LOAN AGREEMENT between THE COUNTY OF COOK, ILLINOIS and NAVISTAR INTERNATIONAL CORPORATION Dated as of October 1, 2010

Exhibit 10.1b

LOAN AGREEMENT

between
THE COUNTY OF ▇▇▇▇, ILLINOIS

and

NAVISTAR INTERNATIONAL CORPORATION

Dated as of October 1, 2010

The rights of the Issuer hereunder (other than Unassigned Rights) have been pledged and assigned to Citibank N.A., as Trustee under the Indenture of Trust, dated as of October 1, 2010, between the Issuer and the Trustee.

TABLE OF CONTENTS

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LOAN AGREEMENT

This is a LOAN AGREEMENT, dated as of October 1, 2010 (herein referred to as the or this “Loan Agreement”), between NAVISTAR INTERNATIONAL CORPORATION, a Delaware corporation (the “Company”), and THE COUNTY OF ▇▇▇▇, ILLINOIS (the “Issuer”), a home rule unit under Section 6(a) of Article VII of the 1970 Constitution of the State of Illinois.

PRELIMINARY STATEMENT:

The Company desires to (a) finance, refinance or be reimbursed for a portion of the costs of the renovation, expansion and equipping of certain capital improvements as more fully described in Exhibit A hereto (the “Project”), (b) pay a portion of the interest accruing on the Bonds (as defined below) during the construction period, and (c) pay certain costs relating to the issuance of the Bonds.

Under the power granted by Section 6(a) of Article VII of the 1970 Constitution of the State of Illinois, as supplemented by the Local Government Debt Reform Act, as amended, and the other Omnibus Bond Acts, as amended, the Issuer is obtaining funds to loan to the Company through the issuance and sale of The County of ▇▇▇▇, Illinois Recovery Zone Facility Revenue Bonds (Navistar International Corporation Project) Series 2010, in the aggregate principal amount of $90,000,000 (the “Bonds”), which will be issued under and secured by the Indenture of Trust dated as of October 1, 2010 (the “Indenture”), between the Issuer and Citibank N.A., as trustee (the “Trustee”).

Pursuant to the Indenture, the Issuer will pledge and assign its rights under this Loan Agreement (other than the Unassigned Rights, as defined in the Indenture) to the Trustee as security for the Bonds.  The Bonds, together with interest thereon, will be payable by the Issuer solely from the payments to be made by the Company from amounts payable under this Loan Agreement, from payments to be made by the Guarantor pursuant to the Bond Guarantee, from certain funds and accounts pledged to the Trustee under the Indenture and as otherwise provided in the Indenture.

Pursuant to this Loan Agreement, the Issuer will loan the proceeds of the Bonds to the Company to finance the foregoing costs, and the Company agrees to make, or cause to be made, payments sufficient to pay when due (whether at stated maturity, by acceleration or otherwise) the principal of and premium, if any, and interest on the Bonds.

The Company desires to secure its obligations hereunder by executing and delivering this Loan Agreement and has taken all action necessary therefor.

IN CONSIDERATION of the premises, the respective representations and agreements contained herein, the loan of the proceeds of the Bonds to the Company by the Issuer and for other good and valuable consideration, the receipt whereof is hereby acknowledged, and in order to secure the payment of the principal of, premium (if any) and interest payable on the Bonds and under this Loan Agreement and the performance of all the covenants of the Company and the

Guarantor contained herein, the Company, the Guarantor and the Issuer hereby covenant and agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01.       Terms Defined.  The capitalized terms used in this Loan Agreement, unless the context requires otherwise or unless otherwise defined herein, shall have the same meanings as set forth in the Indenture.

Section 1.02.       Rules of Interpretation.  For all purposes of this Loan Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(a)           “This Loan Agreement” means this instrument as originally executed and as it may from time to time be supplemented or amended pursuant to the applicable provisions hereof.

(b)           The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Loan Agreement as a whole and not to any particular Article, Section or other subdivision.

(c)           References in this instrument to masculine shall include the feminine and neuter and vice versa, and references herein to the singular shall include the plural and vice versa unless the context or use indicates otherwise.

(d)           All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP.

(e)           Any capitalized terms defined elsewhere in this Loan Agreement shall have the meanings therein prescribed for them.

Section 1.03.       Exhibit.  The following Exhibit is attached to and by reference made a part of this Loan Agreement:

EXHIBIT A:              Description of Project.

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ARTICLE II

PARTICULAR COVENANTS, REPRESENTATIONS, WARRANTIES AND AGREEMENTS

Section 2.01.       Representations and Warranties.

(a)       Issuer Representations and Warranties.  The Issuer makes the following representations and covenants to the Company and the Trustee as the basis for its undertaking herein contained:

(i)            The Issuer is a home rule unit under Section 6(a) of Article VII of the 1970 Constitution of the State, is authorized and empowered by the provisions of the Constitution and the Bond Ordinance to enter into the transactions contemplated by this Loan Agreement and to carry out its obligations hereunder, and by proper action of its governing body has been duly authorized to execute and deliver the Indenture, the Purchase Contract, this Loan Agreement and the Tax Agreement.

(ii)           It is the Issuer’s understanding, based upon certain representations of the Company, that the issuance and sale of the Bonds and the loaning of the proceeds of the Bonds to the Company (which proceeds will be applied for the benefit of the Company) is to provide a portion of the moneys required to (A) finance, refinance or reimburse the Company for all or a portion of the Project, (B) pay a portion of the interest to accrue on the Bonds during construction of the Project, and (C) pay certain costs relating to the issuance of the Bonds.

(iii)          To provide funds to loan to the Company for the purposes described in clause (ii) above, the Issuer has authorized its Bonds in the aggregate principal amount of $90,000,000 to be issued upon the terms set forth in the Indenture, pursuant to which certain of the Issuer’s interests in this Loan Agreement, and the revenues and income to be derived by the Issuer pursuant to this Loan Agreement and the payment of principal, premium, if any, interest and other revenues hereunder (other than Unassigned Rights), will be pledged and assigned to the Trustee as security for payment of the principal of, premium, if any, and interest on the Bonds, and any fees and expenses due under the Indenture.  The Issuer covenants that it has not and will not pledge or assign its interest in this Loan Agreement, or the revenues and receipts derived pursuant to this Loan Agreement, excepting Unassigned Rights, other than to the Trustee under the Indenture to secure the Bonds.

(iv)          Neither the Issuer’s execution and delivery of this Loan Agreement, its consummation of the transactions contemplated on its part hereby, nor the Issuer’s fulfillment of or compliance with the terms and conditions of this Loan Agreement conflicts with or results in a breach of the terms, conditions and provisions of any material restriction, agreement or instrument to which the Issuer is a party, or by which it or any of its property is bound, or constitutes a default under any of the foregoing.

(v)           To the best of its knowledge, no member of the Board of Commissioners of the Issuer or officer or other official of the Issuer is interested in any manner which is prohibited by law in any contract, employment, lease, purchase or sale made or to be made in connection with the proposed transactions contemplated by the Indenture, this Loan Agreement or the Purchase Contract.

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Concurrently with the Closing Date, the Issuer shall execute and deliver a certificate reaffirming the foregoing representations and warranties as of the Closing Date.

(b)      Company Representations, Warranties and Covenants.  The Company represents, warrants and covenants to the Issuer and the Trustee as follows:

(i)            The Company is duly incorporated under the laws of the State of Delaware, is in good standing in the State of Delaware and the State and is duly authorized to conduct its business in the State.  The Company has all authority under the laws of the State of Delaware, the State and its Articles of Incorporation to enter into, execute, deliver and perform this Loan Agreement, the Purchase Contract, the Project Certificate and the Tax Agreement (collectively, the “Company Agreements”), and all action on its part necessary for the valid execution and delivery of the Company Agreements and the Limited Offering Memorandum has been duly and effectively taken, and the Company Agreements will be the legal, valid and binding obligations of the Company enforceable in accordance with their respective terms, subject to any applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting the enforcement of creditors’ rights generally from time to time in effect, and to applicable equitable principles.

(ii)           The representations and covenants contained in the Tax Agreement and Project Certificate executed by the Company on the Closing Date are true and correct and are incorporated herein by this reference and shall have the same effect as if such representations and covenants were actually contained in this Loan Agreement.

(iii)          The execution and delivery of the Company Agreements and the Limited Offering Memorandum on the Company’s part have been duly authorized by all necessary action, and neither the Company’s execution and delivery of the Company Agreements or the Limited Offering Memorandum, the Company’s consummation of the transactions contemplated on its part thereby, nor the Company’s fulfillment of or compliance with the terms and conditions of the Company Agreements, conflicts with or results in a material breach of the Articles of Incorporation, or any material agreement or instrument to which the Company is now a party or by which the Company is bound (except for any such breaches for which the Company has obtained a waiver or a required consent), or constitutes a material default (or would constitute a material default with due notice or the passage of time or both) under any of the foregoing.

(iv)          All orders and approvals have been received and will be in effect prior to the Closing Date, and, no further consent, approval, authorization or order of, or registration with, any court or governmental or regulatory agency or body is required with respect to the Company for the execution, delivery and performance by the Company of the Company Agreements.

(v)           The Company has received an executed counterpart of the Indenture and hereby consents to and approves of the provisions thereof.

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(vi)          The information relating to the Project and use of the proceeds of the Bonds furnished by the Company in writing to ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ LLP, as Bond Counsel, in connection with the issuance of the Bonds, is, to the best of the Company’s knowledge, true and correct in all material respects.

(vii)         The Company does not, as of the date of issuance of the Bonds, reasonably expect any use of moneys derived from the proceeds of the Bonds or any investment or reinvestment thereof or from the sale of the Project which would cause the Bonds to be classified as “arbitrage bonds” within the meaning of Section 148 of the Code.

(viii)        The Project consists of those facilities described in Exhibit A hereto (as such Exhibit A is from time to time amended or supplemented in accordance with Section 3.03 hereof), and the Company shall not consent to any changes in the Project which would adversely affect the Tax-Exempt status of the Bonds.  The Company covenants that at all times when any Bonds are outstanding, the Project will be geographically located in the corporate limits of the Issuer.

(ix)           No litigation, proceedings or investigations are pending or, to the knowledge of the Company, threatened against the Company seeking to restrain, enjoin or in any way limit the approval or the execution and delivery of the Company Agreements and the Limited Offering Memorandum, or which would in any manner challenge or adversely affect the corporate existence, power and authority of the Company to enter into and carry out the transactions described in or contemplated by, or the execution, delivery, validity or performance by the Company of the Company Agreements and the Limited Offering Memorandum.  In addition, except as described in the Limited Offering Memorandum (including all documents incorporated by reference therein), no litigation, proceedings or investigations are pending or, to the knowledge of the Company, threatened in writing against the Company, except litigation, proceedings or investigations involving claims for which the probable ultimate recoveries and the estimated costs and expenses of defense, in the opinion of the Company, (i) will be entirely within the applicable insurance policy limits (subject to applicable deductibles) or are not in excess of the total of the available assets held under applicable self-insurance programs or (ii) will not have a material adverse effect on the operations or condition, financial or otherwise, of the Company.

(x)            The information used in the preparation of the financial statements referred to in paragraph (xi) below, this Loan Agreement, the Tax Agreement and any other written statement furnished by the Company to the Issuer (including the descriptions and information contained or incorporated by reference in the Limited Offering Memorandum relating to (A) the Company, the Guarantor and the Project, (B) the operations and financial and other affairs of the Company and the Guarantor, (C) the application by the Company of the proceeds from the sale of the Bonds and (D) the participation by the Company and the Guarantor in the transactions contemplated herein and in the Limited Offering Memorandum) do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained

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therein or herein not misleading.  There is no fact which the Company has not disclosed to the Issuer in writing which materially adversely affects or, so far as the Company can now foresee, will materially adversely affect the financial condition of the Company or the Guarantor, the ability of the Company to own and operate the Project, the Company’s ability to make payments under this Loan Agreement or the Guarantor’s ability to make payments under the Bond Guarantee when and as the same become due and payable.

(xi)           The audited consolidated statements of operations, cash flows and stockholders’ deficit of the Company for each of the fiscal years ended October 31, 2009, 2008 and 2007 and the consolidated balance sheets as of October 31, 2009 and 2008, all audited by KPMG, LLP, an independent registered public accounting firm, all included in and incorporated by reference in, the Official Statement, correctly and fairly present the financial condition of the Company as of said dates, and the results of the operations of the Company for each of such periods, respectively, all in accordance with GAAP consistently applied except as stated in the notes thereto, and there has been no material adverse change in the condition, financial or otherwise, of the Company since October 31, 2009 from that set forth in the information so utilized except as disclosed in the Official Statement.

(xii)          The Company has all necessary licenses and permits to occupy and operate its existing facilities or has obtained waivers thereof and has obtained, will obtain or will cause to be obtained or waived all necessary licenses and permits to acquire, construct, renovate, occupy and operate the Project as they become required, except where failure to obtain any such license or permit would not have a material adverse effect.  With respect to the construction, renovation and equipping of the Project with proceeds of the Bonds, the Company has complied with and will comply with the Illinois Prevailing Wage Act, 820 ILCS 130/1 to 130/12, to the extent required by applicable laws.

(xiv)        No amounts shall be withdrawn from the Project Fund except for amounts that will be allocated, for federal income tax purposes, to the payment, or to the reimbursement of the Company for the payment, of Project Costs.

(xv)         No Project Costs to be financed with Bond proceeds were incurred or expended on or before July 17, 2010, except for certain preliminary expenditures permitted by the Tax Agreement.

(xvi)        The Company will comply with the provisions of Section 148 of the Code, and in that connection, has executed and delivered the Tax Agreement.

(xvii)       The information furnished by the Company and used by the Issuer in preparing the Form 8038, Information Return for Private Activity Bond Issues, which has been filed by or on behalf of the Issuer with the Internal Revenue Service Center in Ogden, Utah, pursuant to Section 149(e) of the Code, was true and complete as of the date of filing of said Form 8038.

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(xviii)      The Project is accurately described in the Project Certificate.

(xix)         The Company represents to the Issuer that it will allocate the proceeds of the Bonds to the renovation, expansion and equipping of the Project substantially as described in Exhibit A hereto.

(xx)          The execution, delivery and performance of the Company Agreements and the compliance by the Company with all of the provisions hereof and thereof are not in contravention of law or any unwaived provision of any mortgage, deed, instrument or undertaking to which the Company is a party or by which it or its property is bound wherein such law or unwaived provision could materially adversely affect the Company or the ability of the Company to perform its obligations under this Loan Agreement.

(xxi)         The Company is not in default under any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or any indenture, agreement, lease or instrument which could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), results of operations, business or properties of the Company.

(xxii)        The Project conforms in all material respects with all applicable zoning, planning, building, environmental and other regulations of the governmental authorities having jurisdiction of the Project, or any non-conformity has been waived by the applicable government authority, and all licenses and approvals the Company requires to operate its facilities have been obtained or waived by appropriate state and federal agencies and departments or, if not obtained or waived on the date of this Loan Agreement, are expected to be obtained or waived in the normal course of business at or prior to the time such authorizations, consents or approvals are required to be obtained.

(xxiii)       With respect to any pension plan subject to ERISA maintained by the Company, to which the Company has an obligation, or with respect to which the Company has any liability, contingent or otherwise (each, a “Plan”) (a) to the knowledge of the Company, neither any Plan nor the trusts created thereunder, nor any trustee or administrator thereof, has engaged in a “prohibited transaction,” as such term is defined in Section 4975 of the Code, which could subject the Plan, any such trust, or any trustee or administrator thereof, or any party dealing with the Plan or any such trust to the tax or penalty on prohibited transactions imposed by Section 4975 of the Code, and which has had or could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), results of operations, business or properties of the Company (a “Material Adverse Effect”); and (b) the performance of the transactions contemplated by this Loan Agreement will not involve any prohibited transaction (other than an exempt prohibited transaction).  Neither any Plan nor any such trusts have been terminated, nor have there been any “reportable events,” as such term is defined in Section 4043 of ERISA, within the last five years except for the reportable events which either have heretofore been disclosed publiclyor which did not and could not reasonably be expected to have a Material Adverse Effect.  Neither any Plan nor any such trusts have incurred any “accumulated funding deficiency” (whether or not waived), as such term was defined

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in Section 302 of ERISA prior to the effective date of the Pension Protection Act of 2006, nor has any Plan or such trusts failed to satisfy the minimum funding standards (whether or not waived), as defined in Section 302 of ERISA on and after the effective date of the Pension Protection Act of 2006 within the last five years which have had or could reasonably be expected to have a Material Adverse Effect.  In addition, except as could not reasonably be expected to have a Material Adverse Effect, the Company and any member of a controlled corporation or affiliated service group in which the Company is a member within the meaning of Section 4001(a)(14 of ERISA (“ERISA Affiliate”), (a) has fulfilled in all material respects its obligations under the minimum funding standards of ERISA and the Code with respect to each Plan to which it has any such obligation; (b) is in compliance in all material respects with the presently applicable provisions of ERISA, the Code and any Plan; and (c) has not incurred any material and past due liability to the Pension Benefit Guaranty Corporation.  Except as could not reasonably be expected tohave a Material Adverse Effect, neither the Company nor any ERISA Affiliate is required to make or accrue, nor has within the last five years made or accrued, an obligation to make a material contribution to a “multiemployer plan” as defined in Section 3(37)(A) of ERISA or Section 414 of the Code.

Concurrently with the Closing Date, the Company shall execute and deliver a certificate reaffirming the foregoing representations and warranties as of the Closing Date.

Section 2.02.       Tax-Exempt Status.  The Company covenants with the Issuer and for and on behalf of the purchasers and Beneficial Owners of the Bonds from time to time outstanding that so long as any of the Bonds remain outstanding, moneys on deposit in any fund in connection with the Bonds, whether or not such moneys were derived from the proceeds of the sale of the Bonds or from any other sources, will not be used in a manner which will cause the Bonds to be “arbitrage bonds,” within the meaning of Section 148 of the Code, and any lawful Treasury Regulations promulgated thereunder, as the same exist on this date, or may from time to time hereafter be amended, supplemented or revised.  The Company also covenants for the benefit of the Beneficial Owners of the Bonds to comply with all of the provisions of the Tax Agreement.  The Company reserves the right, however, to make any investment of such moneys permitted by State law, if, when and to the extent that said Section 148 or the Treasury Regulations promulgated thereunder shall be repealed or relaxed or shall be held void by final judgment of a court of competent jurisdiction, but only upon receipt of an opinion of Bond Counsel that such investment will not affect the exclusion of the interest on the Bonds from gross income of the owners thereof for federal income tax purposes.

The Company agrees that it will take such actions as are necessary or appropriate and within its control to take to comply with the provisions of the Code and the Treasury Regulations promulgated thereunder in order to avoid any loss of any the exclusion of interest on the Bonds from gross income of the owners thereof for federal income tax purposes, and will not act or fail to act in any other manner which would adversely affect such exclusion.  In connection with the foregoing, the Company acknowledges and agrees to comply with the provisions of the Project Certificate.

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The Company acknowledges that in the event of an examination by the Internal Revenue Service of the exclusion of interest on the Bonds from gross income of the owners thereof for federal income tax purposes, the Issuer may be treated as a “taxpayer” in such examination, and the Company agrees that it will respond, and will direct the Issuer to respond, in a commercially reasonable manner to any inquiries from the Internal Revenue Service in connection with such an examination.  The Issuer covenants that it will cooperate with the Company, at the Company’s expense and at its direction, in connection with such examination.

The Company further covenants that on or before the date that is five years from the Closing Date, the Company shall provide to the Trustee a written certificate of an Authorized Company Representative stating that either (a) no rebate payments are then required to be made to the United States because of the existence of one or more exceptions from the rebate provisions contained in Section 148(f) of the Code and the Treasury Regulations relating to the tax-exempt bond provisions of the Code (the “Rebate Provisions”), or (b) the Company has made (or caused to be made) a calculation of the amount of rebate owed pursuant to the Rebate Provisions and either (i) no rebate was then due and owing with respect to the Bonds, or (ii) rebate (the amount of which shall be specified) has been paid to the United States with respect to the Bonds.  The Company acknowledges that its obligations under this Section 2.02 are supplemental to, and not in lieu of, the Rebate Provisions set forth in the Tax Agreement.

Section 2.03.       Annual Certificate.  For each year that this Loan Agreement remains in effect, the Company will furnish to the Issuer and the Trustee on or before January 31 of each year, commencing January 31, 2012, a certificate of an Authorized Company Representative, stating that the signer of the certificate has made a review of the activities of the Company during the preceding calendar year for the purpose of determining whether or not the Company, to the knowledge of such signer, has complied with all of the terms, provisions and conditions of this Loan Agreement and the Project Certificate and that, to the knowledge of such signer, the Company has kept, observed, performed and fulfilled each and every covenant, provision and condition of this Loan Agreement and the Project Certificate to be performed by the Company and is not in default in the performance or observance of any of the covenants, provisions or conditions hereof or thereof, or if there shall be such a default, such certificate shall specify all such defaults and the nature thereof of which the signer of the certificate shall have knowledge and the corrective action being undertaken or to be undertaken with respect thereto.

Section 2.04.       Taxes, Charges and Assessments; Permitted Contests.  To the extent that the Company or its properties are or become liable to taxation, the Company covenants and agrees to pay or cause to be paid (when the same shall become due or payable, or if an extension has been granted, within the time allotted for such extension) all lawful taxes, charges, assessments and other governmental levies against the Company or its properties which, if not so paid, will have a material adverse effect on the Company or the ability of the Company to operate the Project or make the Loan Payments.  If under applicable law any such tax, charge, fee, rate, imposition or assessment may at the option of the taxpayer be paid in installments, the Company may exercise such option.

The Company shall pay or cause to be satisfied and discharged or make adequate provision to satisfy and discharge (including the provisions of adequate bonding therefor) within

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60 days after the same shall accrue, any lien or charge upon the Loan Payments, and all lawful claims or demands for labor, materials, supplies or other charges which, if unpaid, might be or become a lien thereon.

Nothing contained in this Section 2.04 shall be deemed to constitute an admission by either the Issuer or the Company that either the Issuer or the Company is liable for any tax, charge, fee, rate, imposition or assessment.

The Company shall not be required to pay any tax, charge, fee, rate, imposition or assessment required to be paid under this Section 2.04 hereof, or to comply with any law, ordinance, order, decree, rule, regulation or requirement referred to in Section 2.05 hereof, so long as the Company shall in good faith and at its cost and expense contest the amount or validity thereof, or take other appropriate action with respect thereto, in an appropriate manner or by appropriate proceedings which shall operate during the pendency thereof to prevent the collection of or other realization upon the tax, charge, fee, rate, imposition, assessment, lien, security interest, encumbrance or charge so contested, and the sale, forfeiture or loss of its property or any part thereof to satisfy the same.  While any such matters are pending, the Company shall have the right to pay, remove or cause to be discharged or marked exempt the tax, charge, fee, rate, imposition, assessment, lien, security interest, encumbrance or charge being contested.  Each such contest shall be promptly prosecuted to final conclusion or settlement, and the Company will pay, and save the Issuer and the Trustee harmless against, all losses, judgments, decrees and costs (including reasonable attorneys’ fees and reasonable expenses in connection therewith) and will, promptly after the final determination or settlement of such contest or action, pay and discharge the amounts which shall be levied, assessed or imposed or determined to be payable therein, together with all penalties, fines, interest, costs and reasonable expenses thereon or in connection therewith.

Section 2.05.       Compliance with Laws.  Subject to provisions of Section 2.04 hereof, the Company will, through the term of this Loan Agreement, at no expense to the Issuer, promptly comply or cause compliance with all applicable laws, ordinances, orders, rules, regulations and requirements of duly constituted public authorities, which may be applicable to the Project or to the repair and alteration thereof, or to the use or manner of use of the Project, including, but not limited to the Americans with Disabilities Act, the Illinois Accessibility Code, all federal, State and local environmental and health and safety laws, rules, regulations and orders applicable to or pertaining to the Project, the Federal Worker Adjustment and Retraining Notification Act and the Illinois Prevailing Wage Act.

Section 2.06.       Use of the Project.  The Company recognizes that the Issuer has not made an inspection of the Project or of any fixture or other item constituting a portion thereof, and the Issuer makes no warranty or representation, express or implied or otherwise, with respect to the same or the location, use, description, design, merchantability, condition, workmanship, or fitness, suitability or use for any particular purpose, condition or durability thereof.  The Company further recognizes that the Issuer has no title interest to any part of the Project and that the Issuer makes no representations or warranties of any kind as to the Company’s title thereto or ownership thereof or otherwise, it being agreed that all risks incident thereto are to be borne by the Company.  In the event of any defect or deficiency of any nature in the Project or any fixture

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or other item constituting a portion thereof, whether patent or latent, the Issuer shall have no responsibility or liability with respect thereto. The provisions of this Section 2.06(b) have been negotiated and are intended to be a complete exclusion and negation of any warranties or representations by the Issuer, express or implied, with respect to the Project or any fixture or other item constituting a portion thereof, whether arising pursuant to the Uniform Commercial Code of the State or another law now or hereafter in effect or otherwise.

Section 2.07.       Access to Project.  The Company agrees that during the term of this Loan Agreement the Issuer, the Trustee and their duly authorized agents shall have the right, but shall be under no duty or obligation to exercise this right, during regular business hours, with reasonable notice, to enter upon the premises and examine and inspect the records maintained by the Company pursuant to Section 3.05 hereof and to examine and inspect the Project, subject to federal and State laws and regulations applicable to the site of the Project.  The rights of inspection and access hereby reserved to the Issuer and the Trustee may be exercised only after the Issuer, the Trustee or such agent shall have executed a secrecy agreement if requested by the Company in the form then currently used by Company, and nothing contained in this Section 2.07 or in any other provision of this Loan Agreement shall be construed to entitle the Issuer or the Trustee to any information or inspection involving the confidential know-how of the Company.

Section 2.08.       Maintenance and Repair; Insurance.  The Company will maintain the Project in a safe and sound operating condition, making from time to time all needed material repairs thereto, and shall maintain reasonable amounts of insurance coverage with respect to the Project and shall pay all costs of such maintenance, repair and insurance.  Evidence of insurance shall be provided to the Trustee upon request to the Company.

Section 2.09.       Indemnification of the Issuer and the Trustee.  (a)  The Company will pay, and will protect, indemnify and save the Issuer and the Trustee and each of their respective past, present and future members of the Board of Commissioners, officers, directors, employees, agents, successors, assigns and any other person, if any, who “controls” the Issuer or the Trustee, as the case may be, as that term is defined in Section 15 of the Securities Act (the Issuer, the Trustee and the other listed persons, collectively referred to as, the “Indemnified Persons”) harmless from and against any and all liabilities, losses, damages, taxes penalties, costs and expenses (including attorneys’ fees and expenses of the Issuer or the Trustee), causes of action, suits, proceedings, claims, demands, tax reviews, investigations and judgments of whatsoever kind and nature (including, but not limited to, those arising or resulting from any injury to or death of any person or damage to property) arising from or in any manner directly or indirectly growing out of or connected with the following:

(1)           the use, financing, non-use, condition or occupancy of the Project, any repairs, construction, alterations, renovation, relocation, remodeling and equipping thereof or thereto or the condition of any such Project including adjoining sidewalks, streets or alleys and any equipment or facilities at any time located on or connected with such Project or used in connection therewith but which are not the result of the gross negligence of the Issuer or Trustee;

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(2)           a violation of any agreement, warranty, covenant or condition of this Loan Agreement or any other agreement executed in connection with this Loan Agreement or the Indenture;

(3)           a violation of any contract, agreement or restriction by the Company relating to the Project;

(4)           a violation of any law, ordinance, rules, regulation or court order affecting the Project or the ownership, occupancy or use thereof or the Bonds or use of the proceeds thereof;

(5)           any statement or information concerning the Company, any of its officers and members, its operations or financial condition generally or the Project, contained in any offering document or supplement or amendment thereto furnished to the Issuer or the purchaser of any Bonds, that is untrue or incorrect in any material respect, and any omission from such offering document or any statement or information which should be contained therein for the purpose for which the same is to be used or which is necessary to make the statements therein concerning the Company, any of its officers and members and the Project not misleading in any material respect, provided that such offering document or supplement or amendment has been approved by the Company and the Indemnified Persons did not have actual knowledge of the omission or misstatement; and

(6)           the acceptance or administration of the Indenture, including without limitation the enforcement of any remedies under the Indenture and related documents.

(b)        In case any claim shall be made or any action shall be brought against one or more of the Indemnified Persons in respect of which indemnity can be sought against the Company pursuant to any of the preceding paragraphs in Section 2.09(a), the Indemnified Party seeking indemnity shall promptly notify the Company, in writing, and the Company shall promptly assume the defense thereof, including the employment of counsel chosen by the Company and approved by the Issuer or the Trustee (as the case may be), or both (provided, that such approval by the Issuer or the Trustee shall not be unreasonably withheld), the payment of all expenses and the right to negotiate and consent to settlement.  If any Indemnified Person is advised in a written opinion of Counsel that there may be legal defenses available to such Indemnified Person which are adverse to or in conflict with those available to the Company or that the defense of such Indemnified Person should be handled by separate Counsel, the Company shall not have the right to assume the defense of such Indemnified Person, but the Company shall be responsible for the reasonable fees and expenses of Counsel retained by such Indemnified Person in assuming its own defense, and provided also that, if the Company shall have failed to assume the defense of such action or to retain Counsel reasonably satisfactory to the Issuer or the Trustee within a reasonable time after notice of the commencement of such action, the reasonable fees and expenses of Counsel retained by the Indemnified Person shall be paid by the Company.  Notwithstanding the foregoing, any one or more of the Indemnified Persons shall have the right to employ separate Counsel with respect to any such claim or in any such action and to participate in the defense thereof, but the fees and expenses of such Counsel shall be paid by such Indemnified Person unless the employment of such Counsel has been specifically

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authorized by the Company or unless the provisions of the immediately preceding sentence are applicable.  The Company shall not be liable for any settlement of any such action affected without the consent of the Company (which shall not be unreasonably withheld), but if settled with the consent of the Company or if there be a final judgment for the plaintiff in any such action with or without consent, the Company agrees to indemnify and hold harmless the Indemnified Person from and against any loss, liability or expense by reason of such settlement or judgment.

(c)        The Company shall also indemnify the Issuer, the Trustee and such Indemnified Persons for all reasonable costs and expenses, including reasonable Counsel fees, incurred in: (i) enforcing any obligation of the Company under this Loan Agreement or any related agreement, including the Indenture; (ii) taking any action requested by the Company; (iii) taking any action required by this Loan Agreement or any related agreement; or (iv) taking any action considered necessary by the Issuer or the Trustee and which is authorized by this Loan Agreement or any related agreement.  If the Issuer is to take any action under this Loan Agreement or any other instrument executed in connection herewith for the benefit of the Company, it will do so if and only if (i) the Issuer is a necessary party to any such action or proceedings and (ii) the Issuer has received specific written direction from the Company, as required hereunder or under any other instrument executed in connection herewith, as to the action to be taken by the Issuer.

(d)        All amounts payable to the Issuer under this Section 2.09 shall be deemed to be fees and expenses payable to the Issuer for the purposes of the provisions hereof and of the Indenture dealing with assignment of the Issuer’s rights hereunder.  The Issuer and its members, officers, agents, employees and their successors and assigns shall not be liable to the Company for any reason.

(e)        Any provision of this Loan Agreement or any other instrument or document executed and delivered in connection therewith to the contrary notwithstanding, the Issuer retains the right to (i) enforce any applicable federal or State law or regulation or resolution or ordinance of the Issuer and (ii) enforce any rights accorded to the Issuer by federal or State law or regulation of the Issuer, and nothing in this Loan Agreement shall be construed as an express or implied waiver thereof.

(f)         The obligations of the Company under this Section 2.09 shall survive any assignment or termination of this Loan Agreement in accordance with Section 7.01 and Section 10.01 hereof and the resignation or removal of the Trustee, and such obligations under this Section 2.09 are in addition to any indemnifications or protections provided to the Trustee under the Indenture or any other related document, and the terms hereof shall not limit such indemnification or protections in any way.

Section 2.10.       [Reserved].

Section 2.11.       Recording and Maintenance of Liens.  Upon notice from the Trustee, the Company shall, at its own expense, file and record, refile and re-record, or cause to be filed and recorded, refiled and re-recorded, U.C.C. continuation statements, if required under Illinois law,

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relating to the U.C.C. filing with respect to the Trustee’s rights to the Trust Estate assigned to the Trustee by the Issuer.  The Issuer and the Trustee shall cooperate fully with the Company in taking any such action.

The Company will pay or cause to be paid all filing fees incident to such filing, and all expenses incident to the preparation, execution and acknowledgment of such filing.

The Issuer and the Trustee (other than the Trustee’s obligation to notify the Company hereunder as necessary) shall have no responsibility for the preparation, filing or recording of any such continuation statement or for the maintenance of any security interest intended to be perfected thereby.  The Issuer will execute such instruments provided to it by the Company as may be reasonably necessary in connection with such filing.

Section 2.12.       Indenture Provisions.  The Indenture provisions concerning the Bonds and the other matters therein are an integral part of the terms and conditions of the Loan made by the Issuer to the Company pursuant to this Loan Agreement, and the execution of this Loan Agreement shall constitute conclusive evidence of approval of the Indenture by the Company to the extent it relates to the Company.  Additionally, the Company agrees that, whenever the Indenture by its terms imposes a duty or obligation on the Company, such duty or obligation shall be binding upon the Company to the same extent as if the Company were an express party to the Indenture, and the Company hereby agrees to carry out and perform all of its obligations under the Indenture as fully as if the Company were a party to the Indenture.

Section 2.13.       Exemption from Personal Liability.  No recourse under or upon any obligation, covenant or agreement created by this Loan Agreement, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, organizer, stockholder, member, manager, director, officer or employee, as such, past, present or future, of the Company or of any predecessor or successor entity, either directly or through the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Loan Agreement is solely a Company obligation, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, organizers, stockholders, members, managers, directors, officers or employees, as such, of the Company or any predecessor or successor entity, or any of them, under or by reason of the obligations, covenants or agreements contained in this Loan Agreement or implied therefrom; and that any and all such personal liability, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, organizer, stockholder, director, officer, member, manager or employee, as such, under or by reason of the obligations, covenants or agreements contained in this Loan Agreement, or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Loan Agreement.

Section 2.14.       No Recourse to Issuer.  The obligations of the Issuer under this Loan Agreement are special, limited obligations of the Issuer, payable solely out of the revenues and income derived under this Loan Agreement and as otherwise provided under this Loan Agreement and the Indenture.  The obligations of the Issuer hereunder shall not be deemed to constitute a general obligation of the Issuer or a charge against the general credit or taxing power

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of the Issuer or the State of Illinois.  Neither the Issuer nor any member of the Board of Commissioners, director, officer, employee or agent of the Issuer nor any person executing the Bonds shall be liable personally for the Bonds or be subject to any personal liability or accountability by reason of the issuance of the Bonds.

No recourse shall be had for the payment of the principal of, premium, if any, and interest on any of the Bonds or for any claim based thereon or upon any obligation, covenant or agreement contained in the Indenture, this Loan Agreement or the Purchase Contract against any past, present or future member of the Board of Commissioners, officer, agent or employee of the Issuer, or any member of the Board of Commissioners, officer, employee, director or trustee of any successor entity as such, either directly or through the Issuer or any successor entity, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such member of the Board of Commissioners, officer, employee, directors, agent or trustee as such is hereby expressly waived and released as a condition of and consideration for the execution of the Indenture and this Loan Agreement and the issuance of the Bonds.

Notwithstanding any provision or obligation to the contrary set forth herein, no provision of this Loan Agreement shall be construed so as to give rise to a pecuniary liability of the Issuer or to give rise to a charge upon the general credit of the Issuer, the liability of the Issuer hereunder shall be limited to its interest in this Loan Agreement and the lien of any judgment shall be restricted thereto.  In the performance of the agreements of the Issuer herein contained, any obligation it may incur for the payment of money shall not be a debt of the Issuer, nor shall the Issuer be liable on any obligation so incurred.  The Issuer does not assume general liability for the repayment of the Bonds or for the costs, fees, penalties, taxes, interest, commissions, charges, insurance or any other payments recited herein, and shall be obligated to pay the same only out of the amounts payable by the Company hereunder.  The Issuer shall not be required to do any act whatsoever or exercise any diligence whatsoever to mitigate the damages to the Company if a default shall occur hereunder.

ARTICLE III

LOAN PROCEEDS; RENOVATION, EXPANSION, EQUIPPING,
COMPLETION AND OPERATION OF PROJECT

Section 3.01.       Loan of Proceeds of Bonds.  The Issuer hereby agrees to loan the proceeds of the Bonds to the Company.  The Company hereby directs the Issuer and the Trustee to dispose of the net proceeds from the sale of the Bonds in the manner specified in Section 5.02 of the Indenture.

Section 3.02.       Agreement to Renovate, Expand, Equip and Complete Project.  The Company will complete the renovation, expansion and equipping of the Project as soon as practicable in accordance with the plans and specifications kept, and as they may be revised, under Section 3.03 hereof.  The Company will allocate the proceeds of the Bonds, including investment income thereon, solely in accordance with the provisions of the Indenture, this Loan Agreement, the Tax Agreement and the Project Certificate.

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The Company may at its own expense cause a portion of the Project to be remodeled or cause such substitutions, modifications and improvements to be made to a portion of the Project from time to time as the Company, in its discretion, may deem to be desirable for its uses and purposes, which remodeling, substitutions, modifications and improvements shall be included under the terms of this Loan Agreement as part of the Project.

Within seven Business Days after the Completion Date, the Company shall provide the Completion Certificate to the Trustee and the Issuer.

If the Company determines not to complete any portion of the Project for which Bond proceeds (or investment earnings thereon) are available and delivers the Completion Certificate, or funds such portion of the Project from any other source, such Bond proceeds (or investment earnings thereon) otherwise allocable to such portion of the Project must be used either (i) to pay costs of the remaining parts of the Project, provided that the Company certifies to the Issuer and the Trustee that after recalculating the average reasonably expected economic life of the Project being financed, refinanced or reimbursed with proceeds of the Bonds (or investment earnings thereon), the weighted average maturity of the Bonds will not exceed 120% of the average reasonably expected economic life of the Project, (ii) to pay the costs of other projects qualifying under the Bond Ordinance, with the approval of the Issuer, (iii) to redeem principal on the Bonds in accordance with the provisions of this Loan Agreement and the Indenture or (iv) in any other lawful manner, provided in each case there shall be delivered to the Trustee and the Issuer a Favorable Opinion of Bond Counsel and/or Opinion of Counsel with respect to such application.  If the Company shall so determine (x) not to complete any portion of the Project or (y) to fund such portion from any other source, such portion of the Project shall no longer be deemed to be within the meaning of the term “Project” for any purpose of this Loan Agreement or the Indenture; if the Company shall so determine to use available Bond proceeds to pay the costs of other projects approved by the Issuer, such projects shall thereafter be deemed to be within the meaning of the term “Project” for all purposes of this Loan Agreement and the Indenture.

In the event the money in the Project Fund available for payment of the costs of the Project shall not be sufficient to make such payment in full, the Company agrees to pay directly, or deposit moneys in the Project Fund for the payment of, such costs of completing the Project as may be in excess of the moneys available therefor in the Project Fund.  The Issuer does not make any warranty or representation, either express or implied, that the moneys which will be deposited into the Project Fund, and which under the provisions of this Loan Agreement will be available for payment of the costs of the Project, will be sufficient to pay all of the costs which will be incurred in connection therewith.  The Company agrees that if, after exhaustion of the moneys in the Project Fund, the Company should pay, or deposit moneys in the Project Fund for the payment of, any portion of the costs of the Project pursuant to the provisions of this Section 3.02, it shall not be entitled to any reimbursement therefor from the Issuer, the Trustee or from the owners of any of the Bonds, nor shall it be entitled to any diminution of the amounts payable under Section 6.01 hereof.

The Company covenants and agrees to pay all Costs of Issuance incurred in connection with the issuance of the Bonds.  The Issuer shall have no obligation with respect to such costs.

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Section 3.03.       Plans and Specifications.  Subject to the provisions of the next paragraph and to Section 3.02 hereof, the Company may make, authorize or permit changes or amendments in the components of the Project or may determine not to complete any portion of the Project for which Bond proceeds (and investment income thereon) are available, or may finance such portion of the Project from any other source.

If the Company considers it necessary or desirable to supplement or amend Exhibit A to this Loan Agreement to reflect changes in the description of the Project, such supplement or amendment will not be considered as an amendment to this Loan Agreement requiring the consent of any Owner or the Trustee for the purposes of Article XI of the Indenture.  A copy of each such material change in or material amendment to Exhibit A hereof shall be filed promptly with the Issuer and the Trustee.  In addition, the Company shall deliver to the Issuer a certificate of an Authorized Company Representative detailing the proposed changes.

Section 3.04.       Project Records.  The Company will maintain such records in connection with the acquisition, construction and equipping of the Project as are required to permit ready identification of the Project and the items of Project Costs.

Section 3.05.       Authorized Company Representative.  The Company shall appoint an Authorized Company Representative (who, until another person or officer is designated, shall be the Vice President and Treasurer of the Company) for the purpose of acting on behalf of the Company and taking all actions and making all certifications required to be taken and made by an Authorized Company Representative under the provisions of this Loan Agreement and the Indenture, and shall appoint alternate Authorized Company Representatives to take any such action or make any such certification if the same is not taken or made by the Authorized Company Representative.  In the event any of said persons, or any successor appointed pursuant to the provisions of this Section 3.05, should resign or become unavailable or unable to take any action or make any certificate provided for in this Loan Agreement or the Indenture, another Authorized Company Representative or alternate Authorized Company Representative shall thereupon be appointed by the Company.  If the Company fails to make such designation within 10 days following the date when the then incumbent resigns or becomes unavailable or unable to take any of the said actions, the Chief Financial Officer of the Company shall serve as the Authorized Company Representative.

Whenever under the provisions of this Loan Agreement or the Indenture the approval of the Company is required or the Issuer is required to take some action at the request of the Company, such approval or such request shall be made by the Authorized Company Representative or alternate Authorized Company Representative unless otherwise specified in this Loan Agreement or the Indenture, and the Issuer or the Trustee shall be authorized to act on any such approval or request.

Section 3.06.       Guarantor.  The Company may exercise its rights and carry out its duties and obligations hereunder and under the Indenture directly or through the Guarantor.

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ARTICLE IV

ADDITIONAL COVENANTS OF THE COMPANY

Section 4.01.       Application of Certain Covenants.  (a) Following the first day (the “Suspension Period”):

(i)            the Bonds have been assigned an Investment Grade rating by both Rating Agencies; and

(ii)           no Default under this Loan Agreement, the Senior Note Indenture or the IFA Loan Agreement, has occurred and is continuing,

the Company and its Restricted Subsidiaries will not be subject to Sections 4.07, 4.08, 4.09, 4.11, 4.12, 4.13 and 4.14(a)(ii) of this Loan Agreement (collectively, the “Suspended Covenants”).

(b)      In the event that the Company and its Restricted Subsidiaries are not subject to the Suspended Covenants for any period of time as a result of the foregoing and on any subsequent date (the “Reversion Date”) one or both of the Rating Agencies withdraws its Investment Grade rating or downgrades the rating assigned to the Bonds below an Investment Grade rating, then the Company and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants with respect to future events.  The period of time between the Suspension Date and the Reversion Date is referred to as the “Suspension Period.”  Notwithstanding that the Suspended Covenants may be reinstated, no Default or Event of Default will be deemed to have occurred as a result of a failure to comply with the Suspended Covenants during the Suspension Period.  During any Suspension Period, the Company may not designate any Subsidiary to be an Unrestricted Subsidiary unless the Company would have been permitted to designate such Subsidiary to be an Unrestricted Subsidiary if a Suspension Period had not been in effect for any period.

(c)       On the Reversion Date, all Indebtedness Incurred during the Suspension Period will be deemed to have been outstanding on the Closing Date, so that it is classified as permitted under Section 4.07(b).  Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 4.08 will be made as though the covenant under Section 4.08 had been in effect since the Original Securities Date but not during the Suspension Period.  Accordingly, Restricted Payments made during the Suspension Period will not reduce the amount available to be made as Restricted Payments under clause (3) of Section 4.08(a) and items specified in subclauses (A) through (E) of clause (3) of Section 4.08(a) will not increase the amount available to be made thereunder.  For purposes of determining compliance with Section 4.09, the Net Unutilized Net Available Proceeds from all Asset Dispositions not applied in accordance with the covenant will be deemed to be reset to zero after the Reversion Date.

(d)      Without causing a Default or Event of Default, the Company and its Restricted Subsidiaries may honor any contractual commitments to take actions in the future after any date on which the Bonds no longer have an Investment Grade rating from both of the Rating Agencies as long as such contractual commitments were entered into during the Suspension Period and not

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in anticipation of the Bonds no longer having an Investment Grade rating from both of the Rating Agencies.

Section 4.02.       Corporate Existence.  Subject to Section 4.14 herein, the Company will at all times do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and its rights and franchises; provided, that nothing in this Section 4.02 shall prevent the abandonment or termination of any right or franchise of the Company if, in the opinion of the Company, such abandonment or termination is in the best interests of the Company and does not materially adversely affect the ability of the Company to fulfill its obligations hereunder.

Section 4.03.       Reports by the Company.  The Company covenants that so long as any of the Bonds are outstanding, notwithstanding whether the Company is subject to the requirements of Sections 13 or 15(d) of the Exchange Act, the Company will file with the Commission (unless the Commission will not accept such filing) and, within 15 days after it files them with the Commission, file with the Trustee and mail or cause the Trustee to mail to the Holders at their addresses as set forth in the register of the Bonds, copies of the annual reports and of the information, documents and other reports which the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act or which the Company would be required to file with the Commission if the Company then had a class of securities registered under the Exchange Act.  Delivery of such reports, information and documents to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including information concerning the Company’s compliance with any of its covenants hereunder; provided that the foregoing shall not relieve the Trustee of any of its responsibilities hereunder or under the Indenture.

Notwithstanding the foregoing, the Company will be deemed to have furnished such information referred to in the previous paragraph to the Trustee and the Holders if the Company has filed such reports and other information with either the Commission via the ▇▇▇▇▇ filing system (or any successor system) or the Municipal Securities Rulemaking Board via the EMMA filing system (or any successor system) and such reports and other information are publicly available.  If the Commission or the Municipal Securities Rulemaking Board will not accept the Company’s filings for any reason, the Company will post the reports, documents and information referred to in the first sentence of this paragraph on its website within the time periods that would apply if the Company were required to file such reports, documents and information with the Commission or the Municipal Securities Rulemaking Board, as the case may be, and, in that event, the Company will be deemed to have furnished such information referred to above to the Trustee and the Holders.

Section 4.04.       Notice of Defaults or Events of Default.  The Company covenants and agrees to deliver to the Trustee, within a reasonable time (and in any event within five Business Days) after the Company becomes aware of the occurrence of a Default or an Event of Default, of the character specified in Section 8.01(d) herein, written notice of the occurrence of such Default or Event of Default.

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Section 4.05.       Books of Record and Account.  The Company will keep proper books of record and account, either on a consolidated or individual basis.  The Company shall cause its books of record and account to be examined either on a consolidated or individual basis, by one or more firms of independent public accountants not less frequently than annually.  The Company shall prepare its financial statements in accordance with generally accepted accounting principles.

Section 4.06.       Limitation on Liens.  The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to exist any Liens upon any of their respective properties or assets (including, without limitation, any asset in the form of the right to receive payments, fees or other consideration or benefits) whether owned on the Original Securities Issuance Date or acquired after the Original Securities Issuance Date, other than:

(a)           Liens granted by the Company or a Subsidiary Guarantor on property or assets of the Company or a Subsidiary Guarantor securing Indebtedness of the Company or a Subsidiary Guarantor that is permitted by this Loan Agreement and that is pari passu with the Senior Notes, the Bonds, the IFA Bonds or any Subsidiary Guarantee; provided, that the Senior Notes, the Bonds, the IFA Bonds or Subsidiary Guarantee, as the case may be, are secured on an equal and ratable basis with the Indebtedness secured by such Liens for so long as such Indebtedness is so secured;

(b)           Liens granted by the Company or a Subsidiary Guarantor on property or assets of the Company or a Subsidiary Guarantor securing Indebtedness of the Company or a Subsidiary Guarantor that is permitted by this Loan Agreement and that is subordinated to the Senior Notes, the Bonds, the IFA Bonds or any Subsidiary Guarantee; provided, that the Senior Notes, the Bonds, the IFA Bonds or Subsidiary Guarantee, as the case may be, are secured by Liens ranking prior to such Liens;

(c)           Permitted Liens;

(d)           Liens (including extensions, replacements and renewals thereof) in respect of Acquired Indebtedness permitted by this Loan Agreement; provided, that the Liens in respect of such Acquired Indebtedness secured such Acquired Indebtedness at the time of the incurrence of such Acquired Indebtedness and such Liens and the Acquired Indebtedness were not incurred by the Company, any of its Restricted Subsidiaries or by the Person being acquired or from whom the assets were acquired in connection with, or in anticipation of, the incurrence of such Acquired Indebtedness by the Company or any of its Restricted Subsidiaries, and provided, further that such Liens in respect of such Acquired Indebtedness do not extend to or cover any property or assets of the Company or of any Restricted Subsidiary of the Company other than the property or assets that secured the Acquired Indebtedness prior to the time such Indebtedness became Acquired Indebtedness of the Company or any of its Restricted Subsidiaries;

(e)           Liens granted in connection with any Qualified Securitization Transaction;

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(f)            Liens arising from claims of holders of Indebtedness against funds held in a defeasance trust for the benefit of such holders; and

(g)           Liens on property or assets of the Company or any Restricted Subsidiary securing Indebtedness incurred pursuant to Sections 4.07(c), 4.07(g) and 4.07(z) herein.

Section 4.07.       Limitation on Incurrence of Indebtedness.  The Company will not, and will not cause or permit any of its Restricted Subsidiaries to incur, directly or indirectly, any Indebtedness, except:

(a)           Indebtedness of the Company or any Subsidiary Guarantor, if immediately after giving effect to the incurrence of such Indebtedness and the receipt and application of the net proceeds thereof, the Consolidated Cash Flow Ratio of the Company for the four full fiscal quarters for which quarterly or annual financial statements are available next preceding the incurrence of such Indebtedness would be greater than 2.0 to 1.0;

(b)           Indebtedness outstanding on the Closing Date;

(c)           Indebtedness of the Company or any Restricted Subsidiary of the Company under Credit Facilities in an aggregate amount at any one time outstanding pursuant to this clause (c) not to exceed the greater of (a) $200.0 million or (b) the sum of (i) 85.0% of the total book value of accounts receivable and (ii) 60% of the total book value of inventory, in each case as reflected on the Company’s and its Restricted Subsidiaries’ most recent consolidated financial statements prepared in accordance with GAAP; provided that the amount in clause (b) of this clause (c) shall not exceed $1,000.0 million;

(d)           Indebtedness owed by the Company to any Restricted Subsidiary of the Company or Indebtedness owed by a Restricted Subsidiary of the Company to the Company or a Restricted Subsidiary of the Company; provided, that, upon either:

(i)            the transfer or other disposition by such Restricted Subsidiary or the Company of any Indebtedness so permitted under this paragraph (d) to a Person other than the Company or another Restricted Subsidiary of the Company, or

(ii)           the issuance (other than directors’ qualifying shares), sale, transfer or other disposition of shares of Capital Stock or other ownership interests (including by consolidation or merger) of such Restricted Subsidiary to a Person other than the Company or another such Restricted Subsidiary of the Company,

the provisions of this paragraph (d) shall no longer be applicable to such Indebtedness and such Indebtedness shall be deemed to have been incurred at the time of any such issuance, sale, transfer or other disposition, as the case may be;

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(e)           Indebtedness of the Company or any of its Restricted Subsidiaries under any Interest Rate Protection Agreement, Commodity Agreement or Currency Agreement in each case incurred in the ordinary course of business;

(f)            Acquired Indebtedness, if either (i) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to clause (a) above after giving pro forma effect to the relevant acquisition and incurrence of such Acquired Indebtedness or (ii) (a) the Company’s Consolidated Cash Flow Ratio for the most recent four full fiscal quarters for which financial statements are available after giving pro forma effect to the relevant acquisition and incurrence of such Acquired Indebtedness as of the beginning of such four quarter period would be greater than (b) the Company’s Consolidated Cash Flow Ratio for such four quarter period as of immediately prior to such acquisition and incurrence of such Acquired Indebtedness;

(g)           Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including, without limitation, letters of credit in response to worker’s compensation claims or self-insurance;

(h)           Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries providing for adjustment of purchase price, earn-out or other similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary of the Company;

(i)            obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(j)            Indebtedness consisting of notes issued to employees, officers or directors in connection with the redemption or repurchase of Capital Stock held by such Persons in an aggregate amount not in excess of $10.0 million at any time outstanding;

(k)           Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into by the Company or its Restricted Subsidiaries in the ordinary course of business;

(l)            the guarantees by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or any Restricted Subsidiary permitted to be incurred under another provision of this covenant;

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(m)          Indebtedness incurred to renew, extend, refinance or refund (collectively for purposes of this paragraph (m) to “refund”) any Indebtedness incurred pursuant to paragraphs (a), (b) or (f) above, this paragraph (m) or paragraphs (n) or (o) below (including any successive refundings); provided, that:

(i)            such Indebtedness does not exceed the principal amount (or accreted amount, if less) of Indebtedness so refunded plus the amount of any premium required to be paid in connection with such refunding pursuant to the terms of the Indebtedness refunded or the amount of any premium reasonably determined by the Company as necessary to accomplish such refunding by means of a tender offer, exchange offer, or privately negotiated repurchase, plus the expenses of the Company or such Restricted Subsidiary incurred in connection therewith and

(ii)           (A)  in the case of any refunding of Indebtedness that is pari passu with the Senior Notes, the Bonds, or the IFA Bonds, as the case may be, such refunding Indebtedness is made pari passu with or subordinate in right of payment to such Senior Notes, such Bonds or such IFA Bonds, as the case may be, and, in the case of any refunding of Indebtedness that is subordinate in right of payment to the Senior Notes, the Bonds or the IFA Bonds, as the case may be, such refunding Indebtedness is subordinate in right of payment to such Senior Notes, such Bonds or such IFA Bonds, as the case may be, on terms no less favorable to the Holders than those contained in the Indebtedness being refunded,

(B)           in either case, the refunding Indebtedness by its terms, or by the terms of any agreement or instrument pursuant to which such Indebtedness is issued, does not have an Average Life that is less than the remaining Average Life of the Indebtedness being refunded (in the event that any portion of such refunding Indebtedness has a scheduled maturity prior to the Bonds) and does not permit redemption or other retirement (including pursuant to any required offer to purchase to be made by the Company or any of its Restricted Subsidiaries) of such Indebtedness at the option of the holder thereof prior to the final stated maturity of the Indebtedness being refunded, other than a redemption or other retirement at the option of the holder of such Indebtedness (including pursuant to a required offer to purchase made by the Company or any of its Restricted Subsidiaries) which is conditioned upon a change of control of the Company pursuant to provisions substantially similar to those contained in Section 9.04 herein or an asset sale pursuant to provisions substantially similar to those contained in Section 4.09 and

(C)           Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor may not be incurred to refund any Indebtedness of the Company;

(n)           [Reserved];

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(o)           [Reserved];

(p)           the consummation of any Qualified Securitization Transaction;

(q)           Attributable Indebtedness relating to any Sale/Leaseback Transaction with respect to the purchase of tooling and related manufacturing equipment in the ordinary course of business;

(r)            the incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Capital Lease Obligations) to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount outstanding at any time not to exceed the greater of (a) $75.0 million or (b) 2.0% of Consolidated Net Tangible Assets at the time of any incurrence thereof;

(s)           the accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Capital Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Capital Stock or Preferred Stock; provided in each such case that the amount thereof is included in Consolidated Fixed Charges of the Company as accrued;

(t)            Indebtedness under the Support Agreement and the Master Intercompany Agreements;

(u)           Indebtedness consisting of guarantees by the Company or its Restricted Subsidiaries with respect to obligations with respect to the Financial Services Segment in Mexico; provided that the aggregate principal amount of such guarantees shall not exceed the aggregate principal amount of such guarantees outstanding on the Original Securities Issuance Date;

(v)           Indebtedness of the Company or any Restricted Subsidiary arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five business days after incurrence;

(w)          Indebtedness of the Company or any Restricted Subsidiary to the extent the net proceeds thereof are promptly deposited to defease (i) the Senior Notes as described under the Senior Notes Indenture; (ii) the IFA Bonds as described in the indenture pursuant to which the IFA Bonds are issued, or (iii) the Bonds as described in Section 7.01 of the Indenture;

(x)            Indebtedness that is subordinated in right of payment to the Senior Notes, the Bonds, the IFA Bonds or the related Subsidiary Guarantees, as the case may be, not to exceed in the aggregate $200.0 million at any time outstanding;

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(y)           Indebtedness consisting of guarantees of Indebtedness in lieu of capital contributions, purchases of Capital Stock or other Investments; provided such guarantee constitutes (a) a Restricted Payment permitted pursuant to Section 4.08(a) or Section 4.08(b)(xvi) or (b) a Permitted Investment pursuant to clauses (15) or (16) of the definition of “Permitted Investments” and, in each case, such guarantee reduces the amounts available to make other Restricted Payments or Permitted Investments, as the case may be;

(z)            Indebtedness of any Foreign Subsidiary incurred for working capital in the ordinary course of business; and

(aa)         Indebtedness of the Company or any of its Restricted Subsidiaries not otherwise permitted to be incurred pursuant to clauses (a) through (z) of this Section 4.07, which, together with any other outstanding Indebtedness incurred pursuant to this clause (aa), has an aggregate principal amount not in excess of $150.0 million at any time outstanding;

For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in paragraphs (a) through (aa) above, the Company shall, in its sole discretion, classify such item of Indebtedness and may divide and classify such Indebtedness in more than one of the types of Indebtedness described, and may later reclassify any item of Indebtedness described in paragraphs (a) through (aa) (provided that at the time of reclassification it meets the criteria in such category or categories).  In addition, for purposes of determining any particular amount of Indebtedness under this covenant, guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the determination of such particular amount shall not be included so long as incurred by a Person that could have incurred such Indebtedness.

For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.

If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred shall be equal to the greater of (1) the principal of such Indebtedness and (2) the amount that may be drawn under such letter of credit.

Section 4.08.       Limitation on Restricted Payments.

(a)           The Company will not, and will not cause or permit any of its Restricted Subsidiaries to directly or indirectly:

(i)            declare or pay any dividend, or make any distribution of any kind or character (whether in cash, property or securities), in respect of any class of its Capital Stock or to the holders thereof in their capacity as stockholders, excluding any (A) dividend or distributions payable solely in shares of its Qualified Capital Stock or in

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options, warrants or other rights to acquire its Qualified Capital Stock or (B) in the case of any Restricted Subsidiary of the Company, dividends or distributions payable to the Company or a Restricted Subsidiary of the Company on a pro rata basis to all holders of the Capital Stock of such Restricted Subsidiary;

(ii)           purchase, redeem, or otherwise acquire or retire for value shares of Capital Stock of the Company, or any options, warrants or rights to purchase or acquire shares of Capital Stock of the Company, excluding any debt security that is convertible into, or exchangeable for, Capital Stock of the Company and any such shares of Capital Stock, options, warrants, rights or securities which are owned by the Company or a Restricted Subsidiary of the Company;

(iii)          make any Investment (other than a Permitted Investment); or

(iv)          redeem, defease, repurchase, retire or otherwise acquire or retire for value, prior to any scheduled maturity, repayment or sinking fund payment, Indebtedness (other than Indebtedness permitted under Section 4.07(d)) which is subordinate in right of payment to the Senior Notes, the Bonds, the IFA Bonds or any Subsidiary Guarantee (other than the redemption, defeasance, repurchase, retirement or other acquisition or retirement satisfying a principal installment, sinking fund or maturity, in each case due within one year of the date of such redemption, defeasance, repurchase, retirement or other acquisition or retirement (each of the transactions described in clauses (i) through (iv) of this Section 4.08(a) (other than any exception to any such clause) being a “Restricted Payment”),

if at the time thereof:

(1)           an Event of Default, or an event that with the passing of time or giving of notice, or both, would constitute an Event of Default, shall have occurred and be continuing, or

(2)           upon giving effect to such Restricted Payment, the Company could not incur at least $1.00 of additional Indebtedness pursuant to the terms of paragraph (a) of Section 4.07 of this Loan Agreement, or

(3)           upon giving effect to such Restricted Payment, the aggregate of all Restricted Payments made on or after the Original Securities Issuance Date exceeds the sum (without duplication) of:

(A)          50% of cumulative Consolidated Net Income of the Company (or, in the case cumulative Consolidated Net Income of the Company shall be negative, less 100% of such deficit) for the period (treated as a single accounting period) from August 1, 2009 through the last day of the Company’s most recently ended fiscal quarter for which financial statements are available; plus

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(B)          100% of the aggregate Net Cash Proceeds and the fair market value of property or marketable securities received after the Original Securities Issuance Date, from the issuance of Qualified Capital Stock of the Company and warrants, rights or options on Qualified Capital Stock of the Company (other than in respect of any such issuance to a Subsidiary of the Company) and the principal amount of Indebtedness of the Company or a Subsidiary of the Company that has been converted into or exchanged for Qualified Capital Stock of the Company after the Original Securities Issuance Date; plus

(C)          in the case of the disposition or repayment of any Investment constituting a Restricted Payment made after the Original Securities Issuance Date, an amount equal to the return of capital with respect to such Investment, less the cost of the disposition of such Investment (including any payments made on guarantees constituting Investments); plus

(D)          100% of the aggregate Net Cash Proceeds received after the Original Securities Issuance Date from Unrestricted Subsidiaries resulting from the receipt of dividends or other distributions or payments, repayments of loans or advances or other transfers of assets or proceeds from the disposition of Capital Stock, in each case to the Company or any Restricted Subsidiary from, or with respect to, interests in Unrestricted Subsidiaries; provided that any such amounts included in this subparagraph (D) shall not be included in Consolidated Net Income of the Company for purposes of subparagraph (A) above; plus

(E)           the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of an Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary not to exceed the amount of Investments made by the Company or any Restricted Subsidiary (and treated as a Restricted Payment) in such Unrestricted Subsidiary.

For purposes of determining the amount available for or expended for Restricted Payments under this clause (iii), property other than cash shall be valued at its fair market value and shall be valued in good faith and set forth in an Officers’ Certificate delivered to the Trustee when the fair market value of such property exceeds $25.0 million.

(b)           Notwithstanding the foregoing, the provisions set forth in paragraph (a) above will not prohibit:

(i)            any dividend on any class of Capital Stock of the Company paid within 60 days after the declaration thereof if, on the date when the dividend was declared, the Company could have paid such dividend in accordance with the provisions of this Loan Agreement;

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(ii)           the renewal, extension, refunding or refinancing of any Indebtedness otherwise permitted pursuant to the terms of paragraph (m) of Section 4.07 of this Loan Agreement;

(iii)          the exchange or conversion of any Indebtedness of the Company or any of its Restricted Subsidiaries for or into Qualified Capital Stock of the Company;

(iv)          so long as no Default or Event of Default has occurred and is continuing, any Investment made in exchange for or out of the Net Cash Proceeds of a substantially concurrent sale, or a sale within 60 days of such Investment (other than to a Subsidiary of the Company) of Qualified Capital Stock of the Company; provided, that the proceeds of such sale of Qualified Capital Stock shall not be (and have not been) included in clause (3) of paragraph (a) above;

(v)           the redemption, repurchase, retirement or other acquisition of any Capital Stock of the Company or the payment of any dividend or other distribution in respect of any class of its Capital Stock in exchange for or out of the Net Cash Proceeds of the substantially concurrent sale, or a sale within 60 days of such redemption, repurchase, retirement, other acquisition, dividend or other distribution (other than to a Subsidiary of the Company) of Qualified Capital Stock of the Company; provided, that the proceeds of such sale of Qualified Capital Stock shall not be (and have not been) included in clause (3) of paragraph (a) above;

(vi)          so long as no Event of Default has occurred and is continuing, the redemption, repurchase, retirement or other acquisition of any subordinated Indebtedness of the Company or a Subsidiary Guarantor in exchange for or out of the Net Cash Proceeds of the substantially concurrent sale or a sale within 60 days of such redemption, repurchase, retirement, or other acquisition (other than to a Subsidiary of the Company) of Qualified Capital Stock of the Company; provided, that the proceeds of such sale of Qualified Capital Stock shall not be (and have not been) included in clause (3) of paragraph (a) above;

(vii)         cash payments made (a) with respect to the hedging arrangements entered into by the Company or any of its Restricted Subsidiaries to increase the effective conversion premium of the Convertible Subordinated Notes, (b) made to net share settle Convertible Subordinated Notes in an amount not to exceed the principal amount thereof and (c) made in lieu of the issuance of fractional shares in connection with the conversion of the Convertible Subordinated Notes;

(viii)        the declaration and payment of dividends to holders of any class of Disqualified Capital Stock of the Company or a Restricted Subsidiary of the Company or Preferred Stock of any Restricted Subsidiary of the Company issued after the Original Securities Issuance Date; provided, that such Disqualified Capital Stock or Preferred Stock was issued in accordance with the covenant

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described in Section 4.07 and such dividends constitute Consolidated Fixed Charges;

(ix)          so long as no Event of Default has occurred and is continuing, any purchase or redemption or other retirement for value of Capital Stock of the Company (including purchases of stock from current or former employees, employees’ spouses, estates or estate planning vehicles in accordance with the terms of employee stock purchase plans) pursuant to any shareholders agreement, management agreement or employee stock option agreement in accordance with the provisions of any such arrangement in an amount in a calendar year not to exceed $15.0 million (with unused amounts in any calendar year carried over to succeeding years subject to a maximum of $25.0 million in any calendar year);

(x)           repurchases of Capital Stock deemed to occur upon the exercise of stock options or warrants if such Capital Stock represents a portion of the exercise price thereof or tax withholding related to the exercise of stock options or warrants in connection with the vesting of restricted stock;

(xi)          payments not to exceed $10.0 million per annum in the aggregate to enable the Company to make payments to holders of its Capital Stock in lieu of issuance of fractional shares of its Capital Stock;

(xii)         so long as no Event of Default has occurred and is continuing, the redemption of any other stock purchase rights under a rights plan in an aggregate amount not to exceed $2.5 million;

(xiii)        so long as no Event of Default has occurred and is continuing, Investments in Permitted Joint Ventures and designations of Restricted Subsidiaries as Unrestricted Subsidiaries; provided, that after giving pro forma effect to such Investment or designation, the Company could incur at least $1.00 of additional Indebtedness pursuant to the terms of paragraph (a) of Section 4.07; and

(xiv)        so long as no Event of Default has occurred and is continuing, the repurchase, redemption, acquisition or retirement of subordinated Indebtedness with Unutilized Net Available Proceeds remaining after an Offer to Purchase pursuant to Section 4.09;

(xv)         so long as no Event of Default has occurred and is continuing, the repurchase, redemption, acquisition or retirement of any subordinated Indebtedness at a price not greater than 101% of the principal amount thereof (together with accrued and unpaid interest) following a Change of Control pursuant to provisions similar to those described under Section 9.04; provided that the Company shall have complied with the provisions of Section 9.04 and have purchased all Bonds, all IFA Bonds and all Senior Notes validly tendered and not withdrawn; and

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(xvi)        if no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof, any other Restricted Payment which, together with all other Restricted Payments made pursuant to this clause (xvi), does not to exceed $100.0 million in aggregate since the Original Securities Issuance Date.

Each Restricted Payment described in clauses (i), (vii), (ix), (xiii), (xiv) and (xv) of this paragraph (b) shall be taken into account (and the Restricted Payments described in the remaining clauses shall not be taken into account) for purposes of computing the aggregate amount of all Restricted Payments made pursuant to clause (3) of paragraph (a) above.

For purposes of determining compliance with this covenant, in the event that a proposed Restricted Payment (or portion thereof) meets the criteria of more than one of the categories of Restricted Payments described in clauses (i) through (xvi) in paragraph (b) above, or is entitled to be incurred pursuant to paragraph (a) above, the Company will be entitled to classify such Restricted Payment (or portion thereof) on the date of its payment in any manner that complies with this Section 4.08.

Section 4.09.       Limitation on Certain Asset Dispositions.  The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, make one or more Asset Dispositions unless:

(a)           the Company or the Restricted Subsidiary, as the case may be, receives consideration for such Asset Disposition at least equal to the fair market value of the assets sold or disposed of (as determined in good faith by the Board of Directors of the Company or a member of senior management of the Company);

(b)           not less than 75% of the consideration for the disposition consists of Cash Equivalents or the assumption of Indebtedness (other than non-recourse Indebtedness, intercompany Indebtedness or any Indebtedness subordinated to the Senior Notes, the Bonds and the IFA Bonds) of the Company or such Restricted Subsidiary or other obligations relating to such assets (and release of the Company or such Restricted Subsidiary from all liability on the Indebtedness or other obligations assumed); and

(c)           all Net Available Proceeds, less any amounts invested or committed to be invested within 360 days of such Asset Disposition in non-current assets related to the business of the Company (including capital expenditures or the Capital Stock of another Person (other than the Company or any Person that is a Restricted Subsidiary of the Company immediately prior to such investment); provided, that immediately after giving effect to any such investment (and not prior thereto) such Person shall be a Restricted Subsidiary of the Company) are applied, on or prior to the 360th day after such Asset Disposition (unless and to the extent that the Company shall determine to make an Offer to Purchase), either to

(i)            the permanent reduction and prepayment of any secured Indebtedness of the Company or a Subsidiary Guarantor (other than Indebtedness

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which is expressly subordinate to the Senior Notes, the Bonds and the IFA Bonds) then outstanding (including a permanent reduction of commitments in respect thereof) or

(ii)           the permanent reduction and repayment of any Indebtedness of any Restricted Subsidiary of the Company that is not a Subsidiary Guarantor then outstanding (including a permanent reduction of commitments in respect thereof).

The 361st day after such Asset Disposition shall be deemed to be the “Asset Sale Offer Trigger Date,” and the amount of Net Available Proceeds from Asset Dispositions otherwise subject to the preceding provisions not so applied or as to which the Company has determined not to so apply shall be referred to as the “Unutilized Net Available Proceeds.” Within fifteen days after the Asset Sale Offer Trigger Date, the Company shall make an Offer to Purchase the outstanding Bonds at a purchase price in cash equal to 100% of their principal amount plus any accrued and unpaid interest thereon to the Purchase Date.  Notwithstanding the foregoing, the Company may defer making any Offer to Purchase outstanding Bonds until there are aggregate Unutilized Net Available Proceeds equal to or in excess of $25.0 million (at which time, the amount in excess of $25.0 million, shall be applied as required pursuant to this paragraph).  Pending application of the Unutilized Net Available Proceeds pursuant to this covenant, such Unutilized Net Available Proceeds shall be invested in any manner not otherwise prohibited by this Loan Agreement or applied temporarily to reduce any Indebtedness of the Company or a Subsidiary Guarantor (other than Indebtedness which is expressly subordinated in right of payment to the Senior Notes, the Bonds and the IFA Bonds).

If any Indebtedness of the Company or any of its Restricted Subsidiaries ranking pari passu with the Bonds requires that prepayment of, or an offer to prepay, such Indebtedness be made with any Net Available Proceeds, the Company may apply such Net Available Proceeds pro rata (based on the aggregate principal amount of the Bonds then outstanding and the aggregate principal amount (or accreted value, if less) of all such other Indebtedness then outstanding) to the making of an Offer to Purchase the Bonds in accordance with the foregoing provisions and the prepayment or the offer to prepay such pari passu Indebtedness.  Any remaining Net Available Proceeds following the completion of the required Offer to Purchase may be used by the Company for any other purpose (subject to the other provisions of this Loan Agreement, the Senior Notes Indenture and the IFA Loan Agreement) and the amount of Net Available Proceeds then required to be otherwise applied in accordance with this covenant shall be reset to zero, subject to any subsequent Asset Disposition. These provisions will not apply to a transaction consummated in compliance with the provisions of Section 4.14 of this Loan Agreement.

For purposes of clause (b) of this Section 4.09, the following will be deemed to be cash:  (a) the amount of any notes, securities or other similar obligations received by the Company or any Restricted Subsidiary from such transferee that are immediately converted, sold or exchanged (or are converted, sold or exchanged within 90 days of the related Asset Disposition) by the Company or the Restricted Subsidiaries into cash or Cash Equivalents in an amount equal

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to the Net Cash Proceeds realized upon such conversion, sale or exchange and (b) Qualified Non-Cash Proceeds.

Notwithstanding the foregoing, the provisions of this covenant shall not apply to any Sale/Leaseback Transaction with respect to the purchase of tooling and related manufacturing equipment in the ordinary course of business.

In the event that the Company makes an Offer to Purchase the Bonds, the Company shall comply with any applicable securities laws and regulations, including any applicable requirements of Section 14(e) of, and Rule 14e-1 under, the Exchange Act and any violation of the provisions of this Loan Agreement relating to such Offer to Purchase occurring as a result of such compliance shall not be deemed an Event of Default or an event that with the passing of time or giving of notice, or both, would constitute an Event of Default.

Section 4.10.       Limitation on Sale/Leaseback Transactions.  The Company shall not, and shall not cause or permit any Restricted Subsidiary to, enter into any Sale/Leaseback Transaction with respect to any property unless:

(a)           the Company or such Restricted Subsidiary would be entitled to incur Indebtedness in an amount equal to the Attributable Indebtedness with respect to such Sale/Leaseback Transaction pursuant to Section 4.07;

(b)           the Net Available Proceeds received by the Company or any Restricted Subsidiary in connection with such Sale/Leaseback Transaction are at least equal to the fair value (as determined by the Board of Directors of the Company or a member of senior management of the Company) of such property; and

(c)           the Company or such Restricted Subsidiary applies the Net Available Proceeds of such transaction in compliance with Section 4.09 herein.

Notwithstanding the foregoing, the provisions of this covenant shall not prohibit the Company or any Restricted Subsidiary from entering into any Sale/Leaseback Transaction with respect to the purchase of tooling and related manufacturing equipment in the ordinary course of business.

Section 4.11.       Limitation on Payment Restrictions Affecting Restricted Subsidiaries.  (a)   The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create or suffer to exist or allow to become effective any consensual encumbrance or restriction of any kind on the ability of any such Restricted Subsidiary to:

(i)            pay dividends, in cash or otherwise, or make other payments or distributions on its Capital Stock or any other equity interest or participation in, or measured by, its profits, owned by the Company or by any Restricted Subsidiary of the Company, or make payments or prepayments on any Indebtedness owed to the Company or to any Restricted Subsidiary of the Company;

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(ii)           make loans or advances or make Investments in the Company or any Restricted Subsidiary of the Company; or

(iii)          transfer any of their respective property or assets to the Company or to any Restricted Subsidiary of the Company.

(b)      The restrictions in paragraph (a) above, however, will not apply to encumbrances or restrictions existing under or by reason of:

(i)            applicable law, regulations or order;

(ii)           customary provisions restricting subletting or assignment of any lease, sublease, license, sublicense or service contract;

(iii)          Indebtedness or any other contractual requirements (including pursuant to any corporate governance documents in the nature of a charter or by-laws) of a Securitization Subsidiary arising in connection with a Qualified Securitization Transaction, provided, that any such encumbrances and restrictions apply only to such Securitization Subsidiary;

(iv)          any agreement in effect on the Original Securities Issuance Date as any such agreement is in effect on such date;

(v)           any agreement (including Acquired Indebtedness) of any Restricted Subsidiary in effect on the date on which such Restricted Subsidiary became a Subsidiary of the Company and not entered into in anticipation or contemplation of becoming a Subsidiary of the Company; provided that such encumbrance or restriction shall not apply to any assets of the Company or its Restricted Subsidiaries other than such Restricted Subsidiary;

(vi)          this Loan Agreement, the Bonds, the IFA Loan Agreement, the IFA Bonds, the Senior Notes, the Senior Notes Indenture and the Subsidiary Guarantees;

(vii)         restrictions relating to any Lien permitted under this Loan Agreement, the Senior Notes Indenture or the IFA Loan Agreement imposed by the holder of such Lien;

(viii)        restrictions imposed under any agreement to sell assets permitted under this Loan Agreement to any Person pending the closing of such sale;

(ix)          any other agreement governing Indebtedness entered into after the Original Securities Issuance Date that contains encumbrances and restrictions that are not materially more restrictive with respect to any Restricted Subsidiary than those in effect on the Original Securities Issuance Date with respect to that Restricted Subsidiary pursuant to agreements in effect on the Original Securities Issuance Date;

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(x)           customary provisions in partnership agreements, limited liability company organizational governance documents, joint venture agreements and other similar agreements entered into in the ordinary course of business that restrict the transfer of ownership interests in such partnership, limited liability company, joint venture or similar Person;

(xi)          Indebtedness incurred in compliance with paragraph (r) of Section 4.07, provided that such encumbrance or restriction applies only to assets financed with proceeds of such Indebtedness;

(xii)         restrictions on cash or other deposits or net worth imposed by suppliers or landlords under contracts entered into in the ordinary course of business;

(xiii)        encumbrances or restrictions contained in Indebtedness of Restricted Subsidiaries permitted to be incurred under paragraphs (c), (z) and (aa) of Section 4.07; provided that any such encumbrances or restrictions are ordinary and customary with respect to the type of Indebtedness being incurred under the relevant circumstances and either (A) such encumbrances or restrictions do not materially impair the Company’s ability to make payment on the Bonds when due or (B) such encumbrances or restrictions only apply if a default occurs in respect of a payment or financial covenant relating to such Indebtedness;

(xiv)        encumbrances or restrictions imposed by the Support Agreement, the Master Intercompany Agreements or the Shy Settlement; and

(xv)         any encumbrances or restrictions imposed by any amendments, refinancings or replacements of the contracts, instruments or obligations referred to in clauses (i) through (xiv) above; provided that such amendments, refinancings or replacements are no more materially restrictive with respect to such encumbrances and restrictions than those prior to such amendment, refinancing or replacement.

Section 4.12.       Limitation on Transactions with Affiliates.

(a)           The Company will not, and will not cause or permit any of its Restricted Subsidiaries to:

(i)            sell, lease, transfer or otherwise dispose of any of its property or assets to,

(ii)           purchase any property or assets from,

(iii)          make any Investment in, or

(iv)          enter into or amend or extend any contract, agreement or understanding with or for the benefit of, any Affiliate of the Company or of any Subsidiary (an “Affiliate Transaction”),

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other than Affiliate Transactions that are on terms that are fair and reasonable to the Company or such Restricted Subsidiary of the Company and that are no less favorable to the Company or such Restricted Subsidiary of the Company than those that could be obtained in a comparable arm’s length transaction by the Company or such Restricted Subsidiary of the Company from an unaffiliated party; provided, that if the Company or any Restricted Subsidiary of the Company enters into an Affiliate Transaction or series of Affiliate Transactions involving or having an aggregate value of more than $25.0 million, a majority of the disinterested members of the Board of Directors of the Company or a committee thereof shall, prior to the consummation of such Affiliate Transaction, have determined (as evidenced by a resolution thereof) that such Affiliate Transaction meets the foregoing standard; provided further that if the Company or any Restricted Subsidiary of the Company enters into an Affiliate Transaction or series of Affiliate Transactions involving or having an aggregate value of more than $75.0 million, the Company delivers to the Trustee an opinion issued by an independent accounting, appraisal or investment banking firm of national standing stating that such Affiliate Transaction is fair to the Company or such Restricted Subsidiary from a financial point of view.

(b)           The restrictions in paragraph (a) above shall not apply to:

(i)            any transaction between Restricted Subsidiaries of the Company, or between the Company and any Restricted Subsidiary of the Company;

(ii)           transactions entered into pursuant to the terms of the Master Intercompany Agreements, the Tax Allocation Agreements or the Support Agreement;

(iii)          transactions entered into in the ordinary course of business;

(iv)          any transaction effected in connection with a Qualified Securitization Transaction;

(v)           reasonable fees and compensation paid to and advances of expenses to and indemnity provided on behalf of officers, directors, employees or consultants of the Company or any Subsidiary in the reasonable determination of a member of senior management of the Company or by the Company’s Board of Directors;

(vi)          any agreement as in effect as of the Closing Date or any amendment thereto or any transaction contemplated thereby (including pursuant to any amendment thereto) or in any replacement agreement thereto so long as any such amendment or replacement agreement is not more disadvantageous to the Holders in any material respect than the original agreement as in effect on the Closing Date;

(vii)         Restricted Payments and Permitted Investments (other than clause (5) thereof) permitted by this Loan Agreement;

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(viii)        loans or advances to officers, directors, employees or consultants of the Company or any of its Subsidiaries in the ordinary course of business in an aggregate amount outstanding at any time not to exceed $10.0 million;

(ix)          transactions with Unrestricted Subsidiaries, joint venture partners, customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business which are fair to the Company or its Restricted Subsidiaries, in the reasonable determination of the senior management of the Company, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(x)           any employment, compensation or severance arrangement entered into by the Company or any of its Subsidiaries in the ordinary course of business that is not otherwise prohibited by this Loan Agreement; and

(xi)          the issuance or sale of Capital Stock (other than Disqualified Stock) of the Company to any Affiliate of the Company and the granting of registration and other customary rights in connection therewith.

Section 4.13.       Limitation on Guarantees by Restricted Subsidiaries.  (a) The Company shall not cause or permit any of its Restricted Subsidiaries, directly or indirectly, to guarantee the payment of any Indebtedness of the Company (other than to the extent such Restricted Subsidiary is a co-borrower with respect to Indebtedness permitted pursuant to clause (c) of Section 4.07), which, in the aggregate, together with all other Indebtedness of the Company that is guaranteed by Restricted Subsidiaries, exceeds $35.0 million, unless such Restricted Subsidiary of the Company executes and delivers within ten Business Days a Subsidiary Bond Guarantee by such Restricted Subsidiary of the Company pursuant to Article XI; provided that any guarantee by a Subsidiary Guarantor of such other Indebtedness:

(i)            (A) (1) is unsecured or (2) is secured and (I) in the case of any such guarantee of Indebtedness of the Company ranking pari passu with the Bonds, the Subsidiary Bond Guarantees are secured equally and ratably with any Liens securing such guarantee and (II) in the case of any such guarantee of Indebtedness of the Company subordinated to the Bonds, the relevant Subsidiary Bond Guarantees are secured on a basis ranking prior to the Liens securing such guarantee; and

(B) (1) in the case of any such guarantee of Indebtedness of the Company subordinated or junior to the Bonds (whether pursuant to its terms or by operation of law), such guarantee is subordinated pursuant to a written agreement to the relevant Subsidiary Bond Guarantees at least to the same extent and in the same manner as such other Indebtedness is subordinated to the Bonds, or (2) the Subsidiary Bond Guarantees are not subordinated or junior to any Indebtedness of such Subsidiary Guarantor; and

(ii)           such Subsidiary Guarantor waives, and agrees it will not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other rights against the Company or any other

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Subsidiary of the Company as a result of any payment by it under such Subsidiary Bond Guarantees.

(b)      The Company shall cause each Restricted Subsidiary of the Company that guarantees the payment of any Indebtedness of the Company, which, in the aggregate, together with all other Indebtedness of the Company that is guaranteed by Restricted Subsidiaries of the Company, exceeds $35.0 million, after the Original Securities Issuance Date, to execute and deliver to the Trustee, promptly upon any such formation or acquisition (i) a Subsidiary Bond Guarantee in form and substance satisfactory to the Trustee, and (ii) an Opinion of Counsel to the effect that such Subsidiary Bond Guarantee has been duly authorized and executed by such subsidiary and constitutes the legal, valid, binding and enforceable obligation of such subsidiary (subject to such customary exceptions concerning fraudulent conveyance laws, creditors’ rights and equitable principles as may be acceptable to the Trustee in its discretion).

Section 4.14.       Consolidation, Merger or Sale of Assets Permitted.  (a) The Company will not, in a single transaction or series of related transactions, consolidate or merge with or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the Company’s assets (determined on a consolidated basis) to any Person unless:

(i)            either (A) the Company shall be the surviving or continuing corporation or (B) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance, transfer or lease the properties and assets of the Company and its Restricted Subsidiaries substantially as an entirety (1) shall be a corporation, limited liability company or partnership organized and validly existing under the laws of the United States or any state thereof or the District of Columbia; (2) shall expressly assume, in writing (in form and substance satisfactory to the Trustee), executed and delivered to the Trustee, the due and punctual payment of the principal of, premium, if any, and interest on all of the Bonds and the performance of every covenant of the Bonds and the Company Agreements on the part of the Company to be performed or observed, and (3) shall expressly assume, or its parent or subsidiary shall expressly assume, in writing, in form and substance satisfactory to the Trustee, the performance of every covenant under the Bond Guarantee; provided that in the case where the surviving or continuing Person is not a corporation, a corporation becomes a co-obligor under the Company Agreements;

(ii)           immediately after giving effect to such transaction and the assumption contemplated by clause (i)(B)(2) above (including giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction), (x) the Company (in the case of clause (A) of the foregoing clause (i)) or such Person (in the case of clause (2) thereof) could incur at least $1.00 of additional Indebtedness pursuant to paragraph (a) of Section 4.07 herein or (y) the Company’s or such Person’s Consolidated Cash Flow Ratio for the most recent four full fiscal quarters for which financial statements are available after giving pro forma effect to such transaction as of the beginning of such four quarter period would be greater than the Company’s Consolidated Cash Flow Ratio for such four quarter period immediately prior to such transaction;

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(iii)          immediately before and after giving effect to such transaction and the assumption contemplated by clause (i)(B)(2) above (including giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in connection with or in respect of the transaction), no Default and no Event of Default shall have occurred or be continuing;

(iv)          the Company or such Person shall have delivered to the Issuer and the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if an agreement is required in connection with such transaction, such agreement, comply with this provision of this Loan Agreement, that any such agreement is legal, valid and binding and that all conditions precedent in this Loan Agreement relating to such transaction have been satisfied and an Opinion of Bond Counsel with respect to paragraphs (v) and (vii) below;

(v)           such transaction will not adversely affect the exclusion of interest on the Bonds from gross income of the owners thereof for federal income tax purposes;

(vi)          the Company or the entity surviving the dissolution, liquidation, disposition, consolidation or merger, within 10 days after execution thereof, furnishes to the Issuer and Trustee a true and complete copy of the instrument of dissolution, liquidation, disposition, consolidation or merger;

(vii)         neither the validity nor the enforceability of the Bonds, this Loan Agreement or any agreements to which the Company is a party is adversely affected by such transaction;

(viii)        no rating on the Bonds is reduced or withdrawn as a result of such transaction;

(ix)          the Project continues to be substantially as described herein;

(x)           any successor to the Company shall be qualified to do business in the State and shall continue to be qualified to do business in the State throughout the term hereof;

(xi)          the Issuer has executed a certificate acknowledging receipt of all documents, information and materials required by this Section 4.14; and

(xii)         the Trustee and the Issuer shall receive such certifications and documentation as they may reasonably request.

(b)      Notwithstanding paragraph (a) above:

(i)            a Restricted Subsidiary of the Company may consolidate with, or merge with or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets to, the Company or another Restricted Subsidiary of the Company; and

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(ii)           a series of transactions involving the sale of Receivables or interests therein by a Securitization Subsidiary in connection with a Qualified Securitization Transaction shall not be deemed to be the sale of all or substantially all of the Company’s assets to the extent such transactions are consummated in the ordinary course of business.

For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries of the Company, the Capital Stock of which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.  For the avoidance of doubt, notwithstanding anything to the contrary in this Loan Agreement, the sale, assignment, transfer, conveyance or other disposition of all or any portion of the Company’s Financial Services Segment, including without limitation through the sale or other disposition of all or any portion of the Capital Stock of any Unrestricted Subsidiary that is part of the Financial Services Segment, or all or any portion of their respective assets or properties, shall not under any circumstances constitute the sale, assignment, transfer, conveyance or disposition of all or substantially all of the Company’s assets (on a consolidated basis) for any purpose whatsoever under this Loan Agreement or the Bonds.

Upon any such consolidation, merger, conveyance, lease or transfer in accordance with this Section 4.14, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, lease or transfer is made will succeed to, and be substituted for, and may exercise every right and power of, the Company under this Loan Agreement with the same effect as if such successor had been named as the Company therein, and thereafter (except in the case of a sale, assignment, transfer, lease, conveyance or other disposition) the predecessor corporation will be relieved of all further obligations and covenants under this Loan Agreement and the Bonds.  In addition, such successor Person or its parent or subsidiary, will succeed to, and be substituted for, the Subsidiary Bond Guarantees pursuant to a written agreement in form satisfactory to the Trustee.

(c)       A Subsidiary Guarantor will not, directly or indirectly (1) consolidate or merge with or into another Person (whether or not such Subsidiary Guarantor is the surviving Person), or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties and assets of the Subsidiary Guarantor, in one or more related transactions, to another Person, other than the Company or another Subsidiary Guarantor, unless:

(i)            immediately after giving effect to that transaction, no Default or Event of Default exists; and

(ii)           either:

(1)           the Subsidiary Guarantor is the surviving corporation, or the Person formed by or surviving any such consolidation or merger (if other than the Subsidiary Guarantor) or to which such sale, assignment, transfer, conveyance or other disposition which has been made (i) is organized or existing under the laws of the United States, any state thereof or the District of Columbia and (ii) assumes

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all the obligations of that Subsidiary Guarantor under its Subsidiary Guarantee pursuant to an agreement satisfactory to the Trustee; or

(2)           such sale, assignment, transfer, conveyance or other disposition or consolidation or merger complies with the covenant described in Section 4.09.

ARTICLE V

ISSUANCE OF BONDS; LOAN TO COMPANY; OTHER OBLIGATIONS

Section 5.01.       Issuance of Bonds; Loan to Company.  In order to finance a portion of the costs of the Project, the Issuer will issue, sell and deliver the Bonds to the initial purchasers thereof and deposit the proceeds of the Bonds with the Trustee as provided in Section 5.02 of the Indenture.  Such deposit shall constitute a loan by the Issuer to the Company under this Loan Agreement.  The obligations of the Company under this Loan Agreement, including specifically the obligation to make Loan Payments as provided in Section 5.01(a) hereof are absolute and unconditional.  The Issuer authorizes the Trustee to disburse the proceeds of the Bonds in accordance with Section 5.02 of the Indenture.  The Company hereby approves the Indenture and the issuance by the Issuer of the Bonds and all of the terms and conditions thereof.

ARTICLE VI

LOAN PAYMENTS; ADDITIONAL PAYMENTS

Section 6.01.       Loan Payments; Additional Payments.  (a) In consideration of and in repayment of the Loan, the Company shall make or cause to be made, as Loan Payments, to the Trustee for the account of the Issuer, payments in immediately available funds which correspond, as to time, and are equal in amount as of the Loan Payment date, to the corresponding payment of principal of, premium, if any, and interest due on the Bonds.  All Loan Payments received by the Trustee shall be held and disbursed in accordance with the provisions of the Indenture and this Loan Agreement for the application to the payment of principal of, premium, if any, and interest on the Bonds.  Any amount held by the Trustee in the Bond Fund on any due date for a Loan Payment shall be credited against the Loan Payment due on such date, to the extent available for such purpose.  Notwithstanding the foregoing, if on any date the amount held by the Trustee in the Bond Fund is insufficient to make any required payments on the Bonds as such payments become due, the Company shall pay such deficiency as a Loan Payment under this Loan Agreement.

(b)(i)         The Company agrees to pay directly to the Trustee (A) an amount equal to the annual fee of the Trustee for the ordinary services rendered by the Trustee, as trustee, and its ordinary expenses and all advances, Counsel fees and other expenses necessarily made or incurred under the Indenture, as and when the same become due, (B) the reasonable fees, charges and expenses (including advances and Counsel fees) of the Trustee, as Bond Registrar and paying agent, and any other paying agent on the Bonds acting as paying agent as provided in the Indenture, as and when the same become due, (C) the reasonable fees, charges and expenses

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(including advances and Counsel fees) of the Trustee for the necessary extraordinary services rendered by it and extraordinary expenses incurred by it under the Indenture, as and when the same become due, including the costs of any exchange or transfer of Bonds described in Section 2.05 of the Indenture or which is expressed to be at the sole cost and expense of the Company, and (D) all other amounts payable to the Trustee under this Loan Agreement and/or the Indenture, as applicable, forthwith upon the giving of notice by the Trustee.

(ii)       The Company further covenants to pay directly to the Issuer an issuance fee of $693,000, and the fee of its Counsel, and its Pricing Agent, prior to or contemporaneously with the issuance of the Bonds or as otherwise agreed by the Company and the Issuer, and within 30 days after receipt of a ▇▇▇▇ therefor, the reasonable fees and expenses of the Issuer in connection with and as provided in this Loan Agreement and the Bonds, such fees and expenses to be paid directly to the Issuer or as otherwise directed in writing by the Issuer.

(c)       In the event the Company shall fail to make any Loan Payment, the payment so in default shall continue as an obligation of the Company under this Loan Agreement until the amount in default shall have been fully paid, and the Company will pay interest on any overdue amount with respect to principal of the Bonds and, to the extent permitted by law, on any overdue amount with respect to premium, if any, and interest on the Bonds, at the interest rate then borne by the Bonds until paid.

(d)      If the Company has deposited moneys and/or Government Obligations pursuant to Section 7.01 of the Indenture, and thereafter the Bonds become subject to mandatory redemption upon a Determination of Taxability (as defined in Section 9.02(b) herein) and there are insufficient moneys available under the Indenture to effect such redemption, the Company covenants and agrees to pay to the Trustee under the Indenture any such deficiency amount as is necessary to redeem such Bonds on the date fixed for redemption.

(e)       The foregoing provisions of this Section 6.01 notwithstanding, the Company agrees that the moneys and securities, if any, on deposit or to be deposited in the Rebate Fund are not part of the Trust Estate and are not available to make payments of the principal, premium, if any, and interest on the Bonds.

Section 6.02.       Assignment and Pledge of Issuer’s Rights; Unconditional Obligation.  As security for the payment of the Bonds, the Issuer will assign and pledge to the Trustee for its benefit and the benefit of the Holders, all right, title and interest of the Issuer in and to this Loan Agreement, including the right to receive payments hereunder and thereunder (except its Unassigned Rights, including without limitation, the right to receive payment of expenses, fees, indemnification and the rights to make determinations and receive notices as herein provided) and hereby directs the Company to make such payments directly to the Trustee without defense or set-off by reason of any dispute between the Company and the Issuer or the Trustee, and hereby agrees that its obligation to make payments hereunder and to perform its other agreements contained herein are absolute and unconditional.  The Company herewith assents to such assignment and pledge and will make payments directly to the Trustee. The Company and the Issuer agree that only the Trustee may enforce the rights, remedies and privileges granted to the Issuer hereunder, other than the Unassigned Rights.

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Notwithstanding the foregoing, neither the Issuer nor the Trustee shall have any obligation to advance or expend funds under this Loan Agreement beyond the extent of moneys in the Funds established under the Indenture available therefor.  Until the principal of and interest on the Bonds shall have been fully paid or provision for the payment of the Bonds made in accordance with the Indenture, the Company (a) will not suspend or discontinue any payments provided for in this Loan Agreement, (b) will perform all its other duties and responsibilities called for by this Loan Agreement, and (c) will not terminate this Loan Agreement for any cause including any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Project, commercial frustration or purpose, any change in the laws of the United States or of the State or any political subdivision of either or any failure of the Issuer to perform any of its agreements, whether express or implied, or any duty, liability or obligation arising from or connected with this Loan Agreement.

This Loan Agreement and the obligations of the Company to make payments hereunder are general obligations of the Company payable from any available funds of the Company.

ARTICLE VII

ASSIGNMENT

Section 7.01.       Conditions.  The Company’s interest in this Loan Agreement may be assigned in whole or in part by the Company to another entity, subject, however, to the conditions that (a) such assignment shall not relieve (other than as described in Section 4.14 hereof) (i) the Company from primary liability for its obligations to make the Loan Payments or for any other of its obligations hereunder and (ii) the Subsidiary Guarantors from primary liability for their obligations under the Subsidiary Bond Guarantees; and (b) the assignee or its parent or subsidiary assumes in writing the obligations of the Subsidiary Guarantors under the Subsidiary Bond Guarantees.

Section 7.02.       Documents Furnished to Trustee.  The Company shall, within 30 days after the delivery of the agreements or other documents effectuating any assignment pursuant to Section 7.01 hereof, furnish to the Issuer and the Trustee a true and complete copy thereof.

Section 7.03.       Limitation.  This Loan Agreement shall not be assigned in whole or in part, except as provided in this Article VII or in Section 6.02 herein.

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ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

Section 8.01.       Events of Default.  Each of the following events shall constitute and is referred to in this Loan Agreement as an “Event of Default” (whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(a)           default in the payment of principal of, or premium, if any, on any Loan Payment when due at maturity, upon repurchase, upon acceleration or otherwise, (including, without limitation, failure of the Company to repurchase any Bond on the date required following a Change of Control), which failure shall have resulted in an “Event of Default” under Section 8.01(a) of the Indenture; or

(b)           default in the payment of any installment of interest on any Loan Payment when due and continuance of such Default for 30 days or more, which failure shall have resulted in an “Event of Default” under Section 8.01(b) of the Indenture; or

(c)           failure to observe, perform or comply with Section 4.14; or

(d)           default (other than a default set forth in paragraphs (a), (b) and (c) above) in the performance of, or breach of, any other covenant or warranty of the Company or of any Restricted Subsidiary in this Loan Agreement and failure to remedy such default or breach within a period of 30 days after written notice from the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Bonds; provided however, that such default or breach and failure to remedy with respect to any covenant or warranty in Section 2.05 hereof shall not be an “Event of Default” for purposes of this paragraph (d) unless such default or breach is a material default or breach of the applicable covenant or warranty; or

(e)           default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any Subsidiary of the Company (other than a Securitization Subsidiary) (or the payment of which is guaranteed by the Company or any Restricted Subsidiary of the Company), which default is caused by a failure to pay principal of or premium, if any, on such Indebtedness upon its stated maturity or which default results in the acceleration of such Indebtedness prior to its express maturity and the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness the maturity of which has been so accelerated, aggregates $50.0 million or more and such acceleration has not been rescinded or annulled or such Indebtedness discharged in full within 30 days; or

(f)            the entry by a court of competent jurisdiction of one or more judgments, orders or decrees against the Company or any Subsidiary of the Company (other than a Securitization Subsidiary) or any of their respective property or assets in an aggregate

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amount in excess of $50.0 million, which judgments, orders or decrees have not been vacated, discharged, satisfied or stayed pending appeal within 30 days from the entry thereof and with respect to which legal enforcement proceedings have been commenced;

(g)           the Company, any Subsidiary Guarantor or any Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law, (i) commences a voluntary case or proceeding, (ii) consents to the entry of an order for relief against it in an involuntary case or proceeding, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property, (iv) makes a general assignment for the benefit of its creditors, (v) makes an admission in writing of its inability to pay its debts generally as they become due or (vi) takes corporate action in furtherance of any such action; or

(h)           a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against the Company, any Subsidiary Guarantor or any Significant Subsidiary, in an involuntary case, (ii) adjudges the Company, any Subsidiary Guarantor or any Significant Subsidiary as bankrupt or insolvent, or approves as properly filed a petition seeking reorganization, arrangement, and adjustment or composition of or in respect of the Company, any Subsidiary Guarantor or any Significant Subsidiary, or appoints a Custodian of the Company, any Subsidiary Guarantor or any Significant Subsidiary, or for all or substantially all of its property, or (iii) orders the liquidation of the Company, any Subsidiary Guarantor or any Significant Subsidiary and the decree remains unstayed and in effect for 60 days.

The Company shall deliver to the Trustee, as soon as practicable (and in any event within five Business Days), written notice in the form of an Officers’ Certificate of any Default, its status and what action the Company is taking or proposes to take with respect thereto.

As used in this Loan Agreement, the term “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state bankruptcy, insolvency, reorganization or other law for the relief of debtors.  As used in this Loan Agreement, the term “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

Section 8.02.       Remedies.  (a) Upon the occurrence and continuance of any Event of Default described in Section 8.01(g) or Section 8.01(h) hereof involving the Company, and further upon the condition that, in accordance with the terms of the Indenture, the Bonds shall have been declared to be immediately due and payable pursuant to any provision of the Indenture, the Loan Payments shall without further action, become and be immediately due and payable and the Trustee may take whatever action may appear necessary or desirable to collect the payment then due and to become due.

(b)      Any waiver of any “Event of Default” under the Indenture and a rescission and annulment of its consequences shall constitute a waiver of the corresponding Event or Events of Default under this Loan Agreement and a rescission and annulment of the consequences thereof.

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(c)       Upon the occurrence and continuance of any Event of Default, the Trustee (or the Issuer, but only with respect to the enforcement of Unassigned Rights) may take any action at law or in equity to collect any payments then due and thereafter to become due hereunder or to seek injunctive relief or specific performance of any obligation, agreement or covenant of the Company hereunder, of the Guarantor under the Bond Guarantee or of any other Subsidiary Guarantor under any other Subsidiary Bond Guarantee.

(d)      Any amounts collected from the Company pursuant to this Section 8.02 shall be applied in accordance with the Indenture.  No action taken pursuant to this Section 8.02 shall relieve the Company from the Company’s obligations pursuant to Section 6.01 hereof.

Section 8.03.       No Remedy Exclusive.  No remedy conferred upon or reserved to the Issuer or the Trustee hereby is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Loan Agreement and the Indenture, now or hereafter existing at law or in equity or by statute.  No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient.

Section 8.04.       Reimbursement of Attorneys’ Fees.  If the Company shall default under any of the provisions hereof and the Issuer or the Trustee shall employ attorneys or incur other reasonable and proper expenses for the collection of payments due hereunder or for the enforcement of performance or observance of any obligation or agreement on the part of the Company contained herein, the Company will on demand therefor reimburse the Issuer or the Trustee, as the case may be, for the reasonable and proper fees and expenses of such attorneys and such other reasonable and proper expenses so incurred.

Section 8.05.       Waiver of Breach.  In the event any obligation created hereby shall be breached by either of the parties hereto and such breach shall thereafter be waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder.  In view of the assignment of certain of the Issuer’s rights and interest hereunder to the Trustee, the Issuer shall have no power to waive any Event of Default hereunder by the Company in respect of such rights and interest without the consent of the Trustee, and the Trustee may exercise any of such rights of the Issuer.

ARTICLE IX

REDEMPTION OF BONDS; REPURCHASE OF BONDS

Section 9.01.       Redemption of Bonds.  The Company shall have the option to prepay in whole or in part the amounts payable hereunder by paying an amount equal to the redemption price of Bonds which may be redeemed under Section 3.02 of the Indenture.  The Issuer shall take or cause to be taken the actions required by the Indenture (other than the payment of money) to discharge the lien thereof through the redemption, or provision for payment or redemption, of all Bonds then Outstanding, or to effect the redemption, or provision for payment or redemption,

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of less than all the Bonds then Outstanding, upon receipt by the Issuer and the Trustee from an Authorized Company Representative of a written notice designating the principal amount of the Bonds to be redeemed and specifying the date of redemption (which, unless waived by the Issuer and the Trustee, shall not be less than 45 days from the date such notice is given, or such shorter period as the Trustee and the Company may agree from time to time) and the applicable redemption provision of the Indenture.  Unless otherwise stated therein and except with respect to a redemption under Section 3.03 of the Indenture, such notice shall be revocable by the Company at any time prior to the time at which the Bonds to be redeemed, or for the payment or redemption of which provision is to be made, are first deemed to be paid in accordance with Article VII of the Indenture.  The Company shall furnish any moneys required by the Indenture to be deposited with the Trustee or otherwise paid by the Issuer in connection with any of the foregoing purposes.

Section 9.02.       Obligation to Prepay.  (a) The Company shall be obligated to prepay in whole or in part the amounts payable hereunder upon the occurrence of the events giving rise to a mandatory redemption of the Bonds pursuant to Section 3.03 of the Indenture, by paying an amount equal to the aggregate principal amount of the Bonds to be redeemed pursuant to the Indenture plus accrued interest to the redemption date.

(b)      The Company shall cause a mandatory redemption to occur within 60 days after this Loan Agreement is determined to be invalid or a Determination of Taxability (as defined below) shall have occurred.  A “Determination of Taxability” means a determination that, due to the untruth or inaccuracy of any representation or warranty made by the Company in this Loan Agreement or the breach of any covenant or warranty of the Company contained in this Loan Agreement, interest on the Bonds, or any of them, is determined not to be Tax-exempt by (i) a final administrative determination of the Internal Revenue Service or a final judicial decision of a court of competent jurisdiction in a proceeding of which the Company received notice and in which the Company was afforded an opportunity to participate to the full extent permitted by law or (ii) an opinion of Bond Counsel obtained by the Company and delivered to the Trustee.  A determination or decision will not be considered final for purposes of clause (i) of the preceding sentence unless (A) the Issuer or the holder or holders of the Bonds involved in the proceeding in which the issue is raised (i) shall have given the Company and the Trustee prompt written notice of the commencement thereof, and (ii) shall have offered the Company the opportunity to control the proceeding; provided the Company agrees to pay all expenses and costs in connection therewith and to indemnify the Issuer and such holder or holders against all liability for such expenses and costs (except that any such holder may engage separate counsel for the holder or holders of the Bonds, and the Company shall not be liable for the fees or expenses of such counsel but shall be liable for the fees and expenses of counsel to the Issuer); and (B) such proceeding shall not be subject to a further right of appeal or shall not have been timely appealed.

(c)       At the time of any such prepayment of the amounts payable hereunder pursuant to this Section 9.02, the prepayment amount shall be applied to the redemption of the Bonds on the date specified in the notice as provided in the Indenture, whether or not such date is an Interest Payment Date, to the Trustee’s fees and expenses under the Indenture accrued to such redemption of the Bonds, and to all sums due to the Issuer under this Loan Agreement.

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Whenever the Company shall have given any notice of prepayment of the amounts payable hereunder pursuant to this Article IX, which includes a notice for redemption of the Bonds pursuant to the Indenture, all amounts payable under the first paragraph of Section 9.02(a) herein shall become due and payable on the date fixed for redemption of such Bonds.

Section 9.03.       Compliance with Indenture.  Anything in this Loan Agreement to the contrary notwithstanding, the Issuer and the Company shall take all actions required by this Loan Agreement and the Indenture in order to comply with the provisions of Article III of the Indenture.

Section 9.04.       Offer to Repurchase Upon a Change of Control.  (a) If a Change of Control occurs, each Holder shall have the right to require the Company to repurchase all or any part of that Holder’s Bonds (which, if in part, shall be in an amount equal to an Authorized Denomination and the non-purchased portion shall also be in an amount equal to an Authorized Denomination) pursuant to the Change of Control offer on the terms set forth in this Loan Agreement (a “Change of Control Offer”).  In the Change of Control Offer, the Company shall offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of Bonds repurchased plus accrued and unpaid interest on the Bonds repurchased to the date of purchase.  Within 30 days following any Change of Control, the Trustee, at the direction of the Company shall mail a notice to each Holder stating:

(i)            the transaction or transactions that constitute the Change of Control;

(ii)           that the Change of Control Offer is being made pursuant to this Section 9.04 and that all Bonds tendered shall be accepted for payment;

(iii)          the purchase price and the purchase date, which date shall be no earlier than 30 days and no later than 60 days from the date the notice is mailed (the “Change of Control Payment Date”);

(iv)          that any Bond not tendered shall continue to accrue interest;

(v)           that, unless the Company defaults in the payment of the Change of Control Payment, all Bonds accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date;

(vi)          that Holders electing to have any Bonds (or portions thereof in Authorized Denominations) purchased pursuant to a Change of Control Offer shall deliver an irrevocable notice in writing by the Direct Participant having the ownership interest in such Bonds, in the form set forth as the “Option of Holder to Elect Purchase” attached as Schedule I to the form of Bonds in Exhibit A to the Indenture, to the Trustee at the address specified in the notice, and shall transfer on the registration books of DTC the ownership interest in such Bonds (or portions thereof in Authorized Denominations), to the Trustee, prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

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(vii)         that Holders shall be entitled to withdraw their election if the Trustee receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Bonds delivered for purchase, and a statement that such Holder is withdrawing his election to have the Bonds purchased; and

(viii)        that Holders whose Bonds are being purchased only in part shall be issued new Bonds equal in principal amount to the unpurchased portion of the Bonds surrendered, which unpurchased portion must be equal to an Authorized Denomination.

The Company shall comply with the requirements of Section 14(e) and Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Bonds as a result of a Change of Control.  To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of this Loan Agreement, the Company shall comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of this Loan Agreement by virtue of such conflict.

(b)      On the Change of Control Payment Date, the Company shall, to the extent lawful:

(i)            accept for payment all Bonds or portions of Bonds properly tendered pursuant to the Change of Control offer;

(ii)           deposit with the Trustee an amount equal to the Change of Control Payment in respect of all Bonds or portions of Bonds properly tendered; and

(iii)          deliver or cause to be delivered to the Trustee the Bonds so accepted together with an Officers’ Certificate stating the aggregate principal amount of Bonds or portions of Bonds being purchased by the Company.

The Trustee shall promptly mail to each Holder of Bonds properly tendered the Change of Control Payment for such Bonds, and the Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Bond equal in principal amount to any unpurchased portion of the Bonds surrendered, if any; provided that each new Bond will be in a principal amount equal to an Authorized Denomination.

The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

The provisions described above that require the Company to make a Change of Control Offer following a Change of Control will be applicable regardless of whether any other provisions of this Loan Agreement are applicable.

The Company will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and

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otherwise in compliance with the requirements described herein applicable to a Change of Control Offer made by the Company and purchases all Bonds validly tendered and not withdrawn under such Change of Control Offer or (2) a notice of redemption has been given pursuant to the Indenture as described under Section 3.02 of the Indenture, unless and until there is a default in the payment of the applicable redemption price.  A Change of Control Offer may be made in advance of a Change of Control and may be conditional upon the occurrence of a Change of Control if a definitive agreement is in place for the Change of Control at the time the Change of Control Offer is made.

ARTICLE X

DEFEASANCE

Section 10.01.    Defeasance.  If (a) the Company shall pay and discharge or provide, in a manner satisfactory to the Issuer, for the payment and discharge of the whole amount of the principal of, premium, if any, and interest on the Loan, and shall pay or cause to be paid all other sums payable hereunder, or shall make arrangements satisfactory to the Issuer for such payment and discharge, (b) provision shall have been made for the satisfaction and discharge of the Indenture as provided for in Article VII therein and (c) the Company shall (i) have paid or caused to be paid all other sums then accrued and unpaid under this Loan Agreement and the Indenture and (ii) not be in default of any covenant which has resulted, or with the passage of time or the giving of notice, or both, gives rise to a reasonable likelihood of resulting, in the invalidity of the Bonds or the inclusion of interest on any Bond in the gross income of the owner thereof for purposes of federal income taxation under the Code, then and in that case all property, rights, and interest hereby conveyed or assigned or pledged shall revert to the Company, and the estate, right, title and interest of the Issuer therein shall thereupon cease, terminate and become void; and, except to the extent necessary to assure the maintenance of the exclusion of interest on the Bonds from gross income of the owners thereof for federal income tax purposes, in the opinion of Bond Counsel acceptable to the Issuer, this Loan Agreement, and the rights hereby granted, shall cease, determine and be discharged and the Issuer in such case on demand of the Company and at the Company’s cost and expense, shall execute and deliver to the Company a proper instrument or proper instruments acknowledging the satisfaction and termination of this Loan Agreement and shall convey, assign and transfer or cause to be conveyed, assigned or transferred, and shall deliver or cause to be delivered, to the Company, all property, including money, then held by the Issuer, other than moneys held in the Rebate Fund or deposited with the Trustee for the payment of the principal of and premium, if any, or interest on the Bonds.

ARTICLE XI

SUBSIDIARY BOND GUARANTEES

Section 11.01.    Subsidiary Bond Guarantees.  (a) Subject to the provisions of this Article XI, and only to the extent a Subsidiary Guarantor executes a Subsidiary Guarantee, each Subsidiary Guarantor upon written request of the Company, jointly and severally, will irrevocably and unconditionally guarantee to each Holder of Bonds and to the Trustee for itself

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and on behalf of the Holders (i) the due and punctual payment of principal of, premium, if any, and interest in full on each Bond when and as the same shall become due and payable whether at Stated Maturity, by declaration of acceleration or otherwise, (ii) the due and punctual payment of interest on the overdue principal of, premium, if any, and interest, in full on the Bonds, to the extent permitted by law, and (iii) the due and punctual performance of all other Obligations of the Company and the other Subsidiary Guarantors to the Holders or the Trustee, including without limitation the payment of fees, expenses, indemnification or other amounts, all in accordance with the terms of the Bonds and this Loan Agreement.  In case of the failure of the Company punctually to make any such principal or interest payment or the failure of the Company or any other Subsidiary Guarantor to perform any such other Obligation, each Subsidiary Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at Stated Maturity, by declaration of acceleration or otherwise, and as if such payment were made by the Company and to perform any such other Obligation of the Company immediately.  Each Subsidiary Guarantor hereby further agrees to pay any and all expenses (including reasonable counsel fees and expenses) incurred by the Trustee or the Holders in enforcing any rights under such Subsidiary Bond Guarantees.  The Subsidiary Bond Guarantees delivered in accordance with this Article XI will be guarantees of payment and not of collection.

(b)      In connection with the execution and delivery of a Subsidiary Bond Guarantee, each of the Company and the Subsidiary Guarantors hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger, insolvency or bankruptcy of the Company or any other Subsidiary Guarantor, any right to require a proceeding first against the Company or any other Subsidiary Guarantor, protest or notice with respect to the Bonds or the indebtedness evidenced thereby and all demands whatsoever, and covenants that the Subsidiary Bond Guarantees will not be discharged except by complete performance of the Obligations contained in the Bonds and in this Loan Agreement, or as otherwise specifically provided therein and herein.

(c)       Each Subsidiary Guarantor hereby waives and relinquishes:

(i)            any right to require the Trustee, the Holders or the Company (each, a “Benefited Party”) to proceed against the Company, the Subsidiaries of the Company or any other Person or to proceed against or exhaust any security held by a Benefited Party at any time or to pursue any other remedy in any secured party’s power before proceeding against the Subsidiary Guarantors;

(ii)           any defense that may arise by reason of the incapacity, lack of authority, death or disability of any other Person or Persons or the failure of a Benefited Party to file or enforce a claim against the estate (in administration, bankruptcy or any other proceeding) of any other Person or Persons;

(iii)          demand, protest and notice of any kind (except as expressly required by this Loan Agreement), including but not limited to notice of the existence, creation or incurring of any new or additional indebtedness or obligation or of any action or non-action on the part of the Subsidiary Guarantors, the Company, the Subsidiaries of the

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Company, any Benefited Party, any creditor of the Subsidiary Guarantors, the Company or the Subsidiaries of the Company or on the part of any other Person whomsoever in connection with any obligations the performance of which are hereby guaranteed;

(iv)          any defense based upon an election of remedies by a Benefited Party, including but not limited to an election to proceed against the Subsidiary Guarantors for reimbursement;

(v)           any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal;

(vi)          any defense arising because of a Benefited Party’s election, in any proceeding instituted under the Bankruptcy Law, of the application of Section 1111(b)(2) of the Bankruptcy Law; and

(vii)         any defense based on any borrowing or grant of a security interest under Section 364 of the Bankruptcy Law.

(d)      Each Subsidiary Guarantor further agrees that, as between such Subsidiary Guarantor, on the one hand, and Holders and the Trustee, on the other hand, (i) for purposes of the relevant Subsidiary Bond Guarantee, the maturity of the Obligations guaranteed by such Subsidiary Bond Guarantee may be accelerated as provided in Article VIII herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed thereby, and (ii) in the event of any acceleration of such Obligations (whether or not due and payable) such Obligations shall forthwith become due and payable by such Subsidiary Guarantor for purposes of such Subsidiary Bond Guarantee.

(e)       The Subsidiary Bond Guarantees shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment, or any part thereof, of principal of, premium, if any, or interest on any of the Bonds is rescinded or must otherwise be returned by the Holders or the Trustee upon the insolvency, bankruptcy or reorganization of the Company or any of the Subsidiary Guarantors, all as though such payment had not been made.

(f)       Each Subsidiary Guarantor shall be subrogated to all rights of the Holders against the Company in respect of any amounts paid by such Subsidiary Guarantor pursuant to the provisions of the Subsidiary Bond Guarantees or this Loan Agreement; provided, however, that a Subsidiary Guarantor shall not be entitled to enforce or to receive any payments until the principal of, premium, if any, and interest on all Bonds shall have been paid in full.

Section 11.02.    Obligations of Subsidiary Guarantors Unconditional.  Each Subsidiary Guarantor hereby agrees that its Obligations under the Subsidiary Bond Guarantees shall be guarantees of payment and shall be unconditional, irrespective of and unaffected by the validity, regularity or enforceability of the Bonds or this Loan Agreement, or of any amendment thereto or hereto, the absence of any action to enforce the same, the waiver or consent by any Holder or by the Trustee with respect to any provisions thereof or of this Loan Agreement, the entry of any

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judgment against the Company or any other Subsidiary Guarantor or any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Subsidiary Guarantor.

Section 11.03.    Limitation on Subsidiary Guarantors’ Liability.  Each Subsidiary Guarantor and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that a Subsidiary Bond Guarantee by such Subsidiary Guarantor pursuant to its Subsidiary Bond Guarantee not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law.  To effectuate the foregoing intention, the Holders and such Subsidiary Guarantor hereby irrevocably agree that the Obligations of such Subsidiary Guarantor under this Article XI shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the Obligations of such other Subsidiary Guarantor under this Article XI, result in the Obligations of such Subsidiary Guarantor under its Subsidiary Bond Guarantee not constituting a fraudulent transfer or conveyance under applicable federal or state law.

Section 11.04.    Releases of Subsidiary Bond Guarantees.  A Subsidiary Bond Guarantee of a Subsidiary Guarantor will be automatically and unconditionally released (and thereupon shall terminate and be discharged and be of no further force and effect):

(1)           in connection with any sale or other disposition (including by merger or otherwise) of the Capital Stock of the Subsidiary Guarantor after which such Subsidiary Guarantor is no longer a Subsidiary of the Company to a Person that is not (either before or after giving effect to such transaction) an Affiliate of the Company, if the sale of all such Capital Stock of that Subsidiary Guarantor complies with the applicable provisions of this Loan Agreement;

(2)           if the Company properly designates the Subsidiary Guarantor as an Unrestricted Subsidiary as described in the definition of “Unrestricted Subsidiary” in the Indenture;

(3)           solely in the case of a Subsidiary Bond Guarantee created pursuant to the covenant described under Section 4.13, upon the release or discharge of the guarantee that resulted in the creation of such Subsidiary Bond Guarantee pursuant to that covenant, except a discharge or release by or as a result of payment under such guarantee;

(4)           upon a Legal Defeasance or satisfaction and discharge of this Loan Agreement that complies with the provisions under Article X; or

(5)           upon payment in full of the aggregate principal amount of all Bonds then outstanding and all other financial obligations under this Loan Agreement, the Indenture and the Bonds then due and owing.

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Upon any occurrence giving rise to a release of a Subsidiary Bond Guarantee as specified above, the Trustee will execute any documents reasonably required in order to evidence or effect such release, discharge and termination in respect of such Subsidiary Bond Guarantee.  Neither the Company nor any Subsidiary Guarantor will be required to make a notation on the Bonds to reflect any such Subsidiary Bond Guarantee or any such release, termination or discharge.

Section 11.05.    Application of Certain Terms and Provisions to Subsidiary Guarantors.  (a) For purposes of any provision of this Loan Agreement or the Indenture which provides for the delivery by any Subsidiary Guarantor of an Officers’ Certificate or an Opinion of Counsel or both, the definitions of such terms in Section 1.01 of the Indenture shall apply to such Subsidiary Guarantor as if references therein to the Company were references to such Subsidiary Guarantor.

(b)      Any request, direction, order or demand which by any provision of this Loan Agreement or the Indenture is to be made by any Subsidiary Guarantor shall be sufficient if evidenced by a Company Order; provided that the definition of such term in Section 1.01 of the Indenture shall apply to such Subsidiary Guarantor as if references therein to the Company were references to such Subsidiary Guarantor.

(c)       Any notice or demand which by any provision of this Loan Agreement or the Indenture is required or permitted to be given or served by the Trustee or by the Holders of Bonds to or on any Subsidiary Guarantor may be given or served as described in Section 12.08 of the Indenture.

(d)      Upon any demand, request or application by any Subsidiary Guarantor to the Trustee to take any action under this Loan Agreement or the Indenture, such Subsidiary Guarantor shall furnish to the Trustee such certificates and opinions as are required in this Loan Agreement or the Indenture as if all references therein to the Company were references to such Subsidiary Guarantor.

ARTICLE XII

MISCELLANEOUS

Section 12.01.    Term of Loan Agreement.  This Loan Agreement shall be in full force and effect from the date hereof, and shall continue in effect until the payment in full of all principal of, premium, if any, and interest on the Bonds, or provision for the payment thereof shall have been made pursuant to Article VII of the Indenture; all fees, charges, indemnities and expenses of the Issuer and Trustee, have been fully paid or provision made for such payment (the payment of which fees, charges, indemnities and expenses shall be evidenced by a written certification of the Company that it has fully paid or provided for all such fees, charges, indemnities and expenses); and all other amounts due hereunder have been duly paid or provision made for such payment.  All representations, certifications and covenants by the Company as to the indemnification of various parties and the payment of fees and expenses of the Issuer as described in Section 6.01(b)(ii) hereof, and all matter affecting the tax-exempt status of the Bonds, shall survive the termination of this Loan Agreement.

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Section 12.02.    Notices.  Except as otherwise provided in this Loan Agreement, all notices, certificates, requests, requisitions and other communications hereunder shall be in writing and shall be sufficiently given and shall be deemed given when delivered or mailed as provided in the Indenture.

Section 12.03.    Parties in Interest.  This Loan Agreement shall inure to the benefit of and shall be binding upon the Issuer, the Company and their respective successors and assigns, and no other person, firm or corporation shall have any right, remedy or claim under or by reason of this Loan Agreement except for rights of payment and indemnification hereunder of the Trustee and the Registrar.  Section 12.05 hereof to the contrary notwithstanding, for purposes of perfecting a security interest in this Loan Agreement by the Trustee, only the counterpart delivered, pledged and assigned to the Trustee shall be deemed the original.  No security interest in this Loan Agreement may be created by the transfer of any counterpart thereof other than the original counterpart delivered, pledged and assigned to the Trustee.

Section 12.04.    Amendments.  This Loan Agreement may be amended only by written agreement of the Company and the Issuer and with the written consent of the Trustee in accordance with the provisions of Section 11.05 or Section 11.06 of the Indenture, as applicable; provided, however, that Exhibit A to this Loan Agreement may be amended upon compliance only with the requirements of Section 3.03 hereof.

Section 12.05.    Counterparts.  This Loan Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original (except as expressly provided in Section 12.03 hereof), and such counterparts shall together constitute but one and the same Loan Agreement.

Section 12.06.    Severability.  If any clause, provision or Section of this Loan Agreement shall, for any reason, be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

Section 12.07.    Governing Law.  This Loan Agreement shall be governed exclusively by and construed in accordance with the laws of the State without application of the conflicts of law provisions of any other state.

Section 12.08.    Date for Identification Purposes Only; Effective Date.  The date on this Loan Agreement shall be for identification purposes only and shall not be construed to imply that this Loan Agreement was executed on such date.  This Loan Agreement shall become effective upon the Closing Date.

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IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly executed as of the day and year first above written.

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EXHIBIT A

PROJECT DESCRIPTION

The Project consists of the renovation, expansion and equipping of the existing office and manufacturing plant of the Company or the Guarantor located at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, including but not limited to space and facilities to be used for research, development and project testing, all as more fully described in the Project Certificate.

INDENTURE OF TRUST

between

THE COUNTY OF ▇▇▇▇, ILLINOIS

and

CITIBANK N.A., as Trustee

 providing for the issuance of

$90,000,000

THE COUNTY OF ▇▇▇▇, ILLINOIS

RECOVERY ZONE FACILITY REVENUE BONDS
(NAVISTAR INTERNATIONAL CORPORATION PROJECT) SERIES 2010

Dated as of October 1, 2010

TABLE OF CONTENTS

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ii

EXHIBIT A—FORM OF BOND

EXHIBIT B—FORM OF REQUISITION

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INDENTURE OF TRUST

THIS INDENTURE OF TRUST, made and entered into as of October 1, 2010, between The COUNTY OF ▇▇▇▇, ILLINOIS, a home rule unit under Section 6(a) of Article VII of the 1970 Constitution of the State of Illinois (the “Issuer”), and CITIBANK N.A., duly organized, existing and authorized to accept and execute trusts of the character herein set out, with its designated corporate trust office in New York, New York, and being qualified to accept and administer the trusts hereby created, as trustee (the “Trustee”),

W I T N E S S E T H :

WHEREAS, under the power granted by Section 6(a) of Article VII of the 1970 Constitution of the State of Illinois, as supplemented by the Local Government Debt Reform Act, as amended, and the other Omnibus Bond Acts, as amended, the Issuer is authorized to issue recovery zone facility bonds for qualifying projects within the Issuer, which has been designated as a “recovery zone” for purposes of Section 1400U-1 of the Internal Revenue Code of 1986, as amended; and

WHEREAS, Navistar International Corporation, a Delaware corporation (the “Company”), desires to (i) finance, refinance or be reimbursed for all or a portion of the costs of the renovation, expansion and equipping of certain capital improvements as more fully described in Exhibit A to the Loan Agreement (as hereinafter defined) (the “Project”), (ii) pay a portion of the interest accruing on the Bonds (as hereinafter defined) during the construction period and (iii) pay certain costs relating to the issuance of the Bonds; and

WHEREAS, the Company desires to achieve the foregoing by borrowing funds from the Issuer pursuant to the Loan Agreement dated as of October 1, 2010 (the “Loan Agreement”), between the Company and the Issuer; and

WHEREAS, it has been determined that in order to obtain such funds to lend to the Company, the Issuer will issue $90,000,000 in aggregate principal amount of its Recovery Zone Facility Revenue Bonds (Navistar International Corporation Project) Series 2010 (the “Bonds”), under this Indenture; and

WHEREAS, the execution and delivery of this Indenture and the issuance of the Bonds have been in all respects duly and validly authorized by a resolution duly passed and approved by the Issuer; and

WHEREAS, the Trustee has agreed to accept the trusts herein created upon the terms herein set forth; and

WHEREAS, all things necessary to make the Bonds, when issued as provided in this Indenture, the valid, binding and legal limited obligations of the Issuer according to the import thereof, and to constitute this Indenture a valid assignment of the amounts pledged to the payment of the principal of, premium, if any, and interest on the Bonds and a valid assignment of the rights of the Issuer under the Loan Agreement have been done and performed, and the

creation, execution and delivery of this Indenture and the execution and issuance of the Bonds, subject to the terms hereof, in all respects have been duly authorized;

NOW, THEREFORE, the Issuer, in consideration of the premises and the acceptance by the Trustee of the trusts hereby created, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to secure the payment of the principal of, premium, if any, and interest on the Bonds according to their tenor and effect, and to secure the performance and observance by the Issuer of all of the covenants and obligations expressed or implied herein and in the Bonds, does hereby irrevocably grant, alienate, bargain, sell, convey, transfer, assign and pledge unto the Trustee (to the extent of its legal capacity to hold the same for the purposes hereof), and the successors in trust and assigns of the Trustee forever:

GRANTING CLAUSES

DIVISION I

All right, title and interest of the Issuer (a) in, to and under the Loan Agreement (except its Unassigned Rights); (b) in the amounts payable to the Issuer under the Loan Agreement (excluding Unassigned Rights); and (c) to do any and all other things which the Issuer is or may become entitled to do under the Loan Agreement; provided, however, that the assignment made pursuant to this clause shall not impair or diminish any obligation of the Issuer under the Loan Agreement or alter the rights, duties and obligations of the Trustee under the remaining terms of this Indenture; and

DIVISION II

All right, title and interest of the Issuer in and to all moneys and other obligations which are, from time to time, deposited or required to be deposited with or held or required to be held by or on behalf of the Trustee in trust under any of the provisions of this Indenture (except moneys or obligations deposited with or paid to the Trustee for payment or redemption of Bonds that are deemed no longer Outstanding hereunder); and

DIVISION III

Any and all property, rights and interests of every kind or description which, from time to time hereafter, may be sold, transferred, conveyed, assigned, pledged, mortgaged or delivered to the Trustee as additional security hereunder; the Trustee is hereby authorized to receive all such property at any time and to hold and apply it subject to the terms hereof;

EXCEPTED PROPERTY

There is, however, expressly excepted and excluded from the lien and operation of this Indenture amounts held by the Trustee in the Rebate Fund (as hereinafter defined) established hereunder;

2

TO HAVE AND TO HOLD all and singular the Trust Estate (as hereinafter defined), whether now owned or hereafter acquired, irrevocably unto the Trustee and its successors in trust and assigns forever;

IN TRUST, NEVERTHELESS, upon the terms and trusts herein set forth, to secure the payment of the Bonds to be issued hereunder, and premium, if any, payable upon redemption or prepayment thereof, and the interest payable thereon, and to secure also the observance and performance of all the terms, provisions, covenants and conditions of this Indenture, and for the equal and ratable benefit and security of all and singular the Owners of all Bonds issued hereunder, without preference, priority or distinction as to lien or otherwise, except as otherwise hereinafter provided, of any one Bond over any other Bond or as between principal and interest, and it is hereby mutually covenanted and agreed that the terms and conditions upon which the Bonds are to be issued, authenticated, delivered, secured and accepted by all persons who shall from time to time be or become the Owners thereof, and the trusts and conditions upon which the pledged moneys and revenues are to be held and disbursed, are as follows;

PROVIDED, HOWEVER, that if the Issuer, its successors or assigns, shall well and truly pay, or cause to be paid, the principal of the Bonds and the interest and premium, if any, due or to become due thereon at the times and in the manner mentioned in the Bonds according to the true intent and meaning thereof, and shall cause the payments to be made into the Bond Fund as required under Article V hereof, or shall provide, as permitted by Article VII hereof, for the payment thereof, and for the payment of certain excess investment earnings to the United States of America as required under Article V hereof, and shall well and truly keep, perform and observe all of the covenants and conditions pursuant to the terms of this Indenture to be kept, performed and observed by it, and shall pay or cause to be paid to the Trustee all sums of money due or to become due in accordance with the terms and provisions hereof, and the rights hereby granted shall cease and terminate; otherwise this Indenture is to be and remain in full force and effect.

THIS INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all Bonds issued and secured hereunder are to be issued, authenticated and delivered, and all said property, rights and interests, including, without limitation, the amounts hereby assigned, are to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes hereinafter expressed, and that the Issuer has agreed and covenanted, and hereby does agree and covenant, with the Trustee and the Owners, from time to time, of the Bonds, or any part thereof, as follows:

ARTICLE I

DEFINITIONS AND RULES OF CONSTRUCTION

Section 1.01.       General Definitions.  The terms defined in this Section 1.01 shall have the meanings provided herein for all purposes of this Indenture and the Loan Agreement, unless the context clearly requires otherwise.

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“Acquired Indebtedness” of any specified Person means Indebtedness of any other Person and its Restricted Subsidiaries existing at the time such other Person merged with or into or became a Restricted Subsidiary of such specified Person or assumed by the specified Person in connection with the acquisition of assets from such other Person and not incurred by the specified Person in connection with or in anticipation of (a) such other Person and its Restricted Subsidiaries being merged with or into or becoming a Restricted Subsidiary of such specified Person or (b) such acquisition by the specified Person.

“Affiliate” means, when used with reference to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, the referent Person, as the case may be.  For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct or cause the direction of management or policies of the referent Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative of the foregoing.

“Asset Disposition” means any sale, transfer or other disposition (including, without limitation, by merger, consolidation or sale-and-leaseback transaction) of:

(1)           shares of Capital Stock of a Restricted Subsidiary of the Company (other than directors’ qualifying shares) or

(2)           property or assets of the Company or any of its Restricted Subsidiaries (other than shares of Capital Stock of the Company).

Notwithstanding the foregoing, an Asset Disposition shall not include:

(1)           any sale, transfer or other disposition of shares of Capital Stock, property or assets by a Restricted Subsidiary of the Company to the Company or to any Restricted Subsidiary of the Company;

(2)           any sale, transfer or other disposition of defaulted receivables for collection or any sale, transfer or other disposition of property or assets in the ordinary course of business, including, without limitation, sales of inventory in the ordinary course of its business and the granting of any option or other right to purchase, lease or otherwise acquire inventory in the ordinary course of its business;

(3)           dispositions of assets or shares of Capital Stock of a Restricted Subsidiary in a single market transaction or series of related transactions with an aggregate fair market value less than $10.0 million;

(4)           the grant in the ordinary course of business of any license of patents, trademarks, registrations therefor and other similar intellectual property;

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(5)           the granting of any Lien (or foreclosure thereon) securing Indebtedness to the extent that such Lien is granted in compliance with Section 4.06 of the Loan Agreement;

(6)           any sale, transfer or other disposition constituting a Permitted Investment or Restricted Payment permitted by Section 4.08 of the Loan Agreement;

(7)           any disposition of assets or property in the ordinary course of business to the extent such property or assets are surplus, negligible, obsolete, uneconomical, worn-out or no longer useful in the Company’s or any of its Subsidiaries’ business;

(8)           the sale, lease, conveyance or disposition or other transfer of all or substantially all of the assets of the Company as permitted by Section 4.14 of the Loan Agreement;

(9)           sales of accounts receivable, equipment and related assets (including contract rights) of the type specified in the definition of “Qualified Securitization Transaction” to a Securitization Subsidiary for the fair market value thereof;

(10)         transfers of accounts receivable, equipment and related assets (including contract rights) of the type specified in the definition of “Qualified Securitization Transaction” (or a fractional undivided interest therein) by a Securitization Subsidiary in a Qualified Securitization Transaction.

(11)         any sale, transfer or other disposition of Capital Stock of, or Indebtedness or other securities of, any Unrestricted Subsidiary that was formed or designated as an Unrestricted Subsidiary after the Original Securities Issuance Date;

(12)         sale, transfer or other disposition of cash or Cash Equivalents or any amounts received pursuant to an Interest Rate Agreement, Currency Agreement or Commodity Price Agreement; and

(13)         the surrender or waiver of contract rights or the settlement, release or surrender of contract, tort or other claims of any kind.

“Asset Sale Offer Trigger Date” has the meaning set forth in Section 4.09 of the Loan Agreement.

“Attributable Indebtedness” in respect of a Sale/Leaseback Transaction involving an operating lease means, as at the time of determination, the present value (discounted at the implied interest rate in such transaction compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended).

“Authorized Company Representative” means each person at the time designated to act on behalf of the Company by written certificate furnished to the Issuer and the Trustee

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containing the specimen signature of such person and signed on behalf of the Company by its President, any Vice President, its Secretary or any Assistant Secretary.  Such certificate may designate an alternate or alternates.

“Authorized Denomination” means $100,000 or any integral multiple of $5,000 in excess thereof.

“Average Life” means, as of the date of determination, with respect to any Indebtedness for borrowed money or Preferred Stock, the quotient obtained by dividing

(1)           the sum of the products of the number of years from the date of determination to the dates of each successive scheduled principal or liquidation value payments of such Indebtedness or Preferred Stock, respectively, and the amount of such principal or liquidation value payments, by

(2)           the sum of all such principal or liquidation value payments.

“Beneficial Owner” is defined in Section 2.10.

“Board of Directors” means (i) with respect to a corporation, the board of directors of the corporation, (ii) with respect to a partnership, the board of directors of the general partner of the partnership, and (iii) with respect to any other Person, the board or committee of such Person serving a similar function.

“Bond” or “Bonds” means the Issuer’s Recovery Zone Facility Revenue Bonds (Navistar International Corporation Project) Series 2010, issued pursuant to this Indenture in the aggregate principal amount of $90,000,000.

“Bondholder” or “Bondowner”:  See definition of “Holder” herein.

“Bond Counsel” means ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ LLP or any other firm of nationally recognized bond counsel familiar with the type of transactions contemplated under this Indenture selected by the Company and acceptable to the Trustee.

“Bond Documents” means this Indenture, the Loan Agreement, the Bond Guarantee, the Tax Agreement, the Project Certificate and the Bonds.

“Bond Fund” means the trust fund by that name created pursuant to Section 5.01(a) hereof.

“Bond Guarantee” means the Bond Guarantee from the Guarantor to Citibank N.A. dated as of October 1, 2010 relating to the Bonds, as it may be amended or supplemented in accordance with its terms.  The Bond Guarantee is a Subsidiary Bond Guarantee.

“Bond Payment Date” means any Interest Payment Date, any redemption date, any maturity date and any other date on which the principal of, and premium, if any, and interest on,

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the Bonds is to be paid to the Owners thereof, whether upon redemption, at maturity or upon acceleration of maturity of the Bonds.

“Bond Ordinance” means the Ordinance adopted by the Board of Commissioners of the Issuer on October 5, 2010, authorizing the issuance, delivery and sale of the Bonds.

“Business Day” means a day (other than Saturday or Sunday) on which the Trustee and the banks in New York are open for business.

“Canadian Subsidiary” means any Foreign Subsidiary having its principal operations in Canada.

“Capital Stock” means, with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting or non-voting) of, such Person’s capital stock (or other ownership or profits interest, including, without limitation, partnership, member or trust interest), including each class of Common or Preferred Stock of such Person, whether outstanding on the Original Securities Issuance Date or issued after the Original Securities Issuance Date, and any and all rights, warrants or options exchangeable for or convertible into such capital stock (other than any debt securities convertible or exchangeable into such capital stock).

“Capitalized Lease Obligation” means obligations under a lease that are required to be classified and accounted for as capital lease obligations under GAAP and, for purposes of this Indenture and the Loan Agreement, the amount of such obligations at any date shall be the capitalized amount of such obligations at such date, determined in accordance with GAAP.  The Stated Maturity of such obligation shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without penalty.

“Cash Equivalents” means:

(1)           United States dollars or in the case of any Foreign Subsidiary, such local currencies held by it from time to time in the ordinary course of business;

(2)           securities issued or directly and fully guaranteed or insured by the United States government (or, in the case of a Canadian Subsidiary, Canadian government (federal or provincial)) or any agency or instrumentality of the United States government (or Canadian government) (provided that the full faith and credit of the United States or Canada (federal or provincial, as the case may be), as the case may be, is pledged in support of those securities) having maturities of not more than twenty-four months from the date of acquisition;

(3)           certificates of deposit and eurodollar time deposits with maturities of twenty-four months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding twenty-four months and overnight bank deposits, in each case, with any commercial bank incorporated under the laws of the United States, any state

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thereof, the District of Columbia, Canada or any province or territory thereof and having capital and surplus in excess of $500.0 million and a Thomson Bank Watch Rating of “B” or better;

(4)           repurchase obligations or securities lending arrangements for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5)           commercial paper having a rating of at least “A-2” from S&P or “P-2” from ▇▇▇▇▇’▇ and in each case maturing within 270 days after the date of acquisition or asset backed securities having a rating of at least “A” from S&P or “A2” from ▇▇▇▇▇’▇ and in each case maturing within thirty-six months after the date of acquisition;

(6)           demand or time deposit accounts used in the ordinary course of business with overseas branches of commercial banks incorporated under the laws of the United States of America, any state thereof or the District of Columbia (or in the case of a Canadian Subsidiary, Canada or any province or territory thereof), provided that such commercial bank has, at the time of the Company’s or such Restricted Subsidiary’s Investment therein, (1) capital, surplus and undivided profits (as of the date of such institution’s most recently published financial statements) in excess of $100 million and (2) the long-term unsecured debt obligations (other than such obligations rated on the basis of the credit of a Person other than such institution) of such institution, at the time of the Company’s or any Restricted Subsidiary’s Investment therein, are rated at least “A” from S&P or “A2” from ▇▇▇▇▇’▇;

(7)           obligations (including, but not limited to demand or time deposits, bankers’ acceptances and certificates of deposit) issued or guaranteed by a depository institution or trust company incorporated under the laws of the United States of America, any state thereof or the District of Columbia (or in the case of a Canadian Subsidiary, Canada or any province or territory thereof), provided that (A) such instrument has a final maturity not more than one year from the date of purchase thereof by the Company or any Restricted Subsidiary of the Company and (B) such depository institution or trust company has at the time of the Company’s or such Restricted Subsidiary’s Investment therein or contractual commitment providing for such Investment, (x) capital, surplus and undivided profits (as of the date of such institution’s most recently published financial statements) in excess of $100 million and (y) the long-term unsecured debt obligations (other than such obligations rated on the basis of the credit of a Person other than such institution) of such institution, at the time of the Company’s or such Restricted Subsidiary’s Investment therein or contractual commitment providing for such Investment, are rated at least “A” from S&P or “A2” from ▇▇▇▇▇’▇;

(8)           in the case of any Foreign Subsidiary, securities issued or directly and fully guaranteed or insured by the Federal Government of the country where the Foreign Subsidiary is located, money market funds, demand or time deposits accounts, certificate of deposits, in each case denominated and payable in local currency and used in the

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ordinary course of the business with reputable commercial banks located in the jurisdiction of organization of such Foreign Subsidiary; and

(9)           money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition.

Notwithstanding the foregoing, Investments which would otherwise constitute Cash Equivalents of the kinds described in clauses (2), (3), (4) and (5) that are permitted to have maturities in excess of twelve months shall only be deemed to be Cash Equivalents under this definition if and only if the total weighted average maturity of all Cash Equivalents of the kinds described in clauses (2), (3), (4) and (5) does not exceed twelve months on an aggregate basis.

“Change of Control” means the occurrence of one or more of the following events:

(1)           any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act), other than employee or retiree benefit plans or trusts sponsored or established by the Company or Navistar, Inc., is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 35% or more of the combined voting power of the Company’s then outstanding Voting Stock;

(2)           the following individuals cease for any reason to constitute more than a majority of the number of directors then serving on the Board of Directors of the Company:  individuals who, on the Original Securities Issuance Date, constituted the Board of Directors and any new director whose appointment or election by the Board of Directors or nomination for election by the Company’s stockholders was approved (a) by the vote of at least a majority of the directors then still in office or whose appointment, election or nomination was previously so approved or recommended or (b) with respect to directors whose appointment of election to the Board of Directors was made by the holders of the Company’s nonconvertible junior preference stock, series B, by the holders of such preference stock;

(3)           the shareholders of the Company shall approve any Plan of Liquidation (whether or not otherwise in compliance with the provisions of the Loan Agreement);

(4)           the Company consolidates with or merges with or into another Person, other than a merger or consolidation of the Company in which the holders of the Common Stock of the Company outstanding immediately prior to the consolidation or merger hold, directly or indirectly, at least a majority of the Common Stock of the surviving corporation immediately after such consolidation or merger; or

(5)           the Company or any Restricted Subsidiary of the Company, directly or indirectly, sells, assigns, conveys, transfers, leases or otherwise disposes of, in one transaction or a series of related transactions, all or substantially all of the property or assets of the Company and the Restricted Subsidiaries of the Company (determined on a

9

consolidated basis) to any Person; provided, that neither (a) the merger of a Restricted Subsidiary of the Company into the Company or into any Restricted Subsidiary of the Company nor (b) a series of transactions involving the sale of Receivables or interests therein in the ordinary course of business by a Securitization Subsidiary in connection with a Qualified Securitization Transaction nor (c) the grant (but not the foreclosure or realization) of a Lien on assets of the Company or any Restricted Subsidiary in connection with Indebtedness permitted pursuant to clause (c) under Section 4.07 of the Loan Agreement shall be deemed to be a Change of Control.

For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries of the Company, the Capital Stock of which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

“Closing” and “Closing Date” means the date of the first authentication and delivery of fully executed and authenticated Bonds under this Indenture being October 26, 2010.

“Code” means the Internal Revenue Code of 1986, as amended.  Each reference to a section of the Code herein shall be deemed to include the United States Treasury Regulations, including temporary and proposed regulations, relating to such section which is applicable to the Bonds or the use of the proceeds thereof.

“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

“Commodity Agreement” means any commodity price/index swap, futures or option contract or similar agreement or arrangement.

“Common Stock” of any Person means any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of such Person’s common stock, whether outstanding on the Original Securities Issuance Date or issued after the Original Securities Issuance Date, and includes, without limitation, all series and classes of such common stock.

“Company” means Navistar International Corporation, a Delaware corporation, or a successor Person.

“Company’s Certificate” means a certificate signed on behalf of the Company by an Authorized Company Representative.

“Company Order” and “Company Request” mean, respectively, a written order or request signed in the name of the Company by two Officers, one of whom must be the Chairman

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of the Board, the President, the Chief Financial Officer, any Executive Vice President, Senior Vice President or Vice President of the Company.

“Completion Certificate” means the certificate of that name defined in Section 5.02(b) hereof.

“Completion Date” means the date when all portions of the Project have been fully completed in accordance with the plans and specifications therefor, as then amended, and as identified in the Completion Certificate.

“Consolidated Cash Flow Available For Fixed Charges” of any Person means for any period the Consolidated Net Income of such Person for such period plus (to the extent Consolidated Net Income for such period has been reduced thereby):

(1)           Consolidated Fixed Charges of such Person for such period; plus

(2)           Consolidated Tax Expense of such Person for such period; plus

(3)           the consolidated depreciation and amortization expense included in the income statement of such Person prepared in accordance with GAAP for such period; plus

(4)           any non-recurring fees, expenses or charges related to any offering of Qualified Capital Stock, Permitted Investment, acquisition, recapitalization, disposition or incurrence of Indebtedness permitted under the Loan Agreement (in each case, whether or not successful); plus

(5)           any non-recurring or unusual charges or expenses of such Person or its Restricted Subsidiaries (which, for the avoidance of doubt, shall include the following items:  restructuring, plant closure and consolidation, severance, relocation, contract termination, retention costs, employee termination and similar type items); plus

(6)           [Reserved]

(7)           any other non-cash charges to the extent deducted from or reflected in Consolidated Net Income except for any non-cash charges that represent accruals of, or reserves for, cash disbursements to be made in any future accounting period; minus

(8)           any non-cash items increasing Consolidated Net Income for such period, (other than the reversal of a prior accrual or reserve for cash items previously excluded from Consolidated Cash Flow Available For Fixed Charges); minus

(9)           all cash payments during such period relating to non-cash charges that were added back in determining Consolidated Cash Flow Available For Fixed Charges in any prior period; minus

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(10)         non-recurring or unusual gains or income of such Person and its Restricted Subsidiaries.

“Consolidated Cash Flow Ratio” of any Person means, for any period, the ratio of:

(1)           Consolidated Cash Flow Available for Fixed Charges of such Person for such period to

(2)           Consolidated Fixed Charges for such period.

In the event that the Company or any Restricted Subsidiary incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness (other than Indebtedness incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) or issues or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Consolidated Cash Flow Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Consolidated Cash Flow Ratio is made (the “Consolidated Cash Flow Ratio Calculation Date”), then the Consolidated Cash Flow Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, consolidations and discontinued operations (as determined in accordance with GAAP) that have been made by the Company or any of its Restricted Subsidiaries during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Consolidated Cash Flow Ratio Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, consolidations and discontinued operations (and the change in any associated fixed charge obligations and the change in Consolidated Cash Flow Available for Fixed Charges resulting therefrom) had occurred on the first day of the four-quarter reference period.  If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Company or any of its Restricted Subsidiaries since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation or discontinued operation that would have required adjustment pursuant to this definition, then the Consolidated Cash Flow Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period.

Calculations of pro forma amounts in accordance with this definition shall be done in good faith by a responsible financial or accounting officer of the Company and may give pro forma effect to any cost savings, operating expense reductions or synergies that have been realized during such period as if such actions had been implemented at the beginning of such period and, except as otherwise provided herein, in accordance with Article 11 of Regulation S-X under the Securities Act or any successor provision.

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If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Consolidated Cash Flow Ratio Calculation Date had been the applicable rate for the entire period (taking into account any Interest Rate Protection Agreement applicable to such Indebtedness).  Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.  For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period except as set forth in the first paragraph of this definition.  Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Company may designate.

“Consolidated Fixed Charges” means, with respect to any Person for any period, the sum of, without duplication, the amounts for such period, taken as a single accounting period, of:

(1)         Consolidated Interest Expense; and

(2)         all dividends or other distributions paid or accrued on Disqualified Capital Stock of such Person or Preferred Stock of such Person’s Restricted Subsidiaries (except dividends payable in shares of Qualified Capital Stock).

In calculating “Consolidated Fixed Charges” for purposes of determining the denominator (but not the numerator) of this “Consolidated Fixed Charge Coverage Ratio,”

(1)         interest on Indebtedness determined on a fluctuating basis as of the date of determination and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the date of determination;

(2)         if interest on any Indebtedness actually incurred on the date of determination may be optionally determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate or other rates, then the interest rate in effect on the date of determination will be deemed to have been in effect during the relevant four-quarter period reference; and

(3)         notwithstanding the foregoing, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to interest swap agreements, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements.

“Consolidated Interest Expense” means, with respect to any Person for any period, the aggregate of the net interest expense of such Person and its Consolidated Subsidiaries for such

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period (after giving effect to any interest income), on a consolidated basis, as determined in accordance with GAAP, including:

(1)         all amortization of original issue discount;

(2)         the interest component of Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person during such period;

(3)         net cash payments, if any, made (less any net payments, if any, received) under all Interest Rate Protection Agreements (including amortization of fees);

(4)         all capitalized interest;

(5)         the interest portion of any deferred payment obligations for such period; and

(6)         any interest expense on Indebtedness of another Person (other than Indebtedness incurred under Section 4.07(u) of the Loan Agreement unless the Company or any of its Restricted Subsidiaries makes a payment with respect to such guarantees in which case the interest expense associated with such underlying Indebtedness shall be included) that is guaranteed by the Company or any of its Restricted Subsidiaries or secured by a Lien on assets of the Company or any of its Restricted Subsidiaries, whether or not such guarantees or Liens is called upon;

and excluding:

(a)         amortization or write-off of deferred financing fees, debt issuance costs, commissions, fees and expenses; and

(b)         any non-cash interest imputed on any convertible debt securities (including the Convertible Subordinated Notes) as in accordance with FSP APB 14-1.

“Consolidated Net Income” means, with respect to any Person for any period, the consolidated net income (or deficit) of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, as determined in accordance with GAAP and before any reduction in respect of dividends accrued or paid on any Preferred Stock, if any; provided, that any amounts received from any other Person (other than a Restricted Subsidiary) shall be included in Consolidated Net Income for that period to the extent of the amount that has been actually received by the referent Person or a Restricted Subsidiary of the referent Person in the form of cash dividends or other cash distributions (other than payments in respect of debt obligations), and provided, further, that there shall be excluded:

(1)         any restoration to income of any contingency reserve, except to the extent that provision for such contingency reserve was made out of Consolidated Net Income accrued at any time following the Original Securities Issuance Date;

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(2)         any gain or loss, together with any related provisions for taxes, realized upon the sale or other disposition (including, without limitation, dispositions pursuant to sale-leaseback transactions) of any property or assets which are not sold or otherwise disposed of in the ordinary course of business (provided that sales of Receivables or interests therein pursuant to Qualified Securitization Transactions shall be deemed to be in the ordinary course of business) and upon the sale or other disposition of any Capital Stock of any Subsidiary of the referent Person;

(3)         any extraordinary gain or extraordinary loss together with any related provision for taxes and any one time gains or losses (including, without limitation, those related to the adoption of new accounting standards) realized by the referent Person or any of its Restricted Subsidiaries during the period for which such determination is made;

(4)         income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued);

(5)         in the case of a successor to the referent Person by consolidation or merger or as a transferee of the referent Person’s assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets;

(6)         for purposes of the covenant described under Section 4.08 of the Loan Agreement, the net income of any Restricted Subsidiary of such Person (other than a Subsidiary Guarantor) which is subject to restrictions which prevent or limit the payment of dividends or the making of distributions to such Person to the extent of such restrictions (except to the extent of the amount of dividends or distributions that have been paid to such Person or one or more Restricted Subsidiary not subject to any such restriction during the relevant period);

(7)         non-cash compensation charges resulting from the application of Statement of Financial Accounting Standards No. 123(R), including any such charges resulting from stock options, restricted stock grants, stock appreciation rights or other equity-incentive programs;

(8)         effects of adjustments in such Person’s consolidated financial statements pursuant to GAAP resulting from the application of recapitalization accounting or, if applicable, purchase accounting in relation to any consummated acquisition or the amortization or write-off of any amounts thereof, net of taxes;

(9)         any non-cash impairment charge or asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets, investments in debt and equity securities or as a result of a change in law or regulation, in each case, pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP; and

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(10)          (a) any net unrealized gain or loss (after any offset) resulting in such period from Commodity Agreements, Currency Agreements, Interest Rate Protection Agreements or other derivative instruments and the application of Statement of Financial Accounting Standards No. 133; and (b) any net unrealized gain or loss (after any offset) resulting in such period from currency translation gains or losses including those related to currency remeasurements of Indebtedness (including any net loss or gain resulting from Currency Agreements for currency exchange risk).

“Consolidated Net Tangible Assets” as of any date of determination means the total amount of assets of the Company and its Consolidated Subsidiaries after deducting therefrom all current liabilities (excluding any current liabilities that by their terms are extendable or renewable at the option of the obligor thereon to a time more than twelve months after the time as of which the amount thereof is being computed); total prepaid expenses and deferred charges; and all goodwill, trade names, trademarks, patents, licenses, copyrights and other intangible assets, all as set forth, or on a pro forma basis would be set forth, on the consolidated balance sheet of the Company and its Consolidated Subsidiaries for the Company’s most recently completed fiscal quarter, prepared in accordance with GAAP.

“Consolidated Subsidiary” of any Person means a Restricted Subsidiary which for financial reporting purposes is or, in accordance with GAAP, should be, accounted for by such Person as a consolidated Subsidiary.

“Consolidated Tax Expense” means, with respect to any Person for any period, the aggregate of the U.S. Federal, state and local tax expense attributable to taxes based on income and foreign income tax expenses of such Person and its Consolidated Subsidiaries for such period (net of any income tax benefit), determined in accordance with GAAP other than taxes (either positive or negative) attributable to extraordinary or unusual gains or losses or taxes attributable to sales or dispositions of assets.

“Convertible Subordinated Notes” means the Company’s convertible subordinated notes issued on the Original Securities Issuance Date in the principal amount of $570,000,000, including convertible subordinated notes issued pursuant to the exercise of the over-allotment with respect to the convertible subordinated notes issued on the Original Securities Issuance Date.

“Costs of Issuance” means (a) payment of all reasonable costs incurred by the Company in connection with the issuance of the Bonds including, but not limited to, legal and accounting fees and expenses, printing expenses, financial consultants’ fees, financing charges (including underwriting fees and discounts), printing and engraving costs, the fees and expenses of the Rating Agencies and Fitch, Inc., preparation of the financing statements, preparation of any disclosure document and any other documents necessary for the issuance of the Bonds; and (b) payment of the fees and reasonable expenses of the Trustee, the Issuer and the Registrar and the reasonable expenses of their Counsel properly incurred under or in connection with the issuance of the Bonds.

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“Counsel” means an attorney or firm whose members are attorneys duly admitted to practice law before the highest court of any state and, without limitation, may include legal counsel for the Company, the Trustee or the Issuer.

“Credit Agreement” means that certain ABL Credit Agreement, dated as of June 15, 2007, by and among Navistar, Inc (formerly International Truck and Engine Corporation), IC Bus LLC, SST Truck Company LP, IC Bus of Oklahoma, LLC, Navistar Diesel of Alabama, LLC, Credit Suisse, as Administrative Agent, and the other lenders named therein, providing for up to $200 million of revolving credit borrowings, including any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended, restated, modified, renewed, refunded, replaced or refinanced from time to time, regardless of whether such amendment, restatement, modification, renewal, refunding, replacement or refinancing is with the same financial institutions or otherwise.

“Credit Facilities” means, with respect to the Company or any of its Restricted Subsidiaries, one or more debt facilities, including, without limitation, the Credit Agreement, or other financing arrangements (including, without limitation, commercial paper facilities or indentures) providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables), letters of credit or other long-term indebtedness, including any notes, mortgages, guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements or refundings thereof and any indentures or credit facilities or commercial paper facilities or receivables financings that replace, refund or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount permitted to be borrowed thereunder or alters the maturity thereof (provided that such increase in borrowings is permitted under Section 4.07 of the Loan Agreement) or adds Restricted Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other agent, lender or group of lenders.

“Currency Agreement” means any foreign exchange contract, currency swap agreement, currency forward, future or option contract or other similar agreement or arrangement.

“Dated Date” means the date of initial issuance of the Bonds.

“DealCor Subsidiaries” means any Subsidiaries owned as of the Original Securities Issuance Date by the Company or one of its Subsidiaries or acquired by the Company or one of its Subsidiaries after the Original Securities Issuance Date whose principal business is owning or operating a dealership of that sells products manufactured by the Company or any of its Restricted Subsidiaries.

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“Determination of Taxability” shall have the meaning set forth in Section 9.02(b) of the Loan Agreement.  The Trustee shall give notice of a Determination of Taxability as provided in Section 9.05 hereof.

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“Disqualified Capital Stock” means any Capital Stock that, other than solely at the option of the issuer thereof, by its terms (or by the terms of any security into which it is convertible or exchangeable) is, or upon the happening of an event or the passage of time would be, required to be redeemed or repurchased, in whole or in part, prior to the first anniversary of the maturity date of the Senior Notes or has, or upon the happening of an event or the passage of time would have, a redemption or similar payment due on or prior to the first anniversary of the Maturity Date, or is convertible into or exchangeable for debt securities at the option of the holder thereof at any time prior to the first anniversary of the maturity date of the Senior Notes.

“DTC” means The Depository Trust Company and its successors and assigns.

“DTC Participants” means those brokers, securities dealers, banks, trust companies, clearing corporations and certain other organizations from time to time for which DTC holds Bonds as securities depository.

“DTC Representation Letter” has the meaning assigned thereto in Section 2.10(c) hereof.

“Event of Default” (i) under this Indenture, means any occurrence or event specified in Section 8.01 hereof and (ii) under the Loan Agreement, as defined in Section 8.01 of the Loan Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Favorable Opinion of Bond Counsel” means an opinion of Bond Counsel addressed to the Issuer and the Trustee to the effect that the proposed action is not prohibited by this Indenture or the Loan Agreement, as applicable, and will not adversely affect the Tax-Exempt status of the Bonds.  Bond Counsel, with the consent of the Company, may take such actions as it deems necessary in order to enable it to deliver a Favorable Opinion of Bond Counsel, including, but not limited to, the filing of a Form 8038 with the Internal Revenue Service.  See Section 9.03 herein.

“Financial Services Segment” means the business of the Company and its Subsidiaries consisting of (1) the offer and sale of retail, wholesale and lease financing and/or other financial services products to finance the purchase or lease of products sold by the Company and its Restricted Subsidiaries or other manufacturers whose products are from time to time sold through the dealer network of the Company and its Restricted Subsidiaries (2) the financing of wholesale and retail accounts receivable and (3) captive insurance business.

“Foreign Subsidiary” means any Restricted Subsidiary of the Company that is not organized under the laws of the United States, any state thereof or the District of Columbia and any Subsidiary of such Restricted Subsidiary.

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, the opinions and pronouncements of the Public Company Accounting Oversight Board and statements and pronouncements of the Financial Accounting Standards Board or in

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such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, which are in effect as of the Original Securities Issuance Date.

Notwithstanding the foregoing, under one or more of the following circumstances, “GAAP” shall mean such above-described generally accepted accounting principles which are in effect as of the date of the applicable calculation or report (for purposes of this definition, “Current GAAP”):

(a)         If the Senior Note Indenture is (i) modified to permit the use of Current GAAP for a particular covenant or calculation or (ii) replaced in connection with the refinancing of the Senior Notes and the replacement indenture permits the use of Current GAAP for a particular covenant or calculation, then in either case Current GAAP will also be used for the same covenant or calculation under the Loan Agreement; or

(b)         There are no longer any Senior Notes outstanding under the Senior Note Indenture (or senior obligations outstanding under a replacement indenture), in which case, upon the election of the Company, Current GAAP may be used for purposes of any covenant or calculation that the Company may elect.

If any of the provisions above become applicable, the Company shall deliver an Officer’s Certificate to the Trustee describing the change in circumstances and the provisions of the Loan Agreement to which Current GAAP will thereafter apply.  Once the Company makes an election under clause (b) above to apply Current GAAP to a particular covenant or calculation, the Company cannot thereafter elect to use GAAP for such calculation.

“Government Obligations” means securities which are (i) direct obligations of the United States, for the payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States, which are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary receipt issued by a bank or trust company as custodian with respect to any such Government Obligation or a specific payment of interest on or principal of any such Government Obligation held by such custodian for the account of the holder of a depositary receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Government Obligation evidenced by such depositary receipt.

“guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person:

(1)         to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by agreement to

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keepwell, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or

(2)         entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), provided that the term “guarantee” shall not include endorsements for collection or deposit in the ordinary course of business or customary contractual indemnities or warranties not in connection with borrowing money. The term “guarantee” used as a verb has a corresponding meaning.

“Guarantor” means Navistar, Inc., a Delaware corporation, or a successor Person as permitted under Section 2.9 of the Bond Guarantee.  The Guarantor is also a Subsidiary Guarantor.

“Holder,” “Bondholder,” “Bondowner,” “Owner” and “Registered Owner” when used in reference to the Bonds, means the person or persons in whose name or names a Bond shall be registered in the books of Issuer maintained by the Registrar in accordance with the terms of this Indenture.

“IFA Bond Guarantee” means the Bond Guarantee from the Guarantor to Citibank N.A. dated as of October 1, 2010 relating to the IFA Bonds, as it may be amended or supplemented in accordance with its terms.

“IFA Bonds” means the Illinois Finance Authority Recovery Zone Facility Bonds (Navistar International Corporation Project) Series 2010 in the aggregate principal amount of $135,000,000.

“IFA Loan Agreement” means the Loan Agreement between the Company and the Illinois Finance Authority dated as of October 1, 2010 relating to the IFA Bonds, as it may be amended or supplemented in accordance with its terms.

“incur” means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume, guarantee or otherwise become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of such Person (and “incurrence,” “incurred,” “incurable” and “incurring” shall have meanings correlative to the foregoing), provided that:

(1)         any Indebtedness or Capital Stock of a Person existing at the time such Person becomes (after the Original Securities Issuance Date) a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) of the Company shall be deemed to be incurred or issued, as the case may be, by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary of the Company; and

(2)         any amendment, modification or waiver of any document pursuant to which Indebtedness was previously incurred shall not be deemed to be an incurrence of

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Indebtedness unless and then only to the extent such amendment, modification or waiver increases the principal or premium thereof or interest rate thereon (including by way of original issue discount).

“Indebtedness” means, with respect to any Person, at any date, any of the following, without duplication:

(1)         any liability, contingent or otherwise, of such Person (a) for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), (b) evidenced by a note, bond, debenture or similar instrument or letters of credit (including a purchase money obligation) or (c) for the payment of money relating to a Capitalized Lease Obligation or other obligation (whether issued or assumed) relating to the accrued purchase price of property or services, but excluding trade accounts payable, deferred expenses, deferred compensation and similar obligations of such Person arising in the ordinary course of business;

(2)         all conditional sale obligations and all obligations under any title retention agreement (even if the rights and remedies of the seller under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade accounts payable, deferred expenses, deferred compensation and similar obligations of such Person arising in the ordinary course of business or earn-out obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP;

(3)         all obligations for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction entered into in the ordinary course of business;

(4)         all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien (other than in connection with property subject to a Qualified Securitization Transaction) on any asset or property (including, without limitation, leasehold interests and any other tangible or intangible property) of such Person, whether or not such Indebtedness is assumed by such Person or is not otherwise such Person’s legal liability; provided, that if the obligations so secured have not been assumed by such Person or are otherwise not such Person’s legal liability, the amount of such Indebtedness for the purposes of this definition shall be limited to the lesser of the amount of such Indebtedness secured by such Lien or the fair market value of the assets or property securing such Lien;

(5)         all Indebtedness of others (including all dividends of other Persons the payment of which is) guaranteed, directly or indirectly, by such Person or that is otherwise its legal liability or which such Person has agreed to purchase or repurchase or in respect of which such Person has agreed contingently to supply or advance funds;

(6)         all Disqualified Capital Stock issued by such Person and Preferred Stock of such Person’s Restricted Subsidiary with the amount of Indebtedness represented by

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such Disqualified Capital Stock or Preferred Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends if any;

(7)         all net amounts owing under Interest Rate Protection Agreements, Currency Agreements or Commodity Agreements; and

(8)         all Attributable Indebtedness in respect of Sale/Leaseback Transactions entered into by such person.

For purposes hereof, the “maximum fixed repurchase price” of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the Loan Agreement, and if such price is based upon, or measured by, the fair market value of such Disqualified Capital Stock, such fair market value shall be determined reasonably and in good faith by the Board of Directors of the issuer of such Disqualified Capital Stock. Notwithstanding the foregoing, Indebtedness shall not include: (i) any guarantees of obligations of suppliers to the Company or any of its Restricted Subsidiaries that ensure timely delivery of products, tooling and other materials used in the production process or (ii) any customary contractual indemnities or warranties.

The amount of Indebtedness of any Person at any date shall be the outstanding balance without duplication at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date; provided that the amount outstanding at any time of any Indebtedness issued with original issue discount is the full amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in accordance with GAAP.

“Indenture” means this Indenture of Trust between the Issuer and the Trustee relating to issuance of the Bonds, as amended or supplemented from time to time as permitted herein.

“Initial Subsidiary Guarantor” means the Guarantor, a direct subsidiary of the Company that has guaranteed the Bonds as of the Closing Date pursuant to the Bond Guarantee.

“Interest Account” means the trust account by that name established within the Bond Fund pursuant to Section 5.01(a) hereof.

“Interest Payment Date” means April 15, 2011 and each April 15 and October 15 thereafter on which interest is due and payable with respect to the Bonds.

“Interest Rate Protection Agreement” means any credit default swap or option agreement, interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement (whether from fixed to floating or from floating to

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fixed), interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement.

“Investment” by any Person means any direct or indirect:

(1)         loan, advance or other extension of credit or capital contribution (by means of transfers of cash or other property (valued at the fair market value thereof as of the date of transfer) to others or payments for property or services for the account or use of others, or otherwise other than in the ordinary course of business) and any guarantee of Indebtedness of any other Person;

(2)         purchase or acquisition of Capital Stock, bonds, notes, debentures or other securities or evidences of Indebtedness issued by any other Person (whether by merger, consolidation, amalgamation or otherwise and whether or not purchased directly from the issuer of such securities or evidences of Indebtedness); and

(3)         all other items that would be classified as investments (including, without limitation, purchases of assets outside the ordinary course of business) on a balance sheet of such Person prepared in accordance with GAAP.

If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Capital Stock of a direct or indirect Restricted Subsidiary such that, after giving effect to such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company will be deemed to have made an Investment on the date of any such sale or other disposition equal to the fair market value of the Investment in such Subsidiary not sold or disposed of. For purposes of the definition of “Unrestricted Subsidiary” and Section 4.08 of the Loan Agreement only,

(1)         “Investment” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of any Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, that if such designation is made in connection with the acquisition of such Subsidiary or the assets owned by such Subsidiary, the “Investment” in such Subsidiary shall be deemed to be the consideration paid in connection with such acquisition; provided, further, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (a) the Company’s “Investment” in such Subsidiary at the time of such redesignation less (b) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation and

(2)         any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Board of Directors.

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“Investment Grade” means:

(1)         with respect to S&P any of the long-term rating categories from and including AAA to and including BBB-; and

(2)         with respect to ▇▇▇▇▇’▇ any of the long-term rating categories from and including Aaa to and including Baa3.

“Issuer” means The County of ▇▇▇▇, Illinois, a home rule unit under Section 6(a) of Article VII of the 1970 Constitution of the State of Illinois, and its successors and assigns.

“Issuer Representative” means the Chief Financial Officer of the Issuer, or any other member or officer of the Issuer designated by the Issuer to act on behalf of the Issuer.

“Lien” means, with respect to any Person, any mortgage, pledge, lien, encumbrance, easement, restriction, covenant, right-of-way, charge or adverse claim affecting tide or resulting in an encumbrance against real or personal property of such Person, or a security interest of any kind, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option, right of first refusal or other similar agreement to sell, in each case securing obligations of such Person and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statute or statutes) of any jurisdiction but excluding any such filing or agreement which reflects ownership by a third party of

(1)         property leased to the referent Person or any of its Restricted Subsidiaries under a lease that is not in the nature of a conditional sale or title retention agreement or

(2)         accounts, general intangibles or chattel paper sold to the referent Person.

“Limited Offering Memorandum” means the Limited Offering Memorandum dated October 19, 2010 of the Company, as supplemented and amended, prepared in connection with the issuance and sale of the Bonds.

“Loan” means the loan by the Issuer to the Company of the proceeds received from the sale of the Bonds.

“Loan Agreement” means the Loan Agreement, dated as of the date hereof, between the Issuer and the Company, as amended and supplemented from time to time as permitted therein.

“Loan Payments” means the payments required to be made by the Company pursuant to Section 6.01(a) of the Loan Agreement.

“Mail” means by first-class mail postage prepaid.

“Master Intercompany Agreements” means:  (i) the Amended and Restated Master Intercompany Agreement, dated as of April 1, 2007, between Navistar Financial Corporation and Navistar, Inc. (formerly known as International Truck and Engine Corporation), and its related

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manufacturing subsidiaries and affiliates, as amended to the Original Securities Issuance Date; (ii) the agreement, dated as of December 18, 1986, among Navistar International Corporation Canada, Navistar Financial Corporation Canada Inc. and General Electric Canadian Holdings Limited; (iii) the Operating Agreement, dated March 5, 2010, among General Electric Capital Corporation, GE Capital Commercial, Inc., Navistar International Corporation, Navistar, Inc. and Navistar Financial Corporation, (iv) the Intercompany Operating and Partnership Agreement, dated as of December 1, 2008, by and among Navistar Financial, Inc. De C.V., Sociedad Financiera De Objeto Múltiple, E.N.R. and Navistar México, S.A. De C.V., (v) one or more agreements serving some or all of the same purposes of the agreements listed in clauses (i) through (iv) above entered into after the Original Securities Issuance Date among the Company or one of its Restricted Subsidiaries and one or more other Persons (including one or more Unrestricted Subsidiaries) in the ordinary course of business on terms no less favorable to the Company and its Restricted Subsidiaries than the agreements in clauses (i), (ii), (iii) and (iv) and (vi) any amendment, modification, supplement or restatement from time to time of the agreements in clauses (i) through (v); provided that none of the aforementioned agreements shall be amended, modified, supplemented or restated in a manner adverse in any material respect to the interests of the Company and its Restricted Subsidiaries taken as a whole.

“Moody’s” means ▇▇▇▇▇’▇ Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, and, if such corporation shall for any reason no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized rating agency designated by the Company by notice to the Issuer and the Trustee.

“Net Available Proceeds” from any Asset Disposition by any Person means Cash Equivalents received (including by way of sale or discounting of a note, installment receivable or other receivable, but excluding any other consideration received in the form of assumption by the acquirer of Indebtedness or other obligations relating to such properties or assets or received in any other non-cash form) therefrom by such Person, including any cash received by way of deferred payment or upon the monetization or other disposition of any non-cash consideration (including notes or other securities) received in connection with such Asset Disposition, net of:

(1)         all legal, title and recording tax expenses, commissions and other fees and expenses incurred (including, without limitation, fees and expenses of accountants, brokers, printers and other similar entities) and all federal, state, foreign and local taxes required to be accrued as a liability as a consequence of such Asset Disposition;

(2)         all payments made by such Person or its Restricted Subsidiaries on any Indebtedness which is secured by such assets in accordance with the terms of any Lien upon or with respect to such assets or which must by the terms of such Lien, or in order to obtain a necessary consent to such Asset Disposition or by applicable law, be repaid out of the proceeds from such Asset Disposition;

(3)         all payments made with respect to liabilities associated with the assets which are the subject of the Asset Disposition, including, without limitation, trade payables and other accrued liabilities;

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(4)         appropriate amounts to be provided by such Person or any Restricted Subsidiary thereof, as the case may be, as a reserve in accordance with GAAP against any liabilities associated with such assets and retained by such Person or any Restricted Subsidiary thereof, as the case may be, after such Asset Disposition, including, without limitation, liabilities under any indemnification obligations and severance and other employee termination costs associated with such Asset Disposition (but excluding any indemnification obligations and severance and other employee termination costs that, by their terms, will not be made prior to the maturity date of the Bonds, until such time as such amounts are no longer reserved or such reserve is no longer necessary (at which time any remaining amounts will become Net Available Proceeds to be allocated in accordance with the provisions of Section 4.09(c) of the Loan Agreement; and

(5)         all distributions and other payments made to minority interest holders, if any, in Restricted Subsidiaries of such Person or joint ventures as a result of such Asset Disposition.

“Net Cash Proceeds” with respect to any issuance or sale of Capital Stock, means the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, listing fees, discounts or commissions and brokerage, consultant and other fees and charges actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result of such issuance or sale (after taking into account any available tax credit or deductions and any tax sharing arrangements).

“Obligations” means any principal, premiums, interest, penalties, fees, indemnifications, reimbursements, damages, and other liabilities payable under the documentation governing any indebtedness.

“Offer to Purchase” means a written offer (the “Offer”) sent by the Trustee at the direction of the Company by Mail to each Holder at its address appearing in the register for the Bonds on the date of the Offer, offering to purchase up to the principal amount of the Bonds in such Offer at the purchase price specified in such Offer (as determined pursuant to the Loan Agreement).  Unless otherwise required by applicable law, the Offer shall specify an expiration date (the “Expiration Date”) of the Offer to Purchase which shall be not less than 30 days nor more than 60 days after the date of such Offer and a settlement date (the “Purchase Date”) for purchase of such Bonds within five Business Days after the Expiration Date.  The Company shall notify the Trustee at least 15 Business Days (or such shorter period as is acceptable to such Trustee) prior to the mailing of the Offer of the Company’s obligation to make an Offer to Purchase, and the Offer shall be mailed by the Trustee in the name and at the expense of the Company.  The Offer shall contain all the information required by applicable law to be included therein.  The Offer shall contain all instructions and materials necessary to enable such Holders to tender such Bonds pursuant to the Offer to Purchase. The Offer shall also state:

(1)         the section of the Loan Agreement pursuant to which the Offer to Purchase is being made;

(2)         the Expiration Date and the Purchase Date;

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(3)         the aggregate principal amount of the outstanding Bonds offered to be purchased by the Company pursuant to the Offer to Purchase (including, if less than 100%, the manner by which such amount has been determined pursuant to Section 4.09 of the Loan Agreement) (the “Purchase Amount”);

(4)         the purchase price to be paid by the Company for each $1,000 aggregate principal amount of Bonds accepted for payment (as specified pursuant to the Loan Agreement) (the “Purchase Price”);

(5)         that the Holder may tender all or any portion of the Bonds registered in the name of such Holder and that any portion of a Bond tendered must be tendered in Authorized Denominations and the remaining non-tendered portion shall also be in an Authorized Denomination;

(6)         the place or places where Bonds are to be surrendered for tender pursuant to the Offer to Purchase;

(7)         that interest on any Bond not tendered or tendered but not purchased by the Company pursuant to the Offer to Purchase will continue to accrue;

(8)         that on the Purchase Date the Purchase Price will become due and payable upon each Bond being accepted for payment pursuant to the Offer to Purchase and that interest thereon shall cease to accrue on and after the Purchase Date;

(9)         that each Holder electing to tender all or any portion of a Bond pursuant to the Offer to Purchase will be required to surrender such Bond at the place or places specified in the Offer or transfer such Holder’s beneficial interest to the Company, prior to the close of business on the Expiration Date (any such Bond not in Book Entry form being, if the Company or the Trustee so requires, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by the Holder thereof or his attorney duly authorized in writing);

(10)          that Holders will be entitled to withdraw all or any portion of Bonds tendered if the Company (or the Trustee) receives, not later than the close of business on the fifth Business Day next preceding the Expiration Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Bonds the Holder tendered, the certificate number of the Bond the Holder tendered and a statement that such Holder is withdrawing all or a portion of his tender;

(11)          that (I) if Bonds in an aggregate principal amount less than or equal to the Purchase Amount are duly tendered and not withdrawn pursuant to the Offer to Purchase, the Company shall purchase all such Bonds and (II) if Bonds in an aggregate principal amount in excess of the Purchase Amount are tendered and not withdrawn pursuant to the Offer to Purchase, the Company shall purchase Bonds having an aggregate principal amount equal to the Purchase Amount on a pro rata basis (with such adjustments as may be deemed appropriate so that only Bonds in Authorized Denominations shall be

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purchased and the unpurchased portion of the Bonds shall be in Authorized Denominations); and

(12)          that in the case of any Holder whose Bond is purchased only in part, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Bond without service charge, a new Bond or Bonds of any Authorized Denomination as requested by such Holder, in all aggregate principal amount equal to and in exchange for the unpurchased portion of the Bond or Bonds so tendered.

An Offer to Purchase shall be governed by and effected in accordance with the provisions above pertaining to any Offer.

“Officer” means the Chairman of the Board, the President, the Chief Financial Officer, any Executive Vice President, Senior Vice President or Vice President, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Assistant Secretary.

“Officers’ Certificate,” when used with respect to the Company, means a certificate signed by the Chairman of the Board, the President, the Chief Financial Officer, any Executive Vice President, Senior Vice President and any Vice President, the Treasurer, any Assistant Treasurer, the Controller of the Company, the Secretary or Assistant Secretary.

“Opinion of Counsel” means a written opinion from legal counsel.  Such counsel may be an employee of or counsel to the Company.

“Original Securities Issuance Date” means October 28, 2009, being the date of the issuance of the Senior Notes.

“Outstanding” or “Bonds Outstanding” or “Outstanding Bonds” means, as of any given date, all Bonds which have been authenticated and delivered by the Registrar under this Indenture, except:

(a)         Bonds canceled or purchased by or delivered to the Trustee for cancellation;

(b)         Bonds that have become due (at maturity or upon redemption, acceleration or otherwise) and for the payment, including premium if any, and interest accrued to the due date, of which sufficient moneys are held by the Trustee;

(c)          Bonds deemed paid in accordance with Article VII hereof;

(d)         Bonds in lieu of which others have been authenticated under Section 2.05 hereof (relating to transfer and exchange of Bonds) or Section 2.07 hereof (relating to mutilated, lost, stolen or destroyed Bonds) or Bonds paid pursuant to this Indenture; and

(e)          for purposes of any direction, consent or waiver under this Indenture, Bonds owned as described in Section 12.05 hereof.

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“Owner”:  See definition of “Holder” herein.

“Pari Passu Debt” means any Indebtedness of the Company or a Subsidiary Guarantor that ranks in right of equal payment with the Senior Notes, the Bonds, the IFA Bonds and the related Subsidiary Guarantees, as the case may be.

“Permitted Business” means (1) the lines of business conducted by the Company and its Restricted Subsidiaries on the Original Securities Issuance Date and businesses reasonably related, ancillary or complementary thereto, including reasonably related extensions or expansions thereof, and (2) any unrelated business, to the extent that it is not material in size.

“Permitted Investments” means:

(1)         Investments in Cash Equivalents;

(2)         guarantees of Indebtedness otherwise permitted under Section 4.07 of the Loan Agreement (other than clause (y) thereof);

(3)         any Investment by the Company or any Restricted Subsidiary in or relating to a Securitization Subsidiary that, in the good faith determination of the Company, are necessary or advisable to effect any Qualified Securitization Transaction or any repurchase obligation in connection therewith;

(4)         deposits, including interest-bearing deposits, maintained in the ordinary course of business in banks;

(5)         any acquisition of the Capital Stock of any Person and any Investment in another Person if as a result of such Investment such other Person is merged with or consolidated into, or transfers or conveys all or substantially all of its assets to, the Company or a Restricted Subsidiary of the Company; provided, that after giving effect to any such acquisition or Investment such Person shall become a Restricted Subsidiary of the Company or another Restricted Subsidiary of the Company;

(6)         trade receivables and prepaid expenses, in each case arising in the ordinary course of business; provided, that such receivables and prepaid expenses would be recorded as assets of such Person in accordance with GAAP;

(7)         endorsements for collection or deposit in the ordinary course of business by such Person of bank drafts and similar negotiable instruments of such other Person received as payment for ordinary course of business trade receivables;

(8)         any swap, hedging or other derivative obligation with an unaffiliated Person otherwise permitted by the Loan Agreement (including, without limitation, any Currency Agreement, Commodity Agreement and any Interest Rate Protection Agreement otherwise permitted by the Loan Agreement);

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(9)         Investments received as consideration for an Asset Disposition in compliance with Section 4.09 of the Loan Agreement;

(10)          Investments acquired in exchange for the issuance of Capital Stock (other than Disqualified Capital Stock) of the Company or acquired with the Net Cash Proceeds received by the Company after the Original Securities Issuance Date from the issuance and sale of Capital Stock (other than Disqualified Capital Stock) of the Company; provided that such Net Cash Proceeds are used to make such Investment within 60 days of the receipt thereof and the amount of all such Net Cash Proceeds will be excluded from clause (3)(B) of Section 4.08(a) of the Loan Agreement;

(11)          loans and advances to employees made in the ordinary course of business in an aggregate amount not to exceed $10.0 million at any one time outstanding;

(12)          Investments outstanding on the Original Securities Issuance Date;

(13)          Investments in the Company or a Restricted Subsidiary;

(14)          Investments in securities of trade creditors, suppliers or customers received pursuant to any plan of reorganization, restructuring, workout or similar arrangement of such trade creditor, supplier or customer or upon the compromise of any debt created in the ordinary course of business owing to the Company or a Subsidiary, whether through litigation, arbitration or otherwise;

(15)          Investments in any Person after the Original Securities Issuance Date having an aggregate fair market value (measured on the date each Investment was made without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (15) that are at that time outstanding (after giving effect to any net cash proceeds received from any sale, transfer or other disposition) not to exceed $75.0 million;

(16)          Investments in Navistar Financial Corporation, having an aggregate fair market value (measured on the date each Investment was made without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (16) that are at that time outstanding not to exceed $100.0 million;

(17)          Investments made pursuant to the Support Agreement or Master Intercompany Agreements;

(18)          extensions of loans, trade credit and advances to, and guarantees in favor of customers and suppliers and lease, utility and similar deposits to the extent made in the ordinary course of business; and

(19)          Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangement with other Persons.

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“Permitted Joint Venture” means any Person which is, directly or indirectly, through its subsidiaries or otherwise, engaged principally in any business in which the Company is engaged, or a reasonably related, ancillary or complimentary business, and the Capital Stock of which is owned, or acquired in compliance with the terms of the Loan Agreement, by the Company or a Restricted Subsidiary and owned by one or more Persons other than the Company or any Affiliate of the Company.

“Permitted Liens” mean: