NAVISTAR FINANCIAL 1998-A OWNER TRUST
$500,864,370.04 Asset Backed Notes
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
(SELLER)
UNDERWRITING AGREEMENT
----------------------
May 20, 1998
Chase Securities Inc.
As Representative of the
Several Underwriters named
on Schedule I hereto,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Navistar Financial Retail Receivables Corporation, a Delaware
corporation (the "Seller"), proposes to form an owner trust, Navistar Financial
1998-A Owner Trust (the "Trust"), pursuant to a Trust Agreement (the "Trust
Agreement") to be dated as of the Closing Date (as hereinafter defined), between
the Seller and Chase Manhattan Bank Delaware, as owner trustee (the "Owner
Trustee"), which will issue (i) $483,334,000.00 principal amount of its Class A
5.94% Asset Backed Notes (the "Class A Notes") and (ii) $17,530,370.04 principal
amount of its Class B 6.10% Asset Backed Notes (the "Class B Notes"; together
with the Class A Notes, the "Notes") pursuant to an Indenture to be dated as of
the Closing Date (the "Indenture") between the Trust and The Bank of New York,
as trustee (the "Indenture Trustee"). The Trust will also issue one or more
certificates (the "Certificates") to the Seller representing the equity of the
Trust. The assets of the Trust will include, among other things, a pool of
retail installment sale contracts for and retail notes evidencing loans secured
by new and used medium and heavy duty trucks, buses and trailers (the
"Receivables"), certain monies due or received thereunder on or after May 1,
1998 (the "Cutoff Date"), security interests in the vehicles financed thereby,
certain accounts and the proceeds thereof, the proceeds, if any, of Dealer
Liability, NITC Purchase Obligations and any Guaranties, the proceeds from
claims on certain insurance policies, the benefits of any lease assignments and
certain rights of the Seller under the Purchase Agreement. The Receivables will
be transferred to the Trust by the Seller in exchange for the Notes and the
Certificates and the Receivables will be serviced for the Trust by Navistar
Financial Corporation (in its capacity as Servicer, the "Servicer") pursuant to
a Pooling and Servicing Agreement (the
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"Pooling and Servicing Agreement") to be dated as of the Closing Date among the
Seller, the Servicer and the Trust. Capitalized terms used and not otherwise
defined herein shall have the meanings given them in the Pooling and Servicing
Agreement.
This is to confirm the agreement concerning the purchase of the Notes
from the Seller by the several Underwriters named in Schedule 1 hereto (the
"Underwriters").
1. Representations, Warranties and Agreements of NFC and the Seller.
NFC and the Seller jointly and severally represent and warrant to and agree with
the several Underwriters that:
(a) A registration statement on Form S-3 (No. 33-64249) has been
filed by the Seller with the Securities and Exchange Commission (the
"Commission") and has become effective under the Securities Act of 1933, as
amended (the "Securities Act"). Such registration statement may have been
amended or supplemented from time to time prior to the date hereof. Any
such amendment or supplement was filed with the Commission in accordance
with the Securities Act and the rules and regulations of the Commission
thereunder (the "Rules and Regulations") and any such amendment has become
effective under the Securities Act. The Seller proposes to file with the
Commission pursuant to Rule 424(b) of the Rules and Regulations a
prospectus supplement (the "Prospectus Supplement") to the prospectus dated
October 21, 1996, relating to the Notes and the method of distribution
thereof. Copies of such registration statement, any amendment or supplement
thereto, including the Term Sheet dated May 18, 1998 relating to the Notes
(the "Term Sheet") disseminated by the Underwriters, such prospectus and
the Prospectus Supplement have been delivered to you. Such registration
statement, including exhibits thereto, and the Term Sheet as incorporated
by reference therein, and such prospectus, as amended or supplemented to
the date hereof, and as further supplemented by the Prospectus Supplement,
are hereinafter referred to as the "Registration Statement" and the
"Prospectus," respectively. The conditions to the use of a registration
statement on Form S-3 under the Securities Act have been satisfied. The
Seller filed the Term Sheet on Form 8-K with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), within
two business days of its dissemination by the Underwriters.
(b) The Registration Statement, at the time it became effective, any
post-effective amendment thereto, at the time it became effective, and the
Prospectus, as of the date of the Prospectus Supplement, complied in all
material respects with the applicable requirements of the Securities Act
and the Rules and Regulations and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the rules and regulations of the
Commission thereunder and did not include any untrue statement of a
material fact and, in the case of the Registration Statement and any post-
effective amendment thereto, did not omit to state any material fact
required to be stated therein or necessary to make the
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statements therein not misleading and, in the case of the Prospectus, did
not omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made not misleading; on the Closing Date, the Registration Statement and
the Prospectus, as amended or supplemented as of the Closing Date, will
comply in all material respects with the applicable requirements of the
Securities Act and the Rules and Regulations and the Trust Indenture Act
and the rules and regulations of the Commission thereunder and neither the
Prospectus nor any amendment or supplement thereto will include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The representation and warranty
in the preceding sentence does not apply to (i) that part of the
Registration Statement which shall constitute the Statement of Eligibility
and Qualification (Form T-1) of the Indenture Trustee under the Trust
Indenture Act or (ii) that information contained in or omitted from the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with the Underwriters'
Information (as defined herein). The Indenture has been qualified under the
Trust Indenture Act.
(c) The Seller has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
power and authority to own its properties and to conduct its business as
such properties are presently owned and such business is presently
conducted, and had at all relevant times, and now has, power, authority and
legal right to acquire, own and sell the Receivables.
(d) The representations and warranties of the Seller in Section 3.03
of the Purchase Agreement and Section 6.01 of the Pooling and Servicing
Agreement will be true and correct as of the Closing Date.
(e) The representations and warranties of NFC in Sections 3.01 and
3.02 of the Purchase Agreement and of the Servicer in Section 6.01 of the
Pooling and Servicing Agreement will be true and correct as of the Closing
Date.
(f) Each of the Seller and NFC has the power and authority to execute
and deliver this Agreement and to carry out the terms of this Agreement and
the execution, delivery and performance by each of the Seller and NFC of
this Agreement have been duly authorized by each of the Seller and NFC by
all necessary corporate action.
(g) This Agreement has been duly executed and delivered by NFC and
the Seller.
(h) When authenticated by the Indenture Trustee in accordance with
the Indenture and delivered and paid for pursuant to this Agreement, the
Notes will be duly issued and constitute legal, valid and binding
obligations of the Trust
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enforceable against the Trust in accordance with their terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of
creditors' rights in general and by general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(i) The execution, delivery and performance of this Agreement and the
consummation by each of the Seller and NFC of the transactions contemplated
hereby shall not conflict with, result in any breach of any of the terms
and provisions of or constitute (with or without notice or lapse of time) a
default under, the certificate of incorporation or by-laws of such party,
or any indenture, agreement or other instrument to which either such party
is a party or by which it is bound, or violate any law or, to either such
party's knowledge, any order, rule or regulation applicable to such party
of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over such
party or any of its properties; and, except for the registration of the
Notes under the Securities Act, the qualification of the Indenture under
the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange Act,
and applicable state securities laws in connection with the purchase and
distribution of the Notes by the Underwriters, no permit, consent, approval
of, or declaration to or filing with, any governmental authority is
required in connection with the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby.
(j) There are no proceedings or, to either of the Seller's or NFC's
knowledge, investigations pending or, to such party's knowledge, threatened
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality having jurisdiction over such party or its
properties (i) asserting the invalidity of this Agreement or any of the
Notes, (ii) seeking to prevent the issuance of any of the Notes or the
consummation of any of the transactions contemplated by this Agreement,
(iii) seeking any determination or ruling that might materially and
adversely affect the performance by such party of its obligations under, or
the validity or enforceability of, the Notes or this Agreement, or (iv)
that may adversely affect the federal or state income, excise, franchise or
similar tax attributes of the Notes.
(k) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations and which
have not been so described or filed.
(l) The Seller (i) is not in violation of its certificate of
incorporation or by-laws, (ii) is not in default, in any material respect,
and no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of
any term, covenant or condition contained
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in any indenture, agreement, mortgage, deed of trust or other instrument to
which the Seller is a party or by which the Seller is bound or to which any
of the Seller's property or assets is subject or (iii) is not in violation
in any respect of any law, order, rule or regulation applicable to the
Seller or any of the Seller's property of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over it or any of its property, except
any violation or default that would not have a material adverse effect on
the condition (financial or otherwise), results of operations, business or
prospects of the Seller.
(m) The Purchase Agreement, the Custodian Agreement, the
Administration Agreement and the Further Transfer and Servicing Agreements
conform in all material respects with the descriptions thereof contained in
the Registration Statement and the Prospectus.
(n) Neither the Trust nor the Seller is an "investment company" or
under the "control" of an "investment company" within the meaning thereof
as defined in the Investment Company Act of 1940, as amended.
(o) None of NFC, the Seller or anyone acting on its behalf has taken
any action that would require qualification of the Trust Agreement under
the Trust Indenture Act.
2. Purchase by the Underwriters. On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Seller agrees to issue and sell to
each of the Underwriters, severally and not jointly, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Seller, the
respective principal amount of the Notes set forth opposite the name of such
Underwriter in Schedule 1 hereto at a purchase price equal to (i) with respect
to the Class A Notes, 99.7938% of the principal amount thereof and (ii) with
respect to the Class B Notes, 99.4902% of the principal amount thereof.
The Seller shall not be obligated to sell or deliver any of the Notes
except upon payment for all the Notes to be purchased as provided herein.
3. Delivery of and Payment for the Notes. Delivery of and payment
for the Notes shall be made at the office of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, or at
such other place as shall be agreed upon by Chase Securities Inc., as
representative of the Underwriters (the "Representative") and the Seller, at
10:00 A.M., New York City time, on June 4, 1998, or at such other date or time,
not later than five full business days thereafter, as shall be agreed upon by
the Representative and the Seller (such date and time being referred to herein
as the "Closing Date"). On the Closing Date, the Seller shall deliver or cause
to be delivered to the Representative for the account of each Underwriter the
Notes against payment to or upon the order of the Seller of the purchase price
in immediately available funds. Time shall be of the essence, and delivery at
the time and place specified pursuant to this Agreement is a further
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condition of the obligation of each Underwriter hereunder. Upon delivery, each
class of the Notes shall be represented by one or more global certificates
registered in the name of Cede & Co., as nominee of the Depository Trust Company
("DTC"). The interest of the beneficial owners of the Notes will be represented
by book-entries on the records of DTC and participating members thereof.
Definitive certificates representing the Note will be available only under
limited circumstances.
4. FURTHER AGREEMENTS OF THE SELLER. The Seller agrees with each of
the several Underwriters:
(a) To file the Prospectus Supplement with the Commission pursuant to
and in accordance with Rule 424(b) of the Rules and Regulations within the
time period prescribed by such rule and provide evidence statisfactory to
the Representative of such timely filing.
(b) During any period in which a prospectus relating to the notes is
required to be delivered under the Securities Act: to advise the
Representative promptly of any proposal to amend the Registration Statement
or amend or supplement the Prospectus and not to effect any such amendment
or supplementation without the consent of the Representative; to advise
the Representative promptly of (i) the effectiveness of any post-effective
amendment to the Registration Statement, (ii) any request by the Commission
for any amendment of the Registration Statement or the Prospectus or for
any additional information, (iii) the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the initiation or threatening of any proceedings for that purpose, (iv) the
issuance by the Commission of any order preventing or suspending the use of
any prospectus relating to the notes or the initiation or threatening of
any proceedings for that purpose and (v) the receipt by the Seller of any
notification with respect to the suspension of the qualification of the
notes for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and to use best efforts to prevent the
issuance of any such stop order or of any order presenting or suspending
the use of any prospectus relating to the notes or suspending any such
qualification and, if any such stop order or order of suspension is issued,
to obtain the lifting thereof at the earliest possible time.
(c) If, during any period in which, in the opinion of counsel to the
Underwriters, a prospectus is required by law to be delivered in connection
with the sale of notes, any event shall have occurred as a result of which
the Prospectus, as then amended or supplemented, would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
when such Prospectus is delivered to a purchaser, not misleading, or if for
any other reason it shall be necessary at such time to amend or supplement
the Prospectus in order to comply with the Securities Act, to notify the
Representative immediately thereof, and to promptly prepare and file with
the Commission, subject to
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paragraph (b) of this Section 4, an amendment or a supplement to the
Prospectus such that the statements in the Prospectus, as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading, or such that the
Prospectus will comply with the Securities Act.
(d) To furnish promptly to each of the Representative and counsel for
the Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith; and during
the period described in paragraph (c) of this Section 4, to deliver
promptly without charge to the Representative such number of the following
documents as the Representative may from time to time reasonably request:
(i) conformed copies of the Registration Statement as originally filed with
the Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement, the Purchase Agreement, the Custodian Agreement,
the Administration Agreement and the Further Transfer and Servicing
Agreements) and (ii) any preliminary prospectus supplement, the Term Sheet,
the Prospectus and any amendment or supplement thereto.
(e) During the period described in paragraph (c) of this Section 4,
to file promptly with the Commission any amendment to the Registration
Statement or the Prospectus or any supplement to the Prospectus that may,
in the judgment of the Seller, or, in the reasonable judgment of the
Representative, be required by the Securities Act or requested by the
Commission.
(f) For so long as any of the Notes are outstanding, to furnish to
the underwriters (i) copies of all materials furnished by the Trust to the
Noteholders and all reports and financial statements furnished by the Trust
to the Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder and (ii) from time to time, such other
information concerning the Seller and the Trust as the Representative may
reasonably request.
(g) Promptly from time to time to take such action as the
Representative may reasonably request to qualify the notes for offering and
sale under the securities laws of such jurisdictions as the Representative
may request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the notes; provided that in
connection therewith the Seller shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction.
(h) For a period of 30 days from the date of the Prospectus, to not
offer for sale, sell, contract to sell or otherwise dispose of, directly or
indirectly, or file a registration statement for, or announce any offering
of, any securities collateralized by, or evidencing an ownership interest
in, a pool of retail
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installment sale contracts for and retail notes evidencing loans secured
by, new and used medium and heavy duty trucks, buses and trailers (other
than the Notes and retail notes sold under NFC's retail purchase facility)
without the prior written consent of the Representative.
(i) For a period from the date of this Agreement until the
retirement of the Notes, or until such time as no Underwriter shall
maintain a secondary market in the Notes, whichever occurs first, to
deliver to you the annual statement of compliance and the annual
independent certified public accountants' report furnished to the Owner
Trustee and the Indenture Trustee, pursuant to the Owner Trustee and the
Indenture Trustee, respectively.
(j) To the extent, if any, that the ratings provided with respect to
the Notes by the Standard & Poor's Ratings Service ("S&P") and ▇▇▇▇▇'▇
Investors Service ("Moody's) are conditional upon the furnishing of
documents or the taking of any other actions by NFC or the Seller, to
furnish such documents and take any such other actions.
5. REPRESENTATION OF THE UNDERWRITERS. Each Underwriter hereby
represents and warrants that the Term Sheet constitutes the only "Series Term
Sheet" (as such term is defined in the no-action letter addressed to Greenwood
Trust Company, Discover Card Master Trust I dated April 5, 1996) and the only
"Computational Materials," "ABS Term Sheets," "Structural Term Sheets" or
"Collateral Term Sheet" (as such terms are defined in the no-action letters
addressed to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Acceptance Corporation I, et al. dated May 20,
1994 and to the Public Securities Association dated February 17, 1995)
disseminated by it in connection with offering of the Notes contemplated
hereunder.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective
obligations of the several Underwriters hereunder are subject to the accuracy,
when made and on the Closing Date, of the representations and warranties of
NFC and the Seller contained herein, to the accuracy of the statements of NFC
or the Seller made in any certificates pursuant to the provisions hereof, to the
performance by the Seller of its obligations hereunder, and to each of the
following additional terms and conditions.
(a) Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with to the reasonable
satisfaction of the Representative; and the Seller shall have filed the
Prospectus Supplement with the Commission pursuant to Rule 424(b) of the
Rules and Regulations within the time period prescribed by such rule.
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(b) All corporate proceedings other legal matters incident to the
authorization, form and validity of this Agreement, the Notes, the Purchase
Agreement, the Custodian Agreement, the Administration Agreement, the Further
Transfer and Servicing Agreements, the Registration Statement and the
Prospectus, and all other legal matters relating to such agreements and the
transactions contemplated hereby and thereby shall be reasonably satisfactory in
all material respects to counsel for the Underwriters, and the Seller shall have
furnished to such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(c) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ shall have furnished to the Representative their
written opinions, as counsel to the Seller, addressed to the Underwriters and
dated the Closing Date, in substantially the forms of Exhibit A-1 and Exhibit
A-2 hereto.
(d) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ shall have furnished to the Representative their
written opinion, as counsel to the Seller, addressed to the Underwriters and
dated the Closing Date, in form and substance reasonably satisfactory to the
Representative, with respect to the characterization of the transfer of the
Receivables by NFC to the Seller pursuant to the Purchase Agreement as a sale
and the non-consolidation of NFC and the Seller.
(e) The Representative shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to such matters as the Representative may require,
and the Seller shall have furnished to such counsel such documents as they
reasonably request for enabling them to pass upon such matters.
(f) ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ shall have furnished to the
Representative their written opinion, as counsel to the Owner Trustee, addressed
to the Underwriters and dated the Closing Date, in substantially the form of
Exhibit B hereto.
(g) ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ shall have furnished to the Representative
their written opinion, as counsel to the Indenture Trustee, addressed to the
Underwriters and dated the Closing Date, in substantially the form of Exhibit C
hereto.
(h) The Representative shall have received a letter dated the date hereof
(the "Procedures Letter") from a firm of independent nationally recognized
certified public accountants acceptable to the Representative verifying the
accuracy of such financial and statistical data contained in the Prospectus as
the Representative shall deem advisable. In addition, if any amendment or
supplement to the Prospectus made after the date hereof contains financial or
statistical data, the Representative shall have received a letter dated the
Closing
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Date confirming the Procedures Letter and proving additional comfort on such new
data.
(i) The Representative shall have received certificates, dated the Closing
Date, of any two of the Chairman of the Board, the President, any Vice President
and the chief financial officer of each of NFC and the Seller stating that (A)
the representations and warranties of NFC or the Seller, as the case may be,
contained in this Agreement, the Purchase Agreement, the Custodian Agreement,
the Administration Agreement and the Further Transfer and Servicing Agreements
are true and correct on and as of the Closing Date, (B) NFC or the Seller, as
the case may be, has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied hereunder and under such agreements at
or prior to the Closing Date, (C) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
have been instituted or, to the best of his or her knowledge, are contemplated
by the Commission, and (D) since January 31, 1998, there has been no material
adverse change in the financial position or results of operations of NFC, the
Seller or the Trust or any change, or any development including a prospective
change, in or affecting the condition (financial or otherwise), results of
operations, business or prospects of NFC, the Seller or the Trust except as set
forth in or contemplated by the Registration Statement and the Prospectus. Any
officer making such certification may rely upon his or her knowledge as to the
proceedings pending or threatened.
(j) The Notes shall have been given a rating by S&P or ▇▇▇▇▇'▇, that is
at least equal to or better the rating required for such class of Notes as set
forth in the Prospectus Supplement.
(k) Subsequent to the execution and delivery of this Agreement there shall
not have occurred any of the following: (i) trading in securities generally on
the New York Stock Exchange, the American Stock Exchange or the over-the-counter
market shall have been suspended or limited, or minimum prices shall have been
established on either of such exchanges or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority having
jurisdiction, or trading in securities of NFC on any exchange or in the
over-the-counter market shall have been suspended or (ii) a general moratorium
on commercial banking activities shall have been declared by Federal or New York
State authorities or (iii) an outbreak or escalation of hostilities or a
declaration by the United States of a national emergency or war or such a
material adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of a majority in
interest of the several Underwriters, impracticable or inadvisable to proceed
with the public offering or the delivery of the Notes on the terms and in the
manner contemplated in the Prospectus.
(l) The Certificates shall have been delivered to the Seller in
accordance with the Trust Agreement.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
7. TERMINATION. The obligations of the Underwriters hereunder may be
terminated by the Representative, in its absolute discretion, by notice given to
and received by the Seller prior to delivery of and payment for the Notes if,
prior to that time, any of the events described in Section 6(k) shall have
occurred or any of the conditions described in Section 6(i) or 6(j) shall not be
satisfied.
8. DEFAULTING UNDERWRITERS. (a) If, any one or more of the
Underwriters shall fail to purchase and pay for any of the Notes agreed to be
purchased by such Underwriter hereunder on the Closing Date, and such failure
constitutes a default in the performance of its or their obligations under this
Agreement, the Representative may make arrangements for the purchase of such
Notes by other persons satisfactory to the Seller and the Representative,
including any of the Underwriters, but if no such arrangements are made by the
Closing Date, then each remaining non-defaulting Underwriter shall be severally
obligated to purchase the Notes which the defaulting Underwriter or Underwriters
agreed but failed to purchase on the Closing Date in the respective proportions
which the principal amount of the Notes set forth opposite the name of each
remaining non-defaulting Underwriter in Schedule 1 hereto bears to the aggregate
principal amount of the Notes set forth opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Notes on the Closing Date if the aggregate principal amount of the Notes
which the defaulting Underwriter or Underwriters agreed but failed to purchase
on such date exceed one-eleventh of the aggregate principal amount of the Notes
to be purchased on the Closing Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase in total more than 110% of the
principal amount of the Notes which it agreed to purchase on the Closing Date
pursuant to the terms of Section 2. If the foregoing maximums are exceeded and
the remaining Underwriters or other underwriters satisfactory to the
Representative and the Seller do not elect to purchase the Notes which the
defaulting Underwriter or Underwriters agreed but failed to purchase, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Seller, except that the Seller will continue to be liable for
the payment of expenses to the extent set forth in Sections 9 and 13 and except
that the provisions of Section 10 and 11 shall not terminate and shall remain in
effect. As used in this Agreement, the term "Underwriter" includes, for all
purposes of this Agreement unless the context otherwise requires, any party not
listed in Schedule 1 hereto who, pursuant to this Section 8, purchases Notes
which a defaulting Underwriter agreed but failed to purchase.
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(b) Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have for damages caused by its default. If other underwriters
are obligated or agree to purchase the Notes of a defaulting Underwriter, either
the Representative or the Seller may postpone the Closing Date for up to seven
full business days in order to effect any changes that in the opinion of counsel
for the Seller or counsel for the Underwriters may be necessary in the
Registration Statement, the Prospectus or in any other document or arrangement,
and the Seller agrees to file promptly any amendment or supplement to the
Registration Statement or the Prospectus that effects any such changes.
9. Reimbursement of Underwriters' Expenses. If (a) notice shall have been
given pursuant to Section 7 terminating the obligations of the Underwriters
hereunder, (b) the Seller shall fail to tender the Notes for delivery to the
Underwriters for any reason permitted under this Agreement or (c) the
Underwriters shall decline to purchase the Notes for any reason permitted under
this Agreement, the Seller shall reimburse the Underwriters for the fees and
expenses of their counsel and for such other out-of-pocket expenses as shall
have been reasonably incurred by them in connection with this Agreement and the
proposed purchase of the Notes, and upon demand the Seller shall pay the full
amount thereof to the Representative. If this Agreement is terminated pursuant
to Section 8 by reason of the default of one or more Underwriters, the Seller
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
10. Indemnification. (a) NFC and the Seller shall, jointly and severally,
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Securities Act
(collectively referred to for the purposes of this Section 10 and Section 11 as
the Underwriter) against any loss, claim, damage or liability, joint or several,
to which that Underwriter may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage or liability (or any action in
respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus supplement, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they are made,
not misleading, and shall reimburse each Underwriter for any legal or other
expenses reasonably incurred by that Underwriter in connection with
investigating or preparing to defend or defending against or appearing as a
third party witness in connection with any such loss, claim, damage or liability
(or any action in respect thereof) as such expenses are incurred; provided,
however, that neither NFC nor the Seller shall be liable in any such case to the
extent that any such loss, claim, damage or liability (or any action in respect
thereof arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any preliminary prospectus
supplement, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with the Underwriters'
Information.
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(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Seller, each of its directors, each officer of the Seller
who signed the Registration Statement and each person, if any, who controls the
Seller within the meaning of Section 15 of the Securities Act (collectively
referred to for the purposes of this Section 10 and Section 11 as the Seller),
against any loss, claim, damage or liability, joint or several, to which the
Seller may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage or liability (or any action in respect thereof) arises
out of or is based upon (i) any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus supplement, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading, but in
each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with the written furnished to the Seller by or on behalf of such
Underwriter specifically for use therein, and shall reimburse the Seller for any
legal or other expenses reasonably incurred by the Seller in connection with
investigating or preparing to defend or defending against or appearing as third
party witness in connection with any such loss, claim, damage or liability (or
any action in respect thereof) as such expenses are incurred. The parties
acknowledge and agree that the written information furnished to the Seller
through the Representative by or on behalf of the Underwriters (the
"Underwriters' Information") consists solely of the paragraph below the
footnotes on the cover page of the Prospectus Supplement concerning the terms of
the offering and the second paragraph of text and the following table under the
caption "Underwriting" in the Prospectus Supplement.
(c) Promptly after receipt by an indemnified party under this Section
10 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure; and, provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representative shall have the right to employ one counsel to represent
jointly the Representative and those other Underwriters and their respective
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controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Underwriters against NFC or the
Seller under this Section 10 if, in the reasonable judgment of the
Representative, it is advisable for the Representative and those Underwriters
and controlling persons to be jointly represented by separate counsel because
there may be one or more legal defenses available to such parties which are
different from or additional to those available to the indemnifying party, and
in that event the fees and expenses of such separate counsel shall be paid by
NFC or the Seller. Each indemnified party, as a condition of the indemnity
agreements contained in Sections 10(a) and 10(b), shall use all reasonable
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall be liable for any settlement of any
such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
The obligations of NFC, the Seller and the Underwriters in this
Section 10 and in Section 11 are in addition to any other liability which NFC,
the Seller or the Underwriters, as the case may be, may otherwise have.
11. Contribution. If the indemnification provided for in Section 10
is unavailable or insufficient to hold harmless an indemnified party under
Section 10(a) or (b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability (i)
in such proportion as shall be appropriate to reflect the relative benefits
received by NFC and the Seller on the one hand and the Underwriters on the other
from the offering of the Notes or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of NFC and the Seller on the one hand and the
Underwriters on the other with respect to the statements or omissions which
result in such loss, claim, damage or liability, as well as any other relevant
equitable considerations. The relative benefits received by NFC and the Seller
on the one hand and the Underwriters on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Notes purchased under this Agreement (before deducting expenses)
received by the Seller bear to the total underwriting discounts and commissions
received by the Underwriters with respect to the Notes purchased under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus Supplement. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by NFC or the Seller on the one hand or the Underwriters on
the other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission.
15
NFC, the Seller and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 11 were to be determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability referred to above in this Section 11 shall be deemed to include,
subject to the limitations on the fees and expenses of separate counsel set
forth in Section 10, for purposes of this Section 11, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such claim or any action in respect thereof.
Notwithstanding the provisions of this Section 11, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Notes underwritten by it and distributed to the public were
offered to the public less the amount of any damages which such Underwriter has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to indemnify as
provided in Section 10 and contribute as provided in this Section 11 are several
in proportion to their respective underwriting obligations and not joint.
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, NFC, the Seller,
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, NFC and the Seller and their
respective successors and the controlling persons and officers and directors
referred to in Sections 10 and 11 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
13. Expenses. The Seller agrees with the Underwriters to pay (a) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Notes and any taxes payable in that connection; (b) the costs incident to
the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the costs of
printing, reproducing and distributing this Agreement and any other underwriting
and selling group documents by mail, telex or other means of communications; (d)
the fees and expenses of qualifying the Notes under the securities laws of the
several jurisdictions as provided in Section 4(g) and of preparing, printing and
distributing Blue Sky Memoranda and Legal Investment Surveys (including related
fees and expenses of counsel to the Underwriters); (e) any fees charged by S&P
and ▇▇▇▇▇'▇ for rating the Notes; (f) all fees and expenses of the Owner Trustee
and the Indenture Trustee and their respective counsel; and (g) all other costs
and expenses incident to the performance of the obligations of the Seller under
this Agreement; provided that, except as otherwise provided in this Section 13
and in Section 9, the Underwriters shall pay their own costs and expenses,
including the costs and
16
expenses of their counsel, any transfer taxes on the Notes which they may sell
and the expenses of advertising any offering of the Notes made by the
Underwriters.
14. SURVIVAL. The respective indemnities, rights of contribution,
representations, warranties and agreements of NFC, the Seller and the
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment of the Notes and shall remain in full force and effect, regardless of
any (i) termination or cancellation of this Agreement, (ii) any investigation
made by or on behalf of any of them or any person controlling any of them or
(iii) acceptance of and payment for the Notes.
15. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail or
facsimile transmission and confirmed to Chase Securities Inc., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, with a copy to
the Legal Department;
(b) if to the Seller, shall be delivered or sent by mail or facsimile
transmission and confirmed to the address of the Seller set forth in the
Registration Statement, Attention: General Counsel, with a copy to NFC at
the address of the Servicer set forth in the Registration Statement,
Attention: General Counsel;
provided, however, that any notice to an Underwriter pursuant to Section 10(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representative, which address will be supplied to any other party hereto by the
Representative upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Seller shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by the Representative.
16. DEFINITIONS OF CERTAIN TERMS. For purposes of this Agreement,
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading.
17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
19. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
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If the foregoing is in accordance with your understanding of the
agreement between the Seller and NFC and the several Underwriters, kindly
indicate your acceptance in the space provided for that purpose below.
Very truly yours,
NAVISTAR FINANCIAL RETAIL
RECEIVABLES CORPORATION
By /s/ ▇.▇. ▇▇▇▇
--------------------------------
Name: ▇.▇. ▇▇▇▇
Title: Vice President and Treasurer
NAVISTAR FINANCIAL CORPORATION
By /s/ ▇.▇. ▇▇▇▇
--------------------------------
Name: ▇.▇. ▇▇▇▇
Title: Vice President and Treasurer
Accepted:
CHASE SECURITIES INC.
For Itself and as Representative
of the Several Underwriters
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Authorized Signatory
SCHEDULE 1
Principal Amount Principal Amount
Underwriter of Class A Notes of Class B Notes
----------- ---------------- ----------------
Chase 120,833,500.00 17,530,370.04
Securities Inc.
BancAmerica 120,833,500.00 -------
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
First Chicago 120,833,500.00 -------
Capital Markets,
Inc.
NationsBanc 120,833,500.00 -------
▇▇▇▇▇▇▇▇▇▇
Securities LLC