Exhibit 10.04
AMENDMENT NO. 3 TO THE
POOLING AND SERVICING AGREEMENT
THIS AMENDMENT NO. 3 (this "Amendment") is made as of July 17, 1998, by and
among Navistar Financial Securities Corporation, a Delaware corporation ("NFSC"), Navistar
Financial Corporation, a Delaware corporation ("NFC"), and The Bank of New York, as Master
Trust Trustee (the "Master Trust Trustee").
NFSC, as Seller, NFC, as Servicer, The Chase Manhattan Bank (formerly known as
Chemical Bank), as 1990 Trust Trustee, and the Master Trust Trustee are parties to a Pooling
and Servicing Agreement, dated as of June 8, 1995, and amended by Amendment No. 1, dated as
of September 12, 1995 and by Amendment No. 2, dated March 27, 1996 (as amended, the "Pooling
and Servicing Agreement"). In order to (i) include within the definition of Eligible
Investments certain additional investments and (ii) change the concentration of Eligible
Investments allowed in the Series Principal Account, Excess Funding Account, Negative Carry
Account and the Liquidity Reserve Account, the Seller, the Servicer and the Master Trust
Trustee have agreed to amend the Pooling and Servicing Agreement in the manner set forth
herein. Capitalized terms used herein but not otherwise defined have the meanings set forth
in the Pooling and Servicing Agreement.
1. Amendment to Section 1.01. The definition of "Eligible Investments"
in Section 1.01 of the Pooling and Servicing Agreement is hereby deleted in its entirety and
replaced with the following:
"Eligible Investments" shall mean
(a) book-entry securities, negotiable instruments or securities represented by
instruments in bearer or registered form having (except in the case of clauses (iv)
or (vii) below) remaining maturities occurring not later than the Distribution Date
next succeeding the Master Trust Trustee's acquisition thereof, except as otherwise
described herein or the related Supplement, that evidence:
(i) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(ii) demand deposits, time deposits or certificates of deposit of,
or bankers' acceptances issued by, any depository institution or trust
company incorporated under the laws of the United States of America or
any state thereof (or any domestic branch of a foreign bank) and
subject to supervision and examination by federal or state banking or
depository institution authorities; provided, however, that at the time
of the Master Trust's investment or contractual commitment to invest
therein, the commercial paper or other short-term unsecured debt
obligations (other than such obligations the rating of which is based
on the credit of a person or entity other than such depository
institution or trust company) of such depository institution or trust
company shall have a credit rating not lower than the highest
investment category for short term unsecured debt obligations granted
by the applicable Rating Agency from each Rating Agency then Rating the
affected Series of Investor Certificates;
(iii) commercial paper having, at the time of the Master Trust's
investment or contractual commitment to invest therein, a rating not
lower than the highest investment category for short term unsecured
debt obligations granted by the applicable Rating Agency from each
Rating Agency then Rating the affected Series of Investor Certificates;
(iv) except during an Investment Period, investments in money market
funds or common trust funds having a rating not lower than the highest
investment category for short term unsecured debt obligations granted
by the applicable Rating Agency from each Rating Agency then Rating the
affected Series of Investor Certificates or otherwise approved in
writing by each of such Rating Agencies (including funds for which the
Master Trust Trustee or the 1990 Trust Trustee or any of their
respective affiliates is investment manager or advisor, so long as such
fund shall have such rating);
(v) repurchase obligations (x) with respect to any security that is
a direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case, entered into with a depository institution or
trust company (acting as principal) described in clause (ii) or (y) the
counterparty for which has a rating not lower than the highest
investment category for short term unsecured debt obligations granted
by the applicable Rating Agency from each Rating Agency then Rating the
affected Series of Investor Certificates, the collateral for which is
held by a custodial bank for the benefit of the Trust or the Indenture
Trustee, is marked to market daily and is maintained in an amount that
exceeds the amounts of such repurchase obligation, and which required
liquidation of the collateral immediately upon the amount of such
collateral being less than the amount of such repurchase obligation
(unless the counterparty immediately satisfies the repurchase
obligation upon being notified of such shortfall); or
(vi) commercial paper master notes where the issuer has, at the time
of the Master Trust's investment or contractual commitment to invest
therein, a rating not lower than the highest investment category for
short term unsecured debt obligations granted by the applicable Rating
Agency from each Rating Agency then Rating the affected Series of
Investor Certificates; or
(vii) with respect to the Excess Funding Account only, obligations of a
trust (the assets of which consist solely of Investor Certificates
issued by the Master Trust and of one or more liquidity swap
arrangements for the benefit of investors in such trust) having, at the
time of the Master Trust's investment or contractual commitment to
invest therein, a rating not lower than the highest rating category for
short term unsecured debt obligations granted by the applicable Rating
Agency from each Rating Agency then Rating the affected Series of
Investor Certificates; and
(b) any other investment consisting of a financial asset that by its terms
converts to cash within a finite period of time, provided that the Rating
Agency Condition is satisfied.
Unless the Rating Agency Condition is satisfied, Eligible Investments of funds
in the Series Principal Account, Excess Funding Account, Negative Carry Reserve Fund and the
Liquidity Reserve Account will be subject to the following additional restrictions: (x) no
more than the greater of (A) $1,000,000 and (B) 20% of the aggregate Eligible Investments in
all such accounts collectively shall be obligations of or investments in any single issuer
(except that such 20% limitation shall not apply to Eligible Investments of the type
specified in clause (a)(i) or, with respect to the Excess Funding Account, Eligible
Investments of the type specified in clauses (a)(iv) or (a)(vii)); and (y) each Eligible
Investment shall be denominated and be payable solely in U.S. dollars, shall bear interest
at a specified rate that is, or is based upon, LIBOR or a commercial paper rate, shall
entitle the holder to a fixed principal amount at maturity and shall have a yield that is
not inversely or disproportionately affected by changes in interest rates.
2. Amendment to Section 4.02. Clause (b)(ii) of Section 4.02 of the
Pooling and Servicing Agreement is deleted in its entirety and replaced with the following:
"(ii) Funds on deposit in the Excess Funding Account overnight or for
a longer period shall at all times be invested by the Master Trust Trustee in
Eligible Investments at the direction of the Servicer or its agent, subject to
the restrictions set forth below and in Section 4.06. Except as otherwise
permitted by the Rating Agencies then rating the Investor Certificates and
except for Eligible Investments of the type specified in clause (vii) of the
definition of Eligible Investments, any Eligible Investments with a stated
maturity shall mature no later than the following Transfer Date. Net interest
and earnings (less investment expenses) on funds on deposit in the Excess
Funding Account shall be included in the calculation of Investment Income for
the relevant Due Period."
3. Miscellaneous. This Amendment shall be construed in accordance with
the internal laws of the State of Illinois, without reference to its conflict of law
provisions, except that the obligations, rights and remedies of the Master Trust Trustee
shall be determined in accordance with the internal laws of the State of New York, without
regard to conflict of law provisions. This Amendment may be executed in two or more
counterparts, each of which shall be an original, but all of which together constitute one
and the same instrument. The provisions of this Amendment shall be deemed to be
incorporated in, and made a part of, the Pooling and Servicing Agreement; and the Pooling
and Servicing Agreement, as amended by this Amendment, shall be read, taken and construed as
one and the same instrument. Promptly after the execution of this Amendment the Master
Trust Trustee shall furnish written notification of the substance of this Amendment to each
Investor Certificateholder.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to the Pooling and
Servicing Agreement to be duly executed by their respective officers as of the date first
written above.
NAVISTAR FINANCIAL SECURITIES CORPORATION
as Seller
By: ______________________________________
Its: ______________________________________
NAVISTAR FINANCIAL CORPORATION
as Servicer
By: ______________________________________
Its: ______________________________________
THE BANK OF NEW YORK
as Master Trust Trustee
By: ______________________________________
Its: ______________________________________
