NAVISTAR FINANCIAL CORPORATION
4.75% Subordinated Exchangeable Notes due 2009
Exchangeable for Common Stock of
NAVISTAR INTERNATIONAL CORPORATION
REGISTRATION RIGHTS AGREEMENT
New York, New York
March 25, 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Banc of America Securities LLC
As Representatives of the Initial Purchasers
Named in Schedule I to the Purchase Agreement
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Navistar Financial Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell (such issuance and sale, the "Initial
Placement") to the several parties named in Schedule I to the Purchase Agreement
(the "Initial Purchasers") for whom you (the "Representatives") are acting as
representatives, upon the terms set forth in a purchase agreement dated March
18, 2002 (the "Purchase Agreement"), $200,000,0000 aggregate principal amount
(plus up to an additional $20,000,000 aggregate principal amount to cover
over-allotments, if any) of its 4.75% Subordinated Exchangeable Notes due 2009
(the "Notes").
Holders of the Notes may deliver their Notes to Navistar International
Corporation, a Delaware corporation ("Navistar"), which will, in exchange for
the Notes, deliver shares of Common Stock (as defined below), upon the terms and
subject to the conditions set forth in the Indenture (as defined below).
As an inducement to you to enter into the Purchase Agreement and in
satisfaction of a condition to your obligations thereunder, the Issuers (as
defined herein) agree with you, (i) for your benefit and (ii) for the benefit of
the holders from time to time of the Notes and the Common Stock issuable upon
exchange of the Notes (including you), as follows:
1. DEFINITIONS. Capitalized terms used herein without definition
shall have the respective meanings set forth in the Purchase Agreement. As used
in this Agreement, the following capitalized terms shall have the following
meanings:
A-1
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.
"Affiliate" of any specified person means any other person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such person,
whether through the ownership of voting securities or by agreement or otherwise.
"Broker-Dealer" means any broker or dealer registered as such under
the Exchange Act.
"Business Day" has the meaning set forth in the Indenture.
"Closing Date" means March 25, 2002.
"Common Stock" means the common stock, par value $0.10 per share, of
Navistar, as it exists on the date of this Agreement and any other shares of
capital stock or other securities of Navistar into which such Common Stock may
be reclassified or changed, together with any and all other securities which may
from time to time be issuable upon exchange of Notes.
"Default Rate" means 4.75% per annum.
"DTC" means the Depository Trust Company or its successor.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Final Maturity Date" means April 1, 2009.
"Holder" means a person who is a holder or beneficial owner (including
the Initial Purchasers) of any Notes or shares of Common Stock issued upon
exchange of Notes; provided that, unless otherwise expressly stated herein, only
registered holders of Notes or Common Stock issued on exchange of the Notes
shall be counted for purposes of calculating any proportion of holders entitled
to take any action or give notice pursuant to this Agreement.
"Indenture" means the Indenture relating to the Notes dated as of
March 25, 2002, among the Company, Navistar and BNY Midwest Trust Company, as
trustee, as the same may be amended from time to time in accordance with the
terms thereof.
"Initial Placement" has the meaning set forth in the preamble hereto.
"Initial Purchasers" has the meaning set forth in the preamble hereto.
"Interest Payment Date" shall mean April 1 and October 1.
A-2
"Issuers" means, collectively, the Company and Navistar.
"Liquidated Damages" has the meaning set forth in Section 2(e) hereof.
"Liquidated Damages Payment Date" means, with respect to the Notes or
the Common Stock issuable upon exchange of the Notes, as applicable, each
Interest Payment Date; and in the event that any Note, or portion thereof, is
called for redemption or surrendered for purchase by the Company and not
withdrawn pursuant to a Fundamental Change Offer (as defined in the Indenture),
the relevant redemption date or Fundamental Change Payment Date (as defined in
the Indenture), as the case may be, shall also be a Liquidated Damages Payment
Date with respect to such Note, or portion thereof, unless the Indenture
provides that accrued and unpaid interest on the Note (or portion thereof) to be
redeemed or repurchased, as the case may be, is to be paid to the person who was
the Record Holder thereof on a record date prior to such redemption date or
Fundamental Change Payment Date, as the case may be, in which case the relevant
Liquidated Damages Payment Date shall be the date on which interest is payable
to such Record Holder.
"Losses" has the meaning set forth in Section 5(d) hereof.
"Majority Holders" means the Holders of a majority of the then
outstanding aggregate principal amount of Notes registered under a Shelf
Registration Statement; PROVIDED that Holders of Common Stock issued upon
exchange of Notes shall be deemed to be Holders of the aggregate principal
amount of Notes from which such Common Stock was exchanged; and PROVIDED,
FURTHER, that Notes or Common Stock which have been sold or otherwise
transferred pursuant to the Shelf Registration Statement shall not be included
in the calculation of Majority Holders.
"Majority Underwriting Holders" means, with respect to any
Underwritten Offering, the Holders of a majority of the then outstanding
aggregate principal amount of Notes registered under any Shelf Registration
Statement whose Notes are or are to be included in such Underwritten Offering;
PROVIDED that Holders of Common Stock issued upon exchange of the Notes shall be
deemed to be Holders of the aggregate principal amount of Notes from which such
Common Stock was exchanged.
"Managing Underwriters" means the Underwriter or Underwriters that
shall administer an Underwritten Offering.
"NASD" has the meaning set forth in Section 3(i) hereof.
"Notice and Questionnaire" means a Selling Securityholder Notice and
Questionnaire substantially in the form of Exhibit A hereto.
"Notice Holder" shall mean, on any date, any Holder of Transfer
Restricted Securities that has delivered a completed and signed Notice and
Questionnaire to the Company or Navistar on or prior to such date.
A-3
"Offering Memorandum" means the Final Memorandum as defined in the
Purchase Agreement.
"Person" has the meaning set forth in the Indenture.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Notes or Common Stock issuable upon exchange of
the Notes covered by such Shelf Registration Statement, and all amendments and
supplements to such prospectus, including all documents incorporated or deemed
to be incorporated by reference in such prospectus.
"Purchase Agreement" has the meaning set forth in the preamble hereto.
"Record Holder" means (i) with respect to any Liquidated Damages
Payment Date which occurs on an Interest Payment Date, each person who is
registered on the books of the registrar as the holder of Notes at the close of
business on the record date with respect to such Interest Payment Date and (ii)
with respect to any Liquidated Damages Payment Date relating to the Common Stock
issued upon exchange of the Notes, each person who is a holder of record of such
Common Stock fifteen days prior to the Liquidated Damages Payment Date.
"Registration Default" has the meaning set forth in Section 2(e)
hereof.
"Representative" has the meaning set forth in the preamble hereto.
"Rule 144" means Rule 144 (or any successor provision) under the Act.
"SEC" means the Securities and Exchange Commission.
"Shelf Registration" means a registration effected pursuant to Section
2 hereof.
"Shelf Registration Period" has the meaning set forth in Section 2(c)
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
of the Company and Navistar filed pursuant to the provisions of Section 2 hereof
which covers some or all of the Notes and the Common Stock issuable upon
exchange of the Notes, as applicable, on Form S-3 or on another appropriate form
for an offering to be made on a delayed or continuous basis pursuant to Rule 415
under the Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all documents incorporated or deemed to be
incorporated by reference therein.
"Suspension Period" has the meaning set forth in Section 2(d) hereof.
"Transfer Restricted Securities" means each Note and each share of
Common Stock issuable or issued upon exchange of the Notes until the date on
which such Note or share
A-4
of Common Stock, as the case may be, (i) has been transferred pursuant to the
Shelf Registration Statement or another registration statement covering such
Note or share of Common Stock which has been filed with the SEC pursuant to the
Act, in either case after such registration statement has become effective and
while such registration statement is effective under the Act, (ii) has been
transferred pursuant to Rule 144 under the Act (or any similar provision then in
force) or (iii) may be sold or transferred pursuant to Rule 144(k) under the Act
(or any successor provision then in force).
"Trustee" means the trustee with respect to the Notes under the
Indenture.
"Underwriter" means any underwriter of the Notes or Common Stock
issued upon exchange of the Notes in connection with an offering thereof under a
Shelf Registration Statement.
"Underwritten Offering" means an offering in which the Notes or Common
Stock issued upon exchange of the Notes are sold to an Underwriter or with the
assistance of an Underwriter for reoffering to the public.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included," or "stated" in the Shelf
Registration Statement, any preliminary Prospectus or Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in such Shelf Registration Statement,
preliminary Prospectus or Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Shelf Registration Statement,
any preliminary Prospectus or Prospectus shall be deemed to mean and include any
document filed with the SEC under the Exchange Act, after the date of such Shelf
Registration Statement, preliminary Prospectus or Prospectus, as the case may
be, which is incorporated or deemed to be incorporated by reference therein.
2. SHELF REGISTRATION STATEMENT.
(a) The Issuers shall prepare and file with the SEC within 90 days
following the Closing Date a Shelf Registration Statement with respect to
resales of the Transfer Restricted Securities by the Holders from time to
time in accordance with the methods of distribution contained in the Notice
and Questionnaire elected by such Holders and set forth in such Shelf
Registration Statement (subject to Section 3(u)) and, to the extent
reasonably required under the Act, offers to exchange shares of Common
Stock for Notes, and thereafter shall use their reasonable best efforts to
cause such Shelf Registration Statement to be declared effective under the
Act within 210 days after the Closing Date; PROVIDED that if any Notes are
issued upon exercise of the over-allotment option granted to the Initial
Purchasers in the Purchase Agreement and the date on which such Notes are
issued occurs after the Closing Date, the Issuers will take such steps,
prior to the effective date of the Shelf Registration Statement, to ensure
that such Notes and Common Stock issuable upon exchange of the Notes are
included in the Shelf Registration Statement on the same terms as the Notes
issued on the Closing Date. The Issuers shall supplement or amend the Shelf
Registration Statement if required by the
A-5
rules, regulations or instructions applicable to the registration form used
by the Issuers for the Shelf Registration Statement, or by the Act, the
Exchange Act or the SEC.
(b)(i) Not less than 30 calendar days prior to the effectiveness
of the Shelf Registration Statement, the Issuers shall mail the Notice
and Questionnaire to the Holders of Transfer Restricted Securities.
The Issuers shall take action to name each Holder that is a Notice
Holder as of the date that is 10 calendar days prior to the
effectiveness of the Shelf Registration Statement so that such Holder
is named as a selling security holder in the Shelf Registration
Statement at the time of its effectiveness and is permitted to deliver
the Prospectus forming a part thereof as of such time to purchasers of
such Holder's Transfer Restricted Securities in accordance with
applicable law. The Issuers shall be under no obligation to name any
Holder that is not a Notice Holder as a selling security holder in the
Shelf Registration Statement.
(ii) After the Shelf Registration Statement has become
effective, the Issuers shall, upon the request of any Holder of
Transfer Restricted Securities, promptly send a Notice and
Questionnaire to such Holder. From and after the date on which the
Shelf Registration Statement has become effective, the Issuers shall
(i) as promptly as is practicable after the date a completed and
signed Notice and Questionnaire is delivered to the Issuers, and in
any event within five Business Days after such date, prepare and file
with the SEC (x) a supplement to the Prospectus or, if required by
applicable law, a post-effective amendment to the Shelf Registration
Statement and (y) any other document required by applicable law, so
that the Holder delivering such Notice and Questionnaire is named as a
selling security holder in the Shelf Registration Statement and is
permitted to deliver the Prospectus to purchasers of such Holder's
Transfer Restricted Securities in accordance with applicable law, and
(ii) if the Issuers shall file a post-effective amendment to the Shelf
Registration Statement, use their reasonable best efforts to cause
such post-effective amendment to become effective under the Act as
promptly as is practicable; PROVIDED, HOWEVER, that if a Notice and
Questionnaire is delivered to the Issuers during a Suspension Period,
the Issuers shall not be obligated to take the actions set forth in
clauses (i) and (ii) until the applicable number of days after the
termination of such Suspension Period.
(c) The Issuers shall use their reasonable best efforts to keep the
Shelf Registration Statement continuously effective under the Act in order
to permit the Prospectus forming a part thereof to be usable, subject to
Section 2(d), by all Notice Holders until the earliest of (i) the latest of
the second anniversary of (A) the issue date, (B) the last date on which
any Notes are issued upon exercise of the Initial Purchaser's
over-allotment option or (C) the last date on which any unregistered Common
Stock is issued or issuable in exchange for Notes, (ii) the date on which
all the Notes or Common Stock issued or issuable upon exchange of the Notes
may be sold by non-affiliates ("affiliates" for such purpose having the
meaning set forth in Rule 144) of the Issuers pursuant to paragraph (k) of
Rule 144 (or any successor provision) promulgated by the
A-6
SEC under the Act, (iii) the date as of which all the Notes or unregistered
Common Stock issued or issuable upon exchange of the Notes have been
transferred pursuant to Rule 144 under the Act (or any similar provision
then in force) and (iv) such date as of which all the Notes or the Common
Stock issued or issuable upon exchange of the Notes have been sold pursuant
to the Shelf Registration Statement (in any such case, such period being
called the "Shelf Registration Period").
The Issuers will, (x) subject to Section 2(d), prepare and file
with the SEC such amendments and post-effective amendments to the Shelf
Registration Statement as may be necessary to keep the Shelf Registration
Statement continuously effective for the Shelf Registration Period, (y)
subject to Section 2(d), cause the related Prospectus to be supplemented by
any required supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Act and (z)
comply in all material respects with the provisions of the Act with respect
to the disposition of all securities covered by the Shelf Registration
Statement during the applicable period in accordance with the intended
methods of disposition by the sellers thereof set forth in such Shelf
Registration Statement as so amended or such Prospectus as so supplemented.
(d) The Issuers may suspend the use of the Prospectus for a period
not to exceed 30 days in any three-month period or for three periods not to
exceed an aggregate of 60 days in any 12-month period (the "Suspension
Period") for valid business reasons, to be determined by the Issuers in
their sole reasonable judgment (not including avoidance of the Issuers'
obligations hereunder), including, without limitation, the acquisition or
divestiture of assets, public filings with the SEC, pending corporate
developments and similar events; PROVIDED that the Issuers promptly
thereafter comply with the requirements of Section 3(j) hereof, if
applicable; PROVIDED, FURTHER, that the existence of a Suspension Period
will not prevent the occurrence of a Registration Default or otherwise
limit the obligation of the Issuers to pay Liquidated Damages.
(e) The Issuers and the Initial Purchasers agree that the Holders of
Transfer Restricted Securities will suffer damages if the Issuers fail to
fulfill their obligations under this Section 2 and that it would not be
feasible to ascertain the extent of such damages with precision.
Accordingly, the Issuers severally, and not jointly, agree to pay, as
liquidated damages, additional interest on the Transfer Restricted
Securities ("Liquidated Damages") under the following circumstances:
If (i) the Shelf Registration Statement is not filed with the
SEC on or prior to 90 days after the Closing Date, (ii) the Shelf
Registration Statement has not been declared effective by the SEC within
210 days after the Closing Date or (iii) the Shelf Registration Statement
is filed and declared effective but shall thereafter cease to be effective
(without being succeeded immediately by a replacement shelf registration
statement filed and declared effective) or usable (including as a result of
a Suspension Period) for the offer and sale of Transfer Restricted
Securities for a period of time (including any Suspension Period) which
exceeds 60 days in the aggregate in any 12-month period during the period
beginning on the issue date and ending on or prior to the second
anniversary of the latest of (A) such date, (B) the second anniversary of
the last date on which any Notes are issued upon exercise of the Initial
Purchasers' over-
A-7
allotment option and (c) the last date on which any unregistered Common
Stock is issued or issuable in exchange for the Notes (each such event
referred to in clauses (i) through (iii), a "Registration Default"), the
Company and Navistar will pay Liquidated Damages to each Holder of Transfer
Restricted Notes and Common Stock, respectively, who has complied with such
Holder's obligations under this Agreement. The amount of Liquidated Damages
payable during any period in which a Registration Default has occurred and
is continuing is the amount which is equal to one quarter of one percent
(25 basis points) per annum per $1,000 principal amount of Notes or $2.50
per annum per 17.944 shares of Common Stock (subject to adjustment in the
event of a stock split, stock recombination, stock dividend and the like)
constituting Transfer Restricted Securities for the first 90 days during
which a Registration Default has occurred and is continuing and one-half of
one percent (50 basis points) per annum per $1,000 principal amount of
Notes or $5.00 per annum per 17.944 shares of Common Stock (subject to
adjustment as set forth above) constituting Transfer Restricted Securities
for any additional days during which a Registration Default has occurred
and is continuing (in each case subject to further adjustment from time to
time in the event of a stock split, stock recombination, stock dividend and
the like), it being understood that all calculations pursuant to this and
the preceding sentence shall be carried out to five decimals. Following the
cure of all Registration Defaults, Liquidated Damages will cease to accrue
with respect to such Registration Default. Liquidated Damages shall cease
to accrue in respect of any Transfer Restricted Security when it shall
cease to be such. All accrued Liquidated Damages shall be paid by check by
the Issuers on each Liquidated Damages Payment Date and Liquidated Damages
will be calculated on the basis of a 360-day year consisting of twelve
30-day months. In the event that any Liquidated Damages are not paid when
due, then to the extent permitted by law, such overdue Liquidated Damages,
if any, shall bear interest until paid at the Default Rate, compounded
semi-annually. The parties hereto agree that the Liquidated Damages
provided for in this Section 2(e) constitute a reasonable estimate of the
damages that may be incurred by Holders by reason of a Registration
Default.
(f) All of the Issuers' obligations (including, without limitation,
the obligation to pay Liquidated Damages) set forth in the preceding
paragraph which are outstanding or exist with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer
Restricted Security shall survive until such time as all such obligations
with respect to such security shall have been satisfied in full.
(g) Immediately upon the occurrence or the termination of a
Registration Default, the Issuers shall give the Trustee, in the case of
notice with respect to the Notes, and the transfer and paying agent for the
Common Stock, in the case of notice with respect to Common Stock issued or
issuable upon exchange of the Notes, notice of such commencement or
termination, of the obligation to pay Liquidated Damages with regard to the
Notes and such Common Stock and the amount thereof and of the event giving
rise to such commencement or termination (such notice to be contained in an
Officers' Certificate (as such term is defined in the Indenture)), and
prior to receipt of such Officers' Certificate the Trustee and such
transfer and paying agent shall be entitled to assume that no such
commencement or termination has occurred, as the case may be.
A-8
(h) All Notes which are redeemed, purchased or otherwise acquired by
the Issuers or any of their subsidiaries or affiliates (as defined in Rule
144 (or any successor provision) under the Act) prior to the Final Maturity
Date other than Notes acquired by Navistar or its successor upon exchange
of the Notes shall be delivered to the Trustee for cancellation and the
Issuers may not hold or resell such Notes or issue any new Notes to replace
any such Notes. All shares of Common Stock issued upon exchange of the
Notes which are repurchased or otherwise acquired by the Issuers or any of
their subsidiaries or affiliates (as defined in Rule 144 (or any successor
provision) under the Act) at any time while such shares are "restricted
securities" within the meaning of Rule 144 shall not be resold or otherwise
transferred except pursuant to a registration statement which has been
declared effective under the Act.
3. REGISTRATION PROCEDURES. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) The Issuers shall:
(i) furnish to the Representatives, prior to the filing
thereof with the SEC, a copy of any Shelf Registration Statement, and
each amendment thereof, and a copy of any Prospectus, and each
amendment or supplement thereto (excluding amendments caused by the
filing of a report under the Exchange Act); and
(ii) include information regarding the Notice Holders and the
methods of distribution they have elected for their Transfer
Restricted Securities provided to the Issuers in Notice and
Questionnaires as necessary to permit such distribution by the methods
specified therein.
(b) Subject to Section 2(d), the Issuers shall ensure that (i) any
Shelf Registration Statement and any amendment thereto and any Prospectus
forming a part thereof and any amendment or supplement thereto comply in
all material respects with the Act and the rules and regulations
thereunder, (ii) any Shelf Registration Statement and any amendment thereto
does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and
(iii) any Prospectus forming a part of any Shelf Registration Statement,
and any amendment or supplement to such Prospectus, does not include an
untrue statement of a material fact or omit 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; PROVIDED that the
Issuers make no representation with respect to information (A) with respect
to any Underwriter or any Holder included in any Shelf Registration
Statement or Prospectus pursuant to the Act or the rules and regulations
thereunder and which information is included therein in reliance upon and
in conformity with information furnished to the Issuers in writing by such
Underwriter or Holder and (B) as the Majority of Holders provide or as the
Managing Underwriters or the Majority Underwriting Holders reasonably agree
should be included therein and provide to the Issuers in writing for
inclusion in the Shelf Registration Statement or Prospectus.
A-9
(c) The Issuers, as promptly as reasonably practicable, shall advise
the Representatives and each Notice Holder and, if requested by you or any
such Holder, confirm such advice in writing:
(i) when a Shelf Registration Statement and any amendment
thereto has been filed with the SEC and when the Shelf Registration
Statement or any post-effective amendment thereto has become
effective;
(ii) of any request by the SEC for amendments or supplements to
the Shelf Registration Statement or the Prospectus or for additional
information (a copy of each written request and the Issuers' responses
shall be promptly given to the Initial Purchasers and their counsel);
(iii) of the determination by the Issuers that a post-effective
amendment to the Shelf Registration Statement would be appropriate;
(iv) of the commencement or termination of (but not the nature
of or details concerning) any Suspension Period;
(v) of the issuance by the SEC of any stop order suspending
the effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for that purpose;
(vi) of the receipt by the Issuers of any notification with
respect to the suspension of the qualification of the Transfer
Restricted Securities included in any Shelf Registration Statement for
sale in any jurisdiction or the initiation or threat of any proceeding
for such purpose;
(vii) of the happening of (but not the nature of or details
concerning) any event that requires the making of any changes in the
Shelf Registration Statement or the Prospectus so that, as of such
date, the statements therein are not misleading and the Shelf
Registration Statement or the Prospectus, as the case may be, does not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading; and
(viii) of the Issuers' suspension of the use of the Prospectus
as a result of any of the events or circumstances described in
paragraphs (ii) through (vii) above, and of the termination of any
such suspension.
(d) The Issuers shall use their reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of any Shelf
Registration Statement or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the Transfer
Restricted Securities for offer or sale in any jurisdiction at the earliest
possible time.
A-10
(e) The Issuers shall promptly furnish to each Notice Holder, without
charge, at least one copy of any Shelf Registration Statement and any
post-effective amendment thereto, including all exhibits (including those
incorporated by reference but excluding the exhibits to those exhibits),
financial statements and schedules.
(f) The Issuers shall, during the Shelf Registration Period, promptly
deliver to each Initial Purchaser, each Notice Holder and any sales or
placement agent or Underwriters acting on their behalf, without charge, as
many copies of the Prospectus (including each preliminary Prospectus)
included in any Shelf Registration Statement (excluding documents
incorporated by reference), and any amendment or supplement thereto, as
such person may reasonably request; and, except as provided in Sections
2(d) and 3(s) hereof, the Issuers consent to the use of the Prospectus or
any amendment or supplement thereto by each of the selling Holders in
connection with the offering and sale of the Transfer Restricted Securities
covered by the Prospectus or any amendment or supplement thereto.
(g) Prior to any offering of Transfer Restricted Securities pursuant
to any Shelf Registration Statement, the Issuers shall register or qualify
or cooperate with the Notice Holders and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Transfer Restricted Securities for
offer and sale, under the securities or blue sky laws of such jurisdictions
within the United States as any such Notice Holders reasonably request and
shall maintain such qualification in effect so long as required and do any
and all other acts or things necessary or advisable to enable the offer and
sale in such jurisdictions of the Transfer Restricted Securities covered by
such Shelf Registration Statement; PROVIDED, HOWEVER, that the Issuers will
not be required to (A) qualify generally to do business as a foreign
corporation or as a dealer in securities in any jurisdiction where they are
not then so qualified or to (B) take any action which would subject them to
service of process or taxation in any such jurisdiction where they are not
then so subject.
(h) The Issuers shall cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities sold pursuant to any Shelf Registration Statement
free of any restrictive legends and in such denominations permitted by the
Indenture and registered in such names as Holders may request at least two
Business Days prior to settlement of sales of Transfer Restricted
Securities pursuant to such Shelf Registration Statement.
(i) Subject to the exceptions contained in (A) and (B) of
Section 3(g) hereof, the Issuers shall use their reasonable best efforts to
cause the Transfer Restricted Securities covered by the applicable Shelf
Registration Statement to be registered with or approved by such other
federal, state and local governmental agencies or authorities, and
self-regulatory organizations in the United States as may be necessary to
enable the Holders to consummate the disposition of such Transfer
Restricted Securities as contemplated by the Shelf Registration Statement;
without limitation to the foregoing, the Issuers shall make all filings and
provide all such information as may be required by the National Association
of Securities Dealers, Inc. (the "NASD") in connection with the offering
under the Shelf Registration Statement of the Transfer Restricted
Securities
A-11
(including, without limitation, such as may be required by NASD Rule 2710
or 2720), and shall cooperate with each Holder in connection with any
filings required to be made with the NASD by such Holder in that regard.
(j) Upon the occurrence of any event described in Section 3(c)(vii)
hereof, the Issuers shall promptly prepare and file with the SEC a
post-effective amendment to any Shelf Registration Statement or an
amendment or supplement to the related Prospectus or any document
incorporated therein by reference or file a document which is incorporated
or deemed to be incorporated by reference in such Shelf Registration
Statement or Prospectus, as the case may be, so that, as thereafter
delivered to purchasers of the Transfer Restricted Securities included
therein, the Shelf Registration Statement and the Prospectus, in each case
as then amended or supplemented, will not include an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein (in the case
of the Prospectus in light of the circumstances under which they were made)
not misleading and, in the case of a post-effective amendment, use its
reasonable best efforts to cause it to become effective as promptly as
practicable; PROVIDED that the Issuers' obligations under this paragraph
(j) paragraph (j) shall be suspended if the Issuers have suspended the use
of the Prospectus in accordance with Section 2(d) hereof and given notice
of such suspension to Notice Holders, it being understood that the Issuers'
obligations under this paragraph (j) shall be automatically reinstated at
the end of such Suspension Period.
(k) The Issuers shall use their reasonable best efforts to provide,
on or prior to the first Business Day following the effective date of any
Shelf Registration Statement hereunder (i) a CUSIP number for the Transfer
Restricted Securities registered under such Shelf Registration Statement
and (ii) global certificates for such Transfer Restricted Securities to the
Trustee, in a form eligible for deposit with DTC.
(l) The Issuers shall use their best efforts to comply with all
applicable rules and regulations of the SEC and shall make generally
available to their security holders as soon as practicable but in any event
not later than 50 days after the end of a 12-month period after (i) the
effective date of the applicable Shelf Registration Statement, (ii) the
effective date of each post-effective amendment to any Shelf Registration
Statement and (iii) the date of each filing by the Issuers with the SEC of
an Annual Report on Form 10-K that is incorporated by reference or deemed
to be incorporated by reference in the Shelf Registration Statement, an
earnings statement satisfying the provisions of Section 11(a) of the Act
and Rule 158 promulgated by the SEC thereunder.
(m) The Issuers shall use their reasonable best efforts to cause the
Indenture to be qualified under the TIA (as defined in the Indenture) in a
timely manner.
(n) The Issuers shall cause all Common Stock issued or issuable upon
exchange of the Notes to be listed on each securities exchange or quotation
system on which the Common Stock is then listed no later than the date the
applicable Shelf Registration Statement is declared effective and, in
connection therewith, to make such filings as may be required under the
Exchange Act and to have such filings declared effective as and when
required thereunder.
A-12
(o) The Issuers may require each Holder of Transfer Restricted
Securities to be sold pursuant to any Shelf Registration Statement to
furnish to the Issuers such information regarding the Holder and the
distribution of such Transfer Restricted Securities sought by the Notice
and Questionnaire and such additional information as may, from time to
time, be required by the Act and the rules and regulations promulgated
thereunder, and the obligations of the Issuers to any Holder hereunder
shall be expressly conditioned on the compliance of such Holder with such
request.
(p) The Issuers shall, if requested, use their reasonable best
efforts to promptly incorporate in a Prospectus supplement or
post-effective amendment to a Shelf Registration Statement (i) such
information as the Majority Holders provide or, if Transfer Restricted
Securities are being sold in an Underwritten Offering, as the Managing
Underwriters or the Majority Underwriting Holders reasonably agree should
be included therein and provide to the Issuers in writing for inclusion in
the Shelf Registration Statement or Prospectus, and (ii) such information
as a Holder may provide from time to time to the Issuers in writing for
inclusion in a Prospectus or any Shelf Registration Statement concerning
such Holder and the distribution of such Holder's Transfer Restricted
Securities and, in either case, shall make all required filings of such
Prospectus supplement or post-effective amendment promptly after being
notified in writing of the matters to be incorporated in such Prospectus
supplement or post-effective amendment, provided that the Issuers shall not
be required to take any action under this Section 3(p) that is not, in the
reasonable opinion of counsel for the Issuers, in compliance with
applicable law.
(q) The Issuers shall enter into such customary agreements (including
underwriting agreements) and take all other appropriate actions as may be
reasonably requested in order to expedite or facilitate the registration or
the disposition of the Transfer Restricted Securities, and in connection
therewith, if an underwriting agreement is entered into, the Issuers shall
cause the same to contain indemnification and contribution provisions and
procedures no less favorable than those set forth in Section 5 hereof (or
such other reasonable and customary provisions and procedures acceptable to
the Majority Underwriting Holders and the Managing Underwriters, if any,
with respect to all parties to be indemnified pursuant to Section 5). The
plan of distribution in the Shelf Registration Statement and the Prospectus
included therein shall permit resales of Transfer Restricted Securities to
be made by selling security holders through underwriters, brokers and
dealers, and shall also include such other information as the
Representative may reasonably request.
(r) The Issuers shall if reasonably requested in writing by Majority
Holders, by Majority Underwriting Holders or by the Managing Underwriter:
(i) make reasonably available for inspection during normal
business hours by any Underwriter participating in any disposition
pursuant to such Shelf Registration Statement, and any attorney,
accountant or other agent retained by any such Underwriter all
relevant financial and other records, pertinent corporate documents
and properties of the Issuers and their subsidiaries as is customary
for due diligence examinations in connection with public offerings;
A-13
(ii) cause the Issuers' officers, directors, employees,
accountants and auditors to supply all relevant information reasonably
requested by any such Underwriter, attorney, accountant or agent in
connection with any such Shelf Registration Statement as is customary
for similar due diligence examinations; PROVIDED, HOWEVER, that any
information that is designated in writing by the Issuers, in good
faith, as confidential at the time of delivery of such information
shall be kept confidential by the Holders or any such Underwriter,
attorney, accountant or agent, unless disclosure thereof is made in
connection with a court, administrative or regulatory proceeding or
required by law, or such information has become available to the
public generally through the Issuers or through a third party without
an accompanying obligation of confidentiality;
(iii) obtain opinions of counsel to the Issuers and updates
thereof (which counsel and opinions, in form, scope and substance,
shall be reasonably satisfactory to the Managing Underwriters, if any)
addressed to each selling Holder and the Underwriters, if any,
covering such matters as are customarily covered in opinions requested
in public offerings;
(iv) obtain "cold comfort" letters and updates thereof from the
current and former independent certified public accountants of the
Issuers (and, if necessary, any other independent certified public
accountants of any subsidiary of the Issuers or of any business
acquired by the Issuers for which financial statements and financial
data are, or are required to be, included in the Shelf Registration
Statement), addressed to each selling Holder (provided such Holder
furnishes the accountants, prior to the date such "cold comfort"
letter is required to be delivered, with such representations as the
accountants customarily require in similar situations) and the
Underwriters, if any, in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connection with
primary underwritten offerings; and
(v) deliver such documents and certificates as may be
reasonably requested by the Majority Holders or, in the case of an
Underwritten Offering, the Majority Underwriting Holders, and the
Managing Underwriters, if any, including those to evidence compliance
with Section 3(j) and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Issuers
in customary form and covering matters of the type customarily covered
by such documents and certificates in connection with primary
underwritten offerings.
The foregoing actions set forth in clauses (iii), (iv), (v) and
(vi) of this Section 3(r) shall be performed at (A) the effectiveness
of such Shelf Registration Statement and each post-effective amendment
thereto and (B) each closing under any underwriting or similar
agreement as and to the extent required thereunder.
(s) Each Notice Holder agrees that, upon receipt of notice of the
happening of an event described in Sections 3(c)(ii) through and including
3(c)(vii), each Holder shall forthwith discontinue (and shall cause its
agents and representatives to discontinue)
A-14
disposition of Transfer Restricted Securities and will not resume
disposition of Transfer Restricted Securities until such Holder has
received copies of an amended or supplemented Prospectus contemplated by
Section 3(j) hereof, or until such Holder is advised in writing by the
Issuers that the use of the Prospectus may be resumed or that the relevant
Suspension Period has been terminated, as the case may be, provided that,
the foregoing shall not prevent the sale, transfer or other disposition of
Transfer Restricted Securities by a Notice Holder in a transaction which is
exempt from, or not subject to, the registration requirements of the Act,
so long as such Notice Holder does not and is not required to deliver the
applicable Prospectus or Shelf Registration Statement in connection with
such sale, transfer or other disposition, as the case may be; and PROVIDED,
FURTHER, that the provisions of this Section 3(s) shall not prevent the
occurrence of a Registration Default or otherwise limit the obligation of
the Issuers to pay Liquidated Damages.
(t) The Issuers shall in connection with an Underwritten Offering use
their reasonable best efforts (i) if the Notes have been rated prior to the
initial sale of such Notes, to confirm that such ratings will apply to the
Notes covered by the Shelf Registration Statement (but the Issuers shall
have no obligation to take any action to increase the rating on the Notes);
or (ii) if the Notes were not previously rated, to cause the Notes covered
by the Shelf Registration Statement to be rated with at least one
nationally recognized statistical rating agency, if so requested by the
Majority Holders or by any Managing Underwriters.
(u) In the event that any Broker-Dealer shall underwrite any Notes or
participate as a member of an underwriting syndicate or selling group or
"assist in the distribution" (within the meaning of the NASD Rules)
thereof, whether as a Holder of such Transfer Restricted Securities or as
an underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Issuers shall assist such Broker-Dealer in
complying with the NASD Rules, including, without limitation, by:
(i) if the NASD Rules shall so require, engaging a "qualified
independent underwriter" (as defined in the NASD Rules) to participate
in the preparation of the Shelf Registration Statement, to exercise
usual standards of due diligence with respect thereto and, if any
portion of the offering contemplated by the Shelf Registration
Statement is an Underwritten Offering or is made through a placement
or sales agent, to recommend the price of such Transfer Restricted
Securities;
(ii) indemnifying any such qualified independent underwriter to
the extent of the indemnification of Underwriters provided in Section
5 hereof; and
(iii) providing such information to such Broker-Dealer as may be
required in order for such Broker-Dealer to comply with the
requirements of the NASD Rules.
(iv) Anything herein to the contrary notwithstanding, the
Issuers will not be required to pay the costs and expenses of, or to
participate in the marketing
A-15
or "road show" presentations of, more than one Underwritten Offering
initiated at the request of the Holders of Notes or shares of Common
Stock issued or issuable upon exchange of the Notes, or to effect more
than one Underwritten Offering at the request of such Holders. The
Issuers will not be required to pay the costs and expenses of, or to
participate in the marketing or "road show" presentations of, an
Underwritten Offering unless Holders of at least the Minimum Amount
(as defined below) of Notes and/or Common Stock issued or issuable on
exchange of the Notes have requested that such Notes and/or shares of
such Common Stock be included in such an Underwritten Offering. For
purposes of this Agreement, the "Minimum Amount" means 50% of the
aggregate principal amount of Notes originally issued under the
Indenture; PROVIDED that, for purposes of computing the Minimum
Amount, Holders of Common Stock issued upon exchange of Notes shall be
deemed to be holders of the aggregate principal amount of Notes which
were exchanged into those shares of Common Stock. Only Holders of
Notes or shares of Common Stock issued or issuable upon exchange of
the Notes which are Transfer Restricted Securities shall be entitled
to include such Notes or shares of such Common Stock in an
Underwritten Offering and only Transfer Restricted Securities shall be
included in the computation of the Minimum Amount. The Underwritten
Offering initiated by Holders as aforesaid shall include both Notes
and such Common Stock if so requested by the Holders. Upon receipt by
the Issuers, from Holders of at least the Minimum Amount of Notes
and/or Common Stock issued or issuable upon exchange of the Notes, of
a request for an Underwritten Offering, the Issuers will, within 10
days thereafter, cause the Company to mail notice to all Holders of
Notes and shares of Common Stock issued upon exchange of the Notes
stating that: (1) the Company has received a request from the Holders
of the requisite amount of Notes and/or Common Stock issued or
issuable on exchange of the Notes to effect an Underwritten Offering
on behalf of such Holders; (2) under the terms of this Agreement, all
Holders of Notes and shares of such Common Stock issued or issuable
upon exchange of the Notes which are Transfer Restricted Securities
may include their Notes and shares of such Common Stock in such
Underwritten Offering, subject to the terms and conditions set forth
in this Agreement and subject to the right of the Managing
Underwriters to reduce, in light of market conditions and other
similar factors, the aggregate principal amount of Notes and number of
shares of such Common Stock included in such Underwritten Offering;
(iii) all Holders electing to include Notes or shares of such Common
Stock in such Underwritten Offering must notify the Issuers in writing
of such election (the "Election"), and setting forth an address and
facsimile number to which such written elections may be sent and the
deadline (which shall be 12:00 midnight on the 10th calendar day after
such notice is mailed to Holders or, if not a Business Day, the next
succeeding Business Day (the "Deadline")) by which such elections must
be received by the Issuers; and (iv) setting forth such other
instructions as shall be necessary to enable Holders to include their
Notes and shares of such Common Stock in such Underwritten Offering.
No Holder shall be entitled to participate in an Underwritten Offering
unless such Holder notifies the Issuers of such Election by the
Deadline. Notwithstanding anything to the contrary contained herein,
if the
A-16
Managing Underwriters for an Underwritten Offering to be effected
pursuant to this Section 3(u) advise the Holders of the Notes and
shares of such Common Stock to be included in such Underwritten
Offering that, because of aggregate principal amount of Notes and/or
number of shares of such Common Stock that such Holders have requested
be included in the Underwritten Offering, the success of the offering
would likely be materially adversely affected by the inclusion of all
of the Notes and shares of such Common Stock requested to be included,
then the principal amount of Notes and the number of shares of such
Common Stock to be offered for the accounts of Holders shall be
reduced pro rata, according to the aggregate principal amount of Notes
and number of shares of such Common Stock, respectively, requested for
inclusion by each such Holder, to the extent necessary to reduce the
size of the offering to the size recommended by the Managing
Underwriter. Notwithstanding anything to the contrary contained
herein, neither the Issuers nor any Person, other than a Holder of
Notes or shares of such Common Stock issued or issuable upon exchange
of the Notes and only with respect to its Transfer Restricted
Securities, shall be entitled to include any securities in the
Underwritten Offering.
4. REGISTRATION EXPENSES. The Issuers shall bear all expenses
incurred in connection with the performance of their obligations under Sections
2 and 3 hereof and shall reimburse the Holders for the reasonable fees and
disbursements of one firm or counsel designated by the Majority Holders to act
as counsel for the Holders in connection therewith. Notwithstanding the
provisions of this Section 4, each Holder shall bear the expense of any broker's
commission, agency fee or Underwriter's discount or commission.
5. INDEMNIFICATION AND CONTRIBUTION.
(a) Each of the Issuers, jointly and severally, agrees to indemnify
and hold harmless each Holder of Transfer Restricted Securities covered by
any Shelf Registration Statement (including each of the Initial
Purchasers), the directors, officers, employees and agents of each such
Holder and each person who controls any such Holder within the meaning of
either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other Federal or state
law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Shelf Registration Statement as originally
filed or in any amendment thereof, or in any preliminary Prospectus or
Prospectus, or in any amendment thereof or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party,
as incurred, for any legal or other expenses reasonably incurred by any of
them in connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that neither of the Issuers
will be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon (A) any
A-17
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Issuers by or on behalf of any such Holder or
any Initial Purchaser specifically for inclusion therein, (B) use of a
Shelf Registration Statement or the related Prospectus during a period when
use of such Prospectus has been suspended pursuant to Section 2(d) or
Section 3(s) hereof; PROVIDED, FURTHER, in each case, that Holders received
prior notice of such suspension, or (C) if the Holder fails to deliver a
Prospectus, as then amended or supplemented, PROVIDED that the Issuers
shall have delivered to such Holder such Prospectus, as then amended or
supplemented. This indemnity agreement will be in addition to any liability
which the Issuers may otherwise have.
(b) Each Holder of Transfer Restricted Securities covered by a Shelf
Registration Statement (including the Initial Purchasers) severally and not
jointly agrees to indemnify and hold harmless:
(i) the Issuers;
(ii) each of their directors;
(iii) each of their officers; and
(iv) each person who controls either of the Issuers within
the meaning of either the Act or the Exchange Act to
the same extent as the foregoing indemnity from the
Issuers to each such Holder,
but only with reference to (A) written information relating to such Holder
furnished to the Issuers by or on behalf of such Holder specifically for
inclusion in the documents referred to in the foregoing indemnity, (B) the
use by such Holder of a Shelf Registration Statement or the related
Prospectus during a period when use of such Prospectus has been suspended
pursuant to Section 2(d) or Section 3(s) hereof; PROVIDED, FURTHER, in each
case, that such Holder received prior notice of such suspension or (C) the
failure of such Holder to deliver a Prospectus, as then amended or
supplemented, PROVIDED that the Issuers shall have delivered to such Holder
such Prospectus, as then amended or supplemented.
This indemnity agreement shall be in addition to any liability which any
such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
5 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 5, notify the indemnifying party in writing of the
commencement thereof; but the failure to so notify the indemnifying party
will not relieve it from liability under paragraph (a) or (b) above unless
and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses. The indemnifying party shall be entitled to appoint
counsel of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for
A-18
which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate
counsel retained by the indemnified party or parties except as set forth
below); PROVIDED, HOWEVER, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the indemnified party in
an action, the indemnified party shall have the right to employ separate
counsel (including local counsel), and the indemnifying party shall bear
the reasonable fees, costs and expenses of one such separate counsel (in
addition to any local counsel) if
(i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a
conflict of interest;
(ii) the actual or potential defendants in, or targets of, any
such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that
there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to
the indemnifying party and that representation of the indemnified
party by counsel chosen by the indemnifying party would be
inappropriate due to actual or potential differing interests among the
parties represented by such counsel;
(iii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the
institution of such action; or
(iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying
party.
Neither an indemnifying party nor an indemnified party will, without the
prior written consent of the other parties, settle or compromise or consent
to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not such other parties are
actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of such
other parties from all liability arising out of such claim, action, suit or
proceeding. An indemnifying party shall not be liable for any losses,
claims, damages or liabilities by reason of any settlement of any action or
proceeding effected without such indemnifying party's prior written
consent, which consent will not be unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party
shall have an obligation to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) (collectively
"Losses"), as incurred, to which such indemnified party may be subject in
such proportion as is appropriate to reflect the relative benefits received
by such indemnifying party, on the one hand, and such indemnified party, on
the other hand, from the Initial
A-19
Placement and any sales of Transfer Restricted Securities under the Shelf
Registration Statement; PROVIDED, HOWEVER, that in no case shall the
Initial Purchasers be responsible, in the aggregate, for any amount in
excess of the purchase discount or commission applicable to the Notes, as
set forth in the Purchase Agreement. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the
indemnifying party and the indemnified party shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of such indemnifying party, on the one hand, and
such indemnified party, on the other hand, in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Issuers shall
be deemed to be equal to the sum of (x) the total net proceeds from the
Initial Placement (before deducting expenses) and (y) the total amount of
Liquidated Damages which the Issuers were not required to pay as a result
of registering the Transfer Restricted Securities covered by the Shelf
Registration Statement which resulted in such Losses. Benefits received by
the Initial Purchasers shall be deemed to be equal to the total purchase
discounts and commissions received in connection with the Initial
Placement, and benefits received by any other Holders shall be deemed to be
equal to the value of receiving Transfer Restricted Securities registered
under the Act. Benefits received by any Underwriter shall be deemed to be
equal to the total underwriting discounts and commissions, as set forth on
the cover page of the Prospectus forming a part of the Shelf Registration
Statement which resulted in such Losses. Relative fault shall be determined
by reference to whether any untrue statement or omission or alleged untrue
statement or omission relates to information provided by the indemnifying
party, on the one hand, or by the indemnified party, on the other hand, the
intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this Section 5(d), no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section
5, each person who controls a Holder within the meaning of either the Act
or the Exchange Act and each director, officer, employee and agent of such
Holder shall have the same rights to contribution as such Holder, and each
person who controls either of the Issuers within the meaning of either the
Act or the Exchange Act, each officer of either of the Issuers who signed
the Shelf Registration Statement and each director of either of the Issuers
shall have the same rights to contribution as the Issuers, and each person
who controls an Underwriter within the meaning of either the Act or the
Exchange Act and each officer and director of each Underwriter shall have
the same rights to contribution as such Underwriter, subject in each case
to the applicable terms and conditions of this paragraph (d).
(e) The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder,
any Underwriter, the Issuers or any of the officers, directors or
controlling persons referred to in Section 5
A-20
hereof, and will survive the sale by a Holder of Transfer Restricted
Securities covered by a Shelf Registration Statement.
6. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. Neither of the Issuers has, as of
the date hereof, entered into nor shall it, on or after the date hereof,
enter into, any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders herein or otherwise
conflicts with the provisions hereof.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Issuers have obtained the
written consent of the Majority Holders; PROVIDED that with respect to any
matter that directly or indirectly affects the rights of the Initial
Purchasers hereunder, the Issuers shall obtain the written consent of each
of the Initial Purchasers against which such amendment, qualification,
supplement, waiver or consent is to be effective. Notwithstanding the
foregoing (except the foregoing proviso), a waiver or consent to departure
from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders whose Transfer Restricted Securities
are being sold pursuant to a Shelf Registration Statement and that does not
directly or indirectly affect the rights of other Holders may be given by
the Majority Holders, determined on the basis of the Transfer Restricted
Securities being sold rather than registered under such Shelf Registration
Statement.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telecopier or air courier guaranteeing overnight delivery:
(i) if to the Representative, initially at its address set
forth in the Purchase Agreement;
(ii) if to any other Holder, at the most current address of
such Holder maintained by the Registrar under the Indenture or the
registrar of the Common Stock (provided that while the Notes or the
Common Stock are in book-entry form, notice to the Trustee shall serve
as notice to the Holders), or, in the case of the Notice Holder, the
address set forth in its Notice and Questionnaire; and
(iii) if to the Issuers, initially at the Company's address set
forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received, if delivered by hand or air courier, and when sent, if
sent by first-class mail or telecopier.
The Initial Purchasers or the Issuers by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
A-21
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including, without the need for an express assignment or any consent by the
Issuers thereto, subsequent Holders. The Issuers hereby agree to extend the
benefits of this Agreement to any Holder and Underwriter and any such
Holder and Underwriter may specifically enforce the provisions of this
Agreement as if an original party hereto. In the event that any other
person shall succeed to the Issuers under the Indenture, then such
successor shall enter into an agreement, in form and substance reasonably
satisfactory to the Representative, whereby such successor shall assume all
of the Issuers' obligations, as the case may be, under this Agreement.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(f) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
(h) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way
impaired or affected thereby, it being intended that all of the rights and
privileges of the parties shall be enforceable to the fullest extent
permitted by law.
(i) SECURITIES HELD BY THE ISSUERS, ETC. Whenever the consent or
approval of Holders of a specified percentage of principal amount of Notes
or the Common Stock issuable upon exchange of the Notes is required
hereunder, Notes or the Common Stock issued upon exchange of the Notes held
by the Issuers or their Affiliates (other than subsequent Holders of Notes
or the Common Stock issued upon exchange of the Notes if such subsequent
Holders are deemed to be Affiliates solely by reason of their holdings of
such securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.
(j) TERMINATION. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Shelf Registration Period,
except for any liabilities or obligations under Sections 2(e), 4 or 5 to
the extent arising prior to the end of the Shelf Registration Period.
[signature page follows]
A-22
Please confirm that the foregoing correctly sets forth the agreement
among the Issuers and you.
Very truly yours,
NAVISTAR INTERNATIONAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Treasurer
NAVISTAR FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC
BANC OF AMERICA SECURITIES LLC
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
A-23
