NAVISTAR INTERNATIONAL CORPORATION 61/4% Senior Notes Due 2012 Purchase Agreement

Exhibit10.1
NAVISTARINTERNATIONAL CORPORATION
$400,000,000
6¼%Senior Notes due 2012
PurchaseAgreement
February23, 2005
Banc ofAmerica Securities LLC
CitigroupGlobal Markets Inc.
J.P.Morgan Securities Inc.
CreditSuisse First Boston LLC
ScotiaCapital (USA) Inc.
BNYCapital Markets, Inc.
RBCCapital Markets Corporation
c/o Bancof America Securities LLC
9 West57th Street,6thFloor
New York,New York 10019
Ladiesand Gentlemen:
NavistarInternational Corporation, a Delaware corporation (the “Company”),proposes to issue and sell to the several Initial Purchasers listed in Schedule1 hereto (the “InitialPurchasers”), forwhom Banc of America Securities LLC is acting as representative (the“Representative”),$400,000,000 aggregate principal amount of its 6¼% Senior Notes due 2012 (the“Securities”). TheSecurities will be issued pursuant to an indenture to be dated as of March 2,2005 (the “Indenture”), amongthe Company, International Truck and Engine Corporation, as subsidiary guarantor(the “Guarantor”) andBNY Midwest Trust Company, as trustee (the “Trustee”). TheSecurities will be fully and unconditionally guaranteed on a senior unsecuredbasis by the guarantee of the Guarantor (the “Guarantee”).
TheSecurities will be offered and sold in accordance with this agreement (this“Agreement”) to theInitial Purchasers without being registered under the Securities Act of 1933, asamended (the “SecuritiesAct”), inreliance upon an exemption therefrom. The Company has prepared an offeringmemorandum dated the date hereof (the “OfferingMemorandum”)setting forth information concerning the Company, the Guarantor and theSecurities. Copies of the Offering Memorandum will be delivered by the Companyto the Initial Purchasers pursuant to the terms of this Agreement. Anyreferences herein to the Offering Memorandum shall be deemed to refer to andinclude any documents incorporated by reference therein as of the date of suchOffering Memorandum, and any reference to any amendment or supplement to theOffering Memorandum shall be deemed to refer to and include the portion of theCompany’s Annual Report on Form 10-K for the fiscal year ended October 31, 2004(the “200410-K”)incorporated by reference therein and any documents incorporated by referencetherein as of the date of such Offering Memorandum, and any reference to anyamendment or supplement to the Offering Memorandum shall be deemed to refer toand include any document filed under the Securities Exchange Act of 1934, asamended (the “ExchangeAct”) afterthe date of the Offering Memorandum unless otherwise noted. The Company herebyconfirms that it has authorized the use of the Offering Memorandum in connectionwith the offering and resale of the Securities by the Initial Purchasers in themanner contemplated by this Agreement. Capitalized terms used but not definedherein shall have the meanings given to such terms in the OfferingMemorandum.
Holdersof the Securities (including the Initial Purchasers and their direct andindirect transferees) will be entitled to the benefits of an Exchange andRegistration Rights Agreement to be dated the Closing Date (as defined below)and substantially in the form attached hereto as Annex A (the “RegistrationRights Agreement”),pursuant to which the Company will agree to file with the Securities andExchange Commission (the “Commission”) aregistration statement under the Securities Act (the “ExchangeOffer Registration Statement”)registering an issue of
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Exhibit10.1 (continued)
seniornotes of the Company (the “ExchangeSecurities”) andthe Guarantee which are identical in all material respects to the Securities(except that the Exchange Securities will not contain terms with respect totransfer restrictions) and the Guarantee and under certain circumstances, ashelf registration statement pursuant to Rule 415 under the Securities Act (the“ShelfRegistration Statement”).
TheCompany hereby confirms its agreement with the several Initial Purchasersconcerning the purchase and resale of the Securities, as follows:
1. Purchaseand Resale of the Securities.(a) TheCompany agrees to issue and sell the Securities to each of the InitialPurchasers, severally and not jointly, as provided in this Agreement, and eachInitial Purchaser, on the basis of the representations, warranties andagreements set forth herein and subject to the conditions set forth herein,agrees, severally and not jointly, to purchase from the Company the respectiveprincipal amount of Securities set forth opposite such Initial Purchaser’s namein Schedule 1 hereto at a price equal to 98.75% of the principal amount thereofplus accrued interest, if any. The Company will not be obligated to deliver anyof the Securities except upon payment for all the Securities to be purchased asprovided herein.
(b) TheCompany understands that the Initial Purchasers intend to offer the Securitiesfor resale on the terms set forth in the Offering Memorandum. Each InitialPurchaser, severally and not jointly, represents, warrants and agreesthat:
(i) it is aqualified institutional buyer within the meaning of Rule 144A under theSecurities Act (a “QIB”) and an accredited investor within the meaning of Rule501(a) under the Securities Act;
(ii) it hasnot solicited offers for, or offered or sold, and will not solicit offers for,or offer or sell, the Securities by means of any form of general solicitation orgeneral advertising within the meaning of Rule 502(c) of Regulation D under theSecurities Act (“Regulation D”) or in any manner involving a public offeringwithin the meaning of Section 4(2) of the Securities Act; and
(iii) it hasnot solicited offers for, or offered or sold, and will not solicit offers for,or offer or sell, the Securities as part of their initial offeringexcept:
(A) withinthe United States to persons whom it reasonably believes to be QIBs intransactions pursuant to Rule 144A under the Securities Act (“Rule144A”) and inconnection with each such sale, it has taken or will take reasonable steps toensure that the purchaser of the Securities is aware that such sale is beingmade in reliance on Rule 144A;
(B) outsidethe United States to persons other than U.S. persons in reliance on Regulation Sunder the Securities Act (“RegulationS”);
(C) inconnection with the offer and sale of Securities in reliance on Regulation S,each Initial Purchaser, severally and not jointly, represents, warrants andagrees that:
(i) theSecurities have not been registered under the Securities Act and may not beoffered or sold within the United States or to, or for the account or benefitof, U.S. persons except pursuant to an exemption from, or in transactions notsubject to, the registration requirements of the Securities Act.
(ii) suchInitial Purchaser has offered and sold the Securities, and will offer and sellthe Securities, (A) as part of their distribution at any time and (B) otherwiseuntil 40 days after the later of the commencement of the offering of theSecurities and the Closing Date, only in accordance with Regulation S or Rule144A or any other available exemption from registration under the SecuritiesAct.
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Exhibit10.1 (continued)
(iii) none ofsuch Initial Purchaser or any of its affiliates or any other person acting onits or their behalf has engaged or will engage in any directed selling effortswith respect to the Securities, and all such persons have complied and willcomply with the offering restrictions requirement of Regulation S.
(iv) at orprior to the confirmation of sale of any Securities sold in reliance onRegulation S, such Initial Purchaser will have sent to each distributor, dealeror other person receiving a selling concession, fee or other remuneration thatpurchase Securities from it during the distribution compliance period aconfirmation or notice to substantially the following effect:
“TheSecurities covered hereby have not been registered under the U.S. Securities Actof 1933, as amended (the “SecuritiesAct”), andmay not be offered or sold within the United States or to, or for the account orbenefit of, U.S. persons (i) as part of their distribution at any time or (ii)otherwise until 40 days after the later of the commencement of the offering ofthe Securities and the date of original issuance of the Securities, except inaccordance with Regulation S or Rule 144A or any other available exemption fromregistration under the Securities Act. Terms used above have the meanings givento them by Regulation S.”
(v) suchInitial Purchaser has not and will not enter into any contractual arrangementwith any distributor with respect to the distribution of the Securities, exceptwith its affiliates or with the prior written consent of theCompany.
Termsused in this section (C) and not otherwise defined in this Agreement have themeanings given to them by Regulation S.
(D) EachInitial Purchaser, severally and not jointly, represents, warrants and agreesthat:
(i) it hasnot offered or sold and prior to the date six months after the Closing Date willnot offer or sell any Securities to persons in the United Kingdom except topersons whose ordinary activities involve them in acquiring, holding, managingor disposing of investments (as principal or agent) for the purposes of theirbusinesses or otherwise in circumstances which have not resulted and will notresult in an offer to the public in the United Kingdom within the meaning of theUnited Kingdom Public Offers of Securities Regulations 1995 (as amended);
(ii) it hasonly communicated or caused to be communicated and will only communicate orcause to be communicated any invitation or inducement to engage in investmentactivity (within the meaning of Section 21 of the United Kingdom FinancialServices and Markets Act 2000 (the “FSMA”)) received by it in connection withthe issue or sale of any Securities in circumstances in which Section 21(1) ofthe FSMA does not apply to the Company or the Guarantor; and
(iii) it hascomplied and will comply with all applicable provisions of the FSMA with respectto anything done by it in relation to the Securities in, from or otherwiseinvolving the United Kingdom.
(E) EachInitial Purchaser acknowledges that no action has been or will be taken by theCompany and the Guarantor that would permit a public offering of the Securities,or possession or distribution of the Offering Memorandum or any other offeringor publicity material relating to the Securities, in any country or jurisdictionwhere action for that purpose is required.
(c) EachInitial Purchaser acknowledges and agrees that the Company and the Guarantorand, for purposes of the opinions to be delivered to the Initial Purchaserspursuant to Sections 5(i), 5(j) and 5(k), counsel for the Company and theGuarantor and counsel for the Initial Purchasers, respectively, may rely uponthe accuracy of the representations and warranties of the Initial Purchasers,and compliance by the Initial Purchasers with their agreements, contained inparagraph (b) above, and each Initial Purchaser hereby consents to suchreliance.
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Exhibit10.1 (continued)
(d) TheCompany acknowledges and agrees that the Initial Purchasers may offer and sellSecurities to or through any affiliate of an Initial Purchaser and that any suchaffiliate may offer and sell Securities purchased by it to or through anyInitial Purchaser.
2. Paymentand Delivery. (a)Payment for and delivery of the Securities will be made at the offices ofSimpson Thacher & Bartlett LLP at 10:00 A.M., New York City time, on March2, 2005, or at such other time or place on the same or such other date, notlater than the fifth business day thereafter, as the Representative and theCompany may agree upon in writing. The time and date of such payment anddelivery is referred to herein as the “ClosingDate.”
(b) Paymentfor the Securities shall be made by wire transfer in immediately available fundsto the account(s) specified by the Company to the Representative againstdelivery to the nominee of The Depository Trust Company, for the account of theInitial Purchasers, of one or more global notes representing the Securities(collectively, the “GlobalNote”), withany transfer taxes payable in connection with the sale of the Securities dulypaid by the Company. The Global Note will be made available for inspection bythe Representative not later than 1:00 P.M., New York City time, on the businessday prior to the Closing Date. Time shall be of the essence, and delivery at thetime and place specified pursuant to this Agreement is a further condition ofthe obligations of the Initial Purchasers hereunder.
3. Representationsand Warranties of the Company and the Guarantor. TheCompany and the Guarantor, jointly and severally, represent and warrant to eachInitial Purchaser that:
(a) TheOffering Memorandum, as of its date, did not, and on the Closing Date theOffering Memorandum will not, contain any untrue statement of a material fact oromit to state a material fact required to be stated therein or necessary inorder to make the statements therein, in the light of the circumstances underwhich they were made, not misleading; provided that theCompany and the Guarantor make no representation or warranty as to informationcontained in or omitted from the Offering Memorandum in reliance upon and inconformity with written information relating to the Initial Purchasers furnishedto the Company or the Guarantor by or on behalf of any Initial Purchaserspecifically for use therein (the “InitialPurchasers’ Information”).
(b) Thedocuments filed by the Company under the Exchange Act and incorporated byreference in the Offering Memorandum, when they were filed by the Company withthe Commission, conformed in all material respects (except with respect to thetiming of the filing of the 2004 Annual Report on Form 10-K with the Commission)to the requirements of the Exchange Act and the rules and regulations of theCommission thereunder and none of such documents, in each case when it was filedwith the Commission, contained an untrue statement of a material fact or omittedto state a material fact required to be stated therein or necessary to make thestatements therein, in light of the circumstances under which they were made,not misleading, and any further documents so filed and incorporated by referencein the Offering Memorandum, when such documents are filed with the Commission,will conform in all material respects to the requirements of the Exchange Actand the rules and regulations of the Commission thereunder and shall not containan untrue statement of a material fact or omit to state a material fact requiredto be stated therein or necessary to make the statements therein, in light ofthe circumstances under which they were made, not misleading.
(c) Thefinancial statements, and the related notes thereto, included or incorporated byreference in the Offering Memorandum comply in all material respects with theapplicable requirements of the Securities Act and the Exchange Act, asapplicable. The audited financial statements and the related notes theretoincluded or incorporated by reference in the Offering Memorandum present fairlythe consolidated financial position of the Company and its subsidiaries and theresults of their respective operations and the changes in their respectiveconsolidated cash flows, as of the dates and for the periods indicated, and saidfinancial statements have been prepared in conformity with generally acceptedaccounting principles applied on a consistent basis throughout the periodsinvolved; the summary and selected financial and statistical data included inthe Offering Memorandum present fairly the information shown therein and havebeen prepared and compiled on a basis consistent with the audited and unauditedfinancial statements of the Company, except as otherwise stated therein; andDeloitte & Touche LLP, who are reporting upon
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Exhibit10.1 (continued)
theaudited consolidated financial statements of the Company and its consolidatedsubsidiaries (each a “Subsidiary,” andcollectively, the “Subsidiaries”), areindependent public accountants as defined in the Securities Act.
(d) Since therespective dates as of which information is given in the Offering Memorandum,except as disclosed therein, there has not been (A) any material change in theCompany’s issued capital stock, warrants or options except pursuant to the termsof the instruments governing the same or pursuant to the exercise of suchoptions or warrants, or the issuance of certain options or (B) any materialadverse change, or any development involving a prospective material adversechange, in or affecting the general affairs, the management, business,prospects, financial position, stockholder’s equity or results of operations, ofthe Company and the Subsidiaries, taken as a whole (a “MaterialAdverse Change”). Sincethe respective dates as of which information is given in the OfferingMemorandum, except as disclosed therein, (i) there have been no transactionsentered into by the Company or by any of the Subsidiaries, including thoseentered into in the ordinary course of business, which are material to theCompany and the Subsidiaries taken as a whole; and (ii) there has been nodividend or distribution of any kind declared, paid or made by the Company onany class of its capital stock, except for quarterly dividends in accordancewith the Company’s past practice.
(e) TheCompany and each Subsidiary has been duly incorporated under the laws of itsjurisdiction of incorporation; is a validly existing in good standing under thelaws of its jurisdiction of incorporation, with power and authority (corporateand other) to own, lease and operate its properties and conduct its business asdescribed in the Offering Memorandum, and is duly qualified as a foreigncorporation for the transaction of business and is in good standing under thelaws of each other jurisdiction in which it owns or leases properties, orconducts any business, so as to require such qualification, except where thefailure to be so qualified or in good standing would not reasonably be expectedto have a material adverse effect on the general affairs, business, prospects,management, financial position, stockholder’s equity or results of operations ofthe Company and the Subsidiaries, taken as a whole (a “MaterialAdverse Effect”).
(f) TheCompany has an authorized capitalization as set forth in the OfferingMemorandum, and except as described in the Offering Memorandum, the Companyowns, directly or indirectly, free and clear of any mortgage, pledge, securityinterest, lien, claim or other encumbrance or restriction on transferability orvoting (other than as may be imposed by the Securities Act and the various statesecurities laws), all of the outstanding capital stock of each Subsidiary of theCompany. All of the outstanding capital stock of each Subsidiary of the Companyhas been duly authorized and validly issued and is fully paid andnon-assessable.
(g) TheRegistration Rights Agreement has been duly authorized by the Company and theGuarantor, and when executed and delivered by the Company (assuming dueauthorization, execution and delivery thereof by the Initial Purchasers), theRegistration Rights Agreement will constitute a legal, valid and bindingagreement of the Company and the Guarantor enforceable against the Company andthe Guarantor in accordance with its terms, except that the enforcement thereofmay be subject to (i) bankruptcy, insolvency, reorganization, moratorium orother similar laws now or hereafter in effect relating to creditors’ rightsgenerally and (ii) general principles of equity and the discretion of the courtbefore which any proceeding therefor may be brought and (iii) public policyconsiderations with respect to the enforceability of indemnification agreementsfor violations of the federal securities laws.
(h) Each ofthe Company and the Guarantor has the requisite power and authority to executeand deliver, as applicable, this Agreement, the Securities, the Guarantee, theIndenture and the Registration Rights Agreement (collectively, the “TransactionDocuments”) and toperform its respective obligations hereunder and thereunder; and all corporateaction required to be taken for the due and proper authorization, execution anddelivery of each of the Transaction Documents and the consummation of thetransactions contemplated thereby has been duly and validly taken.
(i) TheIndenture meets the requirements for qualification under the Trust Indenture Actof 1939, as amended (the “TrustIndenture Act”). TheIndenture (including the Guarantee set therein) has been duly and validlyauthorized by the Company and the Guarantor, and, when executed and delivered bythe Company and the
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Exhibit10.1 (continued)
Guarantor(assuming due authorization, execution, and delivery thereof by the Trustee),the Indenture will constitute a legal, valid and binding agreement of theCompany and the Guarantor enforceable against the Company and the Guarantor inaccordance with its terms, except that the enforcement thereof may be subject to(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws nowor hereafter in effect relating to creditors’ rights generally and (ii) generalprinciples of equity and the discretion of the court before which any proceedingtherefor may be brought; and the Securities and the Indenture conform in allmaterial respects to the descriptions thereof in the OfferingMemorandum.
(j) TheSecurities and the Guarantee have been duly and validly authorized by theCompany and the Guarantor, respectively, for issuance and when executed by theCompany and the Guarantor, respectively, and authenticated by the Trustee inaccordance with the provisions of the Indenture, and delivered to and paid forby the Initial Purchasers in accordance with the terms hereof, will have beenduly executed, authenticated, issued and delivered and will constitute legal,valid and binding obligations of the Company and the Guarantor, respectively,entitled to the benefits provided by the Indenture and enforceable against theCompany and the Guarantor, respectively, in accordance with their respectiveterms, except that the enforcement thereof may be subject to (i) bankruptcy,insolvency, reorganization, moratorium or other similar laws now or hereafter ineffect relating to creditors’ rights generally and (ii) general principles ofequity and the discretion of the court before which any proceeding therefor maybe brought.
(k) ThisAgreement has been duly authorized, executed and delivered by each of theCompany and the Guarantor.
(l) EachTransaction Document conforms in all material respects to the descriptionthereof contained in the Offering Memorandum.
(m) Neitherthe Company nor any of the Subsidiaries (i) is in violation of its Certificateof Incorporation or By-Laws (and in the case of the Company’s non-materialSubsidiaries only, in any material respect) or (ii) is in breach or violation ofany of the terms or provisions of, or with the giving of notice or lapse oftime, or both, would be in default under, any contract, indenture, mortgage,deed of trust, loan agreement, note, lease, partnership agreement, or otheragreement or instrument to which the Company or any Subsidiary is a party or bywhich any of them may be bound or to which any of their properties or assets maybe subject, except, in the case of this clause (ii), for such violations ordefaults that would not reasonably be expected to have a Material AdverseEffect.
(n) Theexecution and delivery by the Company and the Guarantor of, and the performanceby the Company and the Guarantor of all of the provisions of its obligationsunder, the Transaction Documents and the consummation by the Company and theGuarantor of the transactions herein and therein contemplated and as set forthin the Offering Memorandum, (i) have been duly authorized by all necessarycorporate action on the part of the Company and the Guarantor, (ii) do not andwill not result in any violation of the Certificate of Incorporation or theBy-laws of the Company and the Guarantor and (iii) do not and will not conflictwith, or result in a breach or violation of any of the terms or provisions of,or constitute a default (or an event which, with notice or lapse of time, orboth, would constitute a default) under, or give rise to any right to acceleratethe maturity or require the prepayment of any indebtedness or the purchase ofany capital stock under, or result in the creation or imposition of any lien,charge or encumbrance upon any properties or assets of the Company or of anySubsidiary under, (A) any contract, indenture, mortgage, deed of trust, loanagreement, note, lease, partnership agreement or other agreement or instrumentto which the Company or any such Subsidiary is a party or by which any of themmay be bound or to which any of their respective properties or assets may besubject, (B) (assuming compliance with the Securities Act and the TrustIndenture Act with respect to the exchange of the Securities for the ExchangeSecurities (as defined in the Registration Rights Agreement) and the otherobligations of the Company and the Guarantor under the Registration RightsAgreement) any applicable law or statute, rule or regulation (other than thesecurities or Blue Sky laws of the various states of the United States ofAmerica) or (C) any judgment, order or decree of any government, governmentalinstrumentality, agency, body or court, domestic or foreign, having jurisdictionover the Company or any such Subsidiary or any of their respective properties orassets, except, with respect to clause (iii), any violation,
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Exhibit10.1 (continued)
conflict,or breach which would not reasonably be expected, individually or in theaggregate, to have a Material Adverse Effect.
(o) Except asdescribed in the Offering Memorandum, there is no action, suit or proceedingbefore or by any government, governmental instrumentality, agency, body orcourt, domestic or foreign, now pending or, to the best knowledge of the Companyor the Guarantor, threatened against or affecting the Company or any of theSubsidiaries that could reasonably be expected to have a Material Adverse Effector that could have a material adverse effect on the consummation of thetransactions contemplated in, or the fulfillment of the terms of, thisAgreement, the Offering Memorandum, the Indenture or the Registration RightsAgreement; there is no action, suit or proceeding before or by any government,governmental instrumentality, agency, body or court, now pending, or to the bestknowledge of the Company or the Guarantor, threatened against or affecting theCompany or any of the Subsidiaries that would be required to be described in aregistration statement pursuant to Item 103 of the Regulation S-K filed pursuantto the Securities Act that is not described in the OfferingMemorandum.
(p) TheCompany is in compliance in all material respects with the applicable provisionsof the Sarbanes-Oxley Act of 2002 that are effective and the rules andregulations of the Commission that have been adopted and are effectivethereunder (collectively, the “Sarbanes-OxleyAct”).
(q) TheCompany, after giving effect to the offering and sale of the Securities, willnot be an “investment company” or an entity “controlled” by an “investmentcompany”, as such terms are defined in the Investment Company Act of 1940, asamended (the “InvestmentCompany Act”).
(r) Except asdescribed in the Offering Memorandum, there has been no storage, generation,transportation, handling, treatment, disposal, discharge, emission or otherrelease of any kind of toxic or other wastes or other hazardous substances by,due to or caused by, to the best knowledge of the Company or the Guarantor, theCompany and each of its Subsidiaries or any other entity (including anypredecessor) for whose acts or omissions each of the Company and itsSubsidiaries is or could reasonably be expected to be liable, upon any of theproperty now or previously owned or leased by the Company and each of itsSubsidiaries, or upon any other property, in violation of any statute or anyordinance, rule, regulation, order, judgment, decree or permit or which would,under any statute or any ordinance, rule (including rule of common law),regulation, order, judgment, decree or permit, give rise to any liability,except for any violation or liability could not reasonably be expected to have,singularly or in the aggregate with all such violations and liabilities, aMaterial Adverse Effect; and except as described in the Offering Memorandum,there has been no disposal, discharge, emission or other release of any kindonto such property or into the environment surrounding such property of anytoxic or other wastes or other hazardous substances with respect to which theCompany has knowledge, except for any such disposal, discharge, emission orother release of any kind which could not reasonably be expected to have,singularly or in the aggregate with all such discharges and other releases, aMaterial Adverse Effect.
(s) TheCompany and each of its Subsidiaries have all licenses, franchises, permits,authorizations, approvals and orders and other concessions of and from allgovernmental or regulatory authorities that are necessary to own or lease theirproperties and conduct their businesses as described in the Offering Memorandum,except for such licenses, franchises, permits, authorizations, approvals andorders the failure to obtain which will not, individually or in the aggregate,have a Material Adverse Effect.
(t) TheCompany and each of its Subsidiaries is conducting business in compliance withall applicable statutes, rules, regulations, standards, guides and ordersadministered or issued by any governmental or regulatory authority in thejurisdictions in which it is conducting business, except where the failure to beso in compliance would not have a Material Adverse Effect.
(u) TheCompany and its Subsidiaries have good and marketable title in fee simple to allreal property and good and marketable title to all personal property owned bythem which is material to the business of the Company and its Subsidiaries, asthe case may be, in each case free and clear of all liens, encumbrances anddefects except such as
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Exhibit10.1 (continued)
aredescribed in the Offering Memorandum or to the extent the failure to have suchtitle or the existence of such liens, encumbrances or defects would notreasonably be expected to have a Material Adverse Effect.
(v) Neitherthe issuance, sale and delivery of the Securities nor the application of theproceeds thereof by the Company as described in the Offering Memorandum willviolate Regulation G, T, U or X of the Board of Governors of the Federal ReserveSystem or any other regulation of such Board of Governors.
(w) Noauthorization, approval, consent, order, registration, qualification or licenseof, or filing with, any government, governmental instrumentality, agency, bodyor court, domestic or foreign or third party (other than as have been or will beprior to the Closing Date obtained under the securities or Blue Sky laws of thevarious states of the United States of America and assuming compliance with theSecurities Act and the Trust Indenture Act with respect to the exchange of theSecurities for the Exchange Securities and the other obligations of the Companyand the Guarantor under the Registration Rights Agreement), is required for thevalid authorization, issuance, sale and delivery of the Securities, the issuanceof the Guarantee or the performance by the Company and the Guarantor of all ofits obligations under this Agreement, the Indenture, the Registration RightsAgreement or the Securities, or the consummation by the Company and theGuarantor of the transactions contemplated by this Agreement, the Indenture, theRegistration Rights Agreement or the Offering Memorandum, except where thefailure to obtain such authorization, approval, consent, order, registration,qualification or license or to make any such filing would not reasonably beexpected, individually or in the aggregate, to have a material adverse effect onthe consummation of the transactions contemplated in, or the fulfillment of theterms of, this Agreement, the Offering Memorandum, the Indenture or theRegistration Rights Agreement.
(x) Neitherthe Company nor any controlled affiliate (as defined in Rule 501(b) ofRegulation D) of the Company has directly, or through any agent, sold, offeredfor sale, solicited offers to buy or otherwise negotiated in respect of, anysecurity (as defined in the Securities Act) which is or will be integrated withthe sale of the Securities in a manner that would require the registration underthe Securities Act of the offering contemplated by the OfferingMemorandum.
(y) Neitherthe Company, the Guarantor nor, to the best of the Company’s or the Guarantor’sknowledge, any person acting on its behalf has offered or sold the Securities bymeans of any general solicitation or general advertising within the meaning ofRule 502(c) under the Securities Act or, with respect to Securities sold outsidethe United States to non-U.S. persons (as defined in Rule 902 under theSecurities Act), by means of any directed selling efforts within the meaning ofRule 902 under the Securities Act and the Company and any of its affiliates andany person acting on their behalf has complied with and will implement the“offering restriction” within the meaning of such Rule 902.
(z) It is notnecessary in connection with the offer, sale and delivery of the Securities inthe manner contemplated by this Agreement and the Offering Memorandum toregister the Securities under the Securities Act or to qualify an indentureunder the Trust Indenture Act.
(aa) TheSecurities satisfy the requirements set forth in Rule 144A(d)(3) under theSecurities Act.
4. FurtherAgreements of the Company and the Guarantor. Each ofthe Company and the Guarantor covenants and agrees with each Initial Purchaserthat:
(a) TheCompany will advise the Initial Purchasers promptly and, if requested, confirmsuch advice in writing, of the happening of any event which makes any statementof a material fact made in the Offering Memorandum untrue or which requires themaking of any additions to or changes in the Offering Memorandum (as amended orsupplemented from time to time) in order to make the statements therein, in thelight of the circumstances under which they were made, not misleading; to advisethe Initial Purchasers promptly of any order preventing or suspending the use ofthe Offering Memorandum, of any suspension of the qualification of theSecurities for
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Exhibit10.1 (continued)
offeringor sale in any jurisdiction and of the initiation or threatening of anyproceeding for any such purpose; and to use its reasonable best efforts toprevent the issuance of any such order preventing or suspending the use of theOffering Memorandum or suspending any such qualification and, if any suchsuspension is issued, to obtain the lifting thereof at the earliest possibletime.
(b) TheCompany will deliver, without charge, to each Initial Purchasers, as many copiesof the Offering Memorandum (including all amendments and supplements thereto) asthey may reasonably request at any time before the completion of the resale ofthe Securities.
(c) Beforemaking any amendment or supplement to the Offering Memorandum, the Company willfurnish to the Representative and counsel for the Initial Purchasers a copy ofthe proposed amendment or supplement for review and not to effect any suchproposed amendment or supplement to which the Representative reasonablyobject.
(d) If at anytime prior to completion of the resale of the Securities by the InitialPurchasers, (i) any event shall occur or condition shall exist as a result ofwhich the Offering Memorandum as then amended or supplemented would include anyuntrue statement of a material fact or omit to state any material fact requiredto be stated therein or necessary in order to make the statements therein, inthe light of the circumstances existing when the Offering Memorandum isdelivered to a purchaser, not misleading or (ii) it is necessary to amend orsupplement the Offering Memorandum to comply with applicable law, the Companywill promptly prepare, subject to paragraph (c) above, such amendments orsupplements to the Offering Memorandum as may be necessary so that thestatements in the Offering Memorandum as so amended or supplemented will not, inthe light of the circumstances existing when the Offering Memorandum isdelivered to a purchaser, be misleading or so that the Offering Memorandum willcomply with applicable law.
(e) TheCompany will, for so long as the Securities are outstanding and are “restrictedsecurities” within the meaning of Rule 144(a)(3) under the Securities Act,furnish to holders of the Securities and prospective purchasers of theSecurities designated by such holders, upon request of such holders or suchprospective purchasers, the information required to be delivered pursuant toRule 144A(d)(4) under the Securities Act, unless the Company is then subject toand in compliance with Section 13 or 15(d) of the Exchange Act (the foregoingagreement being for the benefit of the holders from time to time of theSecurities and prospective purchasers of the Securities designated by suchholders).
(f) TheCompany will, for so long as the Securities are outstanding, furnish to theInitial Purchasers upon request, copies of any annual reports, quarterly reportsand current reports filed by the Company with the Commission on Forms 10-K, 10-Qand 8-K, or such other similar forms as may be designated by the Commission, andsuch other documents, reports and information as shall be furnished by theCompany to the Trustee or to the holders of the Securities pursuant to theIndenture or the Exchange Act or any rule or regulation of the Commissionthereunder.
(g) TheCompany will, from time to time prior to the completion of the resale of theSecurities, qualify the Securities and the Guarantee for offer and sale underthe securities or Blue Sky laws of such jurisdictions as the Representativeshall reasonably request and will continue such qualifications in effect so longas required for the resale of the Securities and the Guarantee; and to arrangefor the determination of the eligibility for investment of the Securities underthe laws of such jurisdictions as the Representative shall reasonably request;provided that theCompany shall not be required to (i) qualify as a foreign corporation or otherentity or as a dealer in securities in any such jurisdiction where it would nototherwise be required to so qualify, (ii) file any general consent to service ofprocess in any such jurisdiction or (iii) subject itself to taxation in any suchjurisdiction if it is not otherwise so subject.
(h) TheCompany will assist the Initial Purchasers in arranging for the Securities to bedesignated Private Offerings, Resale and Trading through Automated Linkages(“PORTAL”) Market securities in accordance with the
E-9


Exhibit10.1 (continued)
rules andregulations adopted by the National Association of Securities Dealers, Inc.(“NASD”) relating to trading in the PORTAL Market and for the Securities to beeligible for clearance and settlement through The Depository Trust Company(“DTC”).
(i) TheCompany will not, and will not cause its affiliates (as defined in Rule 501(b)of Regulation D) to, sell, offer for sale or solicit offers to buy or otherwisenegotiate in respect of any security (as such term is defined in the SecuritiesAct) which could be integrated with the sale of the Securities in a manner whichwould require registration of the Securities under the SecuritiesAct.
(j) TheCompany will not, except following the effectiveness of the Exchange OfferRegistration Statement or the Shelf Registration Statement, as the case may be,and will not cause its affiliates to, authorize or knowingly permit any personacting on their behalf to, solicit any offer to buy or offer to sell theSecurities by means of any form of general solicitation or general advertisingwithin the meaning of Regulation D or in any manner involving a public offeringwithin the meaning of Section 4(2) of the Securities Act; and not to offer,sell, contract to sell or otherwise dispose of, directly or indirectly, anysecurities under circumstances where such offer, sale, contract or dispositionwould cause the exemption afforded by Section 4(2) of the Securities Act tocease to be applicable to the offering and sale of the Securities ascontemplated by this Agreement and the Offering Memorandum.
(k) Duringthe period from the date hereof through and including the date that is 30 daysafter the date hereof, the Company will not, without the prior written consentof the Representative, offer, sell, contract to sell or otherwise dispose of anydebt securities issued or guaranteed by the Company and having a tenor of morethan one year (other than (i) the Securities, including the Exchange Securitiesand (ii) any debt securities issued in connection with (A) sale and lease-backtransactions, (B) asset-backed securitizations and (C) the Company’s Mexicanfinance subsidiaries) without the prior written consent of theRepresentative.
(l) Until theissuance of the Exchange Securities, the Company will not, and will not permitany of its affiliates (as defined in Rule 144 under the Securities Act) to,resell any of the Securities that have been reacquired by them, except forSecurities purchased by the Company or any of its affiliates and resold in atransaction registered under the Securities Act.
(m) Inconnection with the offering of the Securities, until the Initial Purchasersshall have notified the Company of the completion of the resale of theSecurities, the Company will not, and will not cause its affiliated purchasers(as defined in Regulation M under the Exchange Act) to, either alone or with oneor more other persons, bid for or purchase, for any account in which it or anyof its affiliated purchasers has a beneficial interest, any Securities, orattempt to induce any person to purchase any Securities; and not to, and tocause its affiliated purchasers not to, make bids or purchase for the purpose ofcreating actual, or apparent active trading in or of raising the price of theSecurities.
(n) TheCompany will apply the net proceeds from the sale of the Securities as describedin the Offering Memorandum under the heading “Use of proceeds”.
5. Conditionsof Initial Purchasers’ Obligations. Theobligation of each Initial Purchaser to purchase Securities on the Closing Dateas provided herein is subject to the performance by the Company in all materialrespects of its covenants and other obligations hereunder and to the followingadditional conditions:
(a) TheOffering Memorandum (and any amendments or supplements thereto) shall have beenprinted and copies distributed to the Initial Purchasers as promptly asreasonably practicable on or following the date of this Agreement or at suchother date and time as to which the Initial Purchasers may agree; and no stoporder suspending the sale of the Securities in any jurisdiction shall have beenissued and no proceedings for the purpose shall have been commenced or shall bepending or threatened.
(b) None ofthe Initial Purchasers shall have discovered and disclosed to the Company on orprior to the Closing
E-10


Exhibit10.1 (continued)
Date thatthe Offering Memorandum or any amendment or supplement thereto contains anuntrue statement of a fact which, in the opinion of counsel for the InitialPurchasers, is material or omits to state any fact which, in the opinion of suchcounsel is material and is required to be stated therein or is necessary to makethe statements therein not misleading.
(c) Allcorporate proceedings and other legal matters incident to the authorization,form and validity of each of the Transaction Documents and the OfferingMemorandum, and all other legal matters relating to the Transaction Documentsand the transactions contemplated thereby, shall be satisfactory in all materialrespects to the Initial Purchasers, and the Company and the Guarantor shall havefurnished to the Initial Purchasers all documents and information that they ortheir counsel may reasonably request to enable them to pass upon suchmatters.
(d) Therepresentations and warranties of the Company contained herein shall be true andcorrect on the date hereof and on and as of the Closing Date as if made on theClosing Date; and the statements of the Company and its officers made in anycertificates delivered pursuant to this Agreement shall be true and correct onand as of the Closing Date.
(e) Subsequentto the execution and delivery of this Agreement, (i) no downgrading shall haveoccurred in the rating accorded any debt securities or preferred stock of orguaranteed by the Company or any of its subsidiaries by any “nationallyrecognized statistical rating organization”, as such term is defined by theCommission for purposes of Rule 436(g)(2) under the Securities Act and (ii) nosuch organization shall have publicly announced that it has under surveillanceor review, or has changed its outlook with respect to, its rating of any otherdebt securities or preferred stock of or guaranteed by the Company or any of itsSubsidiaries (other than an announcement with positive implications of apossible upgrading).
(f) Section3(d) hereof shall have occurred or shall exist, which event or condition is notdescribed in the Offering Memorandum (excluding any amendment or supplementthereto) and the effect of which in the judgment of the Representative makes itimpracticable or inadvisable to proceed with the offering, sale or delivery ofthe Securities on the terms and in the manner contemplated by this Agreement andthe Offering Memorandum.
(g) TheInitial Purchasers shall have received on and as of the Closing Date acertificate of an executive officer of the Company satisfactory to theRepresentative (i) confirming that such officer has carefully reviewed theOffering Memorandum and, to the best knowledge of such officer, therepresentation set forth in Section 3(a) hereof is true and correct, (ii)confirming that the other representations and warranties of the Company in thisAgreement are true and correct and that the Company has complied with allagreements and satisfied all conditions on its part to be performed or satisfiedhereunder at or prior to the Closing Date and (iii) to the effect set forth inparagraphs (d), (e) and (f) above.
(h) On thedate of this Agreement and on the Closing Date, Deloitte & Touche LLP, shallhave furnished to the Representative, at the request of the Company, letters,dated the respective dates of delivery thereof and addressed to the InitialPurchasers, in form and substance reasonably satisfactory to the Representative,containing statements and information of the type customarily included inaccountants’ “comfort letters” to underwriters with respect to the financialstatements and certain financial information contained or incorporated byreference in the Offering Memorandum; provided that theletter delivered on the Closing Date shall use a “cut-off” date no more thanthree business days prior to the Closing Date.
(i) Kirkland& Ellis LLP, counsel for the Company and the Guarantor, shall have furnishedto the Representative, at the request of the Company, their written opinion,dated the Closing Date and addressed to the Initial Purchasers, in form andsubstance reasonably satisfactory to the Representative, to the effect set forthin Annex B hereto.
(j) Steven K.Covey, Esq., shall have furnished to the Representative his written opinion, asGeneral Counsel of
E-11


Exhibit10.1 (continued)
theCompany, addressed to the Initial Purchasers and dated the Closing Date, in formand substance reasonably satisfactory to the Representative, to the effect setforth in Annex C hereto.
(k) TheRepresentative shall have received on and as of the Closing Date an opinion ofSimpson Thacher & Bartlett LLP, counsel for the Initial Purchasers, withrespect to such matters as the Representative may reasonably request, and suchcounsel shall have received such documents and information as they mayreasonably request to enable them to pass upon such matters.
(l) TheInitial Purchasers shall have received a counterpart of the Registration RightsAgreement which shall have been executed and delivered by a duly authorizedofficer of the Company and the Guarantor.
(m) TheIndenture shall have been duly executed and delivered by the Company and theGuarantor and the Trustee, and the Securities shall have been duly executed anddelivered by the Company and duly authenticated by the Trustee.
(n) If anyevent shall have occurred that requires the Company under Section 4(d) toprepare an amendment or supplement to the Offering Memorandum, such amendment orsupplement shall have been prepared, the Initial Purchasers shall have beengiven a reasonable opportunity to comment thereon, and copies thereof shall havebeen delivered to the Initial Purchasers reasonably in advance of the ClosingDate.
(o) Thereshall not have occurred any invalidation of Rule 144A under the Securities Actby any court or any withdrawal or proposed withdrawal of any rule or regulationunder the Securities Act or the Exchange Act by the Commission or any amendmentor proposed amendment thereof by the Commission which in the judgment of theInitial Purchasers would materially impair the ability of the Initial Purchasersto purchase, hold or effect resales of the Securities contemplatedhereby.
(p) No actionshall have been taken and no statute, rule, regulation or order shall have beenenacted, adopted or issued by any federal, state or foreign governmental orregulatory authority that would, as of the Closing Date, prevent the issuance orsale of the Securities; and no injunction or order of any federal, state orforeign court shall have been issued that would, as of the Closing Date, preventthe issuance or sale of the Securities.
(q) On orprior to the Closing Date, the Company shall have furnished to theRepresentative such further certificates and documents as the Representative mayreasonably request.
Allopinions, letters, certificates and evidence mentioned above or elsewhere inthis Agreement shall be deemed to be in compliance with the provisions hereofonly if they are in form and substance reasonably satisfactory to counsel forthe Initial Purchasers.
6. Indemnificationand Contribution.
(a) TheCompany and the Guarantor shall, jointly and severally, indemnify and holdharmless each Initial Purchaser, its affiliates, directors and officers and eachperson, if any, who controls such Initial Purchaser within the meaning ofSection 15 of the Securities Act or Section 20 of the Exchange Act, from andagainst any and all losses, claims, damages, expenses and liabilities, joint orseveral, that arise out of, or are based upon, any untrue statement or allegeduntrue statement of a material fact contained in the Offering Memorandum (or anyamendment or supplement thereto), or any omission or alleged omission to statetherein a material fact required to be stated therein or necessary in order tomake the statements therein, in the light of the circumstances under which theywere made, not misleading, except insofar as such losses, claims, damages orliabilities arise out of, or are based upon, any untrue statement or omission oralleged untrue statement or omission made in reliance upon and in conformitywith any information relating to any Initial Purchaser furnished to the Companyby or on behalf of such Initial Purchaser through the Representative expresslyfor use therein.
E-12


Exhibit10.1 (continued)
(b) EachInitial Purchaser agrees, severally and not jointly, to indemnify and holdharmless the Company and the Guarantor and each of their respective officers ordirectors and each person, if any, who controls the Company or the Guarantorwithin the meaning of Section 15 of the Securities Act or Section 20 of theExchange Act to the same extent as the indemnity set forth in paragraph (a)above, but only with respect to any losses, claims, damages or liabilities thatarise out of, or are based upon, any untrue statement or omission or allegeduntrue statement or omission made in reliance upon and in conformity with anyinformation relating to such Initial Purchaser furnished to the Company by or onbehalf of such Initial Purchaser through the Representative expressly for use inthe Offering Memorandum (or any amendment or supplement thereto).
(c) If anysuit, action, proceeding (including any governmental or regulatoryinvestigation), claim or demand shall be brought or asserted against any personin respect of which indemnification may be sought pursuant to either paragraph(a) or (b) above, such person (the “Indemnified Person”) shall promptly notifythe person against whom such indemnification may be sought (the “IndemnifyingPerson”) in writing; providedthat the failure to notify the Indemnifying Person shall not relieve it from anyliability that it may have under this Section 6 except to the extent that it hasbeen materially prejudiced (through the forfeiture of substantive rights ordefenses) by such failure; and provided, further, that the failure to notify theIndemnifying Person shall not relieve it from any liability that it may have toan Indemnified Person otherwise than under this Section 6. If any suchproceeding shall be brought or asserted against an Indemnified Person and itshall have notified the Indemnifying Person thereof, the IndemnifyingPerson shallretain counsel reasonably satisfactory to the Indemnified Person to representthe Indemnified Person and any others entitled to indemnification pursuant tothis Section 6 that the Indemnifying Person may designate in such proceeding andshall pay the fees and expenses of such counsel related to such proceeding, asincurred. In any such proceeding, any Indemnified Person shall have the right toretain its own counsel, but the fees and expenses of such counsel shall be atthe expense of such Indemnified Person unless (i) the Indemnifying Person andthe Indemnified Person shall have mutually agreed to the contrary; (ii) theIndemnifying Person has failed within a reasonable time to retain counselreasonably satisfactory to the Indemnified Person; (iii) the Indemnified Personshall have reasonably concluded that there may be legal defenses available to itthat are different from or in addition to those available to the IndemnifyingPerson; or (iv) the named parties in any such proceeding (including anyimpleaded parties) include both the Indemnifying Person and the IndemnifiedPerson and representation of both parties by the same counsel would beinappropriate due to actual or potential differing interests between them. It isunderstood and agreed that the Indemnifying Person shall not, in connection withany proceeding or related proceeding in the same jurisdiction, be liable for thefees and expenses of more than one separate firm (in addition to any localcounsel) for all Indemnified Persons, and that all such fees and expenses shallbe reimbursed as they are incurred. Any such separate firm for any InitialPurchaser, its affiliates, directors and officers and any control persons ofsuch Initial Purchaser shall be designated in writing by Banc of AmericaSecurities LLC and any such separate firm for the Company, the Guarantor or anyof their respective directors or officers and any control persons of the Companyor the Guarantor shall be designated in writing by the Company. The IndemnifyingPerson shall not be liable for any settlement of any proceeding effected withoutits written consent, but if settled with such consent or if there be a finaljudgment for the plaintiff, the Indemnifying Person agrees to indemnify eachIndemnified Person from and against any loss or liability by reason of suchsettlement or judgment. No Indemnifying Person shall, without the writtenconsent of the Indemnified Person, effect any settlement of any pending orthreatened proceeding in respect of which any Indemnified Person is or couldhave been a party and indemnification could have been sought hereunder by suchIndemnified Person, unless such settlement (x) includes an unconditional releaseof such Indemnified Person, in form and substance reasonably satisfactory tosuch Indemnified Person, from all liability on claims that are the subjectmatter of such proceeding and (y) does not include any statement as to or anyadmission of fault, culpability or a failure to act by or on behalf of anyIndemnified Person.
(d) If theindemnification provided for in paragraphs (a) and (b) above is unavailable toan Indemnified Person or insufficient in respect of any losses, claims, damagesor liabilities referred to therein, then each Indemnifying Person under suchparagraph, in lieu of indemnifying such Indemnified Person thereunder, shallcontribute to the amount paid or payable by such Indemnified Person as a resultof such losses, claims, damages or liabilities (i) in such proportion as isappropriate to reflect the relative benefits received by the Company and theGuarantor on the one hand and the Initial Purchasers on the other from theoffering of the Securities or (ii) if the allocation provided by
E-13


Exhibit10.1 (continued)
clause(i) is not permitted by applicable law, in such proportion as is appropriate toreflect not only the relative benefits referred to in clause (i) but also therelative fault of the Company and the Guarantor on the one hand and the InitialPurchasers on the other in connection with the statements or omissions thatresulted in such losses, claims, damages or liabilities, as well as any otherrelevant equitable considerations. The relative benefits received by the Companyand the Guarantor on the one hand and the Initial Purchasers on the other shallbe deemed to be in the same respective proportions as the net proceeds (beforededucting expenses) received by the Company from the sale of the Securities andthe total underwriting discounts and commissions received by the InitialPurchasers in connection therewith, as provided in this Agreement, bear to theaggregate offering price of the Securities. The relative fault of the Companyand the Guarantor on the one hand and the Initial Purchasers on the other shallbe determined by reference to, among other things, whether the untrue or allegeduntrue statement of a material fact or the omission or alleged omission to statea material fact relates to information supplied by the Company and the Guarantoror by the Initial Purchasers and the parties’ relative intent, knowledge, accessto information and opportunity to correct or prevent such statement oromission.
(e) TheCompany and the Initial Purchasers agree that it would not be just and equitableif contribution pursuant to this Section 6 were determined by pro rataallocation (even if the Initial Purchasers were treated as one entity for suchpurpose) or by any other method of allocation that does not take account of theequitable considerations referred to in paragraph (d) above. The amount paid orpayable by an Indemnified Person as a result of the losses, claims, damages andliabilities referred to in paragraph (d) above shall be deemed to include,subject to the limitations set forth above, any legal or other expenses incurredby such Indemnified Person in connection with any such action or claim.Notwithstanding the provisions of this Section 6, in no event shall an InitialPurchaser be required to contribute any amount in excess of the amount by whichthe total underwriting discounts and commissions received by such InitialPurchaser with respect to the offering of the Securities exceeds the amount ofany damages that such Initial Purchaser has otherwise been required to pay byreason of such untrue or alleged untrue statement or omission or allegedomission. No person guilty of fraudulent misrepresentation (within the meaningof Section 11(f) of the Securities Act) shall be entitled to contribution fromany person who was not guilty of such fraudulent misrepresentation. The InitialPurchasers’ obligations to contribute pursuant to this Section 6 are several inproportion to their respective purchase obligations hereunder and notjoint.
(f) Theremedies provided for in this Section 6 are not exclusive and shall not limitany rights or remedies which may otherwise be available to any IndemnifiedPerson at law or in equity.
7. Termination. ThisAgreement may be terminated in the absolute discretion of the Representative, bynotice to the Company, if after the execution and delivery of this Agreement andprior to the Closing Date (i) trading generally shall have been suspended ormaterially limited on the New York Stock Exchange or the over-the-countermarket; (ii) trading of any securities issued or guaranteed by the Company shallhave been suspended on any exchange or in any over-the-counter market; (iii) ageneral moratorium on commercial banking activities shall have been declared byfederal or New York State authorities or a material disruption in commercialbanking or securities settlement or clearance services in the United States;(iv) there shall have occurred any outbreak or escalation of hostilities or anychange in financial markets or any calamity or crisis, either within or outsidethe United States, that in the judgment of the Representative, is material andadverse and makes it impracticable or inadvisable to proceed with the offeringor delivery of the Securities on the terms and in the manner contemplated bythis Agreement and the Offering Memorandum.
8. DefaultingInitial Purchasers. (a) If,on the Closing Date, any InitialPurchaser defaultson its obligation to purchase the Securities that it has agreed to purchasehereunder, the non-defaulting Initial Purchasers may in their discretion arrangefor the purchase of such Securities by other persons satisfactory to the Companyon the terms contained in this Agreement. If, within 36 hours after any suchdefault by any Initial Purchaser, the non-defaulting Initial Purchasers do notarrange for the purchase of such Securities, then the Company shall be entitledto a further period of 36 hours within which to procure other personssatisfactory to the non-defaulting Initial Purchasers to purchase suchSecurities on such terms. If other persons become obligated or agree to purchasethe Securities of a
E-14


Exhibit10.1 (continued)
defaultingInitial Purchaser, either the non-defaulting Initial Purchasers or the Companymay postpone the Closing Date for up to five full business days in order toeffect any changes that in the opinion of counsel for the Company or counsel forthe Initial Purchasers may be necessary in the Offering Memorandum or in anyother document or arrangement, and the Company agrees to promptly prepare anyamendment or supplement to the Offering Memorandum that effects any suchchanges. As used in this Agreement, the term “Initial Purchaser” includes, forall purposes of this Agreement unless the context otherwise requires, any personnot listed in Schedule 1 hereto that, pursuant to this Section 8, purchasesSecurities that a defaulting Initial Purchaser agreed but failed topurchase.
(b) If, aftergiving effect to any arrangements for the purchase of the Securities of adefaulting Initial Purchaser or Initial Purchasers by the non-defaulting InitialPurchasers and the Company as provided in paragraph (a) above, the aggregateprincipal amount of such Securities that remains unpurchased does not exceedone-eleventh of the aggregate principal amount of all the Securities, then theCompany shall have the right to require each non-defaulting Initial Purchaser topurchase the principal amount of Securities that such Initial Purchaser agreedto purchase hereunder plus such Initial Purchaser’s pro rata share(based on the principal amount of Securities that such Initial Purchaser agreedto purchase hereunder) of the Securities of such defaulting Initial Purchaser orInitial Purchasers for which such arrangements have not been made.
(c) If, aftergiving effect to any arrangements for the purchase of the Securities of adefaulting Initial Purchaser or Initial Purchasers by the non-defaulting InitialPurchasers and the Company as provided in paragraph (a) above, the aggregateprincipal amount of such Securities that remains unpurchased exceedsone-eleventh of the aggregate principal amount of all the Securities, or if theCompany shall not exercise the right described in paragraph (b) above, then thisAgreement shall terminate without liability on the part of the non-defaultingInitial Purchasers. Any termination of this Agreement pursuant to this Section 8shall be without liability on the part of the Company, except that the Companywill continue to be liable for the payment of expenses as set forth in Section 9hereof and except that the provisions of Section 6 hereof shall not terminateand shall remain in effect.
(d) Nothingcontained herein shall relieve a defaulting Initial Purchaser of any liabilityit may have to the Company or any non-defaulting Initial Purchaser for damagescaused by its default.
9. Paymentof Expenses. (a)Whether or not the transactions contemplated by this Agreement are consummatedor this Agreement is terminated, the Company and the Guarantor, jointly andseverally agree to pay or cause to be paid all costs and expenses incident tothe performance of its obligations hereunder, including without limitation,(i) thecosts incident to the authorization, issuance, sale, preparation and delivery ofthe Securities and any taxes payable in that connection; (ii) the costs incidentto the preparationand printing of the Offering Memorandum (including all exhibits, amendments andsupplements thereto) and thedistribution thereof; (iii) the costs of reproducing and distributing each ofthe Transaction Documents; (iv) the fees and expenses of the Company’s counseland independent accountants; (v) the fees andexpenses incurred by the Company, the Guarantors or the Initial Purchasers(including related fees and expenses of any counsel to such parties) inconnection with qualifying or registering (or obtaining exemptions from thequalification or registration of) all or any part of the Securities for offerand sale under the securities laws of the several states of the United States,the provinces of Canada or other jurisdictions designated by the InitialPurchasers (including, without limitation, the cost of preparing, printing andmailing preliminary and final Blue Sky or legal investment memoranda and anyrelated supplements to the Offering Memorandum); (vi) anyfees charged by rating agencies for rating the Securities; (vii) the fees andexpenses of the Trustee and any paying agent (including related fees andexpenses of any counsel to such parties); (viii) all expenses and applicationfees incurred in connection with the application for the inclusion of theSecurities on the PORTAL Market and the approval of the Securities forbook-entry transfer by DTC; and (ix) all expenses incurred by the Company inconnection with any “roadshow” presentation to potential investors.
(b) If (i)this Agreement is terminated pursuant to Section 7, (ii) the Company for anyreason fails to tender the Securities for delivery to the Initial Purchasers or(iii) the Initial Purchasers decline to purchase the Securities for any reasonpermitted under this Agreement, the Company agrees to reimburse the InitialPurchasers (other than
E-15


Exhibit10.1 (continued)
defaultingInitial Purchasers pursuant to Section 8 herein) for all out-of-pocket costs andexpenses (including the fees and expenses of their counsel) reasonably incurredby the Initial Purchasers in connection with this Agreement and the offeringcontemplated hereby.
10. PersonsEntitled to Benefit of Agreement. ThisAgreement shall inure to the benefit of and be binding upon the parties heretoand their respective successors and the officers and directors and anycontrolling persons referred to herein, and the affiliates of each InitialPurchaser referred to in Section 6 hereof. Nothing in this Agreement is intendedor shall be construed to give any other person any legal or equitable right,remedy or claim under or in respect of this Agreement or any provision containedherein. No purchaser of Securities from any Initial Purchaser shall be deemed tobe a successor merely by reason of such purchase.
11. Survival. Therespective indemnities, rights of contribution, representations, warranties andagreements of the Company and the Initial Purchasers contained in this Agreementor made by or on behalf of the Company or the Initial Purchaser pursuant to thisAgreement or any certificate delivered pursuant hereto shall survive thedelivery of and payment for the Securities and shall remain in full force andeffect, regardless of any termination of this Agreement or any investigationmade by or on behalf of the Company or the Initial Purchasers.
12. CertainDefined Terms. Forpurposes of this Agreement, (a) except where otherwise expressly provided, theterm “affiliate” has the meaning set forth in Rule 405 under the Securities Act;(b) the term “business day” means any day other than a day on which banks arepermitted or required to be closed in New York City; and (c) the term“subsidiary” has the meaning set forth in Rule 405 under the SecuritiesAct.
13. Miscellaneous. (a)Authorityof the Representative. Anyaction by the Initial Purchasers hereunder may be taken by Banc of AmericaSecurities LLC on behalf of the Initial Purchasers, and any such action taken byBanc of America Securities LLC shall be binding upon the InitialPurchasers.
(b) Notices. Allnotices and other communications hereunder shall be in writing and shall bedeemed to have been duly given if mailed or transmitted and confirmed by anystandard form of telecommunication. Notices to the Initial Purchasers shall begiven to the Representative c/o Banc of America Securities LLC, 9 West57th Street,6th Floor;Attention: High Yield Capital Markets (telecopier no.: (212) 847-5038). Noticesto the Company or Guarantor shall be given to it at 4201 Winfield Road,Warrenville, Illinois 60555, (telecopier no.: (312) 836-2305); Attention:Treasurer and Controller, with a copy to the General Counsel of the Company atthe same address.
(c) GoverningLaw. ThisAgreement shall be governed by and construed in accordance with the laws of theState of New York.
(d) Counterparts. ThisAgreement may be signed in counterparts (which may include counterpartsdelivered by telecopier), each of which shall be an original and all of whichtogether shall constitute one and the same instrument.
(e) Amendmentsor Waivers. Noamendment or waiver of any provision of this Agreement, nor any consent orapproval to any departure therefrom, shall in any event be effective unless thesame shall be in writing and signed by the parties hereto.
(f) Headings. Theheadings herein are included for convenience of reference only and are notintended to be part of, or to affect the meaning or interpretation of, thisAgreement.
E-16


Exhibit10.1 (continued)
If theforegoing is in accordance with your understanding, please indicate youracceptance of this Agreement by signing in the space providedbelow.
Verytruly yours,
NAVISTARINTERNATIONAL CORPORATION
By: /s/TerryEndsley
TerryEnsley
VicePresident and Treasurer
INTERNATIONALTRUCK & ENGINE CORPORATION
By: /s/TerryEndsley
TerryEndsley
VicePresident and Treasurer
Accepted:February 23, 2005
BANC OFAMERICA SECURITIES LLC
Foritself and on behalf of the
severalInitial Purchasers listed
inSchedule 1 hereto.
By:/s/Stephan Jaeger
AuthorizedSignatory
E-17


Exhibit10.1 (continued)
Schedule1
Initial Purchasers
 
 
Principal Amount
 
 

 
 
Banc of America Securities LLC
 
 
$
160,000,000
 
Citigroup Global Markets Inc.
 
 
$
140,000,000
 
J.P. Morgan Securities Inc.
 
 
$
32,000,000
 
Credit Suisse First Boston LLC
 
 
$
24,000,000
 
Scotia Capital (USA) Inc.
 
 
$
24,000,000
 
BNY Capital Markets, Inc.
 
 
$
10,000,000
 
RBC Capital Markets Corporation
 
 
$
10,000,000
 
   
 
Total
 
 
$
400,000,000
 
   
 
E-18


Exhibit10.1 (continued)
AnnexA
[Form ofExchange and Registration Rights Agreement]
E-19


Exhibit10.1 (continued)
AnnexB
[Form ofKirkland & Ellis LLP Opinion]
We areissuing this letter in our capacity as special counsel for NavistarInternational Corporation, a Delaware corporation (the “Company”), andInternational Truck and Engine Corporation, a Delaware corporation(“International”) inresponse to the requirement in Section 5(i) of the Purchase Agreement datedFebruary 23, 2005 (the “PurchaseAgreement”) amongthe Company, International and Banc of America Securities LLC (for itself and onbehalf of the several initial purchasers listed in Schedule 1 to the PurchaseAgreement) (collectively, the “InitialPurchasers” andherein being called “you”). Everyterm which is defined or given a special meaning in the Purchase Agreement andwhich is not given a different meaning in this letter has the same meaningwhenever it is used in this letter as the meaning it is given in the PurchaseAgreement.
Inconnection with the preparation of this letter, we have among other thingsread:
(a) theOffering Memorandum of the Company, dated February 23, 2005, covering theoffering and sale of the Securities (the “OfferingMemorandum”);
(b) anexecuted original of the Purchase Agreement;
(c) anexecuted original of the Indenture dated as of March 2, 2005 by and among theCompany, International and BNY Midwest Trust Company, as Trustee (the“Indenture”) andthe Securities to be delivered on the date hereof;
(d) anexecuted original of the Registration Rights Agreement;
(e) acertified copy of resolutions adopted by the Board of Directors of the Companyon February [__], 2005and certified copies of the resolutions adopted by the unanimous written consentof the Board of Directors of International on February [__], 2005;and
(f) copies ofall certificates and other documents delivered in connection with the sale ofthe Securities on the date hereof and the consummation of the other transactionscontemplated by the Purchase Agreement.
The term“TransactionDocuments” is usedin this letter to collectively refer to the Purchase Agreement, the Indenture,the Securities and the Registration Rights Agreement.
Subjectto the assumptions, qualifications and limitations which are identified in thisletter, we advise you that:
1. TheCompany and International are corporations existing and in good standing underthe General Corporation Law of the State of Delaware.
2. ThePurchase Agreement has been duly authorized, executed and delivered by theCompany and International.
3. TheIndenture has been duly authorized, executed and delivered by the Company andInternational. The Indenture is a valid and binding obligation of the Companyand International, and is enforceable against the Company and International inaccordance with its terms.
4. TheRegistration Rights Agreement has been duly authorized, executed and deliveredby the Company and International. The Registration Rights Agreement is a validand binding obligation of the Company and International, and is enforceableagainst the Company and International in accordance with its terms.
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Exhibit10.1 (continued)
5. TheSecurities have been duly authorized, executed and delivered by the Company, andwhen paid for by the Initial Purchasers in accordance with the terms of thePurchase Agreement (assuming the due authorization, execution and delivery ofthe Indenture by the Trustee and due authentication and delivery of theSecurities by the Trustee in accordance with the Indenture), will constituteSecurities under the terms of the Indenture, will constitute a valid and bindingobligation of the Company, and will be enforceable against the Company inaccordance with their terms.
6. TheGuarantee has been duly authorized, executed and delivered by International, andwhen the Securities are paid for by the Initial Purchasers in accordance withthe terms of the Purchase Agreement (assuming that due authorization, executionand delivery of the Indenture by the Trustee and due authentication and deliveryof the Securities by the Trustee in accordance with the Indenture), willconstitute a valid and binding obligation of International and is enforceableagainst International in accordance with its terms.
7. The Boardof Directors of each of the Company and International has adopted by requisitevote the resolutions necessary to authorize the execution, delivery andperformance of, in the case of the Company, the Exchange Securities, and, in thecase of International, the Guarantee of the Exchange Securities. No approval bythe stockholders of the Company or International is required for such execution,delivery and performance.
8. Theexecution and delivery of the Transaction Documents by the Company andInternational, the performance by the Company and International of theirrespective obligations thereunder and the consummation of the transactionscontemplated thereby (including, without limitation, the Company’s issuance andsale of the Securities to you in accordance with the terms of the PurchaseAgreement and the application of the net proceeds therefrom as described in theOffering Memorandum under the caption “Use of proceeds”) do not and will notconflict with or constitute or result in a breach or default under (or an eventwhich with notice or the passage of time or both would constitute a defaultunder) or violation of any of, (i) the charter, bylaws or other organizationaldocuments of the Company or International, as applicable, (ii) any statute orgovernmental rule or regulation which, in our experience, is normally applicableboth to general business corporations that are not engaged in regulated businessactivities and to transactions of the type contemplated by the OfferingMemorandum (but without our having made any special investigation as to otherlaws and provided that we express no opinion in this paragraph with respect to(a) any laws, rules or regulations to which the Company may be subject as aresult of the Initial Purchasers’ legal or regulatory status or the involvementof the Initial Purchasers in such transactions, (b) any laws, rules orregulations relating to misrepresentations or fraud or (c) the SecuritiesAct, the Exchange Act or the Trust Indenture Act) or (iii) the terms orprovisions of any contract set forth on Schedule A attachedhereto (provided that in each case we express no opinion as to compliance withany financial test or cross-default provision in any such agreement), except forin the case of items (ii) and (iii) any such conflict, breach, violation,default or event which would not, individually or in the aggregate, reasonablybe expected to have a Material Adverse Effect or to materially impair theability of the Company or International to perform their respective obligationsunder the Transaction Documents.
9. To ouractual knowledge, no consent, waiver, approval, authorization or order of anycourt or governmental authority is required for the issuance and sale by theCompany of the Securities to the Initial Purchasers or the consummation by theCompany and International of the other transactions contemplated by theTransaction Documents, except such as may be required under the Securities Act,the Exchange Act, the Trust Indenture Act and the security or Blue Sky laws ofthe various states (and the rules and regulations thereunder), as to which weexpress no opinion in this paragraph.
10. Noregistration under the Securities Act of the Securities is required inconnection with the sale of the Securities to the Initial Purchasers in themanner contemplated by the Purchase Agreement and the Offering Memorandum or inconnection with the initial resale of the Securities by the Initial Purchasersin accordance with Section 1(b) of the Purchase Agreement, and prior to theeffectiveness of the Exchange Offer Registration Statement or the ShelfRegistration Statement, the Indenture is not required to be qualified under theTrust Indenture Act, in
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Exhibit10.1 (continued)
each caseassuming (i) that the purchasers who buy such Securities in the initial resalethereof are qualified institutional buyers as defined in Rule 144A promulgatedunder the Securities Act, or persons other than U. S. persons in connection withoffers and sales made in reliance upon Regulation S under the Securities Act,(ii) the accuracy and completeness of the Initial Purchasers’ representationsset forth in Section 1 of the Purchase Agreement, and those of the Companycontained in the Purchase Agreement regarding the absence of a generalsolicitation in connection with the sale of such Securities to the InitialPurchasers and the initial resales thereof, and (iii) the compliance with theprocedures set forth in the Purchase Agreement by the Initial Purchasers and theCompany.
11. Theinformation in the Offering Memorandum under the heading “Description of thenotes,” “United States federal income tax considerations” and “Notice toinvestors” to the extent it summarizes laws, governmental rules or regulationsor documents referred to therein is correct in all materialrespects.
12. To ouractual knowledge, there is no legal or governmental proceeding that is pendingor threatened against the Company that has caused us to conclude that suchproceeding would be required to be described by Item 103 of Regulation S-K underthe Securities Act if the issuance of the Securities were being registered underthe Securities Act but is not so described in the OfferingMemorandum.
13. TheCompany is not, nor immediately after the sale of the Securities to the InitialPurchasers and application of the net proceeds therefrom as described in theOffering Memorandum under the caption “Use of proceeds” will be, an “investmentcompany” as such term is defined in the Investment Company Act.
14. Neitherthe sale, issuance, execution or delivery of the Securities nor the applicationof the net proceeds therefrom as described in the Offering Memorandum under thecaption “Use of proceeds” will contravene Regulation T (12 C.F.R. Part 220),Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of theBoard of Governors of the Federal Reserve System.
* * **
Thepurpose of our professional engagement was not to establish factual matters, andpreparation of the Offering Memorandum involved many determinations of a whollyor partially nonlegal character. We make no representation that we haveindependently verified the accuracy, completeness or fairness of the OfferingMemorandum or that the actions taken in connection with the preparation of theOffering Memorandum (including the actions described in the next paragraph) weresufficient to cause the Offering Memorandum to be accurate, complete or fair. Weare not passing upon and do not assume any responsibility for the accuracy,completeness or fairness of the Offering Memorandum except to the extentotherwise explicitly indicated in numbered paragraph 11 above. We were notretained by the Company to prepare the periodic reports or other materialincorporated by reference into the Offering Memorandum, and our knowledge ofthese materials is limited. We were not present at any meeting of the Board ofDirectors of the Company or its Pricing Committee or of the Board of Directorsof International at which any resolution relevant to this letter was discussedor adopted.
We canhowever confirm that we have participated in conferences with representatives ofthe Company, representatives of the Initial Purchasers, counsel for the InitialPurchasers and representatives of the independent accountants for the Companyduring which disclosures in the Offering Memorandum and related matters werediscussed. In addition, we have reviewed certain corporate records furnished tous by the Company.
Basedupon our participation in the conferences and our document review identified inthe preceding paragraph, our understanding of applicable law and the experiencewe have gained in our practice thereunder and relying as to materiality to alarge extent upon the opinions and on statements of officers of the Company, wecan, however, advise you that nothing has come to our attention that has causedus to conclude that the Offering Memorandum, at the date it bears or on thedate of this letter, contained or contains an untrue statement of a materialfact or omitted or omits to state a material fact necessary in order to make thestatements therein, in light of the circumstances under which they were made,not misleading.
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Exhibit10.1 (continued)
* * **
Exceptfor the activities described in the immediately preceding section of thisletter, we have not undertaken any investigation to determine the facts uponwhich the advice in this letter is based.
We haveassumed for purposes of this letter: each document we have reviewed for purposesof this letter is accurate and complete, each such document that is an originalis authentic, each such document that is a copy conforms to an authenticoriginal, and all signatures on each such document are genuine; that thePurchase Agreement and every other agreement we have examined for purposes ofthis letter constitutes a valid and binding obligation of each party to thatdocument and that each such party has satisfied all legal requirements that areapplicable to such party to the extent necessary to entitle such party toenforce such agreement (except that we make no such assumption with respect tothe Company); and that you have acted in good faith and without notice of anyfact which has caused you to reach any conclusion contrary to any of the adviceprovided in this letter. We have also made other assumptions which we believe tobe appropriate for purposes of this letter.
Inpreparing this letter we have relied without independent verification upon: (i)information contained in certificates obtained from governmental authorities;(ii) factual information represented to be true in the Purchase Agreement andother documents specifically identified at the beginning of this letter ashaving been read by us; (iii) factual information provided to us by the Companyor its representatives; and (iv) factual information we have obtained from suchother sources as we have deemed reasonable. We have assumed that there has beenno relevant change or development between the dates as of which the informationcited in the preceding sentence was given and the date of this letter and thatthe information upon which we have relied is accurate and does not omitdisclosures necessary to prevent such information from being misleading. Forpurposes of numbered paragraph 1, we have relied exclusively upon certificatesissued by governmental authorities in the relevant jurisdictions and suchopinion is not intended to provide any conclusion or assurance beyond thatconveyed by those certificates.
Weconfirm that we do not have knowledge that has caused us to conclude that ourreliance and assumptions cited in the two immediately preceding paragraphs areunwarranted. Whenever this letter provides advice about (or based upon) ourknowledge of any particular information or about any information which has orhas not come to our attention such advice is based entirely on the consciousawareness at the time this letter is delivered on the date it bears by thelawyers with Kirkland & Ellis LLP who have devoted substantiveattention to the negotiation or preparation of the Transaction Documents, theOffering Memorandum and the due diligence associated therewith.
Eachopinion (an “enforceabilityopinion”) inthis letter that any particular contract is a valid and binding obligation or isenforceable in accordance with its terms is subject to: (i) the effect ofbankruptcy, insolvency, fraudulent conveyance and other similar laws andjudicially developed doctrines in this area such as substantive consolidationand equitable subordination; (ii) the effect of general principles ofequity; and (iii) other commonly recognized statutory and judicialconstraints on enforceability including statutes of limitations. “Generalprinciples of equity” include but are not limited to: principles limiting theavailability of specific performance and injunctive relief; principles whichlimit the availability of a remedy under certain circumstances where anotherremedy has been elected; principles requiring reasonableness, good faith andfair dealing in the performance and enforcement of an agreement by the partyseeking enforcement; principles which may permit a party to cure a materialfailure to perform its obligations; and principles affording equitable defensessuch as waiver, laches and estoppel. It is possible that terms in a particularcontract covered by our enforceability opinion may not prove enforceable forreasons other than those explicitly cited in this letter should an actualenforcement action be brought, but (subject to all the exceptions,qualifications, exclusions and other limitations contained in this letter) suchunenforceability would not in our opinion prevent the party entitled to enforcethat contract from realizing the principal benefits purported to be provided tothat party by the terms in that contract which are covered by our enforceabilityopinion.
Theenforceability opinion related to the Guarantee is further subject to the effectof rules of law that may render guarantees unenforceable under circumstanceswhere, in the absence of an effective consent or waiver by
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Exhibit10.1 (continued)
guarantors(as to which we express no opinion herein), actions, failures to act or waivers,amendments or replacement of the Indenture or the Securities so radically changethe essential nature of the terms and conditions of the guaranteed obligationsand the related transactions that, in effect, a new relationship has arisenbetween the Trustee and the Company or International, which is substantially andmaterially different from that presently contemplated by the Indenture and theSecurities.
Ouradvice on every legal issue addressed in this letter is based exclusively on theinternal law of the State of New York, or the federal law of the United States,except that the opinions in paragraph 1 and paragraphs 2, 3, 4 and 5 withrespect due authorization, execution and delivery of the Transaction Documentsare based solely on the Delaware General Corporation Law (the “DGCL”) withrespect to the Company. In our opinion, New York state courts would apply NewYork state law to resolve state law issues arising under the TransactionDocuments. We express no opinion as to what law might be applied by any othercourts to resolve any issue addressed by our opinion and we express no opinionas to whether any relevant difference exists between the laws upon which ouropinions are based and any other laws which may actually be applied to resolveissues which may arise under the Transaction Documents. The manner in which anyparticular issue would be treated in any actual court case would depend in parton facts and circumstances particular to the case and would also depend on howthe court involved chose to exercise the wide discretionary authority generallyavailable to it. This letter is not intended to guarantee the outcome of anylegal dispute which may arise in the future.
None ofthe opinions or other advice contained in this letter considers or covers:(i) any state securities (or “bluesky”) lawsor regulations, (ii) any financial statements or supporting schedules (orany notes to any such statements or schedules) or other financial or statisticalinformation set forth or incorporated by reference in (or omitted from) theOffering Memorandum or (iii) any rules and regulations of the NationalAssociation of Securities Dealers, Inc. relating to the compensation ofunderwriters. In addition, none of the opinions or other advice contained in theletter covers or otherwise addresses any of the following types of provisionswhich may be contained in the Transaction Documents: (i) provisionsmandating contribution towards judgments or settlements among various parties;(ii) waivers of benefits and rights to the extent they cannot be waivedunder applicable law; (iii) provisions providing for liquidated damages,late charges and prepayment charges, in each case if deemed to constitutepenalties; (iv) provisions which might require indemnification orcontribution in violation of general principles of equity or public policy,including, without limitation, indemnification or contribution obligations whicharise out of the failure to comply with applicable state or federal securitieslaws; or (v) requirements in the Transaction Documents specifying thatprovisions thereof may only be waived in writing (these provisions may not bevalid, binding or enforceable to the extent that an oral agreement or an impliedagreement by trade practice or course of conduct has been created modifying anyprovision of such documents). This letter does not cover any other laws,statutes, governmental rules or regulations or decisions which in our experienceare not usually considered for or covered by opinions like those contained inthis letter or are not generally applicable to transactions of the kind coveredby the Purchase Agreement.
Thisletter speaks as of the time of its delivery on the date it bears. We do notassume any obligation to provide you with any subsequent opinion or advice byreason of any fact about which we did not have knowledge at that time, by reasonof any change subsequent to that time in any law other governmental requirementor interpretation thereof covered by any of our opinions or advice, or for anyother reason.
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Exhibit10.1 (continued)
Thisletter may be relied upon by the Initial Purchasers only for the purpose servedby the provision in the Purchase Agreement cited in the initial paragraph ofthis letter in response to which it has been delivered. Without our writtenconsent: (i) no person other than the Initial Purchasers may rely on thisletter for any purpose; (ii) this letter may not be cited or quoted in anyfinancial statement, offering memorandum, private placement memorandum or othersimilar document; (iii) this letter may not be cited or quoted in any otherdocument or communication which might encourage reliance upon this letter by anyperson or for any purpose excluded by the restrictions in this paragraph; and(iv) copies of this letter may not be furnished to anyone for purposes ofencouraging such reliance.
Verytruly yours,
KIRKLAND& ELLIS LLP
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Exhibit10.1 (continued)
SCHEDULEA
SpecifiedContracts
NavistarInternational Corporation
1. Guarantee,dated as of December 8, 2000, made by Navistar International Corporation, infavor of The Chase Manhattan Bank, as Administrative Agent, for the lendersparties to the Credit Agreement, dated as of December 8, 2000, among NavistarFinancial Corporation and Arrendadora Financiera Navistar, S.A. de C.V.,Servicios Financieros Navistar, S.A. de C.V. and Navistar Comercial, S.A. deC.V., the Lenders, Bank of America, N.A., as syndication agent, The Bank of NovaScotia, as documentation agent, and the Administrative Agent.
2. Indenture,dated as of May 31, 2001, by and between Navistar International Corporation,International Truck and Engine Corporation and BNY Midwest Trust Company, asTrustee, for 93/8% SeniorNotes due 2006 for $400,000,000, as amended by the First Supplement theretodated August 22, 2001.
3. Indenture,dated as of March 25, 2002, by and among Navistar Financial Corporation,Navistar International Corporation and BNY Midwest Trust Company, as Trustee,for Navistar Financial Corporation’s 4.75% Subordinated Exchangeable Notes due2009 for $220,000,000.
4. Indenture,dated as of December 16, 2002, by and among Navistar International Corporation,International Truck and Engine Corporation and BNY Midwest Trust Company, asTrustee, for Navistar International Corporation’s 2.50% Senior Convertible Notesdue 2007 for $190,000,000.
5. Indenture,dated as of June 2, 2004, by and between Navistar International Corporation,International Truck and Engine Corporation and BNY Midwest Trust Company, asTrustee, for 7-1/2% Senior Notes due 2011 for $250,000,000, as amended by theFirst Supplement thereto dated June 2, 2004.
InternationalTruck and Engine Corporation
6. NotePurchase Agreement, dated as of June 15, 2001, as amended by Amendment datedAugust 16, 2001, between International Truck and Engine Corporation and theState of Wisconsin Investment Board for 9.95% Senior Notes due 2011 for$19,000,000.
NavistarFinancial Corporation
7. CreditAgreement for $820,000,000 Revolving Credit and Competitive Advance Facilitydated as of December 8, 2000, between Navistar Financial Corporation,Arrendadora Financiera Navistar, S.A. de C.V., Servicios Financieros Navistar,S.A. de C.V. and Navistar Comercial, S.A. de C.V., as borrowers, lenders partyhereto, The Chase Manhattan Bank as Administrative Agent, Bank of America asSyndication Agent and Bank of Nova Scotia as Documentation Agent.
* * **
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Exhibit10.1 (continued)
AnnexC
[Form ofSteven K. Covey, Esq. Opinion]
I amSenior Vice President and General Counsel of Navistar International Corporation,a Delaware corporation (the “Company”). Thisopinion is delivered to you pursuant to Section 5(j) of the Purchase Agreement,dated February 23, 2005 (the “PurchaseAgreement”),between the Company and Banc of America Securities LLC (the “Representative”) andthe several initial purchasers party thereto (collectively with theRepresentative, the “InitialPurchasers”).Capitalized terms used but not otherwise defined herein shall have therespective meanings specified in the Purchase Agreement.
Inconnection with this opinion, I have reviewed the Offering Memorandum of theCompany, dated February 23, 2005, covering the offering and sale of theSecurities (including the documents incorporated by reference therein, the“OfferingMemorandum”), anexecuted original of the Purchase Agreement, an executed original of theIndenture, a specimen certificate of the Securities, an executed original of theRegistration Rights Agreement, the Certificate of Incorporation and the By-lawsof the Company, certificates of certain public officials, and certificates ofcertain officers of the Company as to certain factual matters. In addition, Ihave reviewed such other documents and have given consideration to such othermatters of law and fact (in accordance with the principles set forth herein) asI have deemed appropriate, in my professional judgment, to express the opinionsexpressed herein under the laws specified below.
In suchreview and investigation, I have assumed with you permission and withoutindependent investigation: (a) the genuineness of the signatures of personssigning all documents in connection with which this opinion is rendered onbehalf of the parties thereto other than the Company, (b) the authenticity ofall documents submitted to me as originals, (c) the conformity to authenticoriginal documents of all documents submitted to me as certified, conformed orphotostatic copies, and (d) all public authority documents are accurate,complete and authentic and all official public records (including their indexingand filing) are accurate and complete. I have also assumed the dueauthorization, execution and delivery of the Purchase Agreement and every otheragreement I have examined for purposes of this opinion and the validity, bindingeffect and enforceability thereof by or on behalf of the parties thereto otherthan the Company. As to factual matters material to this opinion, when suchfacts have not been independently established, I have relied upon originals (orcopies certified or otherwise identified to my satisfaction) of such records,documents, certificates and other written information as in my judgment arenecessary or appropriate to enable me to render the opinions expressedbelow.
Basedupon the foregoing and subject to the qualifications, assumptions andlimitations set forth below, I am of the opinion that:
1. TheCompany has been duly incorporated and is validly existing as a corporation ingood standing under the laws of the State of Delaware with the requisite powerand authority to own, lease and operate its properties and to conduct businessas described in the Offering Memorandum.
2. TheCompany has been duly qualified as a foreign corporation for the transaction ofbusiness and is in good standing in each jurisdiction in which it owns or leasesproperties, or conducts business, so as to require such qualification, exceptwhere the failure to be in good standing would not reasonably be expected tohave a Material Adverse Effect.
3. EachSubsidiary has been duly organized and is validly existing under the laws of itsjurisdiction of organization with the requisite power and authority to own,lease and operate its properties and to conduct its business, and has been dulyqualified as a foreign organization for the transaction of business and is ingood standing in each jurisdiction in which it owns or leases properties, orconducts business, so as to require such qualification, except where the failureto be in good standing would not reasonably be expected to have a MaterialAdverse Effect.
4. Theauthorized capital stock of the Company is as set forth in the OfferingMemorandum.
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Exhibit10.1 (continued)
5. All theoutstanding shares of capital stock of each Subsidiary have been duly authorizedand validly issued and are fully paid and non-assessable, and except asotherwise set forth in the Offering Memorandum, are directly or indirectly ownedby the Company free and clear of any mortgage, pledge, securities interest,lien, claim or other encumbrance or restriction on transferability or voting(other than as may be imposed by the Securities Act and the various statesecurities laws).
6. All ofthe outstanding shares of capital stock of the Company have been duly authorizedand validly issued and are fully paid and non-assessable.
7. Except asdescribed in the Offering Memorandum, there is no action, suit or proceedingbefore or by any government, governmental instrumentality, agency, body orcourt, domestic or foreign, now pending or, to the best of my knowledge afterreasonable investigation, threatened against or affecting the Company or any ofthe Subsidiaries that could reasonably be expected to have a Material AdverseEffect or that could reasonably be expected to have material adverse effect onthe consummation of the transactions contemplated in, or the fulfillment of theterms of, this Agreement, the Offering Memorandum, the Indenture or theRegistration Right Agreement; there is no action, suit or proceeding before orby any government, governmental instrumentality, agency, body or court, nowpending, or to the best of my knowledge after reasonable investigation,threatened against or affecting the Company or any Subsidiary that would berequired to be described in a registration statement filed pursuant to theSecurities Act that is not described in the Offering Memorandum.
8. Theexecution and delivery by the Company of, and the performance by the Company ofall of the provisions of its obligations under, this Agreement, the Indenture,the Registration Rights Agreement, the Securities, and the consummation by theCompany of the transactions contemplated therein and in the Offering Memorandum,do not and will not conflict with, or result in a breach or violation of any ofthe terms or provisions of, or constitute a default (or an event which, withnotice or lapse of time, or both, would constitute a default) under, or giverise to any right to accelerate the maturity or require the prepayment of anyindebtedness or the purchase of any capital stock under, or result in thecreation or imposition of any lien, charge or encumbrance upon any materialproperties or assets of the Company or of any Subsidiary under, (A) any materialcontact, indenture, mortgage, deed of trust, loan agreement, note, lease,partnership agreement or other agreement or instrument known to me afterreasonable investigation to which the Company or any Subsidiary is a party or bywhich any of them may be bound or to which any of their respective properties orassets may be subject, (B) any applicable law or statute, rule or regulation(other than the securities or Blue Sky laws of the various states of the UnitedStates of America) or (C) any judgment, order or decree of any government,governmental instrumentality, agency, body or court, domestic or foreign, havingjurisdiction over the Company or any Subsidiary or any of their respectiveproperties or assets known to me after reasonable investigation except, withrespect to clauses (A) and (B), any breach or violation that would notreasonably be expected to have a Material Adverse Effect.
Thepreparation of the Offering Memorandum involved many determinations of a whollyor partially nonlegal character. I make no representation that I haveindependent verified the accuracy, completeness or fairness of the OfferingMemorandum or that the actions taken in connection with the preparation of theOffering Memorandum were sufficient to cause the Offering Memorandum to beaccurate, complete and fair. I am not passing upon and do not assume anyresponsibility for the accuracy, completeness or fairness of the OfferingMemorandum.
Based onmy participation in the preparation of the Offering Memorandum and conferenceswith officers and representatives of the Company, representatives of theindependent public accountants for the Company, representatives of the InitialPurchasers and counsel for the Initial Purchasers during which disclosures inthe Offering Memorandum and related matters were discussed, my understanding ofapplicable law and the experience I have gained in my practice, and relying asto materiality to a large extent upon the opinions and statements of officers ofthe Company, I can, however, advise you that nothing has come to my attentionthat has caused me to conclude that the Offering Memorandum (other than thefinancial statements, supporting schedules and other financial and statisticaldata set forth therein, as to which no advice is given) at the date it bears oron the date of this letter contained an untrue statement of a material fact oromitted or omits to state a material fact necessary in order to make thestatements therein, in light of the circumstances under which they were made,not misleading.
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Exhibit10.1 (continued)
Myopinions expressed herein are limited to the substantive laws of the State ofIllinois, the General Corporation Law of the State of Delaware and the Federallaws of the United States which, in my experience, are normally applicable togeneral business corporations which are not engaged in regulated businessactivities and to transactions of the type contemplated under the Agreements(but without my having made any special investigation as to any otherlaws).
Myopinions expressed herein are limited to the specific issues addressed hereinand are limited in all respects to documents, laws and facts existing on thedate hereof. By rendering my opinions, I do not undertake to advise you of anychanges in such documents, laws or facts that may occur after the datehereof.
Myopinions expressed herein have been furnished at the request of theRepresentative and may be relied upon by the Initial Purchasers only for thepurpose served by the provision in the Purchase Agreement cited in the initialparagraph of this letter in response to which it has been delivered. This lettermay not be relied upon by any other person or used for any other purpose withoutmy prior written consent.
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