EXHIBIT 1.1
NAVISTAR FINANCIAL 1996-B OWNER TRUST
$454,900,000 ASSET BACKED NOTES
$17,028,000 CLASS B ASSET BACKED CERTIFICATES
NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION
(SELLER)
UNDERWRITING AGREEMENT
October 23, 1996
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 1996-B 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) $106,500,000 principal
amount of its 5.49% Class A-1 Asset Backed Notes (the "Class A-1
Notes"), (ii) $111,900,000 principal amount of its 5.93% Class
A-2 Notes (the "Class A-2 Notes"), and (iii) $236,500,000
principal amount of its 6.33% Class A-3 Notes (the "Class A-3
Notes"; together with the Class A-1 Notes and the Class A-2
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"), (iv)
$17,028,000 principal amount of its 6.50% Class B Asset Backed
Certificates (the "Class B Certificates"), and (v) $14,579,362.75
principal amount of its 7.45% Class C Asset Backed Certificates
(the "Class C Certificates"; together with the Class B
Certificates, the "Certificates") representing fractional
undivided interests in the Trust. The Class C Certificates will
be sold pursuant to a Certificate Purchase Agreement dated
October 23, 1996 (the "Certificate Purchase Agreement") among the
Seller, Navistar Financial Corporation ("NFC") and Chase
Securities Inc. (the "Initial Purchaser"). The Class B
Certificates together with the Notes shall be referred to herein
as the "Offered Securities". 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 October 1, 1996 (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 Offered Securities and the Class C 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
"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 Offered Securities 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.
33-55865) 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)(5) of the Rules and Regulations a prospectus
supplement (the "Prospectus Supplement") to the prospectus
dated October 21, 1996, relating to the Offered Securities
and the method of distribution thereof. Copies of such
registration statement, any amendment or supplement thereto,
such prospectus and the Prospectus Supplement have been
delivered to you. Such registration statement, including
exhibits thereto 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.
(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
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 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 Owner Trustee in
accordance with the Trust Agreement and delivered and paid
for pursuant to this Agreement, the Class B Certificates
will be duly issued and entitled to the benefits and
security afforded by the Trust Agreement and the Pooling and
Servicing Agreement.
(i) 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 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.
(j) 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
Offered Securities 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 Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and
applicable state securities laws in connection with the
purchase and distribution of the Offered Securities 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.
(k) 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 Offered
Securities, (ii) seeking to prevent the issuance of any of
the Offered Securities 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
Offered Securities or this Agreement, or (iv) that may
adversely affect the federal or state income, excise,
franchise or similar tax attributes of the Offered
Securities.
(l) 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.
(m) 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 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.
(n) 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.
(o) 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.
(p) 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 Offered Securities 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-1 Notes,
99.8750000% of the principal amount thereof, (ii) with respect to
the Class A-2 Notes, 99.7721875% of the principal amount thereof,
(iii) with respect to the Class A-3 Notes 99.7343750% of the
principal amount thereof and (iv) with respect to the Class B
Certificates, 99.4765625% of the principal amount thereof.
The Seller shall not be obligated to sell or deliver
any of the Offered Securities except upon payment for all the
Offered Securities to be purchased as provided herein and upon
consummation of the purchase and sale of the Class C Certificates
pursuant to the Certificate Purchase Agreement.
3. Delivery of and Payment for the Securities.
Delivery of and payment for the Offered Securities 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 November 6, 1996,
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 Offered Securities 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 condition of the obligation of each
Underwriter hereunder. Upon delivery, each class of the Offered
Securities 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 Offered Securities will be represented
by book-entries on the records of DTC and participating members
thereof. Definitive certificates representing the Offered
Securities 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)(5)
of the Rules and Regulations within the time period
prescribed by such rule and provide evidence satisfactory to
the Representative of such timely filing.
(b) During any period in which a prospectus relating
to the Offered Securities 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 Offered Securities 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 Offered Securities 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
preventing or suspending the use of any prospectus relating
to the Offered Securities 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 Offered
Securities, 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 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 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 Offered Securities are
outstanding, to furnish to the Underwriters (i) copies of
all materials furnished by the Trust to its Securityholders
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
Offered Securities 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 Offered Securities; 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 installment sale contracts for
and retail notes evidencing loans secured by, for new and
used medium and heavy duty trucks, buses and trailers (other
than the Offered Securities, the Class C Certificates 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 Offered Securities, or until such time
as no Underwriter shall maintain a secondary market in the
Offered Securities, 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 Pooling and Servicing Agreement, as soon as such
statements and reports are furnished to the Owner Trustee
and the Indenture Trustee, respectively.
(j) To the extent, if any, that the ratings provided
with respect to the Offered Securities by the Standard &
Poor's Ratings Services ("S&P") and ▇▇▇▇▇'▇ Investors
Service Inc. ("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. 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)(5) of the Rules and Regulations within the time
period prescribed by such rule.
(b) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this
Agreement, the Offered Securities, 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 opinion, as counsel to the
Seller, addressed to the Underwriters and dated the Closing
Date, in substantially the form of Exhibit A 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 Date confirming the
Procedures Letter and providing 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
July 31, 1996, 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 and the Class B Certificates shall have
been given a rating by S&P or Moody's, that is at least
equal to or better than the rating required for such class
of Securities 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 Offered Securities on the terms and in the
manner contemplated in the Prospectus.
(l) The Class C Certificates being sold pursuant to
the Certificate Purchase Agreement shall have been purchased
by the Initial Purchaser pursuant to the Certificate
Purchase 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.
6. 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 Offered
Securities if, prior to that time, any of the events described in
Section 5(k) shall have occurred or any of the conditions
described in Section 5(i) or 5(j) shall not be satisfied.
7. Defaulting Underwriters. (a) If, any one or more
of the Underwriters shall fail to purchase and pay for any of the
Offered Securities 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 Offered Securities 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 Offered Securities 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 Offered Securities set forth opposite
the name of each remaining non-defaulting Underwriter in Schedule
1 hereto bears to the aggregate principal amount of the Offered
Securities 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 Offered
Securities on the Closing Date if the aggregate principal amount
of the Offered Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds
one-eleventh of the aggregate principal amount of the Offered
Securities 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 Offered
Securities 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 Offered Securities 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 8 and 12 and except that the
provisions of Sections 9 and 10 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 7, purchases Offered
Securities which a defaulting Underwriter agreed but failed to
purchase.
(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 Offered Securities 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.
8. Reimbursement of Underwriters' Expenses. If (a)
notice shall have been given pursuant to Section 6 terminating
the obligations of the Underwriters hereunder, (b) the Seller
shall fail to tender the Offered Securities for delivery to the
Underwriters for any reason permitted under this Agreement or (c)
the Underwriters shall decline to purchase the Offered Securities
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 Offered Securities,
and upon demand the Seller shall pay the full amount thereof to
the Representative. If this Agreement is terminated pursuant to
Section 7 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. If this Agreement is
terminated by the Underwriters or the Seller by reason of the
default by the Initial Purchaser of its obligation to purchase
the Class C Certificates being sold pursuant to the Certificate
Purchase Agreement, the Seller shall not be obligated to
reimburse Chase Securities Inc. on account of those expenses.
9. 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 9 and
Section 10 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.
(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 9 and Section 10 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 information 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 9 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 9, 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 9 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 9. 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 9 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 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 9 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 9(a) and 9(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 9 and in Section 10 are in addition to any other
liability which NFC, the Seller or the Underwriters, as the case
may be, may otherwise have.
10. Contribution. If the indemnification provided for
in Section 9 is unavailable or insufficient to hold harmless an
indemnified party under Section 9(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 Offered Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative
fault of NFC and the Seller on the one hand and the Underwriters
on the other with respect to the statements or omissions which
resulted 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 Offered Securities 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 Offered Securities 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.
NFC, the Seller and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this
Section 10 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 10 shall be deemed to include, subject to the limitations
on the fees and expenses of separate counsel set forth in Section
9, for purposes of this Section 10, 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
10, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the
Offered Securities 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 9
and contribute as provided in this Section 10 are several in
proportion to their respective underwriting obligations and not
joint.
11. 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 9 and 10 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.
12. Expenses. The Seller agrees with the Underwriters
to pay (a) the costs incident to the authorization, issuance,
sale, preparation and delivery of the Offered Securities 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 distributing the Registration Statement as
originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case,
exhibits), any preliminary prospectus supplement, the Prospectus
and any amendment or supplement to the Prospectus, including,
without limitation, the Prospectus Supplement, all as provided in
this Agreement; (d) 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; (e) the fees and expenses of qualifying the
Offered Securities under the securities laws of the several
jurisdictions as provided in Section 4(h) and of preparing,
printing and distributing Blue Sky Memoranda and Legal Investment
Surveys (including related fees and expenses of counsel to the
Underwriters); (f) any fees charged by S&P and ▇▇▇▇▇'▇ for rating
the Offered Securities; (g) all fees and expenses of the Owner
Trustee and the Indenture Trustee and their respective counsel;
and (h) 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 12 and in
Section 8, the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel, any
transfer taxes on the Offered Securities which they may sell and
the expenses of advertising any offering of the Securities made
by the Underwriters.
13. 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 for the
Offered Securities 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 Offered Securities.
14. 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 9(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.
15. 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.
16. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New
York.
17. 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.
18. 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.
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
Name: ▇.▇. ▇▇▇▇
Title: Vice President and
Treasurer
NAVISTAR FINANCIAL CORPORATION
By
Name: ▇.▇. ▇▇▇▇
Title: Vice President and
Treasurer
Accepted:
CHASE SECURITIES INC.
For Itself and as Representative
of the Several Underwriters
By
Authorized Signatory
SCHEDULE 1
Principal Principal Principal
▇▇▇▇▇▇ of Amount of Amount of
CLASS A-1 CLASS A-2 CLASS A-3
UNDERWRITER NOTES NOTES NOTES
Chase 17,750,000 18,650,000 39,425,000
Securities Inc.
BA Securities,
Inc. 17,750,000 18,650,000 39,415,000
CS First Boston 17,750,000 18,650,000 39,415,000
Corporation
First Chicago
Capital 17,750,000 18,650,000 39,415,000
Markets, Inc.
▇.▇. ▇▇▇▇▇▇ 17,750,000 18,650,000 39,415,000
Securities Inc.
NationsBanc
Capital 17,750,000 18,650,000 39,415,000
Markets, Inc.
Certificate
Balance
of Class B
UNDERWRITER CERTIFICATES
Chase Securities Inc. 8,514,000
▇.▇. ▇▇▇▇▇▇ Securities 8,514,000
Inc.
