<PAGE> 1
EXHIBIT 1.1
UNDERWRITING AGREEMENT
Navistar Financial Securities Corporation
Navistar Financial Dealer Note Master Trust
$200,000,000 Class A Floating Rate Dealer Note Asset Backed Certificates,
Series 2000-1
$12,000,000 Class B Floating Rate Dealer Note Asset Backed Certificates,
Series 2000-1
June 28, 2000
Banc of America Securities LLC
231 S. LaSalle Street
Chicago, Illinois 60697
Ladies and Gentlemen:
Navistar Financial Securities Corporation, a Delaware corporation (the
"Company"), as originator of the Navistar Financial Dealer Note Master Trust
(the "Master Trust"), proposes, subject to the terms and conditions stated
herein, to cause to be issued and sold to you (the "Underwriter") an aggregate
of $200,000,000 principal amount of the Class A Floating Rate Dealer Note Asset
Backed Certificates, Series 2000-1 (the "Class A Securities") and an aggregate
of $12,000,000 principal amount of the Class B Floating Rate Dealer Note Asset
Backed Certificates, Series 2000-1 (the "Class B Securities"). The Class A
Securities will have an Expected Principal Payment Date of June 27, 2005 and
will bear interest at LIBOR plus 0.25%. The Class B Securities will have an
Expected Principal Payment Date of June 27, 2005 and will bear interest at LIBOR
plus 0.55%. The Class A Securities and the Class B Securities are referred to
herein collectively as the "Securities".
The Securities will be issued by the Master Trust pursuant to a Pooling
and Servicing Agreement, dated as of June 8, 1995, amended as of September 12,
1995, March 27, 1996, July 17, 1998 and June 2, 2000, and to be amended as of
July 13, 2000 and as supplemented by the Series 1995-1 Supplement, dated as of
June 8, 1995, as amended as of March 27, 1996 and August 19, 1997, the Series
1997-1 Supplement, dated as of August 19, 1997, the Series 1998-1 Supplement
dated as of July 17, 1998 and the Series 2000-VFC Supplement dated as of January
28, 2000 (the "Pooling and Servicing Agreement"), and a Series 2000-1 Supplement
to be dated as of July 13, 2000 (the "Series 2000-1 Supplement"; the Pooling and
Servicing Agreement as
<PAGE> 2
supplemented by the Series 2000-1 Supplement is referred to herein as the
"Master Trust Pooling and Servicing Agreement"), among the Company, Navistar
Financial Corporation ("NFC"), as Servicer and Bank of New York, as trustee (the
"Master Trust Trustee"). Capitalized terms used and not otherwise defined herein
are used as defined in the Master Trust Pooling and Servicing Agreement.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement on Form S-3 (File No. 333-32960), including a prospectus, for the
registration of asset-backed securities (issuable in series and classes
thereof), including the Securities, which registration statement has become
effective, and a copy of which, as amended to the date hereof, has heretofore
been delivered to the Underwriter. The Seller proposes to file with the
Commission pursuant to Rules 424(b)(2) or (5) and 424(c) under the Securities
Act a supplement to be dated on or about July 3, 2000 (the "Prospectus
Supplement") to the prospectus dated June 26, 2000, which may be amended and
dated on or about July 3, 2000 (the "Base Prospectus") relating to the
Securities and the method of distribution thereof. Such registration statement,
including exhibits thereto, is hereinafter called the "Registration Statement";
and the Base Prospectus and the Prospectus Supplement, together with any
amendment thereof or supplement thereto authorized by the Seller prior to the
Closing Date for use in connection with the offering of the Securities are
hereinafter called the "Prospectus."
The Company hereby agrees with the Underwriter as follows:
1. The Company agrees to sell and deliver the Securities to the
Underwriter as hereinafter provided, and the Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase from the Company (x) $200,000,000
principal amount of the Class A Securities at a price equal to 99.75% of such
principal amount and (y) $12,000,000 principal amount of the Class B Securities
at a price equal to 99.70% of such principal amount.
2. Payment for the Securities shall be made to the Company or to its
order by wire transfer or other same day funds at the office of Kirkland &
Ellis, Chicago, Illinois at 9:00 A.M., Chicago time, on July 13, 2000 or at such
other time on the same or such other date, not later than the fifth Business Day
thereafter, as the Underwriter and the Company may agree upon in writing. The
time and date of such payment for the Securities are referred to herein as the
"Closing Date." As used herein, the term "Business Day" means any day other than
a Saturday, a Sunday or a day on which banks are permitted or required to be
closed in New York City.
Payment for the Securities shall be made against delivery to the
Underwriter through the facilities of The Depository Trust Company on the
Closing Date of one or more definitive certificate(s) representing the
Securities registered in the name of Cede & Co., as nominee for The Depository
Trust Company, and in such denominations, as permitted by the Master Trust
Pooling
2
<PAGE> 3
and Servicing Agreement, as the Underwriter shall request in writing not later
than two full Business Days prior to the Closing Date, with any transfer taxes
payable in connection with the transfer to the Underwriter of the Securities
duly paid by the Company. The certificate(s) for the Securities will be made
available for inspection by the Underwriter in Chicago, Illinois not later than
1:00 P.M., New York City time, on the Business Day prior to the Closing Date.
3. The Company represents and warrants to the Underwriter that:
(a) no order preventing or suspending the use of any preliminary
prospectus filed as part of the Registration Statement has been issued
by the Commission, and each preliminary prospectus filed as part of the
Registration Statement, as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities
Act, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, provided that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
relating to the Underwriter furnished to the Company in writing by the
Underwriter expressly for use therein;
(b) the Registration Statement has become effective, and the
Registration Statement as of its effective date (the "Effective Date"),
and the Prospectus, as of the date of the Prospectus Supplement,
complied in all material respects with the applicable requirements of
the Securities Act; no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or, to the best knowledge of the Company,
threatened by the Commission; and the Registration Statement, as of the
Effective Date, did not contain an untrue statement of a material fact
and did not omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and
the Prospectus, as of the date of the Prospectus Supplement, did not,
and as of the Closing Date will not, contain an untrue statement of a
material fact and did not and will not omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that
the foregoing representations and warranties shall not apply to
statements or omissions in the Registration Statement or the Prospectus
made in reliance upon and in conformity with information relating to
the Underwriter furnished to the Company in writing by the Underwriter
expressly for use therein;
(c) each of the Company and NFC has been duly incorporated under
the laws of its jurisdiction of incorporation; each of the Company and
NFC is a validly existing corporation in good standing under the laws
of its jurisdiction of incorporation, with full power and corporate
authority to own, lease and operate its properties and conduct its
business, and is duly qualified as a foreign corporation for the
transaction of business and
3
<PAGE> 4
is in good standing under the laws of each other jurisdiction in which
it owns or leases properties, or conducts any business, so as to
require such qualification, except where the failure to be so
qualified or in good standing would not have a material adverse effect
on the business, results of operations or financial condition or the
material properties or assets of the Company or NFC or the performance
of their obligations hereunder or under the Securitization Agreements
(as defined below) (a "Material Adverse Effect");
(d) each of this Agreement, the Purchase Agreement and the Pooling
and Servicing Agreement (collectively, excluding this Agreement, the
"Existing Agreements") has been duly authorized, executed and delivered
by the Company and NFC;
(e) the execution and delivery of the Series 2000-1 Supplement
(collectively, the Series 2000-1 Supplement together with the Existing
Agreements, the "Securitization Agreements") have been duly and validly
authorized by the Company and NFC;
(f) this Agreement constitutes the valid and binding agreement of
the Company and NFC; and each Existing Agreement constitutes, and when
executed and delivered by each of the Company and NFC, the Series
2000-1 Supplement will (assuming due authorization, execution and
delivery by the Master Trust Trustee) constitute, a legal, valid and
binding agreement of each of the Company and NFC, enforceable against
the Company and NFC in accordance with its terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought;
(g) the Securities and the Securitization Agreements conform in all
material respects to the descriptions thereof in the Prospectus;
(h) the Securities have been duly and validly authorized for
issuance and, when executed by the Company and authenticated by the
Master Trust Trustee in accordance with the provisions of the Master
Trust Pooling and Servicing Agreement, and delivered to and paid for by
the Underwriter in accordance with the terms hereof, will have been
duly and validly executed, authenticated, issued and delivered and will
be entitled to the benefits of the Master Trust Pooling and Servicing
Agreement, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally
and (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought;
(i) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Securities and the Securitization Agreements, and the consummation
by the Company of the transactions contemplated
4
<PAGE> 5
herein and therein and in the Prospectus, (i) do not and will not
result in any violation of the Certificate of Incorporation or the
By-laws of the Company and (ii) do not and will not conflict with, 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, or both, would constitute a default) under, or give rise to any
right to accelerate the maturity or require the prepayment of any
indebtedness or the purchase of any capital stock under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company under, (A) any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease, partnership
agreement or other agreement or instrument to which the Company, NFC,
International Truck and Engine Corporation ("ITEC") or Navistar
International Corporation ("NIC") is a party or by which any of them
may be bound or to which any of their respective properties or assets
may be subject, (B) (assuming, prior to the effectiveness of the
Registration Statement, compliance with the Securities Act) any
applicable law or statute, rule or regulation (other than the
securities or Blue Sky laws of the various states of the United States
of America) or (C) any judgment, order or decree of any government,
governmental instrumentality, agency, body or court, domestic or
foreign, having jurisdiction over the Company, NFC, ITEC or NIC or any
of their respective properties or assets;
(j) the execution and delivery by NFC of, and the performance by
NFC of all of its obligations under, this Agreement and the
Securitization Agreements, and the consummation by NFC of the
transactions contemplated herein and therein and in the Prospectus,
(i) do not and will not result in any violation of the Certificate of
Incorporation or the By-laws of NFC and (ii) do not and will not
conflict with, 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, or both, would constitute a default) under,
or give rise to any right to accelerate the maturity or require the
prepayment of any indebtedness or the purchase of any capital stock
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of NFC under, (A) any
contract, indenture, mortgage, deed of trust, loan agreement, note,
lease, partnership agreement or other agreement or instrument to which
NFC, the Company, ITEC or NIC is a party or by which any of them may
be bound or to which any of their respective properties or assets may
be subject, (B) (assuming, prior to the effectiveness of the
Registration Statement, compliance with the Securities Act) any
applicable law or statute, rule or regulation (other than the
securities or Blue Sky laws of the various states of the United States
of America) or (C) any judgment, order or decree of any government,
governmental instrumentality, agency, body or court, domestic or
foreign, having jurisdiction over NFC, the Company, ITEC or NIC or any
of their respective properties or assets;
(k) the representations and warranties of the Company and NFC set
out in the Securitization Agreements are true and correct in all
material respects;
5
<PAGE> 6
(l) no authorization, approval, consent, order, registration,
qualification or license of, or filing with, any government,
governmental instrumentality, agency, body or court, domestic or
foreign, or third party (other than as have been or will be prior to
the Closing Date obtained under the Securities Act or as may
subsequently be required under the Securities Exchange Act of 1934 (the
"Exchange Act") or as may be required under the securities or Blue Sky
laws of the various states of the United States of America) is required
for the valid authorization, issuance, sale and delivery of the
Securities, or the performance by the Company or NFC of all of its
obligations under this Agreement, the Securitization Agreements or (in
the case of the Company) the Securities, or the consummation by the
Company or NFC of the transactions contemplated by this Agreement, the
Securitization Agreements or the Prospectus;
(m) neither the Company nor NFC (i) is in violation of its
Certificate of Incorporation or By-Laws or (ii) is in breach or
violation of any of the terms or provisions of, or with the giving of
notice or lapse of time, or both, would be in default under, any
contract, indenture, mortgage, deed of trust, loan agreement, note,
lease, partnership agreement, or other agreement or instrument to which
the Company or NFC is a party or by which either of them may be bound
or to which any of their properties or assets may be subject, except
for such violations or defaults that would not have a Material Adverse
Effect;
(n) there is no action, suit or proceeding before or by any
government, governmental instrumentality, agency, body or court,
domestic or foreign, now pending or, to the best knowledge of the
Company and NFC after due inquiry, threatened against or affecting the
Company or NFC (i) asserting the invalidity of this Agreement, any
Securitization Agreement or the Securities, (ii) seeking to prevent the
issuance of the Securities or the consummation of any of the
transactions contemplated by this Agreement or any Securitization
Agreement, (iii) that might materially and adversely affect the
performance by either the Company or NFC of its obligations under, or
the validity or enforceability of, this Agreement, any Securitization
Agreement or the Securities, (iv) seeking to affect adversely the
federal income tax attributes of the Securities described in the
Prospectus or (v) that if determined adversely as to either the Company
or NFC would have a Material Adverse Effect on either the Company or
NFC;
(o) there has not been any material adverse change in the business,
results of operations or financial condition or the material properties
or assets of ITEC or NFC since the end of the most recent fiscal
quarter of ITEC or NFC;
(p) any taxes, fees, and other governmental charges in connection
with the execution and delivery of this Agreement and the
Securitization Agreements and the execution, delivery, and sale of the
Securities have been or will be paid at or before the Closing Date;
6
<PAGE> 7
(q) On the Closing Date, and after giving effect to all
transactions occurring on the Closing Date, including the issuance of
the Securities, the repayment, if any, of the Series 2000-VFC
Certificate and any deposit to the Excess Funding Account, the Master
Trust's Seller's Interest shall be at least equal to the Minimum Master
Trust Seller's Interest;
(r) the Master Trust Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and neither the Company nor the
Master Trust is required to be registered under the Investment Company
Act of 1940, as amended (the "Investment Company Act");
(s) neither the Company nor NFC is a party to, or otherwise bound
by, any indenture or other material agreement or instrument, or, to the
Company's or NFC's knowledge, subject to or in violation of any
statute, regulation, or order of any governmental body, administrative
agency, regulatory body, or court having jurisdiction over the Company
or NFC that would have a Material Adverse Effect; and
(t) there are no contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or
required to be described in the Registration Statement or the
Prospectus which are not filed or described as required.
4. The Company covenants and agrees with the Underwriter as follows:
(a) to cause the Prospectus Supplement to be transmitted to the
Commission for filing pursuant to Rules 424(b)(2) or (5) and 424(c)
under the Securities Act by means reasonably calculated to result in
filing with the Commission pursuant to said rule;
(b) to deliver, at the expense of the Company, (i) on the Closing
Date, one conformed copy of the Registration Statement (as originally
filed) and each amendment thereto, in each case including exhibits, to
the Underwriter, and (ii) during the period mentioned in paragraph (e)
below, to the Underwriter as many copies of the Prospectus (including
all amendments and supplements thereto and documents incorporated by
reference therein) as the Underwriter may reasonably request;
(c) before filing any amendment or supplement to the Registration
Statement or the Prospectus, to furnish to the Underwriter and its
counsel a copy of the proposed amendment or supplement for review
within a reasonable time prior to the proposed filing thereof and not
to file any such proposed amendment or supplement to which the
Underwriter or its counsel reasonably object;
(d) to advise the Underwriter promptly, and to confirm such advice
in writing, (i) when any amendment to the Registration Statement shall
have become effective, (ii) of any request by the Commission for any
amendment to the Registration Statement or any
7
<PAGE> 8
amendment or supplement to the Prospectus or for any additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation or threatening of any proceeding for that purpose and (iv)
of the receipt by the Company of any notification with respect to any
suspension of the qualification of the Securities for offer and sale
in any jurisdiction or the initiation or threatening of any proceeding
for such purpose; and to use its best efforts to prevent the issuance
of any such stop order or notification and, if issued, to obtain
promptly the withdrawal thereof;
(e) if, during such period of time after the first date of the
public offering of the Securities as in the opinion of counsel for the
Underwriter or in the opinion of counsel for the Company a prospectus
relating to the Securities is required by law to be delivered in
connection with sales by the Underwriter or a dealer, any event shall
occur or information shall become known as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances at the time the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with law,
forthwith to, at the sole expense of the Company, prepare and, subject
to Section 4(c) above, file with the Commission, and furnish to the
Underwriter and to the dealers (whose names and addresses the
Underwriter will furnish to the Company) to which Securities may have
been sold by the Underwriter and to any other dealers upon request,
such amendments or supplements to the Prospectus as may be necessary so
that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances at the time the Prospectus
is delivered to a purchaser, be misleading or so that the Prospectus
will comply with law; provided, however, if the need for an amendment
is due to misleading, inaccurate or incomplete information regarding
the Underwriter, all fees and expenses related thereto will be paid by
the Underwriter;
(f) (i) to use its best efforts to qualify the Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions as
the Underwriter shall reasonably request and to continue such
qualification in effect so long as reasonably required for distribution
of the Securities and (ii) to pay all fees and expenses (including fees
and disbursements of counsel for the Underwriter) incurred in
connection with such qualification and in connection with the
determination of the eligibility of the Securities for investment under
the laws of such jurisdictions as the Underwriter may designate;
provided that the Company shall not be required to file a general
consent to service of process or qualify as a foreign corporation in
any jurisdiction;
(g) to cause the Master Trust to make generally available to
holders of the Securities and to the Underwriter, in accordance with
Rule 158 under the Securities Act or otherwise, as soon as practicable,
but in any event not later than forty-five days after the end of the
fourth full fiscal quarter (ninety days in the case of the last fiscal
quarter in any fiscal year) following the fiscal quarter ending after
the Effective Date, an earnings
8
<PAGE> 9
statement of the Master Trust (which need not be audited) complying
with Section 11(a) of the Securities Act and covering a period of at
least twelve consecutive months beginning after the Effective Date;
(h) so long as the Securities are outstanding, to deliver or cause
to be delivered to the Underwriter the annual statements as to
compliance and the annual statement(s) of a firm of independent public
accountants delivered to the Master Trust Trustee pursuant to the
Master Trust Pooling and Servicing Agreement, in each case promptly
after such statements are furnished to the Company;
(i) to pay or cause to be paid all costs and expenses incident to
the performance of its obligations hereunder, including without
limitation, all costs and expenses (i) incident to the preparation,
issuance, execution, authentication and delivery of the Securities,
including any expenses of the Master Trust Trustee, (ii) incident to
the preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the qualification or
exemption of the sale of the Securities under state securities or Blue
Sky laws and the determination of their eligibility for investment
under state and federal laws, including filing fees and reasonable fees
and disbursements of counsel in connection therewith, (iv) in
connection with the printing (including word processing and duplication
costs) and delivery of this Agreement, the Securitization Agreements
and all other agreements relating hereto or thereto, the Preliminary
Blue Sky Memorandum and the furnishing to the Underwriter and dealers
of copies of the Registration Statement and the Prospectus, including
mailing and shipping, as herein provided, and (v) payable to rating
agencies in connection with the rating of the Securities;
(j) so long as any of the Securities are outstanding, to furnish to
the Underwriter as soon as practicable after the end of the fiscal
year, (i) all documents required to be distributed to security holders
of the Master Trust or filed with the Commission pursuant to the
Exchange Act, or any order of the Commission thereunder and (ii) from
time to time, any other information concerning the Company filed with
any government or regulatory authority that is otherwise publicly
available, as the Underwriter may reasonably request; and
(k) to the extent, if any, that a rating provided with respect to
the Securities by the rating agency or agencies that initially rate the
Securities is conditional upon the furnishing of documents or the
taking of any other actions by the Company, to furnish, as soon as
practicable, such documents and take any such other reasonable actions.
The Company and NFC agree with the Underwriter during the period of 30
days from the date of the Prospectus, not to offer, sell, contract to sell or
announce any offering of any securities of the Company or any other affiliate of
NFC, or any other trust for which the Company
9
<PAGE> 10
or any other affiliate of NFC is depositor, which represent participation
interests in wholesale dealer notes issued by dealers to finance purchases of
new and used medium and heavy duty trucks, without the Underwriter's prior
written consent, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, the Company and NFC may at any time cause the
Master Trust to increase the amount outstanding under a variable funding
certificate that has been placed with any asset-backed commercial paper vehicle.
5. The obligation of the Underwriter hereunder to purchase the
Securities is subject to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for such purpose shall
be pending before or threatened by the Commission; and any requests for
additional information by the Commission shall have been complied with
to the reasonable satisfaction of the Underwriter.
(b) Each of the representations and warranties of the Company and
NFC contained herein shall be true and correct on and as of the Closing
Date as if made on and as of the Closing Date, and each of the Company
and NFC shall have complied with all agreements and all conditions on
its part to be performed or satisfied hereunder at or prior to the
Closing Date.
(c) All corporate proceedings and related matters in connection
with the organization of the Company, the validity of the
Securitization Agreements and the registration, authorization, issue,
sale and delivery of the Securities shall have been satisfactory to
counsel to the Underwriter, and such counsel shall have been furnished
with such papers and information as they may reasonably have requested
to enable them to pass upon the matters referred to in this paragraph
(c).
(d) The Underwriter shall have received on the Closing Date a
signed opinion of Kirkland & Ellis, special counsel for the Company and
NFC, in form and substance reasonably satisfactory to the Underwriter
and counsel to the Underwriter, dated the Closing Date and addressed to
the Underwriter, to the effect that:
(i) the issuance of the Securities has been duly authorized
and when the Securities have been executed by the Company and duly
authenticated by the Master Trust Trustee in accordance with the
provisions of the Master Trust Pooling and Servicing Agreement and
delivered to the Underwriter against payment of the agreed
consideration therefor in accordance with the terms of this
Agreement, the Securities will be duly executed, authenticated,
issued and delivered and will be entitled to the benefits provided
by the Master Trust Pooling and Servicing Agreement, in accordance
with its terms;
10
<PAGE> 11
(ii) this Agreement has been duly authorized, executed and
delivered by the Company and NFC; and each Existing Agreement
constitutes, and when executed and delivered by each of the Company
and NFC, the Series 2000-1 Supplement will constitute, a legal,
valid and binding obligation of each of the Company and NFC (and
assuming due authorization, execution and delivery by the Master
Trust Trustee), enforceable against the Company and NFC in
accordance with its respective terms;
(iii) the execution and delivery by the Company of this
Agreement, the Securities and the Securitization Agreements and the
performance by the Company of its obligations hereunder and
thereunder (A) have been duly authorized by the Company, (B) do not
and will not violate the Certificate of Incorporation or By-laws of
the Company and (C) do not and will not breach, or result in a
default under, (1) any contract, indenture, mortgage, deed of trust,
loan agreement, note, lease, partnership agreement or other
agreement or instrument to which the Company, NFC, ITEC or NIC is a
party or by which any of them may be bound or to which any of their
respective properties or assets may be subject, which has been
specified by the Company in an officer's certificate as being
material to the Company, NFC, ITEC or NIC (except that such counsel
need not express any opinion with respect to compliance with any
financial test or any breach or default under any cross-default
provisions arising out of failure to comply with a financial test or
a default under any agreement not so specified in such officer's
certificate), (2) based upon existing facts of which such counsel is
aware, any federal or State of New York or Illinois law which, in
such counsel's experience, is normally applicable to general
business corporations which are not engaged in regulated business
activities and to transactions of the type contemplated by this
Agreement and the Securitization Agreements (but without such
counsel having made any special investigation as to any other laws),
except that such counsel shall express no opinion as to (x)
compliance with any disclosure requirement or any prohibition
against fraud or misrepresentation, (y) whether performance of
indemnification or contribution provisions would be permitted or (z)
any laws which the Company, NFC, ITEC or NIC may be subject solely
as a result of the Underwriter's (as opposed to underwriters
generally) legal or regulatory status, or the Underwriter's (as
opposed to underwriters generally) involvement in the transactions
contemplated by this Agreement or (3) any judgment, order or decree
of any government, governmental instrumentality, agency body or
court, domestic or foreign, which has been specified by the Company
in an officer's certificate as being material to the Company, NFC,
ITEC or NIC and having jurisdiction over the Company, NFC, ITEC, or
NIC or any of their respective properties or assets;
(iv) the execution and delivery by NFC of this Agreement and
the Securitization Agreements and the performance by NFC of its
obligations
11
<PAGE> 12
hereunder and thereunder (A) have been duly authorized by NFC, (B)
do not and will not violate the Certificate of Incorporation or
By-laws of NFC and (C) do not and will not breach, or result in a
default under, (1) any contract, indenture, mortgage, deed of trust,
loan agreement, note, lease, partnership agreement or other
agreement or instrument to which the Company, NFC, ITEC or NIC is a
party or by which any of them may be bound or to which any of their
respective properties or assets may be subject, which has been
specified by the Company in an officer's certificate as being
material to the Company, NFC, ITEC or NIC (except that such counsel
need not express any opinion with respect to compliance with any
financial test or any breach or default under any cross-default
provisions arising out of failure to comply with a financial test or
a default under any agreement not so specified in such officer's
certificate), (2) based upon existing facts of which such counsel is
aware, any federal or State of New York or Illinois law which, in
such counsel's experience, is normally applicable to general
business corporations which are not engaged in regulated business
activities and to transactions of the type contemplated by this
Agreement and the Securitization Agreements (but without such
counsel having made any special investigation as to any other laws),
except that such counsel shall express no opinion as to (x)
compliance with any disclosure requirement or any prohibition
against fraud or misrepresentation, (y) whether performance of
indemnification or contribution provisions would be permitted or (z)
any laws which the Company, NFC, ITEC or NIC may be subject solely
as a result of the Underwriter's (as opposed to underwriters
generally) legal or regulatory status, or the Underwriter's (as
opposed to underwriters generally) involvement in the transactions
contemplated by this Agreement or (3) any judgment, order or decree
of any government, governmental instrumentality, agency body or
court, domestic or foreign, which has been specified by the Company
in an officer's certificate as being material to the Company, NFC,
ITEC or NIC and having jurisdiction over the Company, NFC, ITEC or
NIC or any of their respective properties or assets;
(v) the information in the Registration Statement under the
headings "Material Federal Income Tax Matters," "State Tax Matters,"
"ERISA Considerations" and "Certain Matters Relating to Bankruptcy"
to the extent that it summarizes laws or constitutes legal
conclusions with respect thereto, is correct in all material
respects; and the Securities and the Securitization Agreements
conform in all material respects to the descriptions thereof in the
Prospectus set forth under the heading "Description of the Series
2000-1 Certificates";
(vi) the Master Trust Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act, and neither
the Company nor the Master Trust is required to be registered under
the Investment Company Act; and
(vii) no authorization, approval, consent or order of any
government, governmental instrumentality, agency, body or court,
domestic or foreign, is
12
<PAGE> 13
required for the valid authorization, issuance, sale and delivery of
the Securities, except such consents, approvals, authorizations or
orders as have been obtained under the Securities Act and as may be
required under the state securities or Blue Sky laws of the various
states of the United States of America, and such other consents,
approvals, authorizations or orders as have been obtained, with such
counsel specifying the same.
Such counsel shall also advise that the purpose of their
professional engagement was not to establish factual matters, and that
preparation of the Registration Statement involved many determinations
of a wholly or partially nonlegal character and that they make no
representation that they have independently verified the accuracy,
completeness or fairness of the Prospectus or Registration Statement or
that the actions taken in connection with the preparation of the
Registration Statement or Prospectus (including the actions described
in the next paragraph) were sufficient to cause the Prospectus or
Registration Statement to be accurate, complete or fair and that they
are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the Prospectus or the
Registration Statement except to the extent otherwise explicitly
indicated in numbered paragraph (vi) above, but that they can however
confirm that they have participated in conferences with representatives
of the Company, representatives of the Underwriter, counsel for the
Underwriter and representatives of the independent accountants for the
Company during which disclosures in the Registration Statement and
Prospectus and related matters were discussed and that they have
reviewed certain corporate records furnished to them by the Company and
that they were not retained by the Company to prepare the periodic
reports or other materials incorporated in the Prospectus or
Registration Statement, and that their knowledge about those materials
is limited, but that based upon their participation in the conferences
and their document review identified above, their understanding of
applicable law and the experience they have gained in their practice
thereunder and relying as to materiality to a large extent upon the
opinions and statements of officers of the Company, they can, however,
advise that nothing has come to their attention that has caused them to
conclude that (i) the Registration Statement at its effective date
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) the Prospectus at the date it
bears contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading or (iii) as of the effective date, either the Registration
Statement or the Prospectus appeared on its face not to be responsive
in all material respects to the requirements of Form S-3, in each case,
excluding any financial statements or supporting schedules (or any
notes to any such statements or schedules) or other financial or
statistical information set forth or incorporated by reference in (or
omitted from) the Registration Statement or the Prospectus.
In rendering such opinions, such counsel may rely as to matters of
fact, to the extent such counsel reasonably deems proper, on
certificates of responsible officers of the
13
<PAGE> 14
Company and certificates or other written statements of officials of
jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company. In addition, such opinion
of counsel may state that such counsel's opinions are subject to the
effect of applicable bankruptcy, reorganization, insolvency,
moratorium, fraudulent conveyance or transfer or other laws of general
applicability relating to or affecting the enforcement of creditors'
rights from time to time in effect and to general principles of
equity.
(e) Kirkland & Ellis shall have furnished to the Underwriter a
letter stating that the Underwriter may rely on their opinions, as
special counsel to the Company and NFC, as delivered to Moody's
Investors Service, Inc. and Standard & Poor's Ratings Services in
connection with the rating of the Securities.
(f) The Underwriter shall have received on the Closing Date a
signed opinion of Steven K. Covey, General Counsel of NFC, in form and
substance reasonably satisfactory to the Underwriter and counsel to the
Underwriter, dated the Closing Date and addressed to the Underwriter,
to the effect that:
(i) each of the Company and NFC has been duly incorporated
and is validly existing as a corporation in good standing under
the laws of the State of Delaware with full power and authority
(corporate and other) to own, lease and operate its properties
and to conduct its business;
(ii) except as described in the Registration Statement and the
Prospectus, there is no action, suit or proceeding before or by any
government, governmental instrumentality, agency, body or court,
domestic or foreign, now pending or, to the best knowledge of such
counsel, threatened against or affecting the Company, NFC, ITEC or
NIC that could have a Material Adverse Effect or that could have a
material adverse effect on the consummation of the transactions
contemplated in, or the fulfillment of the terms of, this Agreement,
the Prospectus or the Securitization Agreements; there is no action,
suit or proceeding before or by any government, governmental
instrumentality, agency, body or court, now pending, or to the best
knowledge of such counsel, threatened against or affecting the
Company, NFC, ITEC or NIC that is required to be described in the
Registration Statement or the Prospectus that is not so described;
and to the best of such counsel's knowledge, there are no contracts
or other documents of a character required to be described or
referred to in the Registration Statement or the Prospectus, or to
be filed as an exhibit to the Registration Statement, that are not
described, filed or referred to as required;
(iii) the execution and delivery by the Company and NFC of, and
the performance by the Company and NFC of all of the provisions of
its obligations under, this Agreement, the Securitization Agreements
and the Securities, and the
14
<PAGE> 15
consummation by the Company and NFC of the transactions contemplated
herein, therein and in the Prospectus, do not and will not conflict
with, 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, or both, would constitute a default) under,
or give rise to any right to accelerate the maturity or require the
prepayment of any indebtedness or the purchase of any 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
any Subsidiary under, (A) any contract, indenture, mortgage, deed of
trust, loan agreement, note, lease, partnership agreement or other
agreement or instrument to which the Company, NFC, ITEC or NIC is a
party or by which any of them may be bound or to which any of their
respective properties or assets may be subject or (B) any judgment,
order or decree of any government, governmental instrumentality,
agency, body or court, domestic or foreign, having jurisdiction over
the Company, NFC, ITEC or NIC or any of their respective properties
or assets; and
(iv) the statements contained in the Registration Statement
under the heading "Certain Matters Relating to the Dealer Notes," to
the extent that they constitute statements of matters of law or
legal conclusions with respect thereto, are correct in all material
respects.
Such counsel shall also advise, based on his participation in the
preparation of the Registration Statement and the Prospectus and
conferences with officers and representatives of the Company,
representatives of the independent public accountants for the Company,
representatives of the Underwriter and counsel to the Underwriter, that
nothing has come to his attention that leads him to believe that the
Registration Statement and any post-effective amendment thereto (other
than the financial statements, supporting schedules and other financial
and statistical data set forth therein, as to which no advice need be
given), at the time such Registration Statement or post-effective
amendment became effective or at the Closing Date, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus (as
supplemented, if applicable) (other than the financial statements,
supporting schedules and other financial and statistical data set forth
therein, as to which no advice need be given), as of its date or as of
the Closing Date, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(g) On the date hereof and at the Closing Date, Deloitte & Touche
shall have furnished to the Underwriter letters, dated the respective
date of delivery thereof, in form and substance satisfactory to the
Underwriter.
15
<PAGE> 16
(h) Counsel to the Master Trust Trustee shall have furnished to the
Underwriter written opinions, dated the Closing Date, in form and
substance reasonably satisfactory to the Underwriter.
(i) On the Closing Date, and after giving effect to all
transactions occurring on the Closing Date, including the issuance of
the Securities, the repayment, if any, of the Series 2000-VFC
Certificate and any deposit to the Excess Funding Account, the Master
Trust's Seller's Interest shall be at least equal to the Minimum Master
Trust Seller's Interest.
(j) At or prior to the Closing Date, the Class A Securities shall
be rated "Aaa" by Moody's Investors Service, Inc. and "AAA" by Standard
& Poor's Ratings Services and the Class B Securities shall be rated
"A2" by Moody's Investors Service, Inc. and "A_" by Standard & Poor's
Ratings Services.
(k) The Company shall have furnished or caused to be furnished to
the Underwriter a certificate, dated the Closing Date, by either the
President or a Vice President of ITEC and NFC (in his capacity as such)
to the effect that the signer of such certificate has carefully
examined the Securitization Agreements and to the effect that: (i) the
representations and warranties of the Company and NFC contained in such
agreements are true and correct in all material respects at and as of
the Closing Date with the same effect as if made at the Closing Date,
(ii) the Company and NFC have complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date, (iii) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to the Company's
knowledge, threatened, (iv) there shall have been no material adverse
change in the business, results of operation or financial condition or
the material properties or assets of ITEC or NFC since the end of the
most recent fiscal quarter of ITEC or NFC, and (v) nothing has come to
his attention that would lead him to believe that the Prospectus
contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(l) The Underwriter shall have received on and as of the Closing
Date an opinion dated the Closing Date of Mayer, Brown & Platt, counsel
to the Underwriter, addressed to the Underwriter and in form and
substance satisfactory to the Underwriter with respect to the validity
of the Securities, the Master Trust Pooling and Servicing Agreement,
the Registration Statement, the Prospectus and other related matters as
the Underwriter may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters.
16
<PAGE> 17
(m) On or prior to the Closing Date, the Company shall have
furnished to the Underwriter such further certificates and documents as
the Underwriter or their counsel, Mayer, Brown & Platt, shall
reasonably request.
6. The Company and NFC agree to jointly and severally indemnify and
hold harmless the Underwriter, its officers and directors, and each person, if
any, who controls the Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, the
actual legal fees and other expenses reasonably incurred in connection with any
suit, action or proceeding or any claim asserted) caused by any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company or NFC
shall have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading (in the case of the Prospectus, in the light of the
circumstances under which they were made), except insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information relating to the Underwriter furnished to the Company and NFC in
writing by the Underwriter expressly for use therein and except that neither the
Company nor NFC will be liable to the Underwriter or any person controlling the
Underwriter with respect to any such untrue statement or omission made in any
preliminary prospectus that is completely corrected in the Prospectus (or any
amendment or supplement thereto) if the Company or NFC shall have provided such
amendment or supplement to the Underwriter in accordance with this Agreement if
(i) the person asserting any such loss, claim, damage or liability purchased
Securities directly from the Underwriter in reliance upon the Preliminary
Prospectus but was not sent or given a copy of the Prospectus (as amended or
supplemented if the Company or NFC shall have provided such amendment or
supplement) at or prior to the written confirmation of the sale of such
Securities to such person in any case where such delivery of the Prospectus (as
so amended or supplemented) is required by the Securities Act, unless such
failure to deliver such Prospectus (as amended or supplemented) was a result of
noncompliance by the Company or NFC with Section 4(b)(ii) of this Agreement,
(ii) such Prospectus contains no other untrue statement or omission or alleged
untrue statement or omission of a material fact which was the subject matter of
the related proceeding and (iii) the Company and NFC shall prevail in
establishing in the related proceeding that the Underwriter or controlling
person sold Securities to the person asserting such loss, claim, damage or
liability without sending or giving, or having sent or given on its behalf, at
or prior to the written confirmation of such date, a copy of the Prospectus.
The Underwriter agrees to indemnify and hold harmless the Company and
NFC, their directors, their officers who sign the Registration Statement and
each person who controls the Company or NFC within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company and NFC to the Underwriter, but only with
reference to information relating to the Underwriter furnished to the Company
and NFC in writing by the Underwriter expressly for use in the Registration
Statement,
17
<PAGE> 18
the Prospectus, any amendment or supplement thereto or any preliminary
prospectus. For purposes of this Section 6 and paragraphs (a) and (b) of Section
3 hereof, the only written information furnished by the Underwriter to the
Company and NFC expressly for use in the Registration Statement and the
Prospectus is the information regarding the initial sale of the Securities by
the Underwriter.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Underwriter
and such control persons of Underwriter shall be designated in writing by Banc
of America Securities LLC and any such separate firm for the Company and NFC,
their respective directors, their respective officers who sign the Registration
Statement and such control persons of the Company and NFC shall be designated in
writing by the Company and NFC. The Indemnifying Person shall not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
Indemnifying Person agrees to indemnify any Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an Indemnified Person shall have
requested an Indemnifying Person to reimburse the Indemnified Person for fees
and expenses of counsel as contemplated by the third sentence of this paragraph,
the Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless
18
<PAGE> 19
such settlement includes an unconditional written release, in form and substance
reasonably satisfactory to the Indemnified Party, of such Indemnified Person
from all liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs
of this Section 6 is for any reason unavailable to, or insufficient to hold
harmless, an Indemnified Person in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and NFC on
the one hand and the Underwriter on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and NFC on the one hand and the Underwriter on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and NFC on the one
hand and the Underwriter on the other shall be deemed to be in the same
respective proportions as the net proceeds from the offering (before deducting
expenses) received by the Company and NFC and the total underwriting discounts
and the commissions actually received by the Underwriter, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate public
offering price of the Securities. The relative fault of the Company and NFC on
the one hand and the Underwriter on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or NFC or by the Underwriter and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company, NFC and the Underwriter agree that it would not be just
and equitable if contribution pursuant to this Section 6 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any actual legal or other expenses reasonably incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 6, in no event shall
the Underwriter be required to contribute with respect to any losses, claims,
damages or liabilities in connection with the second paragraph of this Section 6
any amount in excess of the amount by which the total price at which the
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that the Underwriter has otherwise been
required to pay or has paid by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the
19
<PAGE> 20
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The indemnity and contribution agreements contained in this Section 6
are in addition to any liability which the Indemnifying Persons may otherwise
have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this Section 6
and the representations and warranties of the Company and NFC as set forth in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of the Underwriter or any person controlling the Underwriter or by or on
behalf of the Company and NFC, their officers or directors or any other person
controlling the Company or NFC and (iii) acceptance of and payment for any of
the Securities.
7. The Underwriter represents and agrees that:
(a) it has not offered or sold, and will not offer or sell, any
Series 2000-1 Certificates to persons in the United Kingdom, other than
to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances
which have not resulted, and will not result, in an offer to the public
in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995;
(b) it has complied and will comply with all applicable provisions
of the Financial Services Act 1986 of Great Britain with respect to
anything done by it in relation to the Series 2000-1 Certificates in,
from or otherwise involving the United Kingdom; and
(c) it has only issued or passed on, and will only issue or pass
on, in the United Kingdom any document in connection with the issue
of Series 2000-1 Certificates to a person who is of a kind described
in Article 11(3) of the Financial Services Act 1986, as amended,
(Investment Advertisements) (Exceptions) Order 1996, as amended, or
is otherwise a person to whom the document may otherwise lawfully be
issued or passed on.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Underwriter, by notice given to the
Company, if after the execution and delivery of this Agreement and prior to the
Closing Date (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange or the National Association of Securities Dealers, Inc.,
(ii) a general moratorium on commercial banking activities in New York shall
have been declared by either Federal or New York State authorities or (iii)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
the Underwriter, is material and adverse and which, in the judgment of the
20
<PAGE> 21
Underwriter, makes it impracticable or inadvisable to market the Securities on
the terms and in the manner contemplated in the Prospectus.
9. If this Agreement shall be terminated by the Underwriter because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement, the
Company agrees to reimburse the Underwriter for all out-of-pocket expenses
(including the fees and expenses of their counsel) reasonably incurred by the
Underwriter in connection with this Agreement or the offering contemplated
hereunder, provided, however, that in all instances the Underwriter shall be
responsible for the costs and expenses of mailing and shipping any prospectus to
investors or potential investors.
10. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or telecopied. Notices to
the Underwriter shall be given to the Underwriter, at 231 S. LaSalle Street,
Chicago, Illinois 60697, Attention: William Heskett (facsimile: (312) 974-8578).
Notices to the Company shall be given to it at 2850 W. Golf Road, Rolling
Meadows, IL 60008; Attention: Steven K. Covey (facsimile: (847) 734-4090).
11. This Agreement shall inure to the benefit of and be binding upon
the Underwriter and the Company and any controlling person referred to herein
and their respective successors, heirs and legal representatives. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriter and the Company
and their respective successors, heirs and legal representatives and the
controlling persons and officers and directors referred to in Section 6 and
their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained.
No purchaser of Securities from the Underwriter shall be deemed to be a
successor merely by reason of such purchase.
12. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.
13. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAWS PROVISIONS THEREOF.
21
<PAGE> 22
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
NAVISTAR FINANCIAL SECURITIES
CORPORATION
By: /s/ R. Wayne Cain
--------------------------------------
Name: R. Wayne Cain
Title: Vice President and Treasurer
NAVISTAR FINANCIAL CORPORATION
By: /s/ R. Wayne Cain
--------------------------------------
Name: R. Wayne Cain
Title: Vice President and Treasurer
Accepted: June 28, 2000
BANC OF AMERICA SECURITIES LLC
By: /s/ Bill Heskett
--------------------------------
Name: Bill Heskett
Title: Principal
