Document:

ex10.1

Exhibit
10.1

NAVISTAR
INTERNATIONAL CORPORATION

$400,000,000

61⁄4%
Senior Notes due 2012

Purchase
Agreement

February
23, 2005

Banc of
America Securities LLC

Citigroup
Global Markets Inc.

J.P.
Morgan Securities Inc.

Credit
Suisse First Boston LLC

Scotia
Capital (USA) Inc.

BNY
Capital Markets, Inc.

RBC
Capital Markets Corporation

c/o Banc
of America Securities LLC

9 West
57th Street,
6th
Floor

New York,
New York 10019

Ladies
and Gentlemen:

Navistar
International Corporation, a Delaware corporation (the “Company”),
proposes to issue and sell to the several Initial Purchasers listed in Schedule
1 hereto (the “Initial
Purchasers”), for
whom Banc of America Securities LLC is acting as representative (the
“Representative”),
$400,000,000 aggregate principal amount of its 61⁄4% Senior Notes due 2012 (the
“Securities”). The
Securities will be issued pursuant to an indenture to be dated as of March 2,
2005 (the “Indenture”), among
the Company, International Truck and Engine Corporation, as subsidiary guarantor
(the “Guarantor”) and
BNY Midwest Trust Company, as trustee (the “Trustee”). The
Securities will be fully and unconditionally guaranteed on a senior unsecured
basis by the guarantee of the Guarantor (the “Guarantee”).

The
Securities will be offered and sold in accordance with this agreement (this
“Agreement”) to the
Initial Purchasers without being registered under the Securities Act of 1933, as
amended (the “Securities
Act”), in
reliance upon an exemption therefrom. The Company has prepared an offering
memorandum dated the date hereof (the “Offering
Memorandum”)
setting forth information concerning the Company, the Guarantor and the
Securities. Copies of the Offering Memorandum will be delivered by the Company
to the Initial Purchasers pursuant to the terms of this Agreement. Any
references herein to the Offering Memorandum shall be deemed to refer to and
include any documents incorporated by reference therein as of the date of such
Offering Memorandum, and any reference to any amendment or supplement to the
Offering Memorandum shall be deemed to refer to and include the portion of the
Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2004
(the “2004
10-K”)
incorporated by reference therein and any documents incorporated by reference
therein as of the date of such Offering Memorandum, and any reference to any
amendment or supplement to the Offering Memorandum shall be deemed to refer to
and include any document filed under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”) after
the date of the Offering Memorandum unless otherwise noted. The Company hereby
confirms that it has authorized the use of the Offering Memorandum in connection
with the offering and resale of the Securities by the Initial Purchasers in the
manner contemplated by this Agreement. Capitalized terms used but not defined
herein shall have the meanings given to such terms in the Offering
Memorandum.

Holders
of the Securities (including the Initial Purchasers and their direct and
indirect transferees) will be entitled to the benefits of an Exchange and
Registration Rights Agreement to be dated the Closing Date (as defined below)
and substantially in the form attached hereto as Annex A (the “Registration
Rights Agreement”),
pursuant to which the Company will agree to file with the Securities and
Exchange Commission (the “Commission”) a
registration statement under the Securities Act (the “Exchange
Offer Registration Statement”)
registering an issue of 

E-1

Exhibit
10.1 (continued)

senior
notes of the Company (the “Exchange
Securities”) and
the Guarantee which are identical in all material respects to the Securities
(except that the Exchange Securities will not contain terms with respect to
transfer restrictions) and the Guarantee and under certain circumstances, a
shelf registration statement pursuant to Rule 415 under the Securities Act (the
“Shelf
Registration Statement”).

The
Company hereby confirms its agreement with the several Initial Purchasers
concerning the purchase and resale of the Securities, as follows:

1. Purchase
and Resale of the Securities.
(a) The
Company agrees to issue and sell the Securities to each of the Initial
Purchasers, severally and not jointly, as provided in this Agreement, and each
Initial Purchaser, on the basis of the representations, warranties and
agreements set forth herein and subject to the conditions set forth herein,
agrees, severally and not jointly, to purchase from the Company the respective
principal amount of Securities set forth opposite such Initial Purchaser’s name
in Schedule 1 hereto at a price equal to 98.75% of the principal amount thereof
plus accrued interest, if any. The Company will not be obligated to deliver any
of the Securities except upon payment for all the Securities to be purchased as
provided herein.

(b) The
Company understands that the Initial Purchasers intend to offer the Securities
for resale on the terms set forth in the Offering Memorandum. Each Initial
Purchaser, severally and not jointly, represents, warrants and agrees
that:

(i) it is a
qualified institutional buyer within the meaning of Rule 144A under the
Securities Act (a “QIB”) and an accredited investor within the meaning of Rule
501(a) under the Securities Act;

(ii) it has
not solicited offers for, or offered or sold, and will not solicit offers for,
or offer or sell, the Securities by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) of Regulation D under the
Securities Act (“Regulation D”) or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act; and

(iii) it has
not solicited offers for, or offered or sold, and will not solicit offers for,
or offer or sell, the Securities as part of their initial offering
except:

(A) within
the United States to persons whom it reasonably believes to be QIBs in
transactions pursuant to Rule 144A under the Securities Act (“Rule
144A”) and in
connection with each such sale, it has taken or will take reasonable steps to
ensure that the purchaser of the Securities is aware that such sale is being
made in reliance on Rule 144A; 

(B) outside
the United States to persons other than U.S. persons in reliance on Regulation S
under the Securities Act (“Regulation
S”);

(C) in
connection with the offer and sale of Securities in reliance on Regulation S,
each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that:

(i) the
Securities have not been registered under the Securities Act and may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except pursuant to an exemption from, or in transactions not
subject to, the registration requirements of the Securities Act.

(ii) such
Initial Purchaser has offered and sold the Securities, and will offer and sell
the Securities, (A) as part of their distribution at any time and (B) otherwise
until 40 days after the later of the commencement of the offering of the
Securities and the Closing Date, only in accordance with Regulation S or Rule
144A or any other available exemption from registration under the Securities
Act.

E-2

Exhibit
10.1 (continued)

(iii) none of
such Initial Purchaser or any of its affiliates or any other person acting on
its or their behalf has engaged or will engage in any directed selling efforts
with respect to the Securities, and all such persons have complied and will
comply with the offering restrictions requirement of Regulation S.

(iv) at or
prior to the confirmation of sale of any Securities sold in reliance on
Regulation S, such Initial Purchaser will have sent to each distributor, dealer
or other person receiving a selling concession, fee or other remuneration that
purchase Securities from it during the distribution compliance period a
confirmation or notice to substantially the following effect:

“The
Securities covered hereby have not been registered under the U.S. Securities Act
of 1933, as amended (the “Securities
Act”), and
may not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the offering of
the Securities and the date of original issuance of the Securities, except in
accordance with Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act. Terms used above have the meanings given
to them by Regulation S.”

(v) such
Initial Purchaser has not and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the Securities, except
with its affiliates or with the prior written consent of the
Company.

Terms
used in this section (C) and not otherwise defined in this Agreement have the
meanings given to them by Regulation S. 

(D) Each
Initial Purchaser, severally and not jointly, represents, warrants and agrees
that: 

(i) it has
not offered or sold and prior to the date six months after the Closing Date will
not offer or sell any Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
United Kingdom Public Offers of Securities Regulations 1995 (as amended);

(ii) it has
only communicated or caused to be communicated and will only communicate or
cause to be communicated any invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the United Kingdom Financial
Services and Markets Act 2000 (the “FSMA”)) received by it in connection with
the issue or sale of any Securities in circumstances in which Section 21(1) of
the FSMA does not apply to the Company or the Guarantor; and 

(iii) it has
complied and will comply with all applicable provisions of the FSMA with respect
to anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom.

(E) Each
Initial Purchaser acknowledges that no action has been or will be taken by the
Company and the Guarantor that would permit a public offering of the Securities,
or possession or distribution of the Offering Memorandum or any other offering
or publicity material relating to the Securities, in any country or jurisdiction
where action for that purpose is required.

(c) Each
Initial Purchaser acknowledges and agrees that the Company and the Guarantor
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Sections 5(i), 5(j) and 5(k), counsel for the Company and the
Guarantor and counsel for the Initial Purchasers, respectively, may rely upon
the accuracy of the representations and warranties of the Initial Purchasers,
and compliance by the Initial Purchasers with their agreements, contained in
paragraph (b) above, and each Initial Purchaser hereby consents to such
reliance.

E-3

Exhibit
10.1 (continued)

(d) The
Company acknowledges and agrees that the Initial Purchasers may offer and sell
Securities to or through any affiliate of an Initial Purchaser and that any such
affiliate may offer and sell Securities purchased by it to or through any
Initial Purchaser.

2. Payment
and Delivery. (a)
Payment for and delivery of the Securities will be made at the offices of
Simpson Thacher & Bartlett LLP at 10:00 A.M., New York City time, on March
2, 2005, or at such other time or place on the same or such other date, not
later than the fifth business day thereafter, as the Representative and the
Company may agree upon in writing. The time and date of such payment and
delivery is referred to herein as the “Closing
Date.”

(b) Payment
for the Securities shall be made by wire transfer in immediately available funds
to the account(s) specified by the Company to the Representative against
delivery to the nominee of The Depository Trust Company, for the account of the
Initial Purchasers, of one or more global notes representing the Securities
(collectively, the “Global
Note”), with
any transfer taxes payable in connection with the sale of the Securities duly
paid by the Company. The Global Note will be made available for inspection by
the Representative not later than 1:00 P.M., New York City time, on the business
day prior to the Closing Date. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligations of the Initial Purchasers hereunder.

3. Representations
and Warranties of the Company and the Guarantor. The
Company and the Guarantor, jointly and severally, represent and warrant to each
Initial Purchaser that:

(a) The
Offering Memorandum, as of its date, did not, and on the Closing Date the
Offering Memorandum will not, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that the
Company and the Guarantor make no representation or warranty as to information
contained in or omitted from the Offering Memorandum in reliance upon and in
conformity with written information relating to the Initial Purchasers furnished
to the Company or the Guarantor by or on behalf of any Initial Purchaser
specifically for use therein (the “Initial
Purchasers’ Information”).

(b) The
documents filed by the Company under the Exchange Act and incorporated by
reference in the Offering Memorandum, when they were filed by the Company with
the Commission, conformed in all material respects (except with respect to the
timing of the filing of the 2004 Annual Report on Form 10-K with the Commission)
to the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder and none of such documents, in each case when it was filed
with the Commission, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and any further documents so filed and incorporated by reference
in the Offering Memorandum, when such documents are filed with the Commission,
will conform in all material respects to the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder and shall not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.

(c) The
financial statements, and the related notes thereto, included or incorporated by
reference in the Offering Memorandum comply in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, as
applicable. The audited financial statements and the related notes thereto
included or incorporated by reference in the Offering Memorandum present fairly
the consolidated financial position of the Company and its subsidiaries and the
results of their respective operations and the changes in their respective
consolidated cash flows, as of the dates and for the periods indicated, and said
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved; the summary and selected financial and statistical data included in
the Offering Memorandum present fairly the information shown therein and have
been prepared and compiled on a basis consistent with the audited and unaudited
financial statements of the Company, except as otherwise stated therein; and
Deloitte & Touche LLP, who are reporting upon 

E-4

Exhibit
10.1 (continued)

the
audited consolidated financial statements of the Company and its consolidated
subsidiaries (each a “Subsidiary,” and
collectively, the “Subsidiaries”), are
independent public accountants as defined in the Securities Act.

(d) Since the
respective dates as of which information is given in the Offering Memorandum,
except as disclosed therein, there has not been (A) any material change in the
Company’s issued capital stock, warrants or options except pursuant to the terms
of the instruments governing the same or pursuant to the exercise of such
options or warrants, or the issuance of certain options or (B) any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, the management, business,
prospects, financial position, stockholder's equity or results of operations, of
the Company and the Subsidiaries, taken as a whole (a “Material
Adverse Change”). Since
the respective dates as of which information is given in the Offering
Memorandum, except as disclosed therein, (i) there have been no transactions
entered into by the Company or by any of the Subsidiaries, including those
entered into in the ordinary course of business, which are material to the
Company and the Subsidiaries taken as a whole; and (ii) there has been no
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock, except for quarterly dividends in accordance
with the Company's past practice.

(e) The
Company and each Subsidiary has been duly incorporated under the laws of its
jurisdiction of incorporation; is a validly existing in good standing under the
laws of its jurisdiction of incorporation, with power and authority (corporate
and other) to own, lease and operate its properties and conduct its business as
described in the Offering Memorandum, and is duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, except where the
failure to be so qualified or in good standing would not reasonably be expected
to have a material adverse effect on the general affairs, business, prospects,
management, financial position, stockholder’s equity or results of operations of
the Company and the Subsidiaries, taken as a whole (a “Material
Adverse Effect”).

(f) The
Company has an authorized capitalization as set forth in the Offering
Memorandum, and except as described in the Offering Memorandum, the Company
owns, directly or indirectly, free and clear of any mortgage, pledge, security
interest, lien, claim or other encumbrance or restriction on transferability or
voting (other than as may be imposed by the Securities Act and the various state
securities laws), all of the outstanding capital stock of each Subsidiary of the
Company. All of the outstanding capital stock of each Subsidiary of the Company
has been duly authorized and validly issued and is fully paid and
non-assessable.

(g) The
Registration Rights Agreement has been duly authorized by the Company and the
Guarantor, and when executed and delivered by the Company (assuming due
authorization, execution and delivery thereof by the Initial Purchasers), the
Registration Rights Agreement will constitute a legal, valid and binding
agreement of the Company and the Guarantor enforceable against the Company and
the Guarantor in accordance with its terms, except that the enforcement thereof
may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought and (iii) public policy
considerations with respect to the enforceability of indemnification agreements
for violations of the federal securities laws.

(h) Each of
the Company and the Guarantor has the requisite power and authority to execute
and deliver, as applicable, this Agreement, the Securities, the Guarantee, the
Indenture and the Registration Rights Agreement (collectively, the “Transaction
Documents”) and to
perform its respective obligations hereunder and thereunder; and all corporate
action required to be taken for the due and proper authorization, execution and
delivery of each of the Transaction Documents and the consummation of the
transactions contemplated thereby has been duly and validly taken.

(i) The
Indenture meets the requirements for qualification under the Trust Indenture Act
of 1939, as amended (the “Trust
Indenture Act”). The
Indenture (including the Guarantee set therein) has been duly and validly
authorized by the Company and the Guarantor, and, when executed and delivered by
the Company and the 

E-5

Exhibit
10.1 (continued)

Guarantor
(assuming due authorization, execution, and delivery thereof by the Trustee),
the Indenture will constitute a legal, valid and binding agreement of the
Company and the Guarantor enforceable against the Company and the Guarantor in
accordance with its terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors’ rights generally and (ii) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought; and the Securities and the Indenture conform in all
material respects to the descriptions thereof in the Offering
Memorandum.

(j) The
Securities and the Guarantee have been duly and validly authorized by the
Company and the Guarantor, respectively, for issuance and when executed by the
Company and the Guarantor, respectively, and authenticated by the Trustee in
accordance with the provisions of the Indenture, and delivered to and paid for
by the Initial Purchasers in accordance with the terms hereof, will have been
duly executed, authenticated, issued and delivered and will constitute legal,
valid and binding obligations of the Company and the Guarantor, respectively,
entitled to the benefits provided by the Indenture and enforceable against the
Company and the Guarantor, respectively, in accordance with their respective
terms, except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor may
be brought. 

(k) This
Agreement has been duly authorized, executed and delivered by each of the
Company and the Guarantor.

(l) Each
Transaction Document conforms in all material respects to the description
thereof contained in the Offering Memorandum.

(m) Neither
the Company nor any of the Subsidiaries (i) is in violation of its Certificate
of Incorporation or By-Laws (and in the case of the Company’s non-material
Subsidiaries only, in any material respect) or (ii) is in breach or violation of
any of the terms or provisions of, or with the giving of notice or lapse of
time, or both, would be in default under, any contract, indenture, mortgage,
deed of trust, loan agreement, note, lease, partnership agreement, or other
agreement or instrument to which the Company or any Subsidiary is a party or by
which any of them may be bound or to which any of their properties or assets may
be subject, except, in the case of this clause (ii), for such violations or
defaults that would not reasonably be expected to have a Material Adverse
Effect.

(n) The
execution and delivery by the Company and the Guarantor of, and the performance
by the Company and the Guarantor of all of the provisions of its obligations
under, the Transaction Documents and the consummation by the Company and the
Guarantor of the transactions herein and therein contemplated and as set forth
in the Offering Memorandum, (i) have been duly authorized by all necessary
corporate action on the part of the Company and the Guarantor, (ii) do not and
will not result in any violation of the Certificate of Incorporation or the
By-laws of the Company and the Guarantor and (iii) do not and will not conflict
with, or result in a breach or violation of any of the terms or provisions of,
or constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or give rise to any right to accelerate
the maturity or require the prepayment of any indebtedness or the purchase of
any capital stock under, or result in the creation or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company or of any
Subsidiary under, (A) any contract, indenture, mortgage, deed of trust, loan
agreement, note, lease, partnership agreement or other agreement or instrument
to which the Company or any such Subsidiary is a party or by which any of them
may be bound or to which any of their respective properties or assets may be
subject, (B) (assuming compliance with the Securities Act and the Trust
Indenture Act with respect to the exchange of the Securities for the Exchange
Securities (as defined in the Registration Rights Agreement) and the other
obligations of the Company and the Guarantor under the Registration Rights
Agreement) any applicable law or statute, rule or regulation (other than the
securities or Blue Sky laws of the various states of the United States of
America) or (C) any judgment, order or decree of any government, governmental
instrumentality, agency, body or court, domestic or foreign, having jurisdiction
over the Company or any such Subsidiary or any of their respective properties or
assets, except, with respect to clause (iii), any violation, 

E-6

Exhibit
10.1 (continued)

conflict,
or breach which would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.

(o) Except as
described in the Offering Memorandum, there is no action, suit or proceeding
before or by any government, governmental instrumentality, agency, body or
court, domestic or foreign, now pending or, to the best knowledge of the Company
or the Guarantor, threatened against or affecting the Company or any of the
Subsidiaries that could reasonably be expected to have a Material Adverse Effect
or that could have a material adverse effect on the consummation of the
transactions contemplated in, or the fulfillment of the terms of, this
Agreement, the Offering Memorandum, the Indenture or the Registration Rights
Agreement; there is no action, suit or proceeding before or by any government,
governmental instrumentality, agency, body or court, now pending, or to the best
knowledge of the Company or the Guarantor, threatened against or affecting the
Company or any of the Subsidiaries that would be required to be described in a
registration statement pursuant to Item 103 of the Regulation S-K filed pursuant
to the Securities Act that is not described in the Offering
Memorandum.

(p) The
Company is in compliance in all material respects with the applicable provisions
of the Sarbanes-Oxley Act of 2002 that are effective and the rules and
regulations of the Commission that have been adopted and are effective
thereunder (collectively, the “Sarbanes-Oxley
Act”).

(q) The
Company, after giving effect to the offering and sale of the Securities, will
not be an “investment company” or an entity “controlled” by an “investment
company”, as such terms are defined in the Investment Company Act of 1940, as
amended (the “Investment
Company Act”).

(r) Except as
described in the Offering Memorandum, there has been no storage, generation,
transportation, handling, treatment, disposal, discharge, emission or other
release of any kind of toxic or other wastes or other hazardous substances by,
due to or caused by, to the best knowledge of the Company or the Guarantor, the
Company and each of its Subsidiaries or any other entity (including any
predecessor) for whose acts or omissions each of the Company and its
Subsidiaries is or could reasonably be expected to be liable, upon any of the
property now or previously owned or leased by the Company and each of its
Subsidiaries, or upon any other property, in violation of any statute or any
ordinance, rule, regulation, order, judgment, decree or permit or which would,
under any statute or any ordinance, rule (including rule of common law),
regulation, order, judgment, decree or permit, give rise to any liability,
except for any violation or liability could not reasonably be expected to have,
singularly or in the aggregate with all such violations and liabilities, a
Material Adverse Effect; and except as described in the Offering Memorandum,
there has been no disposal, discharge, emission or other release of any kind
onto such property or into the environment surrounding such property of any
toxic or other wastes or other hazardous substances with respect to which the
Company has knowledge, except for any such disposal, discharge, emission or
other release of any kind which could not reasonably be expected to have,
singularly or in the aggregate with all such discharges and other releases, a
Material Adverse Effect.

(s) The
Company and each of its Subsidiaries have all licenses, franchises, permits,
authorizations, approvals and orders and other concessions of and from all
governmental or regulatory authorities that are necessary to own or lease their
properties and conduct their businesses as described in the Offering Memorandum,
except for such licenses, franchises, permits, authorizations, approvals and
orders the failure to obtain which will not, individually or in the aggregate,
have a Material Adverse Effect.

(t) The
Company and each of its Subsidiaries is conducting business in compliance with
all applicable statutes, rules, regulations, standards, guides and orders
administered or issued by any governmental or regulatory authority in the
jurisdictions in which it is conducting business, except where the failure to be
so in compliance would not have a Material Adverse Effect.

(u) The
Company and its Subsidiaries have good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned by
them which is material to the business of the Company and its Subsidiaries, as
the case may be, in each case free and clear of all liens, encumbrances and
defects except such as 

E-7

Exhibit
10.1 (continued)

are
described in the Offering Memorandum or to the extent the failure to have such
title or the existence of such liens, encumbrances or defects would not
reasonably be expected to have a Material Adverse Effect. 

(v) Neither
the issuance, sale and delivery of the Securities nor the application of the
proceeds thereof by the Company as described in the Offering Memorandum will
violate Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System or any other regulation of such Board of Governors.

(w) No
authorization, approval, consent, order, registration, qualification or license
of, or filing with, any government, governmental instrumentality, agency, body
or court, domestic or foreign or third party (other than as have been or will be
prior to the Closing Date obtained under the securities or Blue Sky laws of the
various states of the United States of America and assuming compliance with the
Securities Act and the Trust Indenture Act with respect to the exchange of the
Securities for the Exchange Securities and the other obligations of the Company
and the Guarantor under the Registration Rights Agreement), is required for the
valid authorization, issuance, sale and delivery of the Securities, the issuance
of the Guarantee or the performance by the Company and the Guarantor of all of
its obligations under this Agreement, the Indenture, the Registration Rights
Agreement or the Securities, or the consummation by the Company and the
Guarantor of the transactions contemplated by this Agreement, the Indenture, the
Registration Rights Agreement or the Offering Memorandum, except where the
failure to obtain such authorization, approval, consent, order, registration,
qualification or license or to make any such filing would not reasonably be
expected, individually or in the aggregate, to have a material adverse effect on
the consummation of the transactions contemplated in, or the fulfillment of the
terms of, this Agreement, the Offering Memorandum, the Indenture or the
Registration Rights Agreement.

(x) Neither
the Company nor any controlled affiliate (as defined in Rule 501(b) of
Regulation D) of the Company has directly, or through any agent, sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or will be integrated with
the sale of the Securities in a manner that would require the registration under
the Securities Act of the offering contemplated by the Offering
Memorandum.

(y) Neither
the Company, the Guarantor nor, to the best of the Company's or the Guarantor’s
knowledge, any person acting on its behalf has offered or sold the Securities by
means of any general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act or, with respect to Securities sold outside
the United States to non-U.S. persons (as defined in Rule 902 under the
Securities Act), by means of any directed selling efforts within the meaning of
Rule 902 under the Securities Act and the Company and any of its affiliates and
any person acting on their behalf has complied with and will implement the
“offering restriction” within the meaning of such Rule 902.

(z) It is not
necessary in connection with the offer, sale and delivery of the Securities in
the manner contemplated by this Agreement and the Offering Memorandum to
register the Securities under the Securities Act or to qualify an indenture
under the Trust Indenture Act.

(aa) The
Securities satisfy the requirements set forth in Rule 144A(d)(3) under the
Securities Act.

4. Further
Agreements of the Company and the Guarantor. Each of
the Company and the Guarantor covenants and agrees with each Initial Purchaser
that:

(a) The
Company will advise the Initial Purchasers promptly and, if requested, confirm
such advice in writing, of the happening of any event which makes any statement
of a material fact made in the Offering Memorandum untrue or which requires the
making of any additions to or changes in the Offering Memorandum (as amended or
supplemented from time to time) in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; to advise
the Initial Purchasers promptly of any order preventing or suspending the use of
the Offering Memorandum, of any suspension of the qualification of the
Securities for 

E-8

Exhibit
10.1 (continued)

offering
or sale in any jurisdiction and of the initiation or threatening of any
proceeding for any such purpose; and to use its reasonable best efforts to
prevent the issuance of any such order preventing or suspending the use of the
Offering Memorandum or suspending any such qualification and, if any such
suspension is issued, to obtain the lifting thereof at the earliest possible
time.

(b) The
Company will deliver, without charge, to each Initial Purchasers, as many copies
of the Offering Memorandum (including all amendments and supplements thereto) as
they may reasonably request at any time before the completion of the resale of
the Securities.

(c) Before
making any amendment or supplement to the Offering Memorandum, the Company will
furnish to the Representative and counsel for the Initial Purchasers a copy of
the proposed amendment or supplement for review and not to effect any such
proposed amendment or supplement to which the Representative reasonably
object.

(d) If at any
time prior to completion of the resale of the Securities by the Initial
Purchasers, (i) any event shall occur or condition shall exist as a result of
which the Offering Memorandum as then amended or supplemented would include any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances existing when the Offering Memorandum is
delivered to a purchaser, not misleading or (ii) it is necessary to amend or
supplement the Offering Memorandum to comply with applicable law, the Company
will promptly prepare, subject to paragraph (c) above, such amendments or
supplements to the Offering Memorandum as may be necessary so that the
statements in the Offering Memorandum as so amended or supplemented will not, in
the light of the circumstances existing when the Offering Memorandum is
delivered to a purchaser, be misleading or so that the Offering Memorandum will
comply with applicable law.

(e) The
Company will, for so long as the Securities are outstanding and are “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act,
furnish to holders of the Securities and prospective purchasers of the
Securities designated by such holders, upon request of such holders or such
prospective purchasers, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act, unless the Company is then subject to
and in compliance with Section 13 or 15(d) of the Exchange Act (the foregoing
agreement being for the benefit of the holders from time to time of the
Securities and prospective purchasers of the Securities designated by such
holders).

(f) The
Company will, for so long as the Securities are outstanding, furnish to the
Initial Purchasers upon request, copies of any annual reports, quarterly reports
and current reports filed by the Company with the Commission on Forms 10-K, 10-Q
and 8-K, or such other similar forms as may be designated by the Commission, and
such other documents, reports and information as shall be furnished by the
Company to the Trustee or to the holders of the Securities pursuant to the
Indenture or the Exchange Act or any rule or regulation of the Commission
thereunder.

(g) The
Company will, from time to time prior to the completion of the resale of the
Securities, qualify the Securities and the Guarantee for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Representative
shall reasonably request and will continue such qualifications in effect so long
as required for the resale of the Securities and the Guarantee; and to arrange
for the determination of the eligibility for investment of the Securities under
the laws of such jurisdictions as the Representative shall reasonably request;
provided that the
Company shall not be required to (i) qualify as a foreign corporation or other
entity or as a dealer in securities in any such jurisdiction where it would not
otherwise be required to so qualify, (ii) file any general consent to service of
process in any such jurisdiction or (iii) subject itself to taxation in any such
jurisdiction if it is not otherwise so subject.

(h) The
Company will assist the Initial Purchasers in arranging for the Securities to be
designated Private Offerings, Resale and Trading through Automated Linkages
(“PORTAL”) Market securities in accordance with the 

E-9

Exhibit
10.1 (continued)

rules and
regulations adopted by the National Association of Securities Dealers, Inc.
(“NASD”) relating to trading in the PORTAL Market and for the Securities to be
eligible for clearance and settlement through The Depository Trust Company
(“DTC”).

(i) The
Company will not, and will not cause its affiliates (as defined in Rule 501(b)
of Regulation D) to, sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as such term is defined in the Securities
Act) which could be integrated with the sale of the Securities in a manner which
would require registration of the Securities under the Securities
Act.

(j) The
Company will not, except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
and will not cause its affiliates to, authorize or knowingly permit any person
acting on their behalf to, solicit any offer to buy or offer to sell the
Securities by means of any form of general solicitation or general advertising
within the meaning of Regulation D or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act; and not to offer,
sell, contract to sell or otherwise dispose of, directly or indirectly, any
securities under circumstances where such offer, sale, contract or disposition
would cause the exemption afforded by Section 4(2) of the Securities Act to
cease to be applicable to the offering and sale of the Securities as
contemplated by this Agreement and the Offering Memorandum.

(k) During
the period from the date hereof through and including the date that is 30 days
after the date hereof, the Company will not, without the prior written consent
of the Representative, offer, sell, contract to sell or otherwise dispose of any
debt securities issued or guaranteed by the Company and having a tenor of more
than one year (other than (i) the Securities, including the Exchange Securities
and (ii) any debt securities issued in connection with (A) sale and lease-back
transactions, (B) asset-backed securitizations and (C) the Company’s Mexican
finance subsidiaries) without the prior written consent of the
Representative.

(l) Until the
issuance of the Exchange Securities, the Company will not, and will not permit
any of its affiliates (as defined in Rule 144 under the Securities Act) to,
resell any of the Securities that have been reacquired by them, except for
Securities purchased by the Company or any of its affiliates and resold in a
transaction registered under the Securities Act.

(m) In
connection with the offering of the Securities, until the Initial Purchasers
shall have notified the Company of the completion of the resale of the
Securities, the Company will not, and will not cause its affiliated purchasers
(as defined in Regulation M under the Exchange Act) to, either alone or with one
or more other persons, bid for or purchase, for any account in which it or any
of its affiliated purchasers has a beneficial interest, any Securities, or
attempt to induce any person to purchase any Securities; and not to, and to
cause its affiliated purchasers not to, make bids or purchase for the purpose of
creating actual, or apparent active trading in or of raising the price of the
Securities.

(n) The
Company will apply the net proceeds from the sale of the Securities as described
in the Offering Memorandum under the heading “Use of proceeds”.

5. Conditions
of Initial Purchasers’ Obligations. The
obligation of each Initial Purchaser to purchase Securities on the Closing Date
as provided herein is subject to the performance by the Company in all material
respects of its covenants and other obligations hereunder and to the following
additional conditions:

(a) The
Offering Memorandum (and any amendments or supplements thereto) shall have been
printed and copies distributed to the Initial Purchasers as promptly as
reasonably practicable on or following the date of this Agreement or at such
other date and time as to which the Initial Purchasers may agree; and no stop
order suspending the sale of the Securities in any jurisdiction shall have been
issued and no proceedings for the purpose shall have been commenced or shall be
pending or threatened.

(b) None of
the Initial Purchasers shall have discovered and disclosed to the Company on or
prior to the Closing 

E-10

Exhibit
10.1 (continued)

Date that
the Offering Memorandum or any amendment or supplement thereto contains an
untrue statement of a fact which, in the opinion of counsel for the Initial
Purchasers, is material or omits to state any fact which, in the opinion of such
counsel is material and is required to be stated therein or is necessary to make
the statements therein not misleading.

(c) All
corporate proceedings and other legal matters incident to the authorization,
form and validity of each of the Transaction Documents and the Offering
Memorandum, and all other legal matters relating to the Transaction Documents
and the transactions contemplated thereby, shall be satisfactory in all material
respects to the Initial Purchasers, and the Company and the Guarantor shall have
furnished to the Initial Purchasers all documents and information that they or
their counsel may reasonably request to enable them to pass upon such
matters.

(d) The
representations and warranties of the Company contained herein shall be true and
correct on the date hereof and on and as of the Closing Date as if made on the
Closing Date; and the statements of the Company and its officers made in any
certificates delivered pursuant to this Agreement shall be true and correct on
and as of the Closing Date.

(e) Subsequent
to the execution and delivery of this Agreement, (i) no downgrading shall have
occurred in the rating accorded any debt securities or preferred stock of or
guaranteed by the Company or any of its subsidiaries by any “nationally
recognized statistical rating organization”, as such term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act and (ii) no
such organization shall have publicly announced that it has under surveillance
or review, or has changed its outlook with respect to, its rating of any other
debt securities or preferred stock of or guaranteed by the Company or any of its
Subsidiaries (other than an announcement with positive implications of a
possible upgrading).

(f) Section
3(d) hereof shall have occurred or shall exist, which event or condition is not
described in the Offering Memorandum (excluding any amendment or supplement
thereto) and the effect of which in the judgment of the Representative makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of
the Securities on the terms and in the manner contemplated by this Agreement and
the Offering Memorandum.

(g) The
Initial Purchasers shall have received on and as of the Closing Date a
certificate of an executive officer of the Company satisfactory to the
Representative (i) confirming that such officer has carefully reviewed the
Offering Memorandum and, to the best knowledge of such officer, the
representation set forth in Section 3(a) hereof is true and correct, (ii)
confirming that the other representations and warranties of the Company in this
Agreement are true and correct and that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date and (iii) to the effect set forth in
paragraphs (d), (e) and (f) above.

(h) On the
date of this Agreement and on the Closing Date, Deloitte & Touche LLP, shall
have furnished to the Representative, at the request of the Company, letters,
dated the respective dates of delivery thereof and addressed to the Initial
Purchasers, in form and substance reasonably satisfactory to the Representative,
containing statements and information of the type customarily included in
accountants’ “comfort letters” to underwriters with respect to the financial
statements and certain financial information contained or incorporated by
reference in the Offering Memorandum; provided that the
letter delivered on the Closing Date shall use a “cut-off” date no more than
three business days prior to the Closing Date.

(i) Kirkland
& Ellis LLP, counsel for the Company and the Guarantor, shall have furnished
to the Representative, at the request of the Company, their written opinion,
dated the Closing Date and addressed to the Initial Purchasers, in form and
substance reasonably satisfactory to the Representative, to the effect set forth
in Annex B hereto.

(j) Steven K.
Covey, Esq., shall have furnished to the Representative his written opinion, as
General Counsel of 

E-11

Exhibit
10.1 (continued)

the
Company, addressed to the Initial Purchasers and dated the Closing Date, in form
and substance reasonably satisfactory to the Representative, to the effect set
forth in Annex C hereto.

(k) The
Representative shall have received on and as of the Closing Date an opinion of
Simpson Thacher & Bartlett LLP, counsel for the Initial Purchasers, with
respect to such matters as the Representative may reasonably request, and such
counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.

(l) The
Initial Purchasers shall have received a counterpart of the Registration Rights
Agreement which shall have been executed and delivered by a duly authorized
officer of the Company and the Guarantor.

(m) The
Indenture shall have been duly executed and delivered by the Company and the
Guarantor and the Trustee, and the Securities shall have been duly executed and
delivered by the Company and duly authenticated by the Trustee.

(n) If any
event shall have occurred that requires the Company under Section 4(d) to
prepare an amendment or supplement to the Offering Memorandum, such amendment or
supplement shall have been prepared, the Initial Purchasers shall have been
given a reasonable opportunity to comment thereon, and copies thereof shall have
been delivered to the Initial Purchasers reasonably in advance of the Closing
Date.

(o) There
shall not have occurred any invalidation of Rule 144A under the Securities Act
by any court or any withdrawal or proposed withdrawal of any rule or regulation
under the Securities Act or the Exchange Act by the Commission or any amendment
or proposed amendment thereof by the Commission which in the judgment of the
Initial Purchasers would materially impair the ability of the Initial Purchasers
to purchase, hold or effect resales of the Securities contemplated
hereby.

(p) No action
shall have been taken and no statute, rule, regulation or order shall have been
enacted, adopted or issued by any federal, state or foreign governmental or
regulatory authority that would, as of the Closing Date, prevent the issuance or
sale of the Securities; and no injunction or order of any federal, state or
foreign court shall have been issued that would, as of the Closing Date, prevent
the issuance or sale of the Securities.

(q) On or
prior to the Closing Date, the Company shall have furnished to the
Representative such further certificates and documents as the Representative may
reasonably request.

All
opinions, letters, certificates and evidence 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 Initial Purchasers.

6. Indemnification
and Contribution.

(a) The
Company and the Guarantor shall, jointly and severally, indemnify and hold
harmless each Initial Purchaser, its affiliates, directors and officers and each
person, if any, who controls such Initial Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, expenses and liabilities, joint or
several, that arise out of, or are based upon, any untrue statement or alleged
untrue statement of a material fact contained in the Offering Memorandum (or any
amendment or supplement thereto), or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, except insofar as such losses, claims, damages or
liabilities arise out of, or are based upon, any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with any information relating to any Initial Purchaser furnished to the Company
by or on behalf of such Initial Purchaser through the Representative expressly
for use therein.

E-12

Exhibit
10.1 (continued)

(b) Each
Initial Purchaser agrees, severally and not jointly, to indemnify and hold
harmless the Company and the Guarantor and each of their respective officers or
directors and each person, if any, who controls the Company or the Guarantor
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the indemnity set forth in paragraph (a)
above, but only with respect to any losses, claims, damages or liabilities that
arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any
information relating to such Initial Purchaser furnished to the Company by or on
behalf of such Initial Purchaser through the Representative expressly for use in
the Offering Memorandum (or any amendment or supplement thereto).

(c) If any
suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnification may be sought pursuant to either paragraph
(a) or (b) above, such person (the “Indemnified Person”) shall promptly notify
the person against whom such indemnification may be sought (the “Indemnifying
Person”) in writing; provided
that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have under this Section 6 except to the extent that it has
been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided, further, that the failure to notify the
Indemnifying Person shall not relieve it from any liability that it may have to
an Indemnified Person otherwise than under this Section 6. If any such
proceeding shall be brought or asserted against an Indemnified Person and it
shall have notified the Indemnifying Person thereof, the Indemnifying
Person shall
retain counsel reasonably satisfactory to the Indemnified Person to represent
the Indemnified Person and any others entitled to indemnification pursuant to
this Section 6 that the Indemnifying Person may designate in such proceeding and
shall pay the fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless (i) the Indemnifying Person and
the Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person
shall have reasonably concluded that there may be legal defenses available to it
that are different from or in addition to those available to the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood and agreed that the Indemnifying Person shall not, in connection with
any proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for any Initial
Purchaser, its affiliates, directors and officers and any control persons of
such Initial Purchaser shall be designated in writing by Banc of America
Securities LLC and any such separate firm for the Company, the Guarantor or any
of their respective directors or officers and any control persons of the Company
or the Guarantor shall be designated in writing by the Company. The Indemnifying
Person shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify each
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Person shall, without the written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Person.

(d) If the
indemnification provided for in paragraphs (a) and (b) above is unavailable to
an Indemnified Person or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantor on the one hand and the Initial Purchasers on the other from the
offering of the Securities or (ii) if the allocation provided by 

E-13

Exhibit
10.1 (continued)

clause
(i) is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) but also the
relative fault of the Company and the Guarantor on the one hand and the Initial
Purchasers on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Guarantor on the one hand and the Initial Purchasers on the other shall
be deemed to be in the same respective proportions as the net proceeds (before
deducting expenses) received by the Company from the sale of the Securities and
the total underwriting discounts and commissions received by the Initial
Purchasers in connection therewith, as provided in this Agreement, bear to the
aggregate offering price of the Securities. The relative fault of the Company
and the Guarantor on the one hand and the Initial Purchasers on the other shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and the Guarantor
or by the Initial Purchasers and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.

(e) The
Company and the Initial Purchasers agree that it would not be just and equitable
if contribution pursuant to this Section 6 were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such Indemnified Person in connection with any such action or claim.
Notwithstanding the provisions of this Section 6, in no event shall an Initial
Purchaser be required to contribute any amount in excess of the amount by which
the total underwriting discounts and commissions received by such Initial
Purchaser with respect to the offering of the Securities exceeds the amount of
any damages that such Initial Purchaser has otherwise been required to pay by
reason of such 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 Initial
Purchasers’ obligations to contribute pursuant to this Section 6 are several in
proportion to their respective purchase obligations hereunder and not
joint.

(f) The
remedies provided for in this Section 6 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any Indemnified
Person at law or in equity.

7. Termination. This
Agreement may be terminated in the absolute discretion of the Representative, by
notice to the Company, if after the execution and delivery of this Agreement and
prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on the New York Stock Exchange or the over-the-counter
market; (ii) trading of any securities issued or guaranteed by the Company shall
have been suspended on any exchange or in any over-the-counter market; (iii) a
general moratorium on commercial banking activities shall have been declared by
federal or New York State authorities or a material disruption in commercial
banking or securities settlement or clearance services in the United States;
(iv) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis, either within or outside
the United States, that in the judgment of the Representative, is material and
adverse and makes it impracticable or inadvisable to proceed with the offering
or delivery of the Securities on the terms and in the manner contemplated by
this Agreement and the Offering Memorandum.

8. Defaulting
Initial Purchasers. (a) If,
on the Closing Date, any Initial
Purchaser defaults
on its obligation to purchase the Securities that it has agreed to purchase
hereunder, the non-defaulting Initial Purchasers may in their discretion arrange
for the purchase of such Securities by other persons satisfactory to the Company
on the terms contained in this Agreement. If, within 36 hours after any such
default by any Initial Purchaser, the non-defaulting Initial Purchasers do not
arrange for the purchase of such Securities, then the Company shall be entitled
to a further period of 36 hours within which to procure other persons
satisfactory to the non-defaulting Initial Purchasers to purchase such
Securities on such terms. If other persons become obligated or agree to purchase
the Securities of a 

E-14

Exhibit
10.1 (continued)

defaulting
Initial Purchaser, either the non-defaulting Initial Purchasers or the Company
may postpone the Closing Date for up to five full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the Initial Purchasers may be necessary in the Offering Memorandum or in any
other document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Offering Memorandum that effects any such
changes. As used in this Agreement, the term “Initial Purchaser” includes, for
all purposes of this Agreement unless the context otherwise requires, any person
not listed in Schedule 1 hereto that, pursuant to this Section 8, purchases
Securities that a defaulting Initial Purchaser agreed but failed to
purchase.

(b) If, after
giving effect to any arrangements for the purchase of the Securities of a
defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial
Purchasers and the Company as provided in paragraph (a) above, the aggregate
principal amount of such Securities that remains unpurchased does not exceed
one-eleventh of the aggregate principal amount of all the Securities, then the
Company shall have the right to require each non-defaulting Initial Purchaser to
purchase the principal amount of Securities that such Initial Purchaser agreed
to purchase hereunder plus such Initial Purchaser’s pro rata share
(based on the principal amount of Securities that such Initial Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Initial Purchaser or
Initial Purchasers for which such arrangements have not been made.

(c) If, after
giving effect to any arrangements for the purchase of the Securities of a
defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial
Purchasers and the Company as provided in paragraph (a) above, the aggregate
principal amount of such Securities that remains unpurchased exceeds
one-eleventh of the aggregate principal amount of all the Securities, or if the
Company shall not exercise the right described in paragraph (b) above, then this
Agreement shall terminate without liability on the part of the non-defaulting
Initial Purchasers. Any termination of this Agreement pursuant to this Section 8
shall be without liability on the part of the Company, except that the Company
will continue to be liable for the payment of expenses as set forth in Section 9
hereof and except that the provisions of Section 6 hereof shall not terminate
and shall remain in effect.

(d) Nothing
contained herein shall relieve a defaulting Initial Purchaser of any liability
it may have to the Company or any non-defaulting Initial Purchaser for damages
caused by its default.

9. Payment
of Expenses. (a)
Whether or not the transactions contemplated by this Agreement are consummated
or this Agreement is terminated, the Company and the Guarantor, jointly and
severally agree to pay or cause to be paid all costs and expenses incident to
the performance of its obligations hereunder, including without limitation,
(i) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Securities and any taxes payable in that connection; (ii) the costs incident
to the preparation
and printing of the Offering Memorandum (including all exhibits, amendments and
supplements thereto) and the
distribution thereof; (iii) the costs of reproducing and distributing each of
the Transaction Documents; (iv) the fees and expenses of the Company’s counsel
and independent accountants; (v) the fees and
expenses incurred by the Company, the Guarantors or the Initial Purchasers
(including related fees and expenses of any counsel to such parties) in
connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Securities for offer
and sale under the securities laws of the several states of the United States,
the provinces of Canada or other jurisdictions designated by the Initial
Purchasers (including, without limitation, the cost of preparing, printing and
mailing preliminary and final Blue Sky or legal investment memoranda and any
related supplements to the Offering Memorandum); (vi) any
fees charged by rating agencies for rating the Securities; (vii) the fees and
expenses of the Trustee and any paying agent (including related fees and
expenses of any counsel to such parties); (viii) all expenses and application
fees incurred in connection with the application for the inclusion of the
Securities on the PORTAL Market and the approval of the Securities for
book-entry transfer by DTC; and (ix) all expenses incurred by the Company in
connection with any “roadshow” presentation to potential investors.

(b) If (i)
this Agreement is terminated pursuant to Section 7, (ii) the Company for any
reason fails to tender the Securities for delivery to the Initial Purchasers or
(iii) the Initial Purchasers decline to purchase the Securities for any reason
permitted under this Agreement, the Company agrees to reimburse the Initial
Purchasers (other than 

E-15

Exhibit
10.1 (continued)

defaulting
Initial Purchasers pursuant to Section 8 herein) for all out-of-pocket costs and
expenses (including the fees and expenses of their counsel) reasonably incurred
by the Initial Purchasers in connection with this Agreement and the offering
contemplated hereby.

10. Persons
Entitled to Benefit of Agreement. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and the officers and directors and any
controlling persons referred to herein, and the affiliates of each Initial
Purchaser referred to in Section 6 hereof. Nothing in this Agreement is intended
or shall be construed to give any other person any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein. No purchaser of Securities from any Initial Purchaser shall be deemed to
be a successor merely by reason of such purchase.

11. Survival. The
respective indemnities, rights of contribution, representations, warranties and
agreements of the Company and the Initial Purchasers contained in this Agreement
or made by or on behalf of the Company or the Initial Purchaser pursuant to this
Agreement or any certificate delivered pursuant hereto shall survive the
delivery of and payment for the Securities and shall remain in full force and
effect, regardless of any termination of this Agreement or any investigation
made by or on behalf of the Company or the Initial Purchasers.

12. Certain
Defined Terms. For
purposes of this Agreement, (a) except where otherwise expressly provided, the
term “affiliate” has the meaning set forth in Rule 405 under the Securities Act;
(b) the term “business day” means any day other than a day on which banks are
permitted or required to be closed in New York City; and (c) the term
“subsidiary” has the meaning set forth in Rule 405 under the Securities
Act.

13. Miscellaneous. (a)
Authority
of the Representative. Any
action by the Initial Purchasers hereunder may be taken by Banc of America
Securities LLC on behalf of the Initial Purchasers, and any such action taken by
Banc of America Securities LLC shall be binding upon the Initial
Purchasers.

(b) Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted and confirmed by any
standard form of telecommunication. Notices to the Initial Purchasers shall be
given to the Representative c/o Banc of America Securities LLC, 9 West
57th Street,
6th Floor;
Attention: High Yield Capital Markets (telecopier no.: (212) 847-5038). Notices
to the Company or Guarantor shall be given to it at 4201 Winfield Road,
Warrenville, Illinois 60555, (telecopier no.: (312) 836-2305); Attention:
Treasurer and Controller, with a copy to the General Counsel of the Company at
the same address.

(c) Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.

(d) Counterparts. This
Agreement may be signed in counterparts (which may include counterparts
delivered by telecopier), each of which shall be an original and all of which
together shall constitute one and the same instrument.

(e) Amendments
or Waivers. No
amendment or waiver of any provision of this Agreement, nor any consent or
approval to any departure therefrom, shall in any event be effective unless the
same shall be in writing and signed by the parties hereto.

(f) Headings. The
headings herein are included for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this
Agreement.

E-16

Exhibit
10.1 (continued)

If the
foregoing is in accordance with your understanding, please indicate your
acceptance of this Agreement by signing in the space provided
below.

Very
truly yours,

NAVISTAR
INTERNATIONAL CORPORATION

By: /s/Terry
Endsley

Terry
Ensley

Vice
President and Treasurer

INTERNATIONAL
TRUCK & ENGINE CORPORATION

By: /s/Terry
Endsley

Terry
Endsley

Vice
President and Treasurer

Accepted:
February 23, 2005

BANC OF
AMERICA SECURITIES LLC

For
itself and on behalf of the

several
Initial Purchasers listed

in
Schedule 1 hereto.

By:
/s/
Stephan Jaeger

Authorized
Signatory

E-17

Exhibit
10.1 (continued)

Schedule
1

	
      Initial
      Purchasers

       
	 	
      Principal
      Amount

       
	 
	

    	 	

    	 
	
      Banc
      of America Securities LLC

       
	 	
      $

      
	
      160,000,000

      
	 
	
      Citigroup
      Global Markets Inc.

       
	 	
      $

      
	
      140,000,000

      
	 
	
      J.P.
      Morgan Securities Inc.

       
	 	
      $

      
	
      32,000,000

      
	 
	
      Credit
      Suisse First Boston LLC

       
	 	
      $

      
	
      24,000,000

      
	 
	
      Scotia
      Capital (USA) Inc.

       
	 	
      $

      
	
      24,000,000

      
	 
	
      BNY
      Capital Markets, Inc.

       
	 	
      $

      
	
      10,000,000

      
	 
	
      RBC
      Capital Markets Corporation

       
	 	
      $

      
	
      10,000,000

      
	 
	 	 	
      

    	 
	
      Total

       
	 	
      $

      
	
      400,000,000

      
	 
	 	 	
      

    	 

E-18

Exhibit
10.1 (continued)

Annex
A

[Form of
Exchange and Registration Rights Agreement]

E-19

Exhibit
10.1 (continued)

Annex
B

[Form of
Kirkland & Ellis LLP Opinion]

We are
issuing this letter in our capacity as special counsel for Navistar
International Corporation, a Delaware corporation (the “Company”), and
International Truck and Engine Corporation, a Delaware corporation
(“International”) in
response to the requirement in Section 5(i) of the Purchase Agreement dated
February 23, 2005 (the “Purchase
Agreement”) among
the Company, International and Banc of America Securities LLC (for itself and on
behalf of the several initial purchasers listed in Schedule 1 to the Purchase
Agreement) (collectively, the “Initial
Purchasers” and
herein being called “you”). Every
term which is defined or given a special meaning in the Purchase Agreement and
which is not given a different meaning in this letter has the same meaning
whenever it is used in this letter as the meaning it is given in the Purchase
Agreement.

In
connection with the preparation of this letter, we have among other things
read:

(a) the
Offering Memorandum of the Company, dated February 23, 2005, covering the
offering and sale of the Securities (the “Offering
Memorandum”);

(b) an
executed original of the Purchase Agreement;

(c) an
executed original of the Indenture dated as of March 2, 2005 by and among the
Company, International and BNY Midwest Trust Company, as Trustee (the
“Indenture”) and
the Securities to be delivered on the date hereof;

(d) an
executed original of the Registration Rights Agreement;

(e) a
certified copy of resolutions adopted by the Board of Directors of the Company
on February [__], 2005
and certified copies of the resolutions adopted by the unanimous written consent
of the Board of Directors of International on February [__], 2005;
and

(f) copies of
all certificates and other documents delivered in connection with the sale of
the Securities on the date hereof and the consummation of the other transactions
contemplated by the Purchase Agreement.

The term
“Transaction
Documents” is used
in this letter to collectively refer to the Purchase Agreement, the Indenture,
the Securities and the Registration Rights Agreement.

Subject
to the assumptions, qualifications and limitations which are identified in this
letter, we advise you that:

1. The
Company and International are corporations existing and in good standing under
the General Corporation Law of the State of Delaware.

2. The
Purchase Agreement has been duly authorized, executed and delivered by the
Company and International. 

3. The
Indenture has been duly authorized, executed and delivered by the Company and
International. The Indenture is a valid and binding obligation of the Company
and International, and is enforceable against the Company and International in
accordance with its terms.

4. The
Registration Rights Agreement has been duly authorized, executed and delivered
by the Company and International. The Registration Rights Agreement is a valid
and binding obligation of the Company and International, and is enforceable
against the Company and International in accordance with its terms.

E-20

Exhibit
10.1 (continued)

5. The
Securities have been duly authorized, executed and delivered by the Company, and
when paid for by the Initial Purchasers in accordance with the terms of the
Purchase Agreement (assuming the due authorization, execution and delivery of
the Indenture by the Trustee and due authentication and delivery of the
Securities by the Trustee in accordance with the Indenture), will constitute
Securities under the terms of the Indenture, will constitute a valid and binding
obligation of the Company, and will be enforceable against the Company in
accordance with their terms.

6. The
Guarantee has been duly authorized, executed and delivered by International, and
when the Securities are paid for by the Initial Purchasers in accordance with
the terms of the Purchase Agreement (assuming that due authorization, execution
and delivery of the Indenture by the Trustee and due authentication and delivery
of the Securities by the Trustee in accordance with the Indenture), will
constitute a valid and binding obligation of International and is enforceable
against International in accordance with its terms.

7. The Board
of Directors of each of the Company and International has adopted by requisite
vote the resolutions necessary to authorize the execution, delivery and
performance of, in the case of the Company, the Exchange Securities, and, in the
case of International, the Guarantee of the Exchange Securities. No approval by
the stockholders of the Company or International is required for such execution,
delivery and performance.

8. The
execution and delivery of the Transaction Documents by the Company and
International, the performance by the Company and International of their
respective obligations thereunder and the consummation of the transactions
contemplated thereby (including, without limitation, the Company’s issuance and
sale of the Securities to you in accordance with the terms of the Purchase
Agreement and the application of the net proceeds therefrom as described in the
Offering Memorandum under the caption “Use of proceeds”) do not and will not
conflict with or constitute or result in a breach or default under (or an event
which with notice or the passage of time or both would constitute a default
under) or violation of any of, (i) the charter, bylaws or other organizational
documents of the Company or International, as applicable, (ii) any statute or
governmental rule or regulation which, in our experience, is normally applicable
both to general business corporations that are not engaged in regulated business
activities and to transactions of the type contemplated by the Offering
Memorandum (but without our having made any special investigation as to other
laws and provided that we express no opinion in this paragraph with respect to
(a) any laws, rules or regulations to which the Company may be subject as a
result of the Initial Purchasers’ legal or regulatory status or the involvement
of the Initial Purchasers in such transactions, (b) any laws, rules or
regulations relating to misrepresentations or fraud or (c) the Securities
Act, the Exchange Act or the Trust Indenture Act) or (iii) the terms or
provisions of any contract set forth on Schedule A attached
hereto (provided that in each case we express no opinion as to compliance with
any financial test or cross-default provision in any such agreement), except for
in the case of items (ii) and (iii) any such conflict, breach, violation,
default or event which would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect or to materially impair the
ability of the Company or International to perform their respective obligations
under the Transaction Documents.

9. To our
actual knowledge, no consent, waiver, approval, authorization or order of any
court or governmental authority is required for the issuance and sale by the
Company of the Securities to the Initial Purchasers or the consummation by the
Company and International of the other transactions contemplated by the
Transaction Documents, except such as may be required under the Securities Act,
the Exchange Act, the Trust Indenture Act and the security or Blue Sky laws of
the various states (and the rules and regulations thereunder), as to which we
express no opinion in this paragraph.

10. No
registration under the Securities Act of the Securities is required in
connection with the sale of the Securities to the Initial Purchasers in the
manner contemplated by the Purchase Agreement and the Offering Memorandum or in
connection with the initial resale of the Securities by the Initial Purchasers
in accordance with Section 1(b) of the Purchase Agreement, and prior to the
effectiveness of the Exchange Offer Registration Statement or the Shelf
Registration Statement, the Indenture is not required to be qualified under the
Trust Indenture Act, in 

E-21

Exhibit
10.1 (continued)

each case
assuming (i) that the purchasers who buy such Securities in the initial resale
thereof are qualified institutional buyers as defined in Rule 144A promulgated
under the Securities Act, or persons other than U. S. persons in connection with
offers and sales made in reliance upon Regulation S under the Securities Act,
(ii) the accuracy and completeness of the Initial Purchasers' representations
set forth in Section 1 of the Purchase Agreement, and those of the Company
contained in the Purchase Agreement regarding the absence of a general
solicitation in connection with the sale of such Securities to the Initial
Purchasers and the initial resales thereof, and (iii) the compliance with the
procedures set forth in the Purchase Agreement by the Initial Purchasers and the
Company.

11. The
information in the Offering Memorandum under the heading “Description of the
notes,” “United States federal income tax considerations” and “Notice to
investors” to the extent it summarizes laws, governmental rules or regulations
or documents referred to therein is correct in all material
respects.

12. To our
actual knowledge, there is no legal or governmental proceeding that is pending
or threatened against the Company that has caused us to conclude that such
proceeding would be required to be described by Item 103 of Regulation S-K under
the Securities Act if the issuance of the Securities were being registered under
the Securities Act but is not so described in the Offering
Memorandum.

13. The
Company is not, nor immediately after the sale of the Securities to the Initial
Purchasers and application of the net proceeds therefrom as described in the
Offering Memorandum under the caption “Use of proceeds” will be, an “investment
company” as such term is defined in the Investment Company Act.

14. Neither
the sale, issuance, execution or delivery of the Securities nor the application
of the net proceeds therefrom as described in the Offering Memorandum under the
caption “Use of proceeds” will contravene Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the
Board of Governors of the Federal Reserve System.

* * *
*

The
purpose of our professional engagement was not to establish factual matters, and
preparation of the Offering Memorandum involved many determinations of a wholly
or partially nonlegal character. We make no representation that we have
independently verified the accuracy, completeness or fairness of the Offering
Memorandum or that the actions taken in connection with the preparation of the
Offering Memorandum (including the actions described in the next paragraph) were
sufficient to cause the Offering Memorandum to be accurate, complete or fair. We
are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the Offering Memorandum except to the extent
otherwise explicitly indicated in numbered paragraph 11 above. We were not
retained by the Company to prepare the periodic reports or other material
incorporated by reference into the Offering Memorandum, and our knowledge of
these materials is limited. We were not present at any meeting of the Board of
Directors of the Company or its Pricing Committee or of the Board of Directors
of International at which any resolution relevant to this letter was discussed
or adopted.

We can
however confirm that we have participated in conferences with representatives of
the Company, representatives of the Initial Purchasers, counsel for the Initial
Purchasers and representatives of the independent accountants for the Company
during which disclosures in the Offering Memorandum and related matters were
discussed. In addition, we have reviewed certain corporate records furnished to
us by the Company.

Based
upon our participation in the conferences and our document review identified in
the preceding paragraph, our understanding of applicable law and the experience
we have gained in our practice thereunder and relying as to materiality to a
large extent upon the opinions and on statements of officers of the Company, we
can, however, advise you that nothing has come to our attention that has caused
us to conclude that the Offering Memorandum, at the date it bears or on the
date of this letter, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

E-22

Exhibit
10.1 (continued)

* * *
*

Except
for the activities described in the immediately preceding section of this
letter, we have not undertaken any investigation to determine the facts upon
which the advice in this letter is based.

We have
assumed for purposes of this letter: each document we have reviewed for purposes
of this letter is accurate and complete, each such document that is an original
is authentic, each such document that is a copy conforms to an authentic
original, and all signatures on each such document are genuine; that the
Purchase Agreement and every other agreement we have examined for purposes of
this letter constitutes a valid and binding obligation of each party to that
document and that each such party has satisfied all legal requirements that are
applicable to such party to the extent necessary to entitle such party to
enforce such agreement (except that we make no such assumption with respect to
the Company); and that you have acted in good faith and without notice of any
fact which has caused you to reach any conclusion contrary to any of the advice
provided in this letter. We have also made other assumptions which we believe to
be appropriate for purposes of this letter.

In
preparing this letter we have relied without independent verification upon: (i)
information contained in certificates obtained from governmental authorities;
(ii) factual information represented to be true in the Purchase Agreement and
other documents specifically identified at the beginning of this letter as
having been read by us; (iii) factual information provided to us by the Company
or its representatives; and (iv) factual information we have obtained from such
other sources as we have deemed reasonable. We have assumed that there has been
no relevant change or development between the dates as of which the information
cited in the preceding sentence was given and the date of this letter and that
the information upon which we have relied is accurate and does not omit
disclosures necessary to prevent such information from being misleading. For
purposes of numbered paragraph 1, we have relied exclusively upon certificates
issued by governmental authorities in the relevant jurisdictions and such
opinion is not intended to provide any conclusion or assurance beyond that
conveyed by those certificates.

We
confirm that we do not have knowledge that has caused us to conclude that our
reliance and assumptions cited in the two immediately preceding paragraphs are
unwarranted. Whenever this letter provides advice about (or based upon) our
knowledge of any particular information or about any information which has or
has not come to our attention such advice is based entirely on the conscious
awareness at the time this letter is delivered on the date it bears by the
lawyers with Kirkland & Ellis LLP who have devoted substantive
attention to the negotiation or preparation of the Transaction Documents, the
Offering Memorandum and the due diligence associated therewith.

Each
opinion (an “enforceability
opinion”) in
this letter that any particular contract is a valid and binding obligation or is
enforceable in accordance with its terms is subject to: (i) the effect of
bankruptcy, insolvency, fraudulent conveyance and other similar laws and
judicially developed doctrines in this area such as substantive consolidation
and equitable subordination; (ii) the effect of general principles of
equity; and (iii) other commonly recognized statutory and judicial
constraints on enforceability including statutes of limitations. “General
principles of equity” include but are not limited to: principles limiting the
availability of specific performance and injunctive relief; principles which
limit the availability of a remedy under certain circumstances where another
remedy has been elected; principles requiring reasonableness, good faith and
fair dealing in the performance and enforcement of an agreement by the party
seeking enforcement; principles which may permit a party to cure a material
failure to perform its obligations; and principles affording equitable defenses
such as waiver, laches and estoppel. It is possible that terms in a particular
contract covered by our enforceability opinion may not prove enforceable for
reasons other than those explicitly cited in this letter should an actual
enforcement action be brought, but (subject to all the exceptions,
qualifications, exclusions and other limitations contained in this letter) such
unenforceability would not in our opinion prevent the party entitled to enforce
that contract from realizing the principal benefits purported to be provided to
that party by the terms in that contract which are covered by our enforceability
opinion.

The
enforceability opinion related to the Guarantee is further subject to the effect
of rules of law that may render guarantees unenforceable under circumstances
where, in the absence of an effective consent or waiver by 

E-23

Exhibit
10.1 (continued)

guarantors
(as to which we express no opinion herein), actions, failures to act or waivers,
amendments or replacement of the Indenture or the Securities so radically change
the essential nature of the terms and conditions of the guaranteed obligations
and the related transactions that, in effect, a new relationship has arisen
between the Trustee and the Company or International, which is substantially and
materially different from that presently contemplated by the Indenture and the
Securities.

Our
advice on every legal issue addressed in this letter is based exclusively on the
internal law of the State of New York, or the federal law of the United States,
except that the opinions in paragraph 1 and paragraphs 2, 3, 4 and 5 with
respect due authorization, execution and delivery of the Transaction Documents
are based solely on the Delaware General Corporation Law (the “DGCL”) with
respect to the Company. In our opinion, New York state courts would apply New
York state law to resolve state law issues arising under the Transaction
Documents. We express no opinion as to what law might be applied by any other
courts to resolve any issue addressed by our opinion and we express no opinion
as to whether any relevant difference exists between the laws upon which our
opinions are based and any other laws which may actually be applied to resolve
issues which may arise under the Transaction Documents. The manner in which any
particular issue would be treated in any actual court case would depend in part
on facts and circumstances particular to the case and would also depend on how
the court involved chose to exercise the wide discretionary authority generally
available to it. This letter is not intended to guarantee the outcome of any
legal dispute which may arise in the future.

None of
the opinions or other advice contained in this letter considers or covers:
(i) any state securities (or “blue
sky”) laws
or regulations, (ii) any financial statements or supporting schedules (or
any notes to any such statements or schedules) or other financial or statistical
information set forth or incorporated by reference in (or omitted from) the
Offering Memorandum or (iii) any rules and regulations of the National
Association of Securities Dealers, Inc. relating to the compensation of
underwriters. In addition, none of the opinions or other advice contained in the
letter covers or otherwise addresses any of the following types of provisions
which may be contained in the Transaction Documents: (i) provisions
mandating contribution towards judgments or settlements among various parties;
(ii) waivers of benefits and rights to the extent they cannot be waived
under applicable law; (iii) provisions providing for liquidated damages,
late charges and prepayment charges, in each case if deemed to constitute
penalties; (iv) provisions which might require indemnification or
contribution in violation of general principles of equity or public policy,
including, without limitation, indemnification or contribution obligations which
arise out of the failure to comply with applicable state or federal securities
laws; or (v) requirements in the Transaction Documents specifying that
provisions thereof may only be waived in writing (these provisions may not be
valid, binding or enforceable to the extent that an oral agreement or an implied
agreement by trade practice or course of conduct has been created modifying any
provision of such documents). This letter does not cover any other laws,
statutes, governmental rules or regulations or decisions which in our experience
are not usually considered for or covered by opinions like those contained in
this letter or are not generally applicable to transactions of the kind covered
by the Purchase Agreement.

This
letter speaks as of the time of its delivery on the date it bears. We do not
assume any obligation to provide you with any subsequent opinion or advice by
reason of any fact about which we did not have knowledge at that time, by reason
of any change subsequent to that time in any law other governmental requirement
or interpretation thereof covered by any of our opinions or advice, or for any
other reason.

E-24

Exhibit
10.1 (continued)

This
letter may be relied upon by the Initial Purchasers only for the purpose served
by the provision in the Purchase Agreement cited in the initial paragraph of
this letter in response to which it has been delivered. Without our written
consent: (i) no person other than the Initial Purchasers may rely on this
letter for any purpose; (ii) this letter may not be cited or quoted in any
financial statement, offering memorandum, private placement memorandum or other
similar document; (iii) this letter may not be cited or quoted in any other
document or communication which might encourage reliance upon this letter by any
person or for any purpose excluded by the restrictions in this paragraph; and
(iv) copies of this letter may not be furnished to anyone for purposes of
encouraging such reliance.

Very
truly yours,

KIRKLAND
& ELLIS LLP

E-25

Exhibit
10.1 (continued)

SCHEDULE
A

Specified
Contracts

Navistar
International Corporation

1. Guarantee,
dated as of December 8, 2000, made by Navistar International Corporation, in
favor of The Chase Manhattan Bank, as Administrative Agent, for the lenders
parties to the Credit Agreement, dated as of December 8, 2000, among Navistar
Financial Corporation and Arrendadora Financiera Navistar, S.A. de C.V.,
Servicios Financieros Navistar, S.A. de C.V. and Navistar Comercial, S.A. de
C.V., the Lenders, Bank of America, N.A., as syndication agent, The Bank of Nova
Scotia, as documentation agent, and the Administrative Agent. 

2. Indenture,
dated as of May 31, 2001, by and between Navistar International Corporation,
International Truck and Engine Corporation and BNY Midwest Trust Company, as
Trustee, for 93/8% Senior
Notes due 2006 for $400,000,000, as amended by the First Supplement thereto
dated August 22, 2001. 

3. Indenture,
dated as of March 25, 2002, by and among Navistar Financial Corporation,
Navistar International Corporation and BNY Midwest Trust Company, as Trustee,
for Navistar Financial Corporation’s 4.75% Subordinated Exchangeable Notes due
2009 for $220,000,000. 

4. Indenture,
dated as of December 16, 2002, by and among Navistar International Corporation,
International Truck and Engine Corporation and BNY Midwest Trust Company, as
Trustee, for Navistar International Corporation’s 2.50% Senior Convertible Notes
due 2007 for $190,000,000. 

5. Indenture,
dated as of June 2, 2004, by and between Navistar International Corporation,
International Truck and Engine Corporation and BNY Midwest Trust Company, as
Trustee, for 7-1/2% Senior Notes due 2011 for $250,000,000, as amended by the
First Supplement thereto dated June 2, 2004.

International
Truck and Engine Corporation

6. Note
Purchase Agreement, dated as of June 15, 2001, as amended by Amendment dated
August 16, 2001, between International Truck and Engine Corporation and the
State of Wisconsin Investment Board for 9.95% Senior Notes due 2011 for
$19,000,000. 

Navistar
Financial Corporation

7. Credit
Agreement for $820,000,000 Revolving Credit and Competitive Advance Facility
dated as of December 8, 2000, between Navistar Financial Corporation,
Arrendadora Financiera Navistar, S.A. de C.V., Servicios Financieros Navistar,
S.A. de C.V. and Navistar Comercial, S.A. de C.V., as borrowers, lenders party
hereto, The Chase Manhattan Bank as Administrative Agent, Bank of America as
Syndication Agent and Bank of Nova Scotia as Documentation Agent. 

* * *
*

E-26

Exhibit
10.1 (continued)

Annex
C

[Form of
Steven K. Covey, Esq. Opinion]

I am
Senior Vice President and General Counsel of Navistar International Corporation,
a Delaware corporation (the “Company”). This
opinion is delivered to you pursuant to Section 5(j) of the Purchase Agreement,
dated February 23, 2005 (the “Purchase
Agreement”),
between the Company and Banc of America Securities LLC (the “Representative”) and
the several initial purchasers party thereto (collectively with the
Representative, the “Initial
Purchasers”).
Capitalized terms used but not otherwise defined herein shall have the
respective meanings specified in the Purchase Agreement.

In
connection with this opinion, I have reviewed the Offering Memorandum of the
Company, dated February 23, 2005, covering the offering and sale of the
Securities (including the documents incorporated by reference therein, the
“Offering
Memorandum”), an
executed original of the Purchase Agreement, an executed original of the
Indenture, a specimen certificate of the Securities, an executed original of the
Registration Rights Agreement, the Certificate of Incorporation and the By-laws
of the Company, certificates of certain public officials, and certificates of
certain officers of the Company as to certain factual matters. In addition, I
have reviewed such other documents and have given consideration to such other
matters of law and fact (in accordance with the principles set forth herein) as
I have deemed appropriate, in my professional judgment, to express the opinions
expressed herein under the laws specified below.

In such
review and investigation, I have assumed with you permission and without
independent investigation: (a) the genuineness of the signatures of persons
signing all documents in connection with which this opinion is rendered on
behalf of the parties thereto other than the Company, (b) the authenticity of
all documents submitted to me as originals, (c) the conformity to authentic
original documents of all documents submitted to me as certified, conformed or
photostatic copies, and (d) all public authority documents are accurate,
complete and authentic and all official public records (including their indexing
and filing) are accurate and complete. I have also assumed the due
authorization, execution and delivery of the Purchase Agreement and every other
agreement I have examined for purposes of this opinion and the validity, binding
effect and enforceability thereof by or on behalf of the parties thereto other
than the Company. As to factual matters material to this opinion, when such
facts have not been independently established, I have relied upon originals (or
copies certified or otherwise identified to my satisfaction) of such records,
documents, certificates and other written information as in my judgment are
necessary or appropriate to enable me to render the opinions expressed
below.

Based
upon the foregoing and subject to the qualifications, assumptions and
limitations set forth below, I am of the opinion that:

1. The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware with the requisite power
and authority to own, lease and operate its properties and to conduct business
as described in the Offering Memorandum.

2. The
Company has been duly qualified as a foreign corporation for the transaction of
business and is in good standing in each jurisdiction in which it owns or leases
properties, or conducts business, so as to require such qualification, except
where the failure to be in good standing would not reasonably be expected to
have a Material Adverse Effect.

3. Each
Subsidiary has been duly organized and is validly existing under the laws of its
jurisdiction of organization with the requisite power and authority to own,
lease and operate its properties and to conduct its business, and has been duly
qualified as a foreign organization for the transaction of business and is in
good standing in each jurisdiction in which it owns or leases properties, or
conducts business, so as to require such qualification, except where the failure
to be in good standing would not reasonably be expected to have a Material
Adverse Effect.

4. The
authorized capital stock of the Company is as set forth in the Offering
Memorandum.

E-27

Exhibit
10.1 (continued)

5. All the
outstanding shares of capital stock of each Subsidiary have been duly authorized
and validly issued and are fully paid and non-assessable, and except as
otherwise set forth in the Offering Memorandum, are directly or indirectly owned
by the Company free and clear of any mortgage, pledge, securities interest,
lien, claim or other encumbrance or restriction on transferability or voting
(other than as may be imposed by the Securities Act and the various state
securities laws).

6. All of
the outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable.

7. Except as
described in the Offering Memorandum, there is no action, suit or proceeding
before or by any government, governmental instrumentality, agency, body or
court, domestic or foreign, now pending or, to the best of my knowledge after
reasonable investigation, threatened against or affecting the Company or any of
the Subsidiaries that could reasonably be expected to have a Material Adverse
Effect or that could reasonably be expected to have material adverse effect on
the consummation of the transactions contemplated in, or the fulfillment of the
terms of, this Agreement, the Offering Memorandum, the Indenture or the
Registration Right Agreement; there is no action, suit or proceeding before or
by any government, governmental instrumentality, agency, body or court, now
pending, or to the best of my knowledge after reasonable investigation,
threatened against or affecting the Company or any Subsidiary that would be
required to be described in a registration statement filed pursuant to the
Securities Act that is not described in the Offering Memorandum.

8. The
execution and delivery by the Company of, and the performance by the Company of
all of the provisions of its obligations under, this Agreement, the Indenture,
the Registration Rights Agreement, the Securities, and the consummation by the
Company of the transactions contemplated therein and in the Offering Memorandum,
do not and will not conflict with, or result in a breach or violation of any of
the terms or provisions of, or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or give
rise to any right to accelerate the maturity or require the prepayment of any
indebtedness or the purchase of any capital stock under, or result in the
creation or imposition of any lien, charge or encumbrance upon any material
properties or assets of the Company or of any Subsidiary under, (A) any material
contact, indenture, mortgage, deed of trust, loan agreement, note, lease,
partnership agreement or other agreement or instrument known to me after
reasonable investigation to which the Company or any Subsidiary is a party or by
which any of them may be bound or to which any of their respective properties or
assets may be subject, (B) any applicable law or statute, rule or regulation
(other than the securities or Blue Sky laws of the various states of the United
States of America) or (C) any judgment, order or decree of any government,
governmental instrumentality, agency, body or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their respective
properties or assets known to me after reasonable investigation except, with
respect to clauses (A) and (B), any breach or violation that would not
reasonably be expected to have a Material Adverse Effect.

The
preparation of the Offering Memorandum involved many determinations of a wholly
or partially nonlegal character. I make no representation that I have
independent verified the accuracy, completeness or fairness of the Offering
Memorandum or that the actions taken in connection with the preparation of the
Offering Memorandum were sufficient to cause the Offering Memorandum to be
accurate, complete and fair. I am not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the Offering
Memorandum.

Based on
my participation in the preparation of the Offering Memorandum and conferences
with officers and representatives of the Company, representatives of the
independent public accountants for the Company, representatives of the Initial
Purchasers and counsel for the Initial Purchasers during which disclosures in
the Offering Memorandum and related matters were discussed, my understanding of
applicable law and the experience I have gained in my practice, and relying as
to materiality to a large extent upon the opinions and statements of officers of
the Company, I can, however, advise you that nothing has come to my attention
that has caused me to conclude that the Offering Memorandum (other than the
financial statements, supporting schedules and other financial and statistical
data set forth therein, as to which no advice is given) at the date it bears or
on the date of this letter contained an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

E-28

Exhibit
10.1 (continued)

My
opinions expressed herein are limited to the substantive laws of the State of
Illinois, the General Corporation Law of the State of Delaware and the Federal
laws of the United States which, in my experience, are normally applicable to
general business corporations which are not engaged in regulated business
activities and to transactions of the type contemplated under the Agreements
(but without my having made any special investigation as to any other
laws).

My
opinions expressed herein are limited to the specific issues addressed herein
and are limited in all respects to documents, laws and facts existing on the
date hereof. By rendering my opinions, I do not undertake to advise you of any
changes in such documents, laws or facts that may occur after the date
hereof.

My
opinions expressed herein have been furnished at the request of the
Representative and may be relied upon by the Initial Purchasers only for the
purpose served by the provision in the Purchase Agreement cited in the initial
paragraph of this letter in response to which it has been delivered. This letter
may not be relied upon by any other person or used for any other purpose without
my prior written consent.

E-29Exhibit 10.1

Exhibit 10.1

MBNA Corporation Compensation Committee—Framework for Annual Bonus Determinations to Executive Officers 

The Compensation Committee’s framework for awarding annual bonuses to the top five paid executive officers pursuant to MBNA Corporation’s Senior Executive Performance Plan (the "Performance Plan") incorporates corporate and individual performance criteria. Pursuant to the framework, the Compensation Committee establishes a range of annual net income growth targets and assigns maximum bonus percentages (based on annual salary) to each target in the range. In addition, the Committee establishes additional financial goals (such as loan growth, new accounts and net credit losses) and non-financial business goals, to ensure that achievement of the net income targets for the year is based on the key performance drivers of the Corporation’s business and does not compromise future performance. Based on achievement of the additional goals, the Committee may reduce annual bonuses. The Committee may further adjust annual bonuses based on individual achievement. 

The Compensation Committee’s framework for awarding annual bonuses to members of senior management (other than the top five paid executive officers) is the same as the framework established under the Performance Plan for awarding bonuses to the top five paid executive officers.

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