capitalized terms used herein but not otherwise defined shall have the meaning attributed to them in the Lease Purchase Agreement, dated as of September 1, 2006, between Navistar Financial Corporation, a
Delaware corporation (“NFC”) and Harco Leasing (the “Lease Purchase Agreement”). 
 Pursuant to
Section 10.1 of the Series 2006-ARC Portfolio Supplement, Harco Leasing, as the Requisite GI Holder, hereby directs the General Interest Trustee to designate the Retail Leases more particularly described on the Schedule of Retail Leases
attached hereto as Schedule I, along with the Related Titling Trust Assets with respect to such Retail Leases (collectively, the “Transferred Assets”), and account for the Transferred Assets as part of the Series 2006-ARC Portfolio
Interest. The Transferred Assets, together with all other assets which constitute Series 2006-ARC Portfolio Assets, shall be separately accounted for on the books and records of the Titling Trust and shall be held in trust independently from all
other Trust Assets. 
 For value received, in accordance with the Lease Purchase Agreement, Harco Leasing does hereby sell, assign, transfer
and otherwise convey unto NFC, without recourse, all right, title and interest of Harco Leasing in, to and under the Transferred Assets and all payments paid on and due under such Series 2006-ARC Portfolio Assets on or after the Cutoff Date.

 The foregoing sale does not constitute and is not intended to result in any assumption by NFC of any obligation of the undersigned to the
Obligors, Dealers, insurers or any other Person in connection with the Transferred Assets described above, the agreements with Dealers, any Insurance Policies or any agreement or instrument relating to any of them. 
 It is the intention of Harco Leasing and NFC that the transfers and assignments contemplated by this LPA Assignment shall constitute a sale from Harco
Leasing to NFC of the property described herein and in Section 2.01 of the Lease Purchase Agreement and the beneficial interest in title to such property shall not be part of Harco Leasing’s estate in the event of the filing of a
bankruptcy petition by or against Harco Leasing under any bankruptcy law. Harco Leasing and NFC 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 Harco Leasing’s estate, then Harco Leasing shall be deemed to have granted 
  

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 to NFC a first priority perfected security interest in all of Harco Leasing’s right title and interest in, to and
under the assets conveyed pursuant to this LPA Assignment, and Harco Leasing hereby grants such security interest. For purposes of such grant, this LPA Assignment Notice shall constitute a security agreement under the UCC. 
 This LPA Assignment is made pursuant to and upon the representations, warranties and agreements on the part of the undersigned contained in the Lease
Purchase Agreement and is to be governed by the Lease Purchase Agreement. 
 *     *    
*     * 
  

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

			
	HARCO LEASING COMPANY, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	

  

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 Schedule I 
 to LPA Assignment 
 SCHEDULE OF RETAIL LEASES 
 This Schedule of Retail Leases is made as of September 1, 2006 by HARCO LEASING COMPANY, a Delaware corporation (“Harco Leasing”),
as contemplated by Section 10.01 of the Series 2006-ARC Portfolio Supplement to the Titling Trust Agreement, dated as of September 1, 2006, among Harco Leasing, J.P. Morgan Trust Company, National Association (as
successor-in-interest to Bank One, National Association), a national banking association, as General Interest Trustee (“General Interest Trustee”) and as Series 2006-ARC Portfolio Trustee (“Series 2006-ARC Portfolio
Trustee”), Chase Bank USA, National Association (as successor-in-interest to Bank One Delaware, Inc.), a national banking association, as Delaware Trustee (the “Series 2006-ARC Portfolio Supplement”) and by Harco Leasing
and NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (“NFC”) as contemplated by Section 2.01 of the Lease Purchase Agreement, dated as of September 1, 2006 (“Lease Purchase Agreement”),
between Harco Leasing and NFC. Capitalized terms used herein but not otherwise defined shall have the meaning attributed to them in the Lease Purchase Agreement. 
 As contemplated by Section 10.01 of the Trust Supplement and Section 2 of the Lease Purchase Agreement, NFC hereby directs the General Interest Trustee to allocate the Retail Leases and Related
Titling Trust Assets set forth on the listing attached as Series 2006-ARC Portfolio Assets and Harco Leasing hereby agrees to the following with respect to the Series 2006-ARC Portfolio Assets purchased and sold on the date hereof: 
 1. A listing of such Retail Leases is attached hereto. 
 2. The Cutoff Date with respect to such Retail Leases shall be July 1, 2006. 
 3. The aggregate
Starting Receivables Balance of all such Retail Leases as of the Cutoff Date is $27,431,106.12 (the “Lease Purchase Price”). 
 *     *     *     *

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