Document:

Exhibit 10.1a

 

 

LOAN AGREEMENT

 

between

 

ILLINOIS FINANCE AUTHORITY

 

and

 

NAVISTAR INTERNATIONAL CORPORATION

 

Dated as of October 1,
2010

 

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

 

 

 

TABLE OF CONTENTS

 

	
  SECTION

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  Preliminary Statement

  	
   

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
  Terms Defined

  	
   

  	
  2

  
	
  Section 1.02.

  	
  Rules of Interpretation

  	
   

  	
  2

  
	
  Section 1.03.

  	
  Exhibit

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  PARTICULAR COVENANTS,
  REPRESENTATIONS, WARRANTIES AND AGREEMENTS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  Representations and Warranties

  	
   

  	
  2

  
	
  Section 2.02.

  	
  Tax-Exempt Status

  	
   

  	
  8

  
	
  Section 2.03.

  	
  Annual Certificate

  	
   

  	
  9

  
	
  Section 2.04.

  	
  Taxes, Charges and Assessments; Permitted Contests

  	
   

  	
  10

  
	
  Section 2.05.

  	
  Compliance with Laws

  	
   

  	
  10

  
	
  Section 2.06.

  	
  Use of the Project

  	
   

  	
  11

  
	
  Section 2.07.

  	
  Access to Project

  	
   

  	
  11

  
	
  Section 2.08.

  	
  Maintenance and Repair; Insurance

  	
   

  	
  11

  
	
  Section 2.09.

  	
  Indemnification of the Authority and the Trustee

  	
   

  	
  12

  
	
  Section 2.10.

  	
  [Reserved]

  	
   

  	
  14

  
	
  Section 2.11.

  	
  Recording and Maintenance of Liens

  	
   

  	
  14

  
	
  Section 2.12.

  	
  Indenture Provisions

  	
   

  	
  14

  
	
  Section 2.13.

  	
  Exemption from Personal Liability

  	
   

  	
  15

  
	
  Section 2.14.

  	
  No Recourse to Authority

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  LOAN PROCEEDS; ACQUISITION,
  CONSTRUCTION, EQUIPPING, COMPLETION AND OPERATION OF PROJECT

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Loan of Proceeds of Bonds

  	
   

  	
  16

  
	
  Section 3.02.

  	
  Agreement to Acquire, Construct, Equip and Complete Project

  	
   

  	
  16

  
	
  Section 3.03.

  	
  Plans and Specifications

  	
   

  	
  17

  
	
  Section 3.04.

  	
  Project Records

  	
   

  	
  17

  
	
  Section 3.05.

  	
  Authorized Company Representative

  	
   

  	
  18

  
	
  Section 3.06.

  	
  Guarantor

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  ADDITIONAL COVENANTS OF THE COMPANY

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Application of Certain Covenants

  	
   

  	
  18

  
	
  Section 4.02.

  	
  Corporate Existence

  	
   

  	
  19

  
	
  Section 4.03.

  	
  Reports by the Company

  	
   

  	
  19

  
	
  Section 4.04.

  	
  Notice of Defaults or Events of Default

  	
   

  	
  20

  
	
  Section 4.05.

  	
  Books of Record and Account

  	
   

  	
  20

  
					

 

i

 

	
  Section 4.06.

  	
  Limitation on Liens

  	
   

  	
  20

  
	
  Section 4.07.

  	
  Limitation on Incurrence of Indebtedness

  	
   

  	
  21

  
	
  Section 4.08.

  	
  Limitation on Restricted Payments

  	
   

  	
  26

  
	
  Section 4.09.

  	
  Limitation on Certain Asset
  Dispositions

  	
   

  	
  31

  
	
  Section 4.10.

  	
  Limitation on Sale/Leaseback Transactions

  	
   

  	
  33

  
	
  Section 4.11.

  	
  Limitation on Payment Restrictions Affecting Restricted
  Subsidiaries

  	
   

  	
  33

  
	
  Section 4.12.

  	
  Limitation on Transactions with Affiliates

  	
   

  	
  35

  
	
  Section 4.13.

  	
  Limitation on Guarantees by Restricted Subsidiaries

  	
   

  	
  37

  
	
  Section 4.14.

  	
  Consolidation, Merger or Sale of Assets Permitted

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  ISSUANCE OF BONDS; LOAN TO COMPANY; OTHER OBLIGATIONS

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  Issuance of Bonds; Loan to Company

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  LOAN PAYMENTS; ADDITIONAL PAYMENTS

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
  Loan Payments; Additional Payments

  	
   

  	
  41

  
	
  Section 6.02.

  	
  Assignment and Pledge of Authority’s Rights; Unconditional
  Obligation

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  ASSIGNMENT

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Conditions

  	
   

  	
  43

  
	
  Section 7.02.

  	
  Documents Furnished to Trustee

  	
   

  	
  43

  
	
  Section 7.03.

  	
  Limitation

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  EVENTS OF DEFAULT AND REMEDIES

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Events of Default

  	
   

  	
  43

  
	
  Section 8.02.

  	
  Remedies

  	
   

  	
  45

  
	
  Section 8.03.

  	
  No Remedy Exclusive

  	
   

  	
  45

  
	
  Section 8.04.

  	
  Reimbursement of Attorneys’ Fees

  	
   

  	
  46

  
	
  Section 8.05.

  	
  Waiver of Breach

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  REDEMPTION OF BONDS; REPURCHASE OF BONDS

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
  Redemption of Bonds

  	
   

  	
  46

  
	
  Section 9.02.

  	
  Obligation to Prepay

  	
   

  	
  46

  
	
  Section 9.03.

  	
  Compliance with Indenture

  	
   

  	
  47

  
	
  Section 9.04.

  	
  Offer to Repurchase Upon a Change of Control

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  DEFEASANCE

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
  Defeasance

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  SUBSIDIARY BOND GUARANTEES

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Subsidiary Bond Guarantees

  	
   

  	
  50

  
	
  Section 11.02.

  	
  Obligations of Subsidiary Guarantors Unconditional

  	
   

  	
  52

  
					

 

ii

 

	
  Section 11.03.

  	
  Limitation on Subsidiary Guarantors’ Liability

  	
   

  	
  52

  
	
  Section 11.04.

  	
  Releases of Subsidiary Bond Guarantees

  	
   

  	
  53

  
	
  Section 11.05.

  	
  Application of Certain Terms and Provisions to Subsidiary
  Guarantors

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  MISCELLANEOUS

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 12.01.

  	
  Term of Loan Agreement

  	
   

  	
  54

  
	
  Section 12.02.

  	
  Notices

  	
   

  	
  54

  
	
  Section 12.03.

  	
  Parties in Interest

  	
   

  	
  54

  
	
  Section 12.04.

  	
  Amendments

  	
   

  	
  55

  
	
  Section 12.05.

  	
  Counterparts

  	
   

  	
  55

  
	
  Section 12.06.

  	
  Severability

  	
   

  	
  55

  
	
  Section 12.07.

  	
  Governing Law

  	
   

  	
  55

  
	
  Section 12.08.

  	
  Date for Identification Purposes Only; Effective Date

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  Signatures

  	
   

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  —

  	
  Project
  Description

  	
   

  	
   

  
						

 

iii

 

LOAN AGREEMENT

 

This
is a LOAN AGREEMENT, dated as of October 1, 2010 (herein referred to as
the or this “Loan Agreement”), between NAVISTAR
INTERNATIONAL CORPORATION, a Delaware corporation (the “Company”),
and the ILLINOIS FINANCE AUTHORITY (the “Authority”), a
body politic and corporate duly created and validly existing under and by
virtue of the Illinois Finance Authority Act, 20 ILCS 3501/801-1 et seq., as supplemented and amended (the “Act”).

 

PRELIMINARY STATEMENT:

 

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

 

Pursuant
to the Act, the Authority is obtaining funds to loan to the Company through the
issuance and sale of its Illinois Finance Authority Recovery Zone Facility
Revenue Bonds (Navistar International Corporation Project) Series 2010, in
the aggregate principal amount of $135,000,000 (the “Bonds”),
which will be issued under and secured by the Indenture of Trust dated as of
October 1, 2010 (the “Indenture”),
between the Authority and Citibank N.A., as trustee (the “Trustee”).

 

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

 

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

 

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

 

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

 

 

ARTICLE I

 

DEFINITIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

EXHIBIT A:          Description of
Project.

 

ARTICLE II

 

PARTICULAR COVENANTS, REPRESENTATIONS, WARRANTIES AND AGREEMENTS

 

Section 2.01.       Representations
and Warranties.

 

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

 

(i)            The Authority
is a body corporate and politic, validly created and existing under the Constitution
and laws of the State, is authorized and empowered by the

 

2

 

provisions
of the Act and the Bond Resolution to enter into the transactions contemplated
by this Loan Agreement and to carry out its obligations hereunder, and by
proper action of its governing body has been duly authorized to execute and
deliver the Indenture, the Purchase Contract, this Loan Agreement and the Tax
Agreement.

 

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

 

(iii)          To provide funds to loan to the Company for the
purposes described in clause (ii) above, the Authority has authorized its
Bonds in the aggregate principal amount of $135,000,000 to be issued upon the
terms set forth in the Indenture, pursuant to which certain of the Authority’s
interests in this Loan Agreement, and the revenues and income to be derived by
the Authority pursuant to this Loan Agreement and the payment of principal,
premium, if any, interest and other revenues hereunder (other than Unassigned
Rights), will be pledged and assigned to the Trustee as security for payment of
the principal of, premium, if any, and interest on the Bonds, and any fees and
expenses due under the Indenture.  The Authority
covenants that it has not and will not pledge or assign its interest in this
Loan Agreement, or the revenues and receipts derived pursuant to this Loan
Agreement, excepting Unassigned Rights, other than to the Trustee under the
Indenture to secure the Bonds.

 

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

 

(v)           To the best of its knowledge, no member of the
Authority or officer, agent or employee thereof is, in his or her own name or
in the name of a nominee, an officer, director or holder of an ownership
interest of more than 7-1/2% in any person, association, trust, corporation,
partnership or other entity which is, in its own name or in the name of a
nominee, a party to any contract or agreement upon which the member or officer,
agent or employee may be called upon to act or vote in connection with the
financing of the Project.

 

(vi)          To the best of its knowledge, no member of the
Authority or officer, agent or employee thereof is, in his or her own name or
in the name of a nominee, a holder of any direct or indirect interest (other
than a permitted interest described in paragraph (v) above) in any
contract or agreement related to the transactions contemplated by the Bond

 

3

 

Resolution
or the documents authorized by the Bond Resolution to be executed by the
Authority upon which the member or officer, agent or employee may be called
upon to act or vote in connection with the financing of the Project, except for
direct or indirect interests (other than prohibited interests), (A) which
such member, officer, agent or employee has disclosed to the Secretary of the
Authority prior to the taking of final action by the Authority with respect to
such contract or agreement in the manner required by Section 845-45 of the
Act, which disclosure has been publicly acknowledged by the Authority and entered
upon the minutes of the Authority, and (B) as to which the member,
officer, agent or employee has refrained from taking the actions described in
said Section 845-45.

 

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

 

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

 

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

 

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

 

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

 

4

 

consent), or constitutes a material default (or would constitute a
material default with due notice or the passage of time or both) under any of
the foregoing.

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

insurance programs or (ii) will not have a material adverse effect
on the operations or condition, financial or otherwise, of the Company.

 

(x)            The information used in the preparation of the
financial statements referred to in paragraph (xi) below, this Loan
Agreement, the Tax Agreement and any other written statement furnished by the
Company to the Authority (including the descriptions and information contained
or incorporated by reference in the Limited Offering Memorandum relating to
(A) the Company, the Guarantor and the Project, (B) the operations
and financial and other affairs of the Company and the Guarantor, (C) the
application by the Company of the proceeds from the sale of the Bonds and
(D) the participation by the Company and the Guarantor in the transactions
contemplated herein and in the Limited Offering Memorandum) do not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements contained therein or herein not misleading.  There is no fact which the Company has not
disclosed to the Authority in writing which materially adversely affects or, so
far as the Company can now foresee, will materially adversely affect the financial
condition of the Company or the Guarantor, the ability of the Company to own
and operate the Project, the Company’s ability to make payments under this Loan
Agreement or the Guarantor’s ability to make payments under the Bond Guarantee
when and as the same become due and payable.

 

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

 

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

 

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

 

6

 

(xv)         No
Project Costs to be financed with Bond proceeds were incurred or expended on or
before September 14, 2010.

 

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

 

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

 

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

 

(xix)         The
Company represents to the Authority that it will allocate the proceeds of the
Bonds to the acquisition, construction, improvement and equipping of the
Project substantially as described in Exhibit A
hereto.

 

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

 

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

 

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

 

(xxiii)       With
respect to any pension plan subject to ERISA maintained by the Company, to which
the Company has an obligation, or with respect to which the Company has any
liability, contingent or otherwise (each, a “Plan”)
(a) to the knowledge of the Company, neither any Plan nor the trusts
created thereunder, nor any trustee or administrator thereof, has engaged in a “prohibited
transaction,” as such term is defined in Section 4975 of the Code, which
could subject the Plan, any such trust, or any trustee

 

7

 

or
administrator thereof, or any party dealing with the Plan or any such trust to
the tax or penalty on prohibited transactions imposed by Section 4975 of
the Code, and which has had or could reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), results of
operations, business or properties of the Company (a “Material
Adverse Effect”); and (b) the performance of the transactions
contemplated by this Loan Agreement will not involve any prohibited transaction
(other than an exempt prohibited transaction). 
Neither any Plan nor any such trusts have been terminated, nor have
there been any “reportable events,” as such term is defined in Section 4043
of ERISA, within the last five years except for the reportable events which
either have heretofore been disclosed publiclyor which did not and could not
reasonably be expected to have a Material Adverse Effect.  Neither any Plan nor any such trusts have
incurred any “accumulated funding deficiency” (whether or not waived), as such
term was defined in Section 302 of ERISA prior to the effective date of
the Pension Protection Act of 2006, nor has any Plan or such trusts failed to
satisfy the minimum funding standards (whether or not waived), as defined in Section 302
of ERISA on and after the effective date of the Pension Protection Act of 2006
within the last five years which have had or could reasonably be expected to
have a Material Adverse Effect.  In
addition, except as could not reasonably be expected to have a Material Adverse
Effect, the Company and any member of a controlled corporation or affiliated
service group in which the Company is a member within the meaning of Section 4001(a)(14
of ERISA (“ERISA Affiliate”), (a) has
fulfilled in all material respects its obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan to which it has any
such obligation; (b) is in compliance in all material respects with the
presently applicable provisions of ERISA, the Code and any Plan; and (c) has
not incurred any material and past due liability to the Pension Benefit
Guaranty Corporation.  Except as could
not reasonably be expected tohave a Material Adverse Effect, neither the
Company nor any ERISA Affiliate is required to make or accrue, nor has within
the last five years made or accrued, an obligation to make a material
contribution to a “multiemployer plan” as defined in Section 3(37)(A) of
ERISA or Section 414 of the Code.

 

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

 

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

 

8

 

Counsel
that such investment will not affect the exclusion of the interest on the Bonds
from gross income of the owners thereof for federal income tax purposes.

 

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

 

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

 

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

 

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

 

9

 

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

 

The
Company shall pay or cause to be satisfied and discharged or make adequate
provision to satisfy and discharge (including the provisions of adequate
bonding therefor) within 60 days after the same shall accrue, any lien or
charge upon the Loan Payments, and all lawful claims or demands for labor,
materials, supplies or other charges which, if unpaid, might be or become a
lien thereon.

 

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

 

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

 

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

 

10

 

orders
applicable to or pertaining to the Project, the Federal Worker Adjustment and
Retraining Notification Act and the Illinois Prevailing Wage Act.

 

Section 2.06.       Use of
the Project. 
(a)  The Company will use the Project only in furtherance of
the lawful corporate purposes of the Company, and only for purposes permitted
by the Act.

 

(b)           THE COMPANY RECOGNIZES THAT THE
AUTHORITY HAS NOT MADE AN INSPECTION OF THE PROJECT OR OF ANY FIXTURE OR OTHER
ITEM CONSTITUTING A PORTION THEREOF, AND THE AUTHORITY MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED OR OTHERWISE, WITH RESPECT TO THE SAME OR
THE LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY, CONDITION,
WORKMANSHIP, OR FITNESS, SUITABILITY OR USE FOR ANY PARTICULAR PURPOSE, CONDITION
OR DURABILITY THEREOF.  THE COMPANY
FURTHER RECOGNIZES THAT THE AUTHORITY HAS NO TITLE INTEREST TO ANY PART OF
THE PROJECT AND THAT THE AUTHORITY MAKES NO REPRESENTATIONS OR WARRANTIES OF
ANY KIND AS TO THE COMPANY’S TITLE THERETO OR OWNERSHIP THEREOF OR OTHERWISE, IT
BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY THE
COMPANY.  IN THE EVENT OF ANY DEFECT OR
DEFICIENCY OF ANY NATURE IN THE PROJECT OR ANY FIXTURE OR OTHER ITEM
CONSTITUTING A PORTION THEREOF, WHETHER PATENT OR LATENT, THE AUTHORITY SHALL
HAVE NO RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO. THE PROVISIONS OF
THIS SECTION 2.06(b) HAVE BEEN NEGOTIATED AND ARE INTENDED TO BE A
COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES OR REPRESENTATIONS BY THE
AUTHORITY, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROJECT OR ANY FIXTURE OR
OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER ARISING PURSUANT TO THE UNIFORM COMMERCIAL
CODE OF THE STATE OR ANOTHER LAW NOW OR HEREAFTER IN EFFECT OR OTHERWISE.

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

(b)           In case any claim shall be made or
any action shall be brought against one or more of the Indemnified Persons in
respect of which indemnity can be sought against the Company pursuant to any of
the preceding paragraphs in Section 2.09(a), the Indemnified Party seeking
indemnity shall promptly notify the Company, in writing, and the Company shall
promptly assume the defense thereof, including the employment of counsel chosen
by the Company and approved by the Authority or the Trustee (as the case may
be), or both (provided, that such approval by
the Authority or the Trustee shall not be unreasonably withheld), the payment
of all expenses and the right to negotiate and consent to settlement.  If any Indemnified Person is advised in a
written opinion of Counsel that there may be legal defenses available to such
Indemnified Person which are adverse to or in conflict with those available to
the Company or that the defense of such Indemnified Person should be handled by
separate Counsel, the Company shall not have the right to assume the defense of
such Indemnified Person, but the Company shall be responsible for the
reasonable fees and expenses of Counsel retained by such Indemnified Person in
assuming its own defense, and provided also that, if the Company shall have
failed to assume the defense of such action or to retain Counsel reasonably
satisfactory to the Authority or the Trustee within a reasonable time after
notice of the commencement of such action, the reasonable fees and expenses of
Counsel retained by the Indemnified Person shall be paid by the Company.  Notwithstanding the foregoing, any one or
more of the Indemnified Persons shall have the right to employ separate Counsel
with respect to any such claim or in any such action and to participate in the
defense thereof, but the fees and expenses of such Counsel shall be paid by
such Indemnified Person unless the employment of such Counsel has been
specifically authorized by the Company or unless the provisions of the
immediately preceding sentence are applicable. 
The Company shall not be liable for any settlement of any such action
affected without the consent of the Company (which shall not be unreasonably
withheld), but if settled with the consent of the Company or if there be a
final judgment for the plaintiff in any such action with or without consent,
the Company agrees to indemnify and hold harmless the Indemnified Person from
and against any loss, liability or expense by reason of such settlement or
judgment.

 

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

 

(d)           All amounts payable to the Authority
under this Section 2.09 shall be deemed to be fees and expenses payable to
the Authority for the purposes of the provisions hereof and of the Indenture
dealing with assignment of the Authority’s rights hereunder.  The Authority and its

 

13

 

members,
officers, agents, employees and their successors and assigns shall not be
liable to the Company for any reason.

 

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

 

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

 

Section 2.10.       [Reserved].

 

Section 2.11.       Recording
and Maintenance of Liens.  Upon
notice from the Trustee, the Company shall, at its own expense, file and
record, refile and re-record, or cause to be filed and recorded, refiled and
re-recorded, U.C.C. continuation statements, if required under Illinois law,
relating to the U.C.C. filing with respect to the Trustee’s rights to the Trust
Estate assigned to the Trustee by the Authority.  The Authority and the Trustee shall cooperate
fully with the Company in taking any such action.

 

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

 

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

 

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

 

14

 

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

 

Section 2.14.       No
Recourse to Authority.  The
obligations of the Authority under this Loan Agreement are special, limited
obligations of the Authority, payable solely out of the revenues and income
derived under this Loan Agreement and as otherwise provided under this Loan
Agreement and the Indenture.  The
obligations of the Authority hereunder shall not be deemed to constitute an
indebtedness or an obligation of the Authority, the State of Illinois or any
political subdivision thereof within the purview of any constitutional
limitation or statutory provision, or a charge against the credit or general
taxing powers, if any, of any of them. 
The Authority does not have the power to levy taxes for any purposes
whatsoever.  Neither the Authority nor
any member, director, officer, employee or agent of the Authority nor any
person executing the Bonds shall be liable personally for the Bonds or be
subject to any personal liability or accountability by reason of the issuance
of the Bonds.

 

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

 

Notwithstanding
any provision or obligation to the contrary set forth herein, no provision of
this Loan Agreement shall be construed so as to give rise to a pecuniary
liability of the Authority or to give rise to a charge upon the general credit
of the Authority, the liability of the Authority hereunder shall be limited to
its interest in this Loan Agreement and the lien of any judgment shall be
restricted thereto.  In the performance
of the agreements of the Authority

 

15

 

herein
contained, any obligation it may incur for the payment of money shall not be a
debt of the Authority, nor shall the Authority be liable on any obligation so
incurred.  The Authority does not assume
general liability for the repayment of the Bonds or for the costs, fees,
penalties, taxes, interest, commissions, charges, insurance or any other
payments recited herein, and shall be obligated to pay the same only out of the
amounts payable by the Company hereunder. 
The Authority shall not be required to do any act whatsoever or exercise
any diligence whatsoever to mitigate the damages to the Company if a default
shall occur hereunder.

 

ARTICLE III

 

LOAN PROCEEDS; ACQUISITION, CONSTRUCTION, EQUIPPING,

COMPLETION AND OPERATION OF PROJECT

 

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

 

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

 

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

 

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

 

If
the Company determines not to complete any portion of the Project for which
Bond proceeds (or investment earnings thereon) are available and delivers the
Completion Certificate, or funds such portion of the Project from any other
source, such Bond proceeds (or investment earnings thereon) otherwise allocable
to such portion of the Project must be used either (i) to pay costs of the
remaining parts of the Project, provided that
the Company certifies to the Authority and the Trustee that after recalculating
the average reasonably expected economic life of the Project being financed,
refinanced or reimbursed with proceeds of the Bonds (or investment earnings
thereon), the weighted average maturity of the Bonds will not exceed 120% of
the average reasonably expected economic life of the Project, (ii) to pay
the costs of other projects qualifying under the Act, with the approval of the
Authority, (iii) to redeem principal on the Bonds in accordance with the
provisions of this Loan Agreement and the Indenture or (iv) in any other
lawful manner, provided in each case there shall
be delivered to the Trustee and the

 

16

 

Authority
a Favorable Opinion of Bond Counsel and/or Opinion of Counsel with respect to
such application.  If the Company shall
so determine (x) not to complete any portion of the Project or (y) to
fund such portion from any other source, such portion of the Project shall no
longer be deemed to be within the meaning of the term “Project” for any purpose
of this Loan Agreement or the Indenture; if the Company shall so determine to
use available Bond proceeds to pay the costs of other projects approved by the
Authority, such projects shall thereafter be deemed to be within the meaning of
the term “Project” for all purposes of this Loan Agreement and the Indenture.

 

IN
THE EVENT THE MONEY IN THE PROJECT FUND AVAILABLE FOR PAYMENT OF THE COSTS OF
THE PROJECT SHALL NOT BE SUFFICIENT TO MAKE SUCH PAYMENT IN FULL, THE COMPANY
AGREES TO PAY DIRECTLY, OR DEPOSIT MONEYS IN THE PROJECT FUND FOR THE PAYMENT
OF, SUCH COSTS OF COMPLETING THE PROJECT AS MAY BE IN EXCESS OF THE MONEYS
AVAILABLE THEREFOR IN THE PROJECT FUND. 
THE AUTHORITY DOES NOT MAKE ANY WARRANTY OR REPRESENTATION, EITHER
EXPRESS OR IMPLIED, THAT THE MONEYS WHICH WILL BE DEPOSITED INTO THE PROJECT
FUND, AND WHICH UNDER THE PROVISIONS OF THIS LOAN AGREEMENT WILL BE AVAILABLE
FOR PAYMENT OF THE COSTS OF THE PROJECT, WILL BE SUFFICIENT TO PAY ALL OF THE
COSTS WHICH WILL BE INCURRED IN CONNECTION THEREWITH.  The Company agrees that if, after exhaustion
of the moneys in the Project Fund, the Company should pay, or deposit moneys in
the Project Fund for the payment of, any portion of the costs of the Project
pursuant to the provisions of this Section 3.02, it shall not be entitled
to any reimbursement therefor from the Authority, the Trustee or from the
owners of any of the Bonds, nor shall it be entitled to any diminution of the
amounts payable under Section 6.01 hereof.

 

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

 

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

 

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

 

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

 

17

 

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

 

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

 

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

 

ARTICLE IV

 

ADDITIONAL COVENANTS OF THE COMPANY

 

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

 

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

 

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

 

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

 

(b)           In the event that the
Company and its Restricted Subsidiaries are not subject to the Suspended
Covenants for any period of time as a result of the foregoing and on any
subsequent date (the “Reversion Date”)
one or both of the Rating Agencies withdraws its Investment Grade rating or
downgrades the rating assigned to the Bonds below an Investment Grade rating,
then

 

18

 

the
Company and its Restricted Subsidiaries will thereafter again be subject to the
Suspended Covenants with respect to future events.  The period of time between the Suspension
Date and the Reversion Date is referred to as the “Suspension
Period.”  Notwithstanding that
the Suspended Covenants may be reinstated, no Default or Event of Default will
be deemed to have occurred as a result of a failure to comply with the
Suspended Covenants during the Suspension Period.  During any Suspension Period, the Company may
not designate any Subsidiary to be an Unrestricted Subsidiary unless the
Company would have been permitted to designate such Subsidiary to be an
Unrestricted Subsidiary if a Suspension Period had not been in effect for any
period.

 

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

 

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

 

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

 

Section 4.03.       Reports
by the Company.  The Company
covenants that so long as any of the Bonds are outstanding,
notwithstanding whether the Company is subject to the requirements of Sections
13 or 15(d) of the Exchange Act, the Company will file with the Commission
(unless the Commission will not accept such filing) and, within 15 days after
it files them with the Commission, file with the Trustee and mail or cause the
Trustee to mail to the Holders at their addresses as set forth in the register
of the Bonds, copies of the annual reports and of the information, documents
and other reports which the Company is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act or which the
Company would be required to file with the Commission if the Company then had a
class of securities registered

 

19

 

under
the Exchange Act.  Delivery of such
reports, information and documents to the Trustee is for informational purposes
only, and the Trustee’s receipt of such shall not constitute constructive
notice of any information contained therein or determinable from information
contained therein, including information concerning the Company’s compliance
with any of its covenants hereunder; provided that
the foregoing shall not relieve the Trustee of any of its responsibilities
hereunder or under the Indenture.

 

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

 

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

 

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

 

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

 

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

 

20

 

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

 

(c)           Permitted
Liens;

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           Indebtedness
outstanding on the Closing Date;

 

(c)           Indebtedness of
the Company or any Restricted Subsidiary of the Company under Credit Facilities
in an aggregate amount at any one time outstanding pursuant to this clause (c) not
to exceed the greater of (a) $200.0 million or (b) the sum of

 

21

 

(i) 85.0%
of the total book value of accounts receivable and (ii) 60% of the total
book value of inventory, in each case as reflected on the Company’s and its
Restricted Subsidiaries’ most recent consolidated financial statements prepared
in accordance with GAAP; provided that
the amount in clause (b) of this clause (c) shall not exceed $1,000.0
million;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(h)           Indebtedness
arising from agreements of the Company or any of its Restricted Subsidiaries
providing for adjustment of purchase price, earn-out or other

 

22

 

similar
obligations, in each case, incurred or assumed in connection with the
acquisition or disposition of any business, assets or a Subsidiary of the
Company;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(B)           in either case, the refunding Indebtedness by its
terms, or by the terms of any agreement or instrument pursuant to which such
Indebtedness

 

23

 

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

 

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

 

(n)           [Reserved];

 

(o)           [Reserved];

 

(p)           the consummation
of any Qualified Securitization Transaction;

 

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

 

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

 

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

 

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

 

24

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

For
purposes of determining compliance with this covenant, in the event that an
item of Indebtedness meets the criteria of more than one of the categories of
Permitted Indebtedness described in paragraphs (a) through (aa) above, the
Company shall, in its sole discretion, classify such item of Indebtedness and
may divide and classify such Indebtedness in more than one of the types of
Indebtedness described, and may later reclassify any item of Indebtedness
described in paragraphs (a) through (aa) (provided
that at the time of reclassification it meets the criteria in such category or
categories).  In addition, for purposes
of determining any particular amount of 

 

25

 

Indebtedness
under this covenant, guarantees, Liens or letter of credit obligations
supporting Indebtedness otherwise included in the determination of such
particular amount shall not be included so long as incurred by a Person that
could have incurred such Indebtedness.

 

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

 

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

 

Section 4.08.       Limitation
on Restricted Payments.

 

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

 

(i)            declare or pay any dividend, or make any
distribution of any kind or character (whether in cash, property or
securities), in respect of any class of its Capital Stock or to the holders
thereof in their capacity as stockholders, excluding any (A) dividend or
distributions payable solely in shares of its Qualified Capital Stock or in
options, warrants or other rights to acquire its Qualified Capital Stock or (B) in
the case of any Restricted Subsidiary of the Company, dividends or
distributions payable to the Company or a Restricted Subsidiary of the Company
on a pro rata basis to all holders of the Capital Stock of such Restricted
Subsidiary;

 

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

 

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

 

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

 

26

 

if
at the time thereof:

 

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

 

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

 

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

 

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

 

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

 

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

 

(D)          100% of the aggregate Net Cash Proceeds received
after the Original Securities Issuance Date from Unrestricted Subsidiaries
resulting from the receipt of dividends or other distributions or payments,
repayments of loans or advances or other transfers of assets or proceeds from
the disposition of Capital Stock, in each case to the Company or any Restricted
Subsidiary from, or with respect to, interests in Unrestricted Subsidiaries; provided that any such amounts included in this

 

27

 

subparagraph
(D) shall not be included in Consolidated Net Income of the Company for
purposes of subparagraph (A) above; plus

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(v)           the redemption, repurchase,
retirement or other acquisition of any Capital Stock of the Company or the
payment of any dividend or other distribution in respect of any class of its
Capital Stock in exchange for or out of the Net Cash Proceeds of the
substantially concurrent sale, or a sale within 60 days of such redemption,
repurchase, retirement, other acquisition, dividend or other distribution  (other than to a Subsidiary of the Company) of
Qualified Capital Stock of the Company; provided, that
the proceeds of such sale of

 

28

 

Qualified
Capital Stock shall not be (and have not been) included in clause (3) of
paragraph (a) above;

 

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

 

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

 

(viii)        the declaration and payment of dividends
to holders of any class of Disqualified Capital Stock of the Company or a
Restricted Subsidiary of the Company or Preferred Stock of any Restricted
Subsidiary of the Company issued after the Original Securities Issuance Date; provided, that such Disqualified Capital Stock or Preferred
Stock was issued in accordance with the covenant described in Section 4.07
and such dividends constitute Consolidated Fixed Charges;

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

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

 

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

 

(i)            the permanent reduction and prepayment of any secured
Indebtedness of the Company or a Subsidiary Guarantor (other than Indebtedness
which is expressly subordinate to the Senior Notes, the Bonds and the Cook
County Bonds) then outstanding (including a permanent reduction of commitments
in respect thereof) or

 

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

 

The
361st day after such Asset Disposition shall be deemed to be the “Asset Sale Offer Trigger Date,” and the amount of Net
Available Proceeds from Asset Dispositions otherwise subject to the preceding
provisions not so applied or as to which the Company has determined not to so
apply shall be referred to as the “Unutilized Net Available
Proceeds.” Within fifteen days after the Asset Sale Offer Trigger
Date, the Company shall make an Offer to Purchase the outstanding Bonds at a
purchase price in cash equal to 100% of their principal amount plus any accrued
and unpaid interest thereon to the Purchase Date.  Notwithstanding the foregoing, the Company
may defer making any Offer to Purchase outstanding Bonds until there are
aggregate Unutilized Net Available Proceeds equal to or in excess of
$25.0 million (at which time, the amount in excess of 

 

31

 

$25.0 million,
shall be applied as required pursuant to this paragraph).  Pending application of the Unutilized Net
Available Proceeds pursuant to this covenant, such Unutilized Net Available
Proceeds shall be invested in any manner not otherwise prohibited by this Loan
Agreement or applied temporarily to reduce any Indebtedness of the Company or a
Subsidiary Guarantor (other than Indebtedness which is expressly subordinated
in right of payment to the Senior Notes, the Bonds and the Cook County Bonds).

 

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

 

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

 

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

 

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

 

32

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)            applicable
law, regulations or order;

 

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

 

33

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

Section 4.12.       Limitation
on Transactions with Affiliates.

 

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

 

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

 

(ii)           purchase any property or assets from,

 

(iii)          make any Investment in, or

 

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

 

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

 

35

 

involving
or having an aggregate value of more than $75.0 million, the Company delivers
to the Trustee an opinion issued by an independent accounting, appraisal or
investment banking firm of national standing stating that such Affiliate
Transaction is fair to the Company or such Restricted Subsidiary from a
financial point of view.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

36

 

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

 

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

 

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

 

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

 

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

 

(ii)           such Subsidiary
Guarantor waives, and agrees it will not in any manner whatsoever claim or take
the benefit or advantage of, any rights of reimbursement, indemnity or
subrogation or any other rights against the Company or any other Subsidiary of
the Company as a result of any payment by it under such Subsidiary Bond
Guarantees.

 

(b)           The Company shall cause each
Restricted Subsidiary of the Company that guarantees the payment of any
Indebtedness of the Company, which, in the aggregate, together with all other
Indebtedness of the Company that is guaranteed by Restricted Subsidiaries of
the Company, exceeds $35.0 million, after the Original Securities Issuance
Date, to execute and deliver to the Trustee, promptly upon any such formation
or acquisition (i) a Subsidiary Bond Guarantee in form and substance
satisfactory to the Trustee, and (ii) an Opinion of Counsel to the effect
that such Subsidiary Bond Guarantee has been duly authorized and executed by
such subsidiary and constitutes the legal, valid, binding and enforceable
obligation of such subsidiary

 

37

 

(subject
to such customary exceptions concerning fraudulent conveyance laws, creditors’
rights and equitable principles as may be acceptable to the Trustee in its
discretion).

 

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

 

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

 

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

 

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

 

(iv)          the
Company or such Person shall have delivered to the Authority and the Trustee an
Officers’ Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if an agreement is
required in connection with such transaction, such agreement, comply with this
provision of this

 

38

 

Loan
Agreement, that any such agreement is legal, valid and binding and that all
conditions precedent in this Loan Agreement relating to such transaction have
been satisfied and an Opinion of Bond Counsel with respect to paragraphs (v) and
(vii) below;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           Notwithstanding paragraph (a) above:

 

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

 

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

 

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

 

39

 

of
all or substantially all of the properties and assets of the Company.  For the avoidance of doubt, notwithstanding
anything to the contrary in this Loan Agreement, the sale, assignment,
transfer, conveyance or other disposition of all or any portion of the Company’s
Financial Services Segment, including without limitation through the sale or
other disposition of all or any portion of the Capital Stock of any
Unrestricted Subsidiary that is part of the Financial Services Segment, or all
or any portion of their respective assets or properties, shall not under any
circumstances constitute the sale, assignment, transfer, conveyance or
disposition of all or substantially all of the Company’s assets (on a
consolidated basis) for any purpose whatsoever under this Loan Agreement or the
Bonds.

 

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

 

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

 

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

 

(ii)           either:

 

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

 

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

 

40

 

ARTICLE V

 

ISSUANCE OF BONDS; LOAN TO COMPANY; OTHER OBLIGATIONS

 

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

 

ARTICLE VI

 

LOAN PAYMENTS; ADDITIONAL PAYMENTS

 

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

 

(b)(i)       The Company agrees to pay directly to the
Trustee (A) an amount equal to the annual fee of the Trustee for the
ordinary services rendered by the Trustee, as trustee, and its ordinary
expenses and all advances, Counsel fees and other expenses necessarily made or
incurred under the Indenture, as and when the same become due, (B) the
reasonable fees, charges and expenses (including advances and Counsel fees) of
the Trustee, as Bond Registrar and paying agent, and any other paying agent on
the Bonds acting as paying agent as provided in the Indenture, as and when the
same become due, (C) the reasonable fees, charges and expenses (including
advances and Counsel fees) of the Trustee for the necessary extraordinary services
rendered by it and extraordinary expenses incurred by it under the Indenture,
as and when the same become due, including the costs of any exchange or
transfer of Bonds described in Section 2.05 of the Indenture or which is
expressed to be at the sole cost and expense of the Company, and (D) all
other amounts payable to the Trustee under this Loan Agreement and/or the
Indenture, as applicable, forthwith upon the giving of notice by the Trustee.

 

41

 

(ii)           The Company further covenants to pay
directly to the Authority an issuance fee of $450,000 and the fee of its
Counsel, prior to or contemporaneously with the issuance of the Bonds or as
otherwise agreed by the Company and the Authority and within 30 days after
receipt of a bill therefor, the reasonable fees and expenses of the Authority
in connection with and as provided in this Loan Agreement and the Bonds, such
fees and expenses to be paid directly to the Authority or as otherwise directed
in writing by the Authority.

 

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

 

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

 

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

 

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

 

Notwithstanding
the foregoing, neither the Authority nor the Trustee shall have any obligation
to advance or expend funds under this Loan Agreement beyond the extent of
moneys in the Funds established under the Indenture available therefor.  Until the principal of and interest on the
Bonds shall have been fully paid or provision for the payment of the Bonds made
in accordance with the Indenture, the Company (a) will not suspend or
discontinue any payments provided for in this Loan Agreement, (b) will
perform all its other duties and responsibilities

 

42

 

called
for by this Loan Agreement, and (c) will not terminate this Loan Agreement
for any cause including any acts or circumstances that may constitute failure
of consideration, destruction of or damage to the Project, commercial
frustration or purpose, any change in the laws of the United States or of the
State or any political subdivision of either or any failure of the Authority to
perform any of its agreements, whether express or implied, or any duty,
liability or obligation arising from or connected with this Loan Agreement.

 

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

 

ARTICLE VII

 

ASSIGNMENT

 

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

 

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

 

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

 

ARTICLE VIII

 

EVENTS OF DEFAULT AND REMEDIES

 

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

 

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

 

43

 

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

 

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

 

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

 

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

 

(f)            the entry by a
court of competent jurisdiction of one or more judgments, orders or decrees
against the Company or any Subsidiary of the Company (other than a
Securitization Subsidiary) or any of their respective property or assets in an
aggregate amount in excess of $50.0 million, which judgments, orders or
decrees have not been vacated, discharged, satisfied or stayed pending appeal
within 30 days from the entry thereof and with respect to which legal
enforcement proceedings have been commenced;

 

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

 

(h)           a court of competent
jurisdiction enters an order or decree under any Bankruptcy Law that
(i) is for relief against the Company, any Subsidiary Guarantor or

 

44

 

any
Significant Subsidiary, in an involuntary case, (ii) adjudges the Company,
any Subsidiary Guarantor or any Significant Subsidiary as bankrupt or
insolvent, or approves as properly filed a petition seeking reorganization,
arrangement, and adjustment or composition of or in respect of the Company, any
Subsidiary Guarantor or any Significant Subsidiary, or appoints a Custodian of
the Company, any Subsidiary Guarantor or any Significant Subsidiary, or for all
or substantially all of its property, or (iii) orders the liquidation of
the Company, any Subsidiary Guarantor or any Significant Subsidiary and the
decree remains unstayed and in effect for 60 days.

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 8.03.       No Remedy
Exclusive.  No remedy
conferred upon or reserved to the Authority or the Trustee hereby is intended
to be exclusive of any other available remedy or remedies, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy
given under this Loan Agreement and the Indenture, now or hereafter existing at
law or in equity or by statute.  No delay
or omission to exercise any right or power accruing upon

 

45

 

any
Event of Default shall impair any such right or power or shall be construed to
be a waiver thereof, but any such right or power may be exercised from time to
time and as often as may be deemed expedient.

 

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

 

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

 

ARTICLE IX

 

REDEMPTION OF BONDS; REPURCHASE OF BONDS

 

Section 9.01.       Redemption
of Bonds.  The Company
shall have the option to prepay in whole or in part the amounts payable
hereunder by paying an amount equal to the redemption price of Bonds which may
be redeemed under Section 3.02 of the Indenture.  The Authority shall take or cause to be taken
the actions required by the Indenture (other than the payment of money) to
discharge the lien thereof through the redemption, or provision for payment or
redemption, of all Bonds then Outstanding, or to effect the redemption, or
provision for payment or redemption, of less than all the Bonds then
Outstanding, upon receipt by the Authority and the Trustee from an Authorized
Company Representative of a written notice designating the principal amount of
the Bonds to be redeemed and specifying the date of redemption (which, unless
waived by the Authority and the Trustee, shall not be less than 45 days
from the date such notice is given, or such shorter period as the Trustee and
the Company may agree from time to time) and the applicable redemption provision
of the Indenture.  Unless otherwise
stated therein and except with respect to a redemption under Section 3.03
of the Indenture, such notice shall be revocable by the Company at any time
prior to the time at which the Bonds to be redeemed, or for the payment or
redemption of which provision is to be made, are first deemed to be paid in
accordance with Article VII of the Indenture.  The Company shall furnish any moneys required
by the Indenture to be deposited with the Trustee or otherwise paid by the
Authority in connection with any of the foregoing purposes.

 

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

 

46

 

amount
equal to the aggregate principal amount of the Bonds to be redeemed pursuant to
the Indenture plus accrued interest to the redemption date.

 

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

 

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

 

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

 

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

 

Section 9.04.       Offer to
Repurchase Upon a Change of Control.  (a) If a Change of Control occurs, each
Holder shall have the right to require the Company to repurchase all or any
part of that Holder’s Bonds (which, if in part, shall be in an amount equal to
an Authorized Denomination and the non-purchased portion shall also be in an
amount equal to an Authorized Denomination) pursuant to the Change of Control
offer on the terms set forth in this Loan

 

47

 

Agreement
(a “Change of Control Offer”).  In the Change of Control Offer, the Company
shall offer a Change of Control Payment in cash equal to 101% of the aggregate
principal amount of Bonds repurchased plus accrued and unpaid interest on the
Bonds repurchased to the date of purchase. 
Within 30 days following any Change of Control, the Trustee, at the
direction of the Company shall mail a notice to each Holder stating:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

The
Company shall comply with the requirements of Section 14(e) and Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent those laws and regulations are applicable in connection with the
repurchase of the Bonds as a result of a Change of Control.  To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control provisions
of this Loan Agreement, the Company shall

 

48

 

comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under the Change of Control provisions of this
Loan Agreement by virtue of such conflict.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

The
Company will not be required to make a Change of Control Offer upon a Change of
Control if (1) a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements
described herein applicable to a Change of Control Offer made by the Company
and purchases all Bonds validly tendered and not withdrawn under such Change of
Control Offer or (2) a notice of redemption has been given pursuant to the
Indenture as described under Section 3.02 of the Indenture, unless and
until there is a default in the payment of the applicable redemption
price.  A Change of Control Offer may be
made in advance of a Change of Control and may be conditional upon the
occurrence of a Change of Control if a definitive agreement is in place for the
Change of Control at the time the Change of Control Offer is made.

 

ARTICLE X

 

DEFEASANCE

 

Section 10.01.       Defeasance.  If (a) the Company
shall pay and discharge or provide, in a manner satisfactory to the Authority,
for the payment and discharge of the whole amount of the

 

49

 

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

 

ARTICLE XI

 

SUBSIDIARY BOND GUARANTEES

 

Section 11.01.       Subsidiary
Bond Guarantees.  (a) Subject
to the provisions of this Article XI, and only to the extent a Subsidiary
Guarantor executes a Subsidiary Guarantee, each Subsidiary Guarantor upon
written request of the Company, jointly and severally, will irrevocably and
unconditionally guarantee to each Holder of Bonds and to the Trustee for itself
and on behalf of the Holders (i) the due and punctual payment of principal
of, premium, if any, and interest in full on each Bond when and as the same
shall become due and payable whether at Stated Maturity, by declaration of
acceleration or otherwise, (ii) the due and punctual payment of interest
on the overdue principal of, premium, if any, and interest, in full on the
Bonds, to the extent permitted by law, and (iii) the due and punctual
performance of all other Obligations of the Company and the other Subsidiary
Guarantors to the Holders or the Trustee, including without limitation the
payment of fees, expenses, indemnification or other amounts, all in accordance
with the terms of the Bonds and this Loan Agreement.  In case of the failure of the Company
punctually to make any such principal or interest payment or the failure of the
Company or any other Subsidiary Guarantor to perform any such other Obligation,
each Subsidiary Guarantor hereby agrees to cause any such payment to be made
punctually when and as the same shall become due and payable, whether at Stated
Maturity, by declaration of acceleration or otherwise, and as if such payment
were made by the Company and to perform any such other Obligation of the
Company immediately.  Each Subsidiary
Guarantor hereby

 

50

 

further
agrees to pay any and all expenses (including reasonable counsel fees and
expenses) incurred by the Trustee or the Holders in enforcing any rights under
such Subsidiary Bond Guarantees.  The
Subsidiary Bond Guarantees delivered in accordance with this Article XI
will be guarantees of payment and not of collection.

 

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

 

(c)           Each Subsidiary Guarantor hereby
waives and relinquishes:

 

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

 

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

 

(iii)          demand,
protest and notice of any kind (except as expressly required by this Loan
Agreement), including but not limited to notice of the existence, creation or
incurring of any new or additional indebtedness or obligation or of any action
or non-action on the part of the Subsidiary Guarantors, the Company, the
Subsidiaries of the Company, any Benefited Party, any creditor of the
Subsidiary Guarantors, the Company or the Subsidiaries of the Company or on the
part of any other Person whomsoever in connection with any obligations the
performance of which are hereby guaranteed;

 

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

 

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

 

51

 

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

 

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

 

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

 

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

 

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

 

Section 11.02.       Obligations of Subsidiary Guarantors
Unconditional.  Each
Subsidiary Guarantor hereby agrees that its Obligations under the Subsidiary
Bond Guarantees shall be guarantees of payment and shall be unconditional,
irrespective of and unaffected by the validity, regularity or enforceability of
the Bonds or this Loan Agreement, or of any amendment thereto or hereto, the
absence of any action to enforce the same, the waiver or consent by any Holder
or by the Trustee with respect to any provisions thereof or of this Loan
Agreement, the entry of any judgment against the Company or any other
Subsidiary Guarantor or any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a Subsidiary Guarantor.

 

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

 

52

 

other
contingent and fixed liabilities of such Subsidiary Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the Obligations of such other Subsidiary
Guarantor under this Article XI, result in the Obligations of such
Subsidiary Guarantor under its Subsidiary Bond Guarantee not constituting a
fraudulent transfer or conveyance under applicable federal or state law.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

53

 

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

 

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

 

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

 

ARTICLE XII

 

MISCELLANEOUS

 

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

 

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

 

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

 

54

 

in
this Loan Agreement may be created by the transfer of any counterpart thereof
other than the original counterpart delivered, pledged and assigned to the
Trustee.

 

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

 

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

 

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

 

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

 

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

 

55

 

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

 

	
   

  	
   

  	
  ILLINOIS
  FINANCE AUTHORITY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Christopher B. Meister

  
	
   

  	
   

  	
   

  	
  Executive
  Director

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Brendan M. Cournane

  	
   

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NAVISTAR
  INTERNATIONAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Jim Moran

  
	
   

  	
   

  	
   

  	
  Name:
  Jim Moran

  
	
   

  	
   

  	
   

  	
  Title: Vice
  President and Treasurer

  
						

 

56

 

EXHIBIT A

 

PROJECT DESCRIPTION

 

The
Project consists of (i) the acquisition, construction, equipping and
installation of certain qualified capital improvements to, and the construction
of various building additions at, nine buildings to be owned by the Company or
the Guarantor, located at 2601-2701 Lucent Lane, Lisle, Illinois 60532-1511;
and (ii) the improvement, expansion and equipping of an existing warehouse
facility to be leased by the Company or the Guarantor located at 2700 Haven,
Joliet, Illinois 60435, all as more fully described in the Project
Certificate.

 

 

 

INDENTURE OF TRUST

 

between

 

ILLINOIS FINANCE AUTHORITY

 

and

 

CITIBANK N.A., as Trustee

 

 providing for the issuance of

 

$135,000,000

ILLINOIS FINANCE AUTHORITY

RECOVERY ZONE FACILITY REVENUE BONDS

(NAVISTAR INTERNATIONAL CORPORATION PROJECT) SERIES 2010

 

Dated as of October 1,
2010

 

 

 

TABLE OF CONTENTS

 

	
  SECTION

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  Granting Clauses

  	
   

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS AND RULES OF CONSTRUCTION

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
   

  	
  General Definitions

  	
  4

  
	
  Section 1.02.

  	
   

  	
  Rules of Construction

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  THE BONDS

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
   

  	
  Authorization of Bonds

  	
  42

  
	
  Section 2.02.

  	
   

  	
  Date, Denomination, Interest Rates, and Maturities

  	
  42

  
	
  Section 2.03.

  	
   

  	
  Form of Bonds

  	
  43

  
	
  Section 2.04.

  	
   

  	
  Execution of Bonds

  	
  43

  
	
  Section 2.05.

  	
   

  	
  Transfer and Exchange of Bonds

  	
  43

  
	
  Section 2.06.

  	
   

  	
  Bond Register

  	
  44

  
	
  Section 2.07.

  	
   

  	
  Bonds Mutilated, Lost, Destroyed or Stolen

  	
  44

  
	
  Section 2.08.

  	
   

  	
  Bonds; Limited Obligations

  	
  45

  
	
  Section 2.09.

  	
   

  	
  Disposal of Bonds

  	
  46

  
	
  Section 2.10.

  	
   

  	
  Book-Entry System

  	
  46

  
	
  Section 2.11.

  	
   

  	
  CUSIP Numbers

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  REDEMPTION OF BONDS

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
   

  	
  Redemption of Bonds Generally

  	
  48

  
	
  Section 3.02.

  	
   

  	
  Redemption upon Optional Prepayment

  	
  48

  
	
  Section 3.03.

  	
   

  	
  Mandatory Redemption upon Determination of Taxability

  	
  49

  
	
  Section 3.04.

  	
   

  	
  Selection of Bonds for Redemption

  	
  49

  
	
  Section 3.05.

  	
   

  	
  Notice of Redemption

  	
  49

  
	
  Section 3.06.

  	
   

  	
  Partial Redemption or Purchase of Bonds

  	
  50

  
	
  Section 3.07.

  	
   

  	
  No Partial Redemption after Default

  	
  50

  
	
  Section 3.08.

  	
   

  	
  Payment of Redemption Price

  	
  50

  
	
  Section 3.09.

  	
   

  	
  Effect of Redemption

  	
  51

  
	
  Section 3.10.

  	
   

  	
  Purchase in Lieu of Optional Redemption

  	
  51

  
	
  Section 3.11.

  	
   

  	
  Company’s Offer to Purchase

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  GENERAL COVENANTS

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
   

  	
  Payment of Bonds

  	
  52

  
	
  Section 4.02.

  	
   

  	
  Performance of Covenants by Authority; Authority; Due
  Execution

  	
  53

  
	
  Section 4.03.

  	
   

  	
  Defense of Authority’s Rights

  	
  54

  
	
  Section 4.04.

  	
   

  	
  Recordation and Other Instruments

  	
  54

  
	
  Section 4.05.

  	
   

  	
  Rights under Loan Agreement

  	
  54

  
	
  Section 4.06.

  	
   

  	
  Prohibited Activities

  	
  55

  
	
  Section 4.07.

  	
   

  	
  No Disposition of Trust Estate

  	
  55

  
					

 

i

 

	
  SECTION

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.08.

  	
   

  	
  Access to Books

  	
  55

  
	
  Section 4.09.

  	
   

  	
  Source of Payment of Bonds

  	
  55

  
	
  Section 4.10.

  	
   

  	
  Provisions for Payment of Expenses

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  FUND AND ACCOUNTS; DEPOSIT AND APPLICATION OF BOND PROCEEDS

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
   

  	
  Creation of Bond Fund and Accounts; Rebate Fund

  	
  56

  
	
  Section 5.02.

  	
   

  	
  Application of Bond Proceeds

  	
  56

  
	
  Section 5.03.

  	
   

  	
  Deposits into the Funds; Use of Moneys in the Funds

  	
  60

  
	
  Section 5.04.

  	
   

  	
  Bonds Not Presented for Payment of Principal

  	
  60

  
	
  Section 5.05.

  	
   

  	
  Payment to the Company

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  INVESTMENTS

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
   

  	
  Investment of Moneys in Funds

  	
  61

  
	
  Section 6.02.

  	
   

  	
  Conversion of Investment to Cash

  	
  61

  
	
  Section 6.03.

  	
   

  	
  Credit for Gains and Charge for Losses

  	
  62

  
	
  Section 6.04.

  	
   

  	
  Payments into Rebate Fund; Application of Rebate Fund

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  DEFEASANCE

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
   

  	
  Defeasance

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  DEFAULTS AND REMEDIES

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
   

  	
  Events of Default

  	
  64

  
	
  Section 8.02.

  	
   

  	
  Acceleration; Other Remedies

  	
  65

  
	
  Section 8.03.

  	
   

  	
  Restoration to Former Position

  	
  66

  
	
  Section 8.04.

  	
   

  	
  Owners’ Right to Direct Proceedings

  	
  67

  
	
  Section 8.05.

  	
   

  	
  Limitation on Owners’ Right to Institute Proceedings

  	
  67

  
	
  Section 8.06.

  	
   

  	
  No Impairment of Right to Enforce Payment

  	
  67

  
	
  Section 8.07.

  	
   

  	
  Proceedings by Trustee Without Possession of Bonds

  	
  67

  
	
  Section 8.08.

  	
   

  	
  No Remedy Exclusive

  	
  68

  
	
  Section 8.09.

  	
   

  	
  No Waiver of Remedies

  	
  68

  
	
  Section 8.10.

  	
   

  	
  Application of Moneys

  	
  68

  
	
  Section 8.11.

  	
   

  	
  Severability of Remedies

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  TRUSTEE; REGISTRAR

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
   

  	
  Acceptance of Trusts; Representations, Warranties and
  Covenants of the Trustee

  	
  69

  
	
  Section 9.02.

  	
   

  	
  No Responsibilities for Recitals

  	
  70

  
	
  Section 9.03.

  	
   

  	
  Limitations on Liability

  	
  70

  
	
  Section 9.04.

  	
   

  	
  Compensation, Expenses and Advances

  	
  72

  
	
  Section 9.05.

  	
   

  	
  Notice of Events of Default and Determination of Taxability

  	
  73

  
	
  Section 9.06.

  	
   

  	
  Action by Trustee

  	
  73

  
	
  Section 9.07.

  	
   

  	
  Good-Faith Reliance

  	
  74

  
					

 

ii

 

	
  SECTION

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.08.

  	
   

  	
  Dealings in Bonds; Allowance of Interest

  	
  75

  
	
  Section 9.09.

  	
   

  	
  Several Capacities

  	
  75

  
	
  Section 9.10.

  	
   

  	
  Resignation of Trustee

  	
  75

  
	
  Section 9.11.

  	
   

  	
  Removal of Trustee

  	
  75

  
	
  Section 9.12.

  	
   

  	
  Appointment of Successor Trustee

  	
  76

  
	
  Section 9.13.

  	
   

  	
  Qualifications of Successor Trustee

  	
  76

  
	
  Section 9.14.

  	
   

  	
  Judicial Appointment of Successor Trustee

  	
  77

  
	
  Section 9.15.

  	
   

  	
  Acceptance of Trusts by Successor Trustee

  	
  77

  
	
  Section 9.16.

  	
   

  	
  Successor by Merger or Consolidation

  	
  77

  
	
  Section 9.17.

  	
   

  	
  Standard of Care

  	
  77

  
	
  Section 9.18.

  	
   

  	
  Intervention in Litigation of the Authority

  	
  77

  
	
  Section 9.19.

  	
   

  	
  Registrar

  	
  78

  
	
  Section 9.20.

  	
   

  	
  Qualifications of Registrar; Resignation; Removal

  	
  78

  
	
  Section 9.21.

  	
   

  	
  Additional Duties of Trustee

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  EXECUTION OF INSTRUMENTS BY OWNERS AND PROOF OF OWNERSHIP
  OF BONDS

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  MODIFICATION OF THIS INDENTURE AND THE LOAN AGREEMENT

  	
  80

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
   

  	
  Supplemental Indentures Without Owner Consent

  	
  80

  
	
  Section 11.02.

  	
   

  	
  Supplemental Indentures Requiring Owner Consent

  	
  82

  
	
  Section 11.03.

  	
   

  	
  Effect of Supplemental Indenture

  	
  83

  
	
  Section 11.04.

  	
   

  	
  Consent of the Company and Other Parties

  	
  83

  
	
  Section 11.05.

  	
   

  	
  Amendment of Loan Agreement Without Owner Consent; Waivers

  	
  83

  
	
  Section 11.06.

  	
   

  	
  Amendment of Loan Agreement Requiring Owner Consent

  	
  84

  
	
  Section 11.07.

  	
   

  	
  Amendment of Bond Guarantee

  	
  85

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  MISCELLANEOUS

  	
  86

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 12.01.

  	
   

  	
  Successors of the Authority

  	
  86

  
	
  Section 12.02.

  	
   

  	
  Parties in Interest

  	
  86

  
	
  Section 12.03.

  	
   

  	
  Severability

  	
  86

  
	
  Section 12.04.

  	
   

  	
  No Personal Liability of Authority Officials

  	
  86

  
	
  Section 12.05.

  	
   

  	
  Bonds Owned by the Authority or the Company

  	
  86

  
	
  Section 12.06.

  	
   

  	
  Counterparts

  	
  87

  
	
  Section 12.07.

  	
   

  	
  Governing Law; Waiver of Jury Trial

  	
  87

  
	
  Section 12.08.

  	
   

  	
  Notices

  	
  87

  
	
  Section 12.09.

  	
   

  	
  Holidays

  	
  89

  
	
  Section 12.10.

  	
   

  	
  Date for Identification Purposes Only; Effective Date

  	
  89

  
	
  Section 12.11.

  	
   

  	
  Force Majeure

  	
  89

  
	
  Section 12.12.

  	
   

  	
  U.S.A. Patriot Act

  	
  89

  
	
   

  	
   

  	
   

  	
   

  
	
  Signatures

  	
   

  	
   

  	
  90

  
					

 

iii

 

	
  SECTION

  	
   

  	
  PAGE

  
	
   

  	
   

  
	
  EXHIBIT A—FORM OF
  BOND

  	
   

  
	
  EXHIBIT B—FORM OF
  REQUISITION

  	
   

  
	
  EXHIBIT C—FORM C-08:
  FORM OF NOTICE OF PAYMENT OF BOND INTEREST AND/OR PRINCIPAL

  	
   

  
				

 

iv

 

INDENTURE OF TRUST

 

THIS
INDENTURE OF TRUST, made and entered into as of October 1, 2010, between
the ILLINOIS FINANCE AUTHORITY, a body politic and corporate duly created and
existing under the laws of the State of Illinois (the “Authority”),
and CITIBANK N.A., duly organized, existing and authorized to accept and
execute trusts of the character herein set out, with its designated corporate
trust office in New York, New York, and being qualified to accept and
administer the trusts hereby created, as trustee (the “Trustee”),

 

W I
T N E S S E T H :

 

WHEREAS,
the Authority is authorized under the Illinois Finance Authority Act, 20 ILCS
3501/801-1 et seq.,  as
supplemented and amended (“Act”), to
issue revenue bonds for any of its purposes, including the purpose of
acquisition, construction, refurbishment, creation, development or
redevelopment of “industrial projects” (as such term is defined in the Act);
and

 

WHEREAS,
the Authority is further authorized under the Act to receive recovery zone bond
allocations waived to the State from counties and municipalities within the
State in order to issue recovery zone facility bonds for qualifying projects
within the State and to designate all or a portion of the State as a “recovery
zone” for purposes of Section 1400U-1 of the Internal Revenue Code of
1986, as amended; and

 

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

 

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

 

WHEREAS,
it has been determined that in order to obtain such funds to lend to the
Company, the Authority will issue $135,000,000 in aggregate principal amount of
its Recovery Zone Facility Revenue Bonds (Navistar International Corporation
Project) Series 2010 (the “Bonds”), under
this Indenture; and

 

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

 

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

 

 

WHEREAS,
all things necessary to make the Bonds, when issued as provided in this
Indenture, the valid, binding and legal limited obligations of the Authority
according to the import thereof, and to constitute this Indenture a valid
assignment of the amounts pledged to the payment of the principal of, premium,
if any, and interest on the Bonds and a valid assignment of the rights of the
Authority under the Loan Agreement have been done and performed, and the
creation, execution and delivery of this Indenture and the execution and
issuance of the Bonds, subject to the terms hereof, in all respects have been
duly authorized;

 

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

 

GRANTING CLAUSES

 

DIVISION I

 

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

 

DIVISION II

 

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

 

DIVISION III

 

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

 

2

 

EXCEPTED PROPERTY

 

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

 

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

 

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

 

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

 

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

 

3

 

ARTICLE I

 

DEFINITIONS AND RULES OF CONSTRUCTION

 

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

 

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

 

“Act” means the Illinois Finance Authority Act, 20 ILCS
3501/801-1 et seq., as supplemented and amended.

 

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

 

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

 

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

 

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

 

Notwithstanding
the foregoing, an Asset Disposition shall not include:

 

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

 

(2)           any
sale, transfer or other disposition of defaulted receivables for collection or
any sale, transfer or other disposition of property or assets in the ordinary
course of business, including, without limitation, sales of inventory in the
ordinary course

 

4

 

of
its business and the granting of any option or other right to purchase, lease
or otherwise acquire inventory in the ordinary course of its business;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

“Authority” means the Illinois Finance Authority, a body
politic and corporate, created and existing under and by virtue of the Act, and
its successors and assigns.

 

“Authority Representative” means the Chairman, the
Vice Chairman, the Secretary, the Executive Director of the Authority, or any
other member or officer of the Authority designated by the Authority to act on
behalf of the Authority.

 

“Authorized Company Representative” means each person at the
time designated to act on behalf of the Company by written certificate
furnished to the Authority and the Trustee containing the specimen signature of
such person and signed on behalf of the Company by its President, any Vice
President, its Secretary or any Assistant Secretary.  Such certificate may designate an alternate
or alternates.

 

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

 

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

 

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

 

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

 

“Beneficial Owner” is defined in
Section 2.10.

 

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

 

“Bond” or “Bonds” means
the Authority’s Recovery Zone Facility Revenue Bonds (Navistar International
Corporation Project) Series 2010, issued pursuant to this Indenture in the
aggregate principal amount of $135,000,000.

 

6

 

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

 

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

 

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

 

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

 

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

 

“Bond Payment Date” means any Interest Payment
Date, any redemption date, any maturity date and any other date on which the
principal of, and premium, if any, and interest on, the Bonds is to be paid to
the Owners thereof, whether upon redemption, at maturity or upon acceleration
of maturity of the Bonds.

 

“Bond Resolution” means the Resolution adopted by the members
of the Authority on September 14, 2010, authorizing the issuance, delivery
and sale of the Bonds.

 

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

 

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

 

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

 

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

 

7

 

“Cash Equivalents” means:

 

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

 

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

 

(3)           certificates
of deposit and eurodollar time deposits with maturities of twenty-four months
or less from the date of acquisition, bankers’ acceptances with maturities not
exceeding twenty-four months and overnight bank deposits, in each case, with
any commercial bank incorporated under the laws of the United States, any state
thereof, the District of Columbia, Canada or any province or territory thereof
and having capital and surplus in excess of $500.0 million and a Thomson
Bank Watch Rating of “B” or better;

 

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

 

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

 

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

 

(7)           obligations
(including, but not limited to demand or time deposits, bankers’ acceptances
and certificates of deposit) issued or guaranteed by a depository institution
or trust company incorporated under the laws of the United States of America,
any state thereof or the District of Columbia (or in the case of a Canadian
Subsidiary,

 

8

 

Canada
or any province or territory thereof), provided that
(A) such instrument has a final maturity not more than one year from the
date of purchase thereof by the Company or any Restricted Subsidiary of the
Company and (B) such depository institution or trust company has at the
time of the Company’s or such Restricted Subsidiary’s Investment therein or
contractual commitment providing for such Investment, (x) capital, surplus
and undivided profits (as of the date of such institution’s most recently
published financial statements) in excess of $100 million and (y) the
long-term unsecured debt obligations (other than such obligations rated on the
basis of the credit of a Person other than such institution) of such
institution, at the time of the Company’s or such Restricted Subsidiary’s
Investment therein or contractual commitment providing for such Investment, are
rated at least “A” from S&P or “A2” from Moody’s;

 

(8)           in the case of any
Foreign Subsidiary, securities issued or directly and fully guaranteed or
insured by the Federal Government of the country where the Foreign Subsidiary
is located, money market funds, demand or time deposits accounts, certificate
of deposits, in each case denominated and payable in local currency and used in
the ordinary course of the business with reputable commercial banks located in
the jurisdiction of organization of such Foreign Subsidiary; and

 

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

 

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

 

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

 

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

 

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

 

9

 

holders
of the Company’s nonconvertible junior preference stock, series B, by the
holders of such preference stock;

 

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

 

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

 

(5)           the Company or any
Restricted Subsidiary of the Company, directly or indirectly, sells, assigns,
conveys, transfers, leases or otherwise disposes of, in one transaction or a
series of related transactions, all or substantially all of the property or
assets of the Company and the Restricted Subsidiaries of the Company
(determined on a consolidated basis) to any Person; provided,
that neither (a) the merger of a Restricted Subsidiary of the Company into
the Company or into any Restricted Subsidiary of the Company nor (b) a
series of transactions involving the sale of Receivables or interests therein
in the ordinary course of business by a Securitization Subsidiary in connection
with a Qualified Securitization Transaction nor (c) the grant (but not the
foreclosure or realization) of a Lien on assets of the Company or any
Restricted Subsidiary in connection with Indebtedness permitted pursuant to
clause (c) under Section 4.07 of the Loan Agreement shall be deemed
to be a Change of Control.

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

“Company Order” and “Company Request”
mean, respectively, a written order or request signed in the name of the
Company by two Officers, one of whom must be the Chairman of the Board, the
President, the Chief Financial Officer, any Executive Vice President, Senior
Vice President or Vice President of the Company.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

11

 

(6)           [Reserved]

 

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

 

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

 

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

 

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

 

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

 

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

 

(2)           Consolidated Fixed
Charges for such period.

 

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

 

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

 

12

 

merged
with or into the Company or any of its Restricted Subsidiaries since the
beginning of such period shall have made any Investment, acquisition,
disposition, merger, consolidation or discontinued operation that would have
required adjustment pursuant to this definition, then the Consolidated Cash
Flow Ratio shall be calculated giving pro forma effect thereto for such period
as if such Investment, acquisition, disposition, merger, consolidation or
discontinued operation had occurred at the beginning of the applicable
four-quarter period.

 

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

 

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

 

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

 

(1)           Consolidated
Interest Expense; and

 

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

 

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

 

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

 

13

 

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

 

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

 

“Consolidated Interest Expense” means, with respect to any
Person for any period, the aggregate of the net interest expense of such Person
and its Consolidated Subsidiaries for such period (after giving effect to any
interest income), on a consolidated basis, as determined in accordance with
GAAP, including:

 

(1)           all amortization of
original issue discount;

 

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

 

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

 

(4)           all capitalized
interest;

 

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

 

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

 

and
excluding:

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(7)           non-cash compensation
charges resulting from the application of Statement of Financial Accounting
Standards No. 123(R), including any such charges

 

15

 

resulting
from stock options, restricted stock grants, stock appreciation rights or other
equity-incentive programs;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

with
respect to the convertible subordinated notes issued on the Original Securities
Issuance Date.

 

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

 

“Cook County Bonds” means The County of Cook, Illinois
Recovery Zone Facility Bonds (Navistar International Corporation Project)
Series 2010 in the aggregate principal amount of $90,000,000.

 

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

 

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

 

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

 

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

 

“Credit Facilities” means, with respect to the
Company or any of its Restricted Subsidiaries, one or more debt facilities,
including, without limitation, the Credit Agreement, or other financing
arrangements (including, without limitation, commercial paper facilities or
indentures) providing for revolving credit loans, term loans, receivables
financing (including through the sale of receivables), letters of credit or
other long-term indebtedness, including any notes, mortgages, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, and any amendments, supplements, modifications, extensions,
renewals,

 

17

 

restatements
or refundings thereof and any indentures or credit facilities or commercial
paper facilities or receivables financings that replace, refund or refinance
any part of the loans, notes, other credit facilities or commitments
thereunder, including any such replacement, refunding or refinancing facility
or indenture that increases the amount permitted to be borrowed thereunder or
alters the maturity thereof (provided that
such increase in borrowings is permitted under Section 4.07 of the Loan
Agreement) or adds Restricted Subsidiaries as additional borrowers or
guarantors thereunder and whether by the same or any other agent, lender or
group of lenders.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

“GAAP” means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants, the opinions and
pronouncements of the Public Company Accounting Oversight Board and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect as of the
Original Securities Issuance Date.

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

(1)           to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness
of such other Person (whether arising by agreement to keepwell, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or

 

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

 

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

 

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

 

“incur” means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (by conversion, exchange or
otherwise), assume, guarantee or otherwise

 

20

 

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

 

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

 

(2)           any amendment,
modification or waiver of any document pursuant to which Indebtedness was
previously incurred shall not be deemed to be an incurrence of Indebtedness
unless and then only to the extent such amendment, modification or waiver
increases the principal or premium thereof or interest rate thereon (including
by way of original issue discount).

 

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

 

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

 

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

 

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

 

(4)           all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien (other than in
connection with property subject to a Qualified Securitization Transaction) on
any asset or property (including, without limitation, leasehold interests and
any other tangible or intangible property) of such Person, whether or not such
Indebtedness is

 

21

 

assumed
by such Person or is not otherwise such Person’s legal liability; provided, that if the obligations so secured have not been
assumed by such Person or are otherwise not such Person’s legal liability, the
amount of such Indebtedness for the purposes of this definition shall be
limited to the lesser of the amount of such Indebtedness secured by such Lien
or the fair market value of the assets or property securing such Lien;

 

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

 

(6)           all Disqualified
Capital Stock issued by such Person and Preferred Stock of such Person’s
Restricted Subsidiary with the amount of Indebtedness represented by such
Disqualified Capital Stock or Preferred Stock being equal to the greater of its
voluntary or involuntary liquidation preference and its maximum fixed
repurchase price, but excluding accrued dividends if any;

 

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

 

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

 

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

 

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

 

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

 

22

 

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

 

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

 

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

 

“Interest Rate Protection Agreement” means any credit default
swap or option agreement, interest rate protection agreement, interest rate
future agreement, interest rate option agreement, interest rate swap agreement
(whether from fixed to floating or from floating to fixed), interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement.

 

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

 

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

 

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

 

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

 

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

 

(1)           “Investment”
shall include the portion (proportionate to the Company’s equity interest in
such Subsidiary) of the fair market value of the net assets of any Subsidiary
of the Company at the time that such Subsidiary is designated an Unrestricted
Subsidiary; provided, that if such designation is
made in connection with the acquisition of such Subsidiary or the assets owned
by such Subsidiary, the “Investment” in such Subsidiary shall be deemed to be
the consideration paid in connection with such

 

23

 

acquisition;
provided, further, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent “Investment” in an Unrestricted
Subsidiary in an amount (if positive) equal to (a) the Company’s “Investment”
in such Subsidiary at the time of such redesignation less (b) the portion
(proportionate to the Company’s equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time of such
redesignation and

 

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

 

“Investment Grade” means:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

24

 

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

 

“Master Intercompany Agreements” means:  (i) the Amended and Restated Master
Intercompany Agreement, dated as of April 1, 2007, between Navistar
Financial Corporation and Navistar, Inc. (formerly known as International
Truck and Engine Corporation), and its related manufacturing subsidiaries and
affiliates, as amended to the Original Securities Issuance Date; (ii) the
agreement, dated as of December 18, 1986, among Navistar International
Corporation Canada, Navistar Financial Corporation Canada Inc. and General
Electric Canadian Holdings Limited; (iii) the Operating Agreement, dated
March 5, 2010, among General Electric Capital Corporation, GE Capital
Commercial, Inc., Navistar International Corporation, Navistar, Inc.
and Navistar Financial Corporation, (iv) the Intercompany Operating and
Partnership Agreement, dated as of December 1, 2008, by and among Navistar
Financial, Inc. De C.V., Sociedad Financiera De Objeto Múltiple, E.N.R.
and Navistar México, S.A. De C.V., (v) one or more agreements serving some
or all of the same purposes of the agreements listed in clauses (i) through
(iv) above entered into after the Original Securities Issuance Date among
the Company or one of its Restricted Subsidiaries and one or more other Persons
(including one or more Unrestricted Subsidiaries) in the ordinary course of
business on terms no less favorable to the Company and its Restricted
Subsidiaries than the agreements in clauses (i), (ii), (iii) and (iv) and
(vi) any amendment, modification, supplement or restatement from time to
time of the agreements in clauses (i) through (v); provided
that none of the aforementioned agreements shall be amended, modified,
supplemented or restated in a manner adverse in any material respect to the
interests of the Company and its Restricted Subsidiaries taken as a whole.

 

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

 

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

 

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

 

(2)           all payments made by
such Person or its Restricted Subsidiaries on any Indebtedness which is secured
by such assets in accordance with the terms of any Lien upon or with respect to
such assets or which must by the terms of such Lien, or in order

 

25

 

to
obtain a necessary consent to such Asset Disposition or by applicable law, be
repaid out of the proceeds from such Asset Disposition;

 

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

 

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

 

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

 

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

 

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

 

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

 

26

 

therein.  The Offer shall contain all instructions and
materials necessary to enable such Holders to tender such Bonds pursuant to the
Offer to Purchase. The Offer shall also state:

 

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

 

(2)           the Expiration Date
and the Purchase Date;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

27

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

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

 

“Permitted Investments” means:

 

(1)           Investments in Cash
Equivalents;

 

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

 

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

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

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

 

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

 

“Permitted Liens” mean:

 

(1)           Liens for taxes,
assessments and governmental charges (other than any Lien imposed by the
Employee Retirement Income Security Act of 1974, as amended) that are not yet
delinquent or are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and for which adequate reserves
have been established or other provisions have been made in accordance with
generally accepted accounting principles;

 

(2)           statutory mechanics’,
workmen’s, materialmen’s, operators’ or similar Liens imposed by law and
arising in the ordinary course of business for sums which are not yet overdue
for a period of more than 30 days or are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and for
which adequate reserves have been established or other provisions have been
made in accordance with generally accepted accounting principles;

 

(3)           minor imperfections
of, or encumbrances on, title that do not impair the value of property for its
intended use;

 

(4)           Liens (other than
any Lien under the Employee Retirement Income Security Act of 1974, as amended)
incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security;

 

(5)           Liens incurred or
deposits made to secure the performance of tenders, bids, trade contracts,
leases, statutory or regulatory obligations, bankers’ acceptances, surety and
appeal bonds, government contracts, performance and return of money bonds and
other obligations of a similar nature incurred in the ordinary course of
business (exclusive of obligations for the payment of borrowed money);

 

31

 

(6)           easements,
rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
adversely affect the use of the subject to property for its present purposes;

 

(7)           Liens (including
extensions, replacements and renewals thereof) upon real or tangible personal
property acquired after the Original Securities Issuance Date; provided, that

 

(a)           (i) such
Lien is created solely for the purpose of securing Indebtedness that is
incurred in accordance with the Loan Agreement to finance the cost (including
the cost of improvement or construction) of the item of property or assets
subject thereto and such Lien is created prior to, at the time of or within
180 days after the later of the acquisition, the completion of
construction or the commencement of full operation of such property or (ii) such
Lien exists on any such property or assets at the time of acquisition (other
than any such Liens created in contemplation of such acquisition that do not
secure the purchase price),

 

(b)           the
principal amount of the Indebtedness secured by such Lien does not exceed 100%
of such cost and

 

(c)           any
such Lien shall not extend to or cover any property or assets of the Company or
of any Restricted Subsidiary of the Company other than such item of property or
assets and any improvements on such item;

 

(8)           leases
or subleases, licenses and sublicenses granted to others that do not materially
interfere with the ordinary course of business of the Company or of any
Restricted Subsidiary of the Company;

 

(9)           any
interest or title of a lessor in the property subject to any Capitalized Lease
Obligation; provided that any transaction related
thereto otherwise complies with the Loan Agreement;

 

(10)         Liens
arising from filing Uniform Commercial Code financing statements regarding
leases;

 

(11)         Liens
securing judgments or orders, or securing appeal or other surety bonds related
to such judgments or orders, against the Company or any Restricted Subsidiary
of the Company that does not give rise to an Event of Default;

 

(12)         Liens
securing reimbursement obligations with respect to letters of credit incurred
in accordance with the Loan Agreement that encumber documents and other
property relating to such letters of credit and the products and proceeds
thereof;

 

(13)         Liens
in favor of the Trustee arising under this Indenture or the Loan Agreement;
Liens in favor of the trustee for the Senior Notes arising under the Senior

 

32

 

Notes
Indenture; and Liens in favor of the trustee for the Cook County Bonds arising
under the indenture for the Cook County Bonds or the Cook County Loan
Agreement;

 

(14)         any
Lien (including extensions, replacements and renewals thereof) existing on
property, shares of stock or Indebtedness of a Person at the time such Person
becomes a Restricted Subsidiary of the Company or is merged with or
consolidated into the Company or a Restricted Subsidiary of the Company or at
the time of sale, lease or other disposition of the properties of any Person as
an entirety or substantially as an entirety to the Company or any Restricted
Subsidiary of the Company;

 

(15)         Liens
on property of any Subsidiary of the Company to secure Indebtedness for
borrowed money owed to the Company or to another Restricted Subsidiary of the
Company;

 

(16)         Liens
in favor of the Company or any Restricted Subsidiary;

 

(17)         Liens
existing on the Original Securities Issuance Date including extensions,
replacements and renewals thereof, provided that
the Lien so extended, replaced or renewed does not extend to any additional
property or assets;

 

(18)         Liens
in favor of custom and revenue authorities arising as a matter of law to secure
payment of nondelinquent customs duties in connection with the importation of
goods;

 

(19)         Liens
encumbering customary initial deposits and margin deposits, and other Liens
incurred in the ordinary course of business that are within the general
parameters customary in the industry, in each case securing Indebtedness under
any Interest Rate Protection Agreement, Commodity Agreement or Currency
Agreement;

 

(20)         Liens
encumbering deposits made in the ordinary course of business to secure
nondelinquent obligations arising from statutory, regulatory, contractual or
warranty requirements of the Company or its Restricted Subsidiaries for which a
reserve or other appropriate provision, if any, as shall be required by GAAP
shall have been made;

 

(21)         Liens
arising out of consignment or similar arrangements for the sale of goods
entered into by the Company or any Restricted Subsidiary in the ordinary course
of business in accordance with industry practice;

 

(22)         other
Liens securing Indebtedness outstanding in an aggregate principal amount not to
exceed $50.0 million at any time;

 

(23)         Liens
incurred pursuant to the Master Intercompany Agreements or Support Agreement;

 

33

 

(24)         Liens
securing Indebtedness otherwise permitted to be incurred under clause (m) under
Section 4.07 of the Loan Agreement where the Indebtedness being refunded
was secured by a Lien, or amendments or renewals of Liens that were permitted
to be incurred; provided that the Lien so
extended, renewed or replaced does not extend to any additional property or
assets;

 

(25)         Liens
under licensing agreements for use of intellectual property entered into in the
ordinary course of business; and

 

(26)         Liens
securing Indebtedness incurred pursuant to Section 4.07(h) of the
Loan Agreement; provided such Liens do not extend to any property or assets of
the Company or any Restricted Subsidiary of the Company other than the assets
so acquired.

 

“Person” means any individual, corporation, partnership,
limited liability company, joint stock company, joint venture, trust, estate,
unincorporated organization or other entity or government or any agency or
political subdivision thereof.

 

“Plan of Liquidation” means, with respect to any
Person, a plan (including by operation of law) that provides for, contemplates
or the effectuation of which is preceded or accompanied by (whether or not
substantially contemporaneously):

 

(1)           the
sale, lease, conveyance or other disposition of all or substantially all of the
assets of the referent Person; and

 

(2)           the
distribution of all or substantially all of the proceeds of such sale, lease,
conveyance or other disposition and all or substantially all of the remaining
assets of the referent Person to holders of Capital Stock of the referent
Person.

 

“Preferred Stock” means, as applied to the Capital Stock of
any Person, the Capital Stock of such Person (other than the Common Stock of
such Person) of any class or classes (however designated) that ranks prior, as
to the payment of dividends or as to the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding-up of such Person,
to shares of Capital Stock of any other class of such Person.

 

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

 

“Principal Office of the Registrar” means the office or offices
designated as such by the Registrar in writing to the Trustee, the Company and
the Authority, which may be changed from time to time by a writing delivered to
the Authority, the Trustee and the Company.

 

“Principal Office of the Trustee” means the office designated
as such by the Trustee in writing to the Registrar, the Authority and the
Company, which may be changed from time to time by a writing delivered to the
Registrar, the Authority and the Company.

 

34

 

“Project” means the facilities financed from the proceeds of
the Bonds and described in Exhibit A to the Loan Agreement, as
Exhibit A may be modified in accordance with Section 3.03 of the Loan
Agreement.

 

“Project Certificate” means the certificate or
certificates, delivered by the Company on the Closing Date, with respect to
certain facts which are within the knowledge of the Company to enable Bond
Counsel to determine whether interest on the Bonds is includible in the gross
income of the owners thereof under applicable provisions of the Code.

 

“Project Costs” means all costs properly chargeable to the
acquisition, construction, installation or equipping of the Project or to its
financing, as more specifically set forth in the Project Certificate.

 

“Project Fund” means the trust fund of that name created
pursuant to Section 5.02(a) hereof.

 

“Qualified Capital Stock” means, with respect to any
Person, any Capital Stock of such Person that is not Disqualified Capital Stock
or convertible into or exchangeable or exercisable for Disqualified Capital
Stock.

 

“Qualified Non-Cash Proceeds” means any of the following
or any combination of the following:

 

(1)           non-current
assets that are used or usable in the Permitted Business and

 

(2)           Capital
Stock of any Person engaged primarily in the Permitted Business if, in connection
with the receipt by the Company or any Restricted Subsidiary of such Capital
Stock (a) such Person becomes a Restricted Subsidiary or (b) such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the Company
or any Restricted Subsidiary.

 

“Qualified Securitization Transaction” means any transaction or
series of transactions that have been or may be entered into by any of the
Restricted Subsidiaries of the Company in connection with or reasonably related
to a transaction or series of transactions in which any of the Restricted
Subsidiaries of the Company may sell, convey or otherwise transfer to

 

(1)           a Securitization
Subsidiary or

 

(2)           any other Person, or
may grant a security interest in, any Receivables or interests therein secured
by the merchandise or services financed thereby (whether such Receivables are
then existing or arising in the future) of any of the Restricted Subsidiaries
of the Company, and any assets related thereto including, without limitation,
all security or ownership interests in merchandise or services financed
thereby, the proceeds of such Receivables, and other assets which are
customarily sold or in respect of which security interests are customarily
granted in connection with securitization transactions involving such assets.

 

35

 

“Rating Agency” means each of S&P and Moody’s.

 

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

 

“Receivables” means any right of payment from or on behalf
of any obligor, whether constituting an account, chattel paper, instrument,
general intangible or otherwise, arising from the financing by any Restricted
Subsidiary of the Company of merchandise or services, and monies due
thereunder, security or ownership interests in the merchandise and services
financed thereby, records related thereto, and the right to payment of any
interest or finance charges and other obligations with respect thereto,
proceeds from claims on insurance policies related thereto, any other proceeds
related thereto, and any other related rights.

 

“Record Date” means the first day of the month in which
each Interest Payment Date occurs.

 

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

 

“Registrar” means Citibank N.A., New York, New York, or any
successor Registrar appointed in accordance with Section 9.20.

 

“Responsible Officer,” when used with respect to
the Trustee, shall mean any officer within the corporate trust department of
the Trustee, including any vice president, any assistant vice president, any
assistant treasurer, any trust officer, or any other officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred because of such officer’s knowledge of and familiarity
with a particular subject and who shall have direct responsibility for the
administration of this Indenture.

 

“Restricted Subsidiary” means any Subsidiary of the
Company that is not an Unrestricted Subsidiary.

 

“S&P” means Standard & Poor’s Ratings Services, a
division of The McGraw-Hill Companies, Inc., a corporation organized and
existing under the laws of the State of New York, its successors and assigns,
and, if such corporation shall for any reason no longer perform the functions
of a securities rating agency, “S&P” shall
be deemed to refer to any other nationally recognized securities rating agency
designated by the Company by notice to the Authority and the Trustee.

 

“Sale/Lease-back Transaction” means an arrangement
relating to property now owned or hereafter acquired whereby the Company or a
Restricted Subsidiary transfers such property to a Person and the Company or a
Restricted Subsidiary leases it from such Person.

 

“Securities Act” means the Securities Act of 1933, as
amended.

 

36

 

“Securities Depositories” means The Depository Trust Company,
Call Notification Department, 711 Stewart Avenue, Garden City, New York 11530,
Telephone:  (516) 227-4070, Fax:  (516) 227-4190, or, in accordance with
then-current guidelines of the Commission, such other addresses and/or such
other securities depositories, or no such depositories, as the Company may
designate in a certificate delivered to the Trustee.

 

“Securitization Subsidiary” means a Subsidiary of the
Company existing on the Original Securities Issuance Date or formed or acquired
thereafter which engages principally in securitization transactions and in
activities reasonably related to or in connection with the entering into of
securitization transactions and:

 

(1)           no portion of the
Indebtedness or any other obligations (contingent or otherwise) of which

 

(a)           is
guaranteed by the Company or any Restricted Subsidiary of the Company,

 

(b)           is
recourse to or obligates the Company or any Restricted Subsidiary of the
Company in any way other than pursuant to representations, warranties and
covenants (including those related to servicing) entered into in the ordinary
course of business in connection with a Qualified Securitization Transaction or

 

(c)           subjects
any property or asset of the Company or any Restricted Subsidiary of the
Company, directly or indirectly, contingently or otherwise, to any Lien or to
the satisfaction thereof, other than pursuant to representations, warranties
and covenants (including those related to servicing) entered into in the
ordinary course of business in connection with a Qualified Securitization
Transaction;

 

(2)           with which neither
the Company nor any Restricted Subsidiary of the Company

 

(a)           provides
any credit support or

 

(b)           has
any contract, agreement, arrangement or understanding other than on terms that
are fair and reasonable and that are no less favorable to the Company or such
Restricted Subsidiary than could be obtained from an unrelated Person (other
than, in the case of subclauses (a) and (b) of this
clause (2), representations, warranties and covenants (including those
relating to servicing) entered into in the ordinary course of business in
connection with a Qualified Securitization Transaction and intercompany notes
relating to the sale of Receivables to such Securitization Subsidiary); and

 

(3)           with which neither
the Company nor any Restricted Subsidiary of the Company has any obligation to
maintain or preserve such Subsidiary’s financial

 

37

 

condition
or to cause such Subsidiary to achieve certain levels of operating
results.  For purposes of the foregoing,
Navistar Inc. shall not be deemed to be providing credit support to any
Subsidiary of Navistar Financial Corporation that would otherwise qualify as a
Securitization Subsidiary as a result of the terms of the Support Agreement in
which Navistar Inc. agrees to provide credit support directly to Navistar
Financial Corporation for the benefit of its lenders (but not any other
provisions).

 

“Senior Notes” means the Company’s outstanding 8.25% Senior
Notes due 2021 in the aggregate principal amount of $1,000,000,000.

 

“Senior Notes Indenture” means the Indenture dated
as of October 28, 2009 among the Company, the Initial Subsidiary Guarantor
and The Bank of New York Mellon Trust Company, N.A., as trustee, as
amended or supplemented in accordance with its terms.

 

“Shy Settlement” means that certain Amended and Restated
Settlement Agreement dated June 30, 1993 in reference to the class action
of Shy et al. v. Navistar, Civil Action
No. C-3-92-333 (S.D. Ohio).

 

“Significant Subsidiary” means any Subsidiary, or
group of Subsidiaries, that would, taken together, be a “Significant Subsidiary”
of the Company as defined in Article 1, Rule 1-02 of
Regulation S-X promulgated under the Securities Act, as such regulation is
in effect on the Closing Date.

 

“State” means the State of Illinois.

 

“Stated Maturity” means, with respect to any security or
Indebtedness of a Person, the date specified therein as the fixed date on which
any principal of such security or Indebtedness is due and payable, including
pursuant to any mandatory redemption provision (but excluding any provision
providing for the repurchase thereof at the option of the holder thereof).

 

“Subsidiary” of any Person means

 

(1)           a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned by
such Person, by one or more Restricted Subsidiaries of such Person or by such
Person and one or more Restricted Subsidiaries of such Person or

 

(2)           any other Person
(other than a trust formed in connection with a Qualified Securitization
Transaction) in which such Person, a Restricted Subsidiary of such Person or
such Person and one or more Restricted Subsidiaries of such Person, directly or
indirectly, at the date of determination thereof, have at least a majority
ownership interest.

 

“Subsidiary Bond Guarantee” means the Bond Guarantee
and each other Subsidiary Guarantee of the Bonds issued pursuant to
Section 4.13 of the Loan Agreement.

 

38

 

“Subsidiary Cook County Bond Guarantee” means the Cook County Bond
Guarantee and each Subsidiary Guarantee of the Cook County Bonds issued
pursuant to Section 4.13 of the loan agreement relating to the Cook County
Bonds.

 

“Subsidiary Guarantee” means either a Subsidiary
Bond Guarantee, a Subsidiary Cook County Bond Guarantee or a Subsidiary Note
Guarantee and “Subsidiary Guarantees”
collectively means the Subsidiary Bond Guarantees, the Subsidiary Cook County
Bond Guarantees and the Subsidiary Note Guarantees.

 

“Subsidiary Guarantor” means the Initial
Subsidiary Guarantor and each Restricted Subsidiary of the Company that becomes
a guarantor of (i) the Bonds pursuant to Section 4.13 of the Loan
Agreement; (ii) the Cook County Bonds pursuant to Section 4.13 of the
Cook County Loan Agreement; or (iii) the Senior Notes pursuant to the
Senior Notes Indenture.

 

“Subsidiary Note Guarantee” means the guarantee of the
Senior Notes by the Initial Subsidiary Guarantor and each Subsidiary Guarantee
of the Senior Notes issued pursuant to the Senior Notes Indenture.

 

“Supplemental Indenture” means any indenture
supplemental to this Indenture entered into between the Authority and the
Trustee pursuant to the provisions of Section 11.01 or Section 11.02
hereof.

 

“Support Agreement” means the Side Agreement
dated as of July 1, 2005, as amended to the Original Securities Issuance
Date between the Company and Navistar, Inc. (formerly known as
International Truck and Engine Corporation), as it may be amended, modified,
supplemented, restated or renewed from time to time; provided that
such agreement shall not be amended, modified, supplemented, restated or
renewed in a manner adverse in any material respect to the interests of the
Company and its Restricted Subsidiaries taken as a whole.

 

“Tax Agreement” means the Tax Exemption Certificate and
Agreement relating to the Bonds, dated the Closing Date, among the Company, the
Trustee and the Authority, as amended and supplemented from time to time as
permitted therein.

 

“Tax Allocation Agreement” means the Tax Allocation
Agreement among the Company and its Subsidiaries, effective as of
April 14, 2008, as it may be amended and/or supplemented from time to
time; provided that no such amendment or
supplement shall be adverse in any material respect to the interests of the
Company and its Restricted Subsidiaries taken as a whole.

 

“Tax-Exempt” means, with respect to interest on any obligations
of a state or local government, including the Bonds, that such interest is not
includible in gross income of the owners of such obligations for federal income
tax purposes, except for interest on any such obligations for any period during
which such obligations are owned by a person who is a “substantial user” of any
facilities financed with such obligations or a “related person” within the
meaning of Section 147(a) of the Code, whether or not such interest
is includible as an item of tax preference or otherwise includible directly or
indirectly for purposes of calculating other tax liabilities, including any
alternative minimum tax under the Code.

 

39

 

“Treasury Regulations” means the United States
Treasury Regulations dealing with the tax-exempt bond provisions of the Code.

 

“Trust Estate” means the property conveyed to the Trustee
pursuant to the Granting Clauses of this Indenture.

 

“Trust Indenture Act” means the Trust Indenture
Act of 1939 as in effect on the date of this Indenture.

 

“Trustee” means Citibank N.A., as trustee and paying agent
under this Indenture, and any successor Trustee appointed hereunder.

 

“Unassigned Rights” means the rights of the
Authority under Section 6.01(b)(ii) (relating to fees and expenses),
Section 2.14 (relating to no recourse to the Authority), Section 2.09
(relating to indemnification), Section 2.13 (relating to exemption from
personal liability) and Section 8.04 (relating to expenses of collection)
of the Loan Agreement and any rights of the Authority to receive notices,
certificates, requests, requisitions, directions and other communications under
the Loan Agreement.

 

“United States” means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.

 

“Unrestricted Subsidiary” means:

 

(1)           each of Navistar Financial Corporation; Navistar
Financial S.A. de C.V. SOFOM E.N.R.; Navistar Comercial, S.A. de C.V.;
Servicios Corporativos NFC, S. de R.L. de C.V.; Transproteccion Agente de
Seguros, S.A. de C.V. Harbour Assurance Company of Bermuda Limited; Navistar
Leasing Services Corporation f/k/a Harco Leasing Company, Inc.;  Navistar Acceptance Corporation Limited;
International Truck and Engine Corporation US Holding Company, LLC;
International Truck and Engine Corporation Cayman Islands Holding Company;
International Truck and Engine Investments Corporation; Blue Diamond Truck, S.
de R.L. de C.V.; Blue Diamond Parts, LLC, International Dealcor Operations, Ltd.;
Diamond Force Engineering LLC; International Truck and Engine Mauritius Holding
Ltd.; International Truck Leasing Corp.; Navistar Financial Retail Receivables
Corporation; Navistar Financial Securities Corporation; Truck Engine
Receivables Financing Co.; Truck Retail Accounts Corporation; Truck Retail
Installment Paper Corp.; Westco Holdings, LLC; Navistar Cayman Islands
Intellectual Property Company; Navistar Luxembourg Intellectual Property
Company; World Truck Rapid Service, LLC; Cumberland Servicenter, Inc.;
Custom Chassis Products, LLC (in bankruptcy); Navistar Cayman Islands Sourcing
Company; Navistar China Sourcing LLC; Navistar International Hong Kong Limited;
Navistar Investment Hong Kong Limited; Navistar Hong Kong Holding Company
Limited; Navistar (Shanghai) Trading Co. Ltd.; NC2 Global LLC; Mahindra
Navistar Automotives Limited; Mahindra Navistar Engines Private Limited; all
DealCor Subsidiaries and all Securitization Subsidiaries in existence as of the
Original Securities

 

40

 

Issuance Date and their respective Subsidiaries until such time as it
is designated a Restricted Subsidiary pursuant to the second succeeding
sentence;

 

(2)           any Subsidiary of the Company (other than Navistar, Inc.
as long as its Subsidiary Guarantee is in effect) that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of
Directors in the manner provided below; and

 

(3)           any Subsidiary of an Unrestricted Subsidiary.

 

The
Board of Directors may designate any Subsidiary of the Company (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary or any of its Subsidiaries owns any Capital Stock of, or
holds any Lien on any property of, the Company or any other Restricted
Subsidiary of the Company; provided, that
either

 

(1)           the Subsidiary to be so designated has total assets
of $1,000 or less or

 

(2)           if such Subsidiary has assets greater than $1,000,
such designation would be permitted under Section 4.08 of the Loan
Agreement.

 

The
Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, that immediately after giving
effect to such designation (a) if such Unrestricted Subsidiary at such
time has Indebtedness, the Company could incur $1.00 of additional Indebtedness
under paragraph (a) of Section 4.07 of the Loan Agreement and
(b) no Default shall have occurred and be continuing. Any such designation
by the Board of Directors shall be evidenced by the Company to the Trustee by
promptly filing with the Trustee a copy of the board resolution giving effect
to such designation and an Officers’ Certificate certifying that such
designation complied with the foregoing provisions.

 

“Voting Stock” means, with respect to any Person,
securities of any class or classes of Capital Stock in such Person entitling
the holders thereof (whether at all times or only so long as no senior class of
stock has voting power by reason of any contingency) to vote in the election of
members of the Board of Directors or other governing body of such Person.

 

Section 1.02.       Rules of
Construction.  Unless the
context otherwise requires:

 

(a)           a term has the meaning assigned to it;

 

(b)           an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;

 

(c)           references to Articles and Sections are to the
Articles and Sections of this Indenture or the Loan Agreement, as the case may
be;

 

(d)           words importing the singular number shall include
the plural number and vice versa and words importing the masculine shall
include the feminine and vice versa;

 

41

 

(e)           “or” is not exclusive;

 

(f)            “including” means including without limitation; and

 

(g)           the headings and Table of Contents herein are solely
for convenience of reference and shall not constitute a part of this Indenture
nor shall they affect its meanings, construction or effect.

 

ARTICLE II

 

THE BONDS

 

Section 2.01.       Authorization
of Bonds.  There is
hereby authorized and created under this Indenture an issue of bonds designated
as “Illinois Finance Authority Recovery Zone Facility Revenue Bonds (Navistar
International Corporation Project) Series 2010”.  The total aggregate principal amount of Bonds
that may be issued and Outstanding under this Indenture is expressly limited to
$135,000,000, exclusive of Bonds executed and authenticated as provided in
Section 2.07 hereof; provided, however,
that no Bonds shall be delivered hereunder until the Registrar receives a
request and authorization of the Authority signed by the Authority Representative
to authenticate and deliver the principal amount of the Bonds therein specified
to the purchaser or purchasers therein identified upon payment to the Trustee,
for the account of the Authority, of the sum specified in such request and
authorization.

 

Section 2.02.       Date,
Denomination, Interest Rates, and Maturities.  (a)  The
Bonds shall be dated as of the Dated Date. 
The Bonds shall be issued as registered bonds without coupons.  The Bonds shall be issued only in Authorized
Denominations.  The Bonds shall be
numbered consecutively from R-1 upwards.

 

The Bonds shall mature on October 15, 2040 and bear interest at the rate of 6.50% per annum.  The Bonds shall bear interest from the Dated
Date or from and including the most recent Interest Payment Date with respect
to which interest has been paid or duly provided for.  Interest shall be calculated on the basis of
a 360-day year consisting of twelve 30-day months.

 

(b)           Each Bond shall bear
interest from the Interest Payment Date next preceding the date of registration
and authentication thereof unless it is registered and authenticated on or
prior to the first Interest Payment Date, in which event it shall bear interest
from the Dated Date; provided, however, that
if, as shown by the records of the Trustee, interest on the Bonds shall be in
default, Bonds issued in exchange for Bonds surrendered for registration of
transfer or exchange shall bear interest from the last date to which interest
has been paid in full or duly provided for on the Bonds, or, if no interest has
been paid or duly provided for on the Bonds, from the Dated Date.  Payment of the interest on any Bond shall be
made to the person appearing on the bond registration books of the Registrar as
the registered Owner thereof on the Record Date (except that, if and to the
extent that there shall be a default in the payment of the interest due on an
Interest Payment Date, such defaulted interest shall be paid to the Owners in
whose name any such Bonds are registered as of a special record date to be fixed
by the Trustee, notice

 

42

 

of
which shall be given to such Owners not less than ten days prior thereto), such
interest to be paid by the Trustee to such registered Owner, as follows:

 

(1)           in respect of any Bond which is registered in the
book-entry system pursuant to Section 2.10 hereof, in immediately
available funds by no later than 12:00 noon, New York City time, and

 

(2)           in respect of any Bond which is not registered in
the book-entry system pursuant to Section 2.10 hereof, (i) by bank
check mailed by Mail on the Interest Payment Date, to such Owner’s address as
it appears on the registration books of the Registrar or at such other address
as has been furnished to the Registrar in writing by such Owner, or
(ii) by wire transfer on the Interest Payment Date to any owner of at
least $1,000,000 in aggregate principal amount of Bonds (or such lesser amount
if such Bonds constitute all of the Bonds then outstanding).

 

Both
the principal of and premium, if any, on the Bonds shall be payable upon
surrender thereof in lawful money of the United States of America at the
Principal Office of the Trustee.

 

Section 2.03.       Form of
Bonds.  The Bonds and the
certificate of authentication to be executed thereon shall be in substantially
the form attached hereto as Exhibit A,
with such appropriate variations, omissions and insertions as are permitted or
required by this Indenture.

 

Section 2.04.       Execution
of Bonds.  The Bonds
shall be executed on behalf of the Authority with the official manual or
facsimile signature of its Chairman and attested with the official manual or
facsimile signature of its Secretary or Assistant Secretary, and shall have
impressed or printed thereon the corporate seal of the Authority.  All authorized facsimile signatures shall
have the same force and effect as if manually signed.  In case any officer whose signature or
facsimile of whose signature shall appear on the Bonds shall cease to be such
officer before the delivery of such Bonds, such signature or such facsimile
shall nevertheless be valid and sufficient for all purposes, the same as if he
had remained in office until delivery. 
The Bonds may be signed on behalf of the Authority by such persons who,
at the time of execution of such Bonds, are duly authorized to hold appropriate
offices of the Authority, although on the date of the Bonds such persons were
not so authorized or did not hold such offices.

 

Only
such of the Bonds as shall bear thereon a certificate of authentication in the
form set forth in Exhibit A hereto, manually
executed by an authorized signatory of the Registrar, shall be valid or
obligatory for any purpose or entitled to the benefits of this Indenture, and
such certificate of the Registrar shall be conclusive evidence that the Bonds
so authenticated have been duly authenticated and delivered hereunder and are
entitled to the benefits of this Indenture. 
Upon authentication of any Bond, the Registrar shall set forth on such
Bond the date of such authentication.

 

Section 2.05.       Transfer
and Exchange of Bonds.  Registration of
any Bond may, in accordance with the terms of this Indenture, be transferred at
the Principal Office of the Registrar, upon the books of the Registrar required
to be kept pursuant to the provisions of Section 2.06 hereof, by the
Person in whose name it is registered, in person or by its attorney

 

43

 

duly authorized in writing, upon surrender of such Bond for
cancellation, accompanied by a written instrument of transfer in a form
approved by the Registrar, duly executed. 
The Registrar shall require the payment by the Owner of the Bond
requesting such transfer of any tax or other governmental charge required to be
paid and there shall be no other charge to any Owners for any such
transfer.  Whenever any Bond shall be
surrendered for registration of transfer, the Authority shall execute and the
Registrar shall authenticate and deliver a new Bond or Bonds of the same tenor
and of Authorized Denominations.  No
registration of transfer of Bonds shall be required to be made for a period of
15 days next preceding the date on which the Trustee sends by Mail any notice
of redemption, nor shall any registration of transfer of Bonds called for
redemption be required, except the unredeemed portion of any Bond being
redeemed in part.

 

In
the event any Owner fails to provide a correct taxpayer identification number
to the Trustee, the Trustee may make a charge, or other security, against the
Owner sufficient to pay any government charge required to be paid as a result
of such failure.  In compliance with Section 3406
of the Code, this amount may be deducted by the Trustee from amounts payable to
the Owner under this Indenture or the Bonds.

 

Bonds
may be exchanged at the Principal Office of the Registrar for a like aggregate
principal amount of Bonds of the same tenor and of Authorized
Denominations.  The Registrar shall
require the payment by the Owner of the Bond requesting such exchange of any
tax or other governmental charge required to be paid with respect to such
exchange, and there shall be no other charge to any Owners for any such
exchange.  No exchange of Bonds shall be
required to be made for a period of 15 days next preceding the date on which
the Trustee Mails notice of redemption, nor shall any exchange of Bonds called
for redemption be required, except the unredeemed portion of any Bond being
redeemed in part.

 

The
Authority, the Registrar, the Trustee and any agent of the Authority, the
Registrar or the Trustee may treat the person in whose name the Bond is
registered as the owner thereof for the purpose of receiving payment as herein
provided and for all other purposes, whether or not the Bond be overdue, and
neither the Authority, the Registrar, the Trustee, nor any such agent shall be
affected by notice to the contrary.

 

Section 2.06.       Bond
Register.  The Registrar
will keep or cause to be kept at its Principal Office sufficient books for the
registration and the registration of transfer of the Bonds, which shall at all
times, during regular business hours, be open to inspection by the Authority,
the Trustee and the Company; and, upon presentation for such purpose, the
Registrar shall under such reasonable regulations as it may prescribe, register
the transfer or cause to be registered the transfer, on said books, Bonds as
hereinbefore provided.

 

Section 2.07.       Bonds
Mutilated, Lost, Destroyed or Stolen.  If  any Bond shall become mutilated, the Authority, upon the
request and at the expense of the Owner of said Bond, shall execute, and the
Registrar shall thereupon authenticate and deliver, a new Bond of like tenor
and number in exchange and substitution for the Bond so mutilated, but only
upon surrender to the Registrar of the Bond so mutilated.  Every mutilated Bond so surrendered to the
Registrar shall be canceled by it and delivered to the Company.  If any Bond issued hereunder shall be lost,
destroyed or stolen, evidence of such loss, destruction or theft may be
submitted to the Authority,

 

44

 

the Company and the Registrar, and if such evidence shall be
satisfactory to them and indemnity satisfactory to them shall be given, the
Authority, at the expense of the Owner, shall execute, and the Registrar shall
thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in
substitution for the Bond so lost, destroyed or stolen (or if any such Bond
shall have matured or shall be about to mature, instead of issuing a substitute
Bond the Registrar may pay the same without surrender thereof).  The Authority may require payment of a
reasonable fee for each new Bond issued under this Section and payment of
the expenses which may be incurred by the Authority and the Registrar.  Any Bond issued under the provisions of this Section in
lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an
original additional contractual obligation on the part of the Authority whether
or not the Bond so alleged to be lost, destroyed or stolen be at any time
enforceable by anyone, and shall be equally and proportionately entitled to the
benefits of this Indenture with all other Bonds secured by this Indenture.

 

To
the extent permitted by law, the provisions of this Section are exclusive
and shall preclude all other rights and remedies with respect to the
replacement or payment of mutilated, lost, destroyed or stolen Bonds.

 

Section 2.08.       Bonds;
Limited Obligations.  The
Bonds, together with all principal and interest thereon, and premium, if any,
with respect thereto are special, limited obligations of the Authority secured
by the Loan Agreement, and shall always be payable solely from the revenues and
income derived from the Loan Agreement and the security therefor, and from
certain funds and accounts pledged to the Trustee under this Indenture (except
to the extent paid out of money attributable to proceeds of the Bonds or the
income from the temporary investment thereof), are and shall be a valid claim
of the respective Owners thereof only against the revenues and income derived
from the Loan Agreement and such other instruments assigned to or held by the
Trustee, which revenues and income shall be used for no other purpose than to
pay the principal of, premium, if any, and interest on the Bonds, except as may
be otherwise expressly authorized in this Indenture, the Bond Resolution and in
the Loan Agreement.

 

The
Bonds and the obligation to pay principal and interest thereon and any premium
with respect thereto do not now and shall never constitute an indebtedness or
obligation of the Authority, the State or any political subdivision thereof,
within the purview of any constitutional or statutory limitation or provision
or a charge against its general credit or the taxing powers, if any, of any of
them, but shall be secured as aforesaid, and shall be, and shall never give
rise to any pecuniary liability of the Authority, and neither the Authority,
the State nor any other political subdivision thereof shall be liable for the
payments of principal of and premium, if any, and interest on the Bonds and the
Bonds are payable solely from the revenues and income derived from the Loan
Agreement and the security therefor.  No
owner of the Bonds shall have the right to compel any exercise of the taxing
power of the Authority, the State or any other political subdivision thereof to
pay any principal installment of the Bonds or the interest or redemption
premium, if any, thereon.  The Authority
does not have the power to levy taxes for any purpose whatsoever.

 

No
recourse shall be had for the payment of the principal of, or premium, if any,
or interest on any of the Bonds or for any claim based thereon or upon any
obligation, covenant or agreement contained in this Indenture, the Bonds, the
Loan Agreement or any other related 

 

45

 

documents,
against any past, present or future officer, agent or employee of the
Authority, or any incorporator, officer, director, employee, trustee or member
of any successor corporation, as such, either directly or through the Authority
or any successor corporation, under any rule of law or equity, statute or
constitution or by the enforcement of any assessment or penalty or otherwise,
and all such liability of any such incorporator, officer, director, employee, agent,
trustee or member as such is hereby expressly waived and released as a
condition of and in consideration for the execution of this Indenture and the
issuance of any of the Bonds.

 

Section 2.09.       Disposal
of Bonds.  Upon payment of
the principal of, premium, if any, and interest represented thereby or transfer
or exchange pursuant to Section 2.05 hereof or replacement pursuant to
Section 2.07 hereof, any Bond shall be canceled and such Bond shall be
disposed of by the Registrar in accordance with its customary procedures and
the Registrar, upon written request of the Company, shall provide evidence
satisfactory to the Company of such cancellation and disposition.

 

Section 2.10.       Book-Entry
System.  (a) Unless otherwise
determined by the Authority, the Bonds shall be issued in the form of a single
certificated fully-registered Bond, registered in the name of Cede &
Co., as nominee of DTC, or any successor nominee (the “Nominee”).  The actual owners of
the Bonds (the “Beneficial Owners”)  will not receive physical delivery of Bond certificates
except as provided herein.  Except as
provided in paragraph (d) below, all of the outstanding Bonds shall be so
registered in the registration books kept by the Registrar, and the provisions
of this Section shall apply thereto.

 

(b)           With respect to Bonds
registered on the registration books kept by the Registrar in the name of the
Nominee, the Authority, the Company, the Registrar and the Trustee shall have
no responsibility or obligation to any DTC Participant or the Beneficial
Owners.  Without limiting the immediately
preceding sentence, the Authority, the Company, the Registrar and the Trustee
shall have no responsibility or obligation to DTC, any DTC Participant or any
Beneficial Owner with respect to (1) the accuracy of the records of DTC,
the Nominee or any DTC Participant with respect to any ownership interest in
the Bonds, (2) the delivery by DTC or any DTC Participant of any notice
with respect to the Bonds, including any notice of redemption, or (3) the
payment to any DTC Participant or Beneficial Owner of any amount with respect
to principal or purchase price of, or premium, if any, or interest on, the
Bonds.  The Authority, the Company, the
Registrar and the Trustee may treat and consider the person in whose name each
Bond is registered in the registration books kept by the Registrar as the
absolute owner of such Bond for the purpose of payment of principal, purchase
price, premium and interest with respect to such Bond, for the purpose of
giving notices of redemption and other matters with respect to such Bond, for
the purpose of registering transfers with respect to such Bond, and for all
other purposes whatsoever.  The Trustee
shall pay all principal of and premium if any, and interest on, the Bonds only
to or upon the order of the respective Owners, as shown in the registration
books kept by the Registrar, or their respective attorneys duly authorized in
writing, and all such payments shall be valid and effective to fully satisfy
and discharge the Authority’s obligations with respect to payment of principal
of, and premium, if any, and interest on, the Bonds to the extent of the sum or
sums so paid.  No person other than an
Owner, as shown in the registration books kept by the Registrar, shall receive
a certificated Bond evidencing the obligation of the

 

46

 

Authority to make payments of principal, premium, if any, and interest
pursuant to this Indenture.

 

(c)           The Authority has executed
and delivered to DTC a letter of representations in customary form with respect
to the Bonds in book-entry form (the “DTC Representation Letter”).

 

(d)           DTC may determine to
discontinue providing its services with respect to the Bonds at any time by
giving reasonable notice to the Authority or the Trustee and discharging its
responsibilities with respect thereto under applicable law.  The Authority, with the consent of the
Company, may terminate the services of DTC with respect to the Bonds.  Upon the discontinuance or termination of the
services of DTC with respect to the Bonds, unless a substitute securities
depository is appointed to undertake the functions of DTC hereunder, the
Authority, at the expense of the Company, is obligated to deliver Bond
certificates to the Beneficial Owners of such Bonds, as described in this
Indenture, and such Bonds shall no longer be restricted to being registered in
the registration books kept by the Registrar in the name of the Nominee, but
may be registered in whatever name or names Owners transferring or exchanging
Bonds shall designate, in accordance with the provisions of this
Indenture.  The Trustee, the Registrar
and the Authority may conclusively rely on information provided by DTC and DTC
Participants as to the identity of the Owners and the amount owed.

 

(e)             Notwithstanding any other
provision of this Indenture to the contrary, so long as any Bond is registered
in the name of the Nominee, all payments with respect to principal of, or
premium, if any, and interest on, such Bond and all notices with respect to
such Bond shall be made and given, respectively, in the manner provided in the
DTC Representation Letter.  Owners shall
have no lien or security interest in any rebate or refund paid by DTC to the
Trustee which arises from the payment by the Trustee of principal of, or
premium, if any, or interest on, the Bonds in immediately available funds to
DTC.

 

Section 2.11.       CUSIP
Numbers.  The Authority in issuing the
Bonds may use “CUSIP” numbers (if then
generally in use), and, if so, the Trustee shall use CUSIP numbers in notices
of redemption as a convenience to Owners; provided that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Bonds or as contained in any notice of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Bonds, and any such redemption shall not be affected by
any defect in or omission of such numbers. 
The Authority or the Company will promptly notify the Trustee and the
Registrar of any change in any CUSIP number(s).

 

None
of the Authority, the Registrar nor the Trustee shall have any responsibility
for any defect in the CUSIP number that appears on any Bond, check, advice of
payment or redemption notice, and any such document may contain a statement to
the effect that CUSIP numbers have been assigned by an independent service for
convenience of reference and that none of the Authority, the Registrar nor the
Trustee shall be liable for any inaccuracy in such matters.

 

47

 

ARTICLE III

 

REDEMPTION OF BONDS

 

Section 3.01.       Redemption
of Bonds Generally.  (a) The
Bonds are subject to redemption if and to the extent the Company is entitled or
required to make and makes a prepayment pursuant to Article IX of the Loan
Agreement.  Except as specifically
provided in Section 3.03 hereof, the Trustee shall not give notice of any
redemption under Section 3.05 hereof unless the Company has so directed in
accordance with Section 9.01 of the Loan Agreement; provided
that the Trustee may require prepayment of Loan Payments under
Section 6.01 of the Loan Agreement in the case of mandatory redemption.

 

(b)       If the Bonds are to be
redeemed in part, they shall only be redeemed in Authorized Denominations and
in such manner that the unredeemed portion shall also be in Authorized
Denominations.

 

Section 3.02.       Redemption
upon Optional Prepayment.  (a) Extraordinary Optional Redemption.  The Bonds shall be redeemed in whole or in
part, and if in part by such method as the Trustee may deem fair and appropriate,
at any time at a redemption price equal to 100% of the principal amount thereof
plus accrued interest to the redemption date, upon receipt by the Trustee of a
written notice from the Company stating that any of the following events has
occurred and that the Company therefore intends to exercise its option to
prepay the payments due under the Loan Agreement in whole or in part pursuant
to Section 9.01 of the Loan Agreement and thereby effect the redemption of
Bonds in whole or in part:

 

(i)            the Company shall have determined or concurred in a
determination that the continued operation of the Project is impracticable,
uneconomical or undesirable for any reason;

 

(ii)           all or substantially all of the Project shall have
been condemned or taken by eminent domain;

 

(iii)          the operation of the Project shall have been
enjoined or shall have otherwise been prohibited by, or shall conflict with,
any order, decree, rule or regulation of any court or of any federal,
State or local regulatory body, administrative agency or other governmental
body; or

 

(iv)          unreasonable burdens or excessive liabilities shall
have been imposed upon the Company in respect of all or a part of the Project
including, without limitation, federal, State or other ad valorem, property,
income or other taxes not being imposed on the date of the Loan Agreement, as
well as any statute or regulation enacted or promulgated after the date of the
Loan Agreement that prevents the Company from deducting interest in respect of
the Loan Agreement for federal income tax purposes.

 

(b)           Optional
Redemption.  The Bonds shall
be subject to redemption in whole, or in part by lot, prior to their maturity,
at the redemption price of 100% of the principal amount thereof, together with
accrued interest to the date of redemption, following receipt by the Authority
and

 

48

 

the Trustee of a written notice from the Company pursuant to Section 9.01
of the Loan Agreement and upon prepayment of the related Loan Payments at the
option of the Company, on or after October 15, 2020.

 

Section 3.03.       Mandatory
Redemption upon Determination of Taxability.  The Bonds shall be subject to mandatory
redemption in whole on any date from amounts which are to be prepaid by the
Company under Section 9.02(b) of the Loan Agreement, at a redemption
price equal to 100% of the principal amount thereof plus interest accrued, if
any, to the redemption date within 60 days following a Determination of
Taxability; provided that if, in the opinion of Bond
Counsel delivered to the Trustee, the redemption of a specified portion of the
Bonds outstanding would have the result that interest payable on the Bonds
remaining outstanding after such redemption would remain Tax-Exempt, then the
Bonds shall be redeemed in part by such method as the Trustee may deem fair and
appropriate (in Authorized Denominations), in such amount as Bond Counsel in
such opinion shall have determined, and as is set forth in such opinion,
necessary to accomplish that result.

 

Section 3.04.       Selection
of Bonds for Redemption.  Except as
described in Section 3.03 hereof for partial redemptions upon a
Determination of Taxability, if  less than all
of the Bonds are called for redemption the Trustee shall select the Bonds or
any given portion thereof to be redeemed, from the outstanding Bonds or such
given portion thereof not previously called for redemption, by such method as
the Trustee may deem fair and appropriate. 
For the purpose of any such selection the Trustee shall (to the extent practicable)
assign a separate number for each minimum Authorized Denomination of each Bond
of a denomination of more than such minimum; provided
that, following any such selection, both the portion of such Bond to be
redeemed and the portion remaining shall be in Authorized Denominations.  The Trustee shall promptly notify the
Authority and the Company in writing of the numbers of the Bonds or portions
thereof so selected for redemption.

 

Section 3.05.       Notice
of Redemption.  (a) The
Trustee, for and on behalf of the Authority, shall give notice of the
redemption of any Bond by Mail, postage prepaid, not less than 30 days nor
more than 60 days prior to the redemption date, to the Owner of such Bond at
the address shown on the registration books of the Registrar on the date such
notice is mailed and to the Securities Depositories.  Notice of redemption shall also be given to
DTC in accordance with the DTC Representation Letter.  The Trustee shall deliver the notice of
redemption at the written direction of the Company.  Such written direction is to be received by
the Trustee not less than 45 days prior to the date of the mailing of any
redemption notice, or such shorter period as is permitted by the Trustee.  Notice of redemption to the Securities
Depositories shall be given electronically in accordance with the Securities
Depositories standard procedures along with a notice delivered by Mail.  Each notice of redemption shall state the
date of such notice, the date of issue of the Bonds to be redeemed, the redemption
date, the redemption price, the place of redemption (including the name and
appropriate address or addresses of the Trustee), the principal amount, the
CUSIP number (if any) of the maturity and, if less than all, the distinctive
certificate numbers of the Bonds to be redeemed and, in the case of Bonds to be
redeemed in part only, the respective portions of the principal amount thereof
to be redeemed.  Each such notice shall
also state that the interest on the Bonds designated for redemption shall cease
to accrue from and after such redemption date and that on said date there will
become due and payable on

 

49

 

each of said Bonds the principal amount thereof to be redeemed,
interest accrued thereon, if any, to the redemption date and the premium, if
any, thereon (such premium to be specified) and shall require that such Bonds
be then surrendered at the address or addresses of the Trustee specified in the
redemption notice.  Notwithstanding the
foregoing, failure by the Trustee to give notice pursuant to this
Section 3.05 to any one or more of the Securities Depositories or the
insufficiency of any such notices shall not affect the sufficiency of the
proceedings for redemption.  Failure to
give any required notice of redemption as to any particular Bond shall not
affect the validity of the call for redemption of any Bonds in respect of which
no such failure has occurred.

 

(b)       With respect to any notice
of optional redemption of Bonds in accordance with Section 3.02(b) hereof,
unless, upon the giving of such notice, such Bonds shall be deemed to have been
paid within the meaning of Article VII hereof, such notice may state that
such redemption is conditioned upon the receipt by the Trustee, on or prior to
the date fixed for such redemption, of moneys sufficient to pay the principal
of, and premium, if any, and interest on, such Bonds to be redeemed.  In the event such moneys are not so received,
the redemption shall not be made and the Trustee shall within a reasonable time
thereafter give notice, in the manner in which the notice of redemption was
given, that such redemption will not take place.

 

Section 3.06.       Partial
Redemption or Purchase of Bonds.  Upon surrender
of any Bond redeemed or purchased in part only, the Registrar shall exchange
the Bond redeemed or purchased for a new Bond of like tenor and in an
Authorized Denomination without charge to the Owner in the principal amount of
the portion of the Bond not redeemed or purchased.  In the event of any partial redemption or
purchase of a Bond which is registered in the name of Cede & Co., DTC
may elect to make a notation on the Bond certificate which reflects the date
and amount of the reduction in the principal amount of said Bond in lieu of
surrendering the Bond certificate to the Registrar for exchange.  The Authority, the Company and the Trustee
shall be fully released and discharged from all liability to the extent of
payment of the redemption or purchase price for such partial redemption or
purchase.

 

Section 3.07.       No
Partial Redemption after Default.  Anything in
this Indenture to the contrary notwithstanding, if there shall have occurred
and be continuing an Event of Default (other than an Event of Default described
in Section 8.01(c) hereof) of which an authorized officer of the
corporate trust department of the Trustee has actual knowledge, there shall be
no redemption of less than all of the Bonds at the time Outstanding.

 

Section 3.08.       Payment
of Redemption Price.  For the
redemption of any of the Bonds, the Trustee shall deposit in the Principal
Account of the Bond Fund solely out of the revenues and income derived pursuant
to the Loan Agreement and the security therefor, and any other moneys
constituting the Trust Estate, an amount sufficient to pay the principal of,
and premium, if any, and interest to become due on, the Bonds called for
redemption on the date fixed for such redemption.  Such deposit shall be reduced by the amount
of moneys in the Principal Account of the Bond Fund and used on such redemption
date for payment of the principal of, and premium, if any, and accrued interest
on, the Bonds to be redeemed.

 

50

 

Section 3.09.       Effect
of Redemption.  Notice of
redemption having been duly given as aforesaid, and moneys for payment of the
redemption price being held by the Trustee if such redemption was conditioned
thereon, the Bonds so called for redemption shall, on the redemption date
designated in such notice, become due and payable at the redemption price
specified in such notice, interest on the Bonds so called for redemption shall
cease to accrue, said Bonds shall cease to be entitled to any lien, benefit or
security under this Indenture, and the Owners of said Bonds shall have no
rights in respect thereof except to receive payment of the redemption price
thereof, without interest accrued on any funds held to pay such redemption
price accruing after the date of redemption.

 

All
Bonds fully redeemed pursuant to the provisions of this Article III shall
be canceled upon surrender thereof to the Trustee, which shall upon the written
request of the Company, deliver to the Company a certificate evidencing such
cancellation.

 

Section 3.10.       Purchase
in Lieu of Optional Redemption.  The Company shall have the option to cause
the Bonds to be purchased in lieu of redemption pursuant to Section 3.02(b) hereof.  Such option shall be exercised by the Company
by delivering to the Trustee on or prior to the Business Day preceding the
redemption date a written direction of the Company specifying that the Bonds
shall not be redeemed, but instead shall be subject to purchase pursuant to
this Section.  Upon delivery of such
notice, the Bonds shall not be redeemed but shall instead be subject to
mandatory tender for purchase at a purchase price equal to the redemption price
at which the Bonds would have been redeemed hereunder on the date that would
have been the redemption date; provided that
funds in an amount equal to the purchase price shall be made available to the
Trustee on or prior to the purchase date. 
Anything herein to the contrary notwithstanding, in no event shall the
purchase of Bonds pursuant to this Section 3.10 be deemed to constitute a
redemption of such Bonds, except upon the written notice by the Company to the
Trustee that the Company has elected to treat such Bonds as paid and retired in
full, accompanied by the surrender of said Bonds to the Trustee for
cancellation.

 

Section 3.11.       Company’s
Offer to Purchase.  The Company
is obligated to make an offer to purchase Bonds upon the occurrence of the
following events:

 

(a)           If the Company or any Restricted Subsidiary
consummates a permitted Asset Disposition and on the 361st day after such Asset
Disposition, the aggregate amount of Unutilized Net Available Proceeds exceeds
$25.0 million, the Company is required to direct the Trustee to notify the
Bondholders of an Offer to Purchase all or a portion of the Bonds (in an amount
determined in accordance with Section 4.09 of the Loan Agreement) for a price
equal to 100% of the principal amount thereof, plus accrued interest to the
purchase date.  If the amount of Bonds
tendered for purchase exceeds the amount required to be used to purchase Bonds,
the Trustee shall select the Bonds or any given portion thereof to be purchased
from the tendered Bonds by such method as the Trustee may deem fair and
appropriate.  For the purpose of any such
selection the Trustee shall (to the extent practicable) assign a separate
number for each minimum Authorized Denomination of each Bond of a denomination
of more than such minimum; provided that,
following any such selection, both the portion of such Bond to be redeemed and
the portion remaining shall be in Authorized Denominations.  The Trustee shall promptly

 

51

 

notify the Authority and the Company in writing of the numbers of the
Bonds or portions thereof so selected for purchase.

 

(b)           If a Change of Control occurs, each Bondholder shall
have the right to require the Company to purchase all or any part of such
Holder’s Bonds pursuant to a Change of Control Offer, in an amount equal to
101% of the aggregate principal amount of the Bonds plus accrued interest to
the purchase date.  The Company is
required to direct the Trustee to notify the Bondholders of the occurrence of
the Change of Control and the purchase price and the purchase date as set forth
in Section 9.04 of the Loan Agreement.

 

ARTICLE IV

 

GENERAL COVENANTS

 

Section 4.01.       Payment
of Bonds.  (a) The
Authority covenants that it will promptly pay or cause to be paid the principal
of, and premium, if any, and interest on, every Bond issued under this
Indenture at the place, on the dates and in the manner provided herein and in
the Bonds, provided that the principal, premium if
any, and interest are payable by the Authority solely from amounts payable
under the Loan Agreement, the Bond Guarantee and certain funds and account
pledged to the Trustee under this Indenture and nothing in the Bonds or this
Indenture shall be considered as assigning or pledging any other funds or
assets of the Authority other than the Trust Estate.  Pursuant to Article XI of the Loan
Agreement, the Bonds may also be secured from time to time by the delivery of
additional Subsidiary Bond Guarantees.

 

(b)       Each and every covenant made
herein by the Authority is predicated upon the condition that the Authority
shall not in any event be liable for the payment of the principal of, or
premium, if any, or interest on the Bonds, or the performance of any pledge,
obligation or agreement created by or arising under this Indenture or the Bonds
from any property other than the Trust Estate; and, further, that neither the
Bonds nor any such obligation or agreement of the Authority shall be construed
to constitute an indebtedness or a lending of credit of the Authority within
the meaning of any constitutional or statutory provision whatsoever, or
constitute or give rise to a pecuniary liability of the Authority or a charge
against its general credit.

 

(c)       For the payment of interest
on the Bonds, the Trustee shall deposit in the Interest Account on or prior to
each Interest Payment Date, all moneys designated as payments for interest on
the Bonds and paid on behalf of the Company pursuant to the Loan Agreement or
paid by the Guarantor pursuant to the Bond Guarantee (or paid by any other
Subsidiary Guarantor pursuant to any other Subsidiary Bond Guarantee), an
amount sufficient to pay the interest to become due on such Interest Payment
Date.  Such deposit shall be reduced by
the amount of moneys in the Interest Account available on the Interest Payment
Date for the payment of the interest on the Bonds.

 

(d)       For payment of the principal
of the Bonds upon redemption, maturity or acceleration of maturity, the Trustee
shall deposit in the Principal Account, on or prior to the

 

52

 

redemption date or the maturity date (whether accelerated or not) of
the Bonds, all moneys designated as payments of principal of the Bonds and paid
on behalf of the Company pursuant to the Loan Agreement or paid by the
Guarantor pursuant to the Bond Guarantee (or paid by any other Subsidiary
Guarantor pursuant to any other Subsidiary Bond Guarantee).  Such deposit shall be reduced by the amount
of moneys in the Principal Account available on the redemption date or the
maturity date (whether accelerated or not) for the payment of the principal of
the Bonds.

 

Section 4.02.       Performance
of Covenants by Authority; Authority; Due Execution.  The Authority covenants that
it will faithfully perform at all times any and all covenants, undertakings,
stipulations and provisions contained in this Indenture, in any and every Bond
executed, authenticated and delivered hereunder and in all of its proceedings
pertaining thereto; provided, however,
that except for the matters set forth in any documents hereof relating to
payment of the Bonds, the Authority shall not be obligated to take any action
or execute any instrument pursuant to any provision hereof until it shall have
been requested to do so by the Company or by the Trustee, or shall have
received the instrument to be executed and at the option of the Authority shall
have received from the party requesting such action or execution assurance
satisfactory to the Authority that the Authority shall be reimbursed for its
reasonable expenses, including legal counsel fees, incurred or to be incurred
in connection with taking such action or executing such instrument.

 

The
Authority represents that it is duly authorized under the Constitution and laws
of the State, including particularly the Act and the Bond Resolution, to issue
the Bonds and to execute this Indenture, to execute and deliver the Loan
Agreement, to grant the security interest herein provided, to assign and pledge
the Loan Agreement and amounts payable thereunder, and to assign and pledge the
amounts hereby assigned and pledged in the manner and to the extent herein set
forth, that all action on its part for the issuance of the Bonds and the
execution and delivery of this Indenture has been duly and effectively taken,
and that the Bonds in the hands of the Owners are and will be valid and
enforceable obligations of the Authority according to the terms thereof and
hereof.

 

The
Authority shall fully cooperate with the Trustee and with the Owners of the
Bonds to the end of fully protecting the rights and security of the Owners of
any Bonds.

 

Except
to the extent otherwise provided in this Indenture, the Authority shall not
enter into any contract or take any action by which the rights of the Trustee
or the Owners of the Bonds may be impaired and shall, from time to time,
execute and deliver such further instruments and take such further action as
may be reasonably required to carry out the purposes of this Indenture.

 

Anything
contained in this Indenture to the contrary notwithstanding, it is hereby
understood and agreed that all of the representations and warranties or
covenants of the Authority contained in this Indenture are subject to the
limitations set forth in Section 2.08 hereof and are not intended to and
do not create a general or primary obligation of the Authority.  The Bonds are issued pursuant to the Act and
do not and shall never become general obligations of the Authority, but are
limited obligations payable solely and only from the Trust Estate, and as 

 

53

 

authorized
by the Act and provided herein. No covenant or agreement contained in the
Bonds, in this Indenture or in any other agreement referred in this Indenture
shall be deemed to be the covenant or agreement of any trustee, officer,
member, agent or employee of the Authority in his or her individual capacity,
and neither such persons nor any official executing the Bonds shall be liable
personally on the Bonds or be subject to any personal liability or
accountability by reason of the issuance thereof.

 

Section 4.03.       Defense
of Authority’s Rights.  The Authority
agrees that the Trustee may defend the Authority’s rights to the payments and
other amounts due under the Loan Agreement, for the benefit of the Owners of
the Bonds, against the claims and demands of all persons whomsoever.  The Authority covenants that it will do,
execute, acknowledge and deliver, or cause to be done, executed, acknowledged
and delivered, such indentures supplemental hereto and such further acts,
instruments and transfers as the Trustee may reasonably require for the better
assuring, transferring, pledging, assigning and confirming to the Trustee all
and singular the rights assigned hereby and the amounts pledged hereby to the
payment of the principal of, and premium, if any, and interest on, the
Bonds.  The Authority covenants and
agrees that, except as herein and in the Loan Agreement provided, it will not
sell, convey, assign, pledge, encumber or otherwise dispose of any part of the
Trust Estate.

 

Section 4.04.       Recordation
and Other Instruments.  In
order to perfect the security interest of the Trustee in the Trust Estate, the
Authority, to the extent permitted by law, will execute such financing
statements, naming the Trustee as assignee and pledgee of the Trust Estate
assigned and pledged under this Indenture for the payment of the principal of,
premium, if any, and interest on the Bonds and as otherwise provided herein,
and the Trustee will cause the same to be duly filed and recorded, as the case
may be, in the appropriate State and county offices as required by the
provisions of the Uniform Commercial Code or other similar law as adopted in
the State, as from time to time amended. 
To continue the security interest evidenced by such financing
statements, the Trustee shall file and record or cause to be filed and recorded
such necessary continuation statements or supplements thereto and other
instruments from time to time as may be required pursuant to the provisions of
the said Uniform Commercial Code or other similar law to fully preserve and
protect the security interest of the Trustee in the Trust Estate.  The Authority, to the extent permitted by
law, at the expense of the Company, shall execute and cause to be executed any
and all further instruments as shall be reasonably required by the Trustee for
such protection and perfection of the interests of the Trustee, the registered
owners and the Trustee shall file and refile or cause to be filed and refiled
such continuation statements which shall be necessary to preserve and perfect
the lien of this Indenture upon the Trust Estate until the principal of,
premium, if any, and interest on the Bonds issued hereunder shall have been paid
or provision for their payment shall be made as herein provided.

 

Section 4.05.       Rights
under Loan Agreement.  The Loan
Agreement, a duly executed counterpart of which has been filed with the
Trustee, sets forth the covenants and obligations of the Authority and the
Company, including provisions that, subsequent to the issuance of the Bonds and
prior to the payment in full or provision for payment thereof in accordance
with the provisions hereof, the Loan Agreement (except as expressly provided
therein) may not be effectively amended, changed, modified, altered or
terminated without the concurring written consent of the Trustee, as evidenced
by an Opinion of Counsel, as provided in Article XI hereof,

 

54

 

and reference is hereby made to the Loan Agreement for a detailed
statement of such covenants and obligations of the Company, and the Authority
agrees that the Trustee in its name or (to the extent required by law) in the
name of the Authority may enforce all rights of the Authority and all
obligations of the Company under and pursuant to the Loan Agreement, whether or
not the Authority is in default hereunder. 
The Authority shall cooperate with the Trustee in enforcing the
obligations of the Company to pay or cause to be paid all amounts payable by
the Company under the Loan Agreement.

 

Section 4.06.       Prohibited
Activities.  Subject to the
limitations on its liability as stated herein and to the extent permitted by
law, the Authority covenants and agrees that it has not knowingly engaged and
will not knowingly engage in any activities and that it has not knowingly taken
and will not knowingly take any action which might result in any interest on
the Bonds becoming includable in the gross income of the owners thereof for
purposes of federal income taxation.

 

Section 4.07.       No
Disposition of Trust Estate.  Except as
permitted by this Indenture, the Authority shall not sell lease, pledge, assign
or otherwise encumber or dispose of its interest in the Trust Estate and will
promptly pay (but only from the revenues and income derived pursuant to the
Loan Agreement and the security therefor, and any other moneys constituting the
Trust Estate) or cause to be discharged, or make adequate provision to
discharge, any lien or charge on any part thereof not permitted hereby.

 

Section 4.08.       Access
to Books.  All books and
documents in the possession of the Authority relating to the revenues and
income derived pursuant to the Loan Agreement and the security therefor, and
any other moneys constituting the Trust Estate shall at all reasonable times be
open to inspection by such accountants or other agencies as the Trustee may
from time to time designate.  If
requested by the Trustee, such inspection shall occur annually at a time convenient
for the Authority and the Trustee.

 

Section 4.09.       Source
of Payment of Bonds.  The Bonds are
not general obligations of the Authority, nor are they payable in any manner
from revenues raised by taxation, but are limited obligations payable solely
from the revenues and income derived pursuant to the Loan Agreement and the
security therefor, the Bond Guarantee and any other Subsidiary Bond Guarantees
delivered from time to time and any other moneys constituting the Trust Estate.  The revenues and income derived pursuant to
the Loan Agreement and the security therefor, and any other moneys constituting
the Trust Estate have been pledged and assigned as security for the equal and
ratable payment of the Bonds and shall be used for no other purpose than to pay
the principal of, and premium, if any, and interest on, the Bonds, except as
may be otherwise expressly authorized in this Indenture or the Loan Agreement.

 

Section 4.10.       Provisions
for Payment of Expenses.  The
Authority shall not be obligated to execute any documents or take any other
action under or pursuant to this Indenture, the Loan Agreement, or any other
document in connection with the Bonds unless and until provision for the
payment of expenses of the Authority, including legal counsel fees, shall have
been made.  Provision for expenses shall
be deemed to have been made upon arrangements reasonably

 

55

 

satisfactory to the Authority for the provision of expenses being
agreed upon by the Authority and the party requesting such execution.

 

ARTICLE V

 

FUND AND ACCOUNTS; DEPOSIT AND
APPLICATION OF BOND PROCEEDS

 

Section 5.01.       Creation of Bond Fund and Accounts; Rebate Fund.  (a) There is hereby created by the
Authority and ordered established a separate Bond Fund, to be held by the
Trustee and to be designated “Illinois Finance Authority Recovery Zone Facility
Revenue Bonds (Navistar International Corporation Project) Series 2010
Bond Fund” and therein created (i) a Principal Account and (ii) an
Interest Account.

 

(b)           For purposes of
complying with the requirements of Section 148 of the Code, there is
hereby created by the Authority and ordered established a separate Rebate Fund,
to be held by the Trustee and to be designated “Illinois Finance Authority
Recovery Zone Facility Revenue Bonds (Navistar International Corporation
Project) Series 2010 Rebate Fund,” to make arbitrage payments as
contemplated by the Tax Agreement.

 

Section 5.02.       Application
of Bond Proceeds. 
(a) The Authority shall loan all proceeds from the sale of the
Bonds to the Company and the Authority shall cause the proceeds of the initial
sale of the Bonds to be deposited with the Trustee in the “Project Fund,”
which is hereby created with the Trustee. 
The Trustee will hold those proceeds in trust for the benefit of the
Company and the Bondholders and will apply the proceeds in accordance with this
Section 5.02.

 

Moneys
in the Project Fund will be allocated for federal income tax purposes to the
payment of the Project Costs, or to the reimbursement of the Company for
Project Costs paid by it.  The Trustee
shall disburse moneys in the Project Fund upon receipt of a requisition,
substantially in the form as attached hereto as Exhibit B,
signed by an Authorized Company Representative stating with respect to each
disbursement to be made, the following:

 

(i)            the name and address of the person, firm or
corporation to whom payment is due or has been made (which may include the
Company) is set forth on Schedule I attached thereto;

 

(ii)           the amount to be or which has been paid is set forth
on Schedule I attached thereto;

 

(iii)          that the costs of an aggregate amount set forth in
such requisition have been or will be made or incurred or financed and were or
will be necessary for the Project and were made or incurred in accordance with
the construction contracts, plans and specifications and building permits
therefor then in effect;

 

(iv)          that the amount paid or to be paid, as set forth in
such requisition, represents a part of the amount that is or will be due and
payable for Project Costs and

 

56

 

was or will be made in accordance with the terms of any contracts
applicable thereto and in accordance with usual and customary practice under
existing conditions;

 

(v)           that no part of the Project Costs was included
within the costs referred to in any requisition previously filed with the
Trustee under the provisions of this Indenture;

 

(vi)          that (A) the withdrawal of moneys from the
Project Fund and the use of the property financed or reimbursed therefrom has
not and will not result in a violation of any representation, term or covenant
in the Tax Agreement or Project Certificate and (B) any Favorable Opinion
of Bond Counsel required to be delivered as a result of changes in the use of
Project Fund moneys pursuant to Section 3.04 of the Loan Agreement has
been delivered to the Trustee and the Authority;

 

(vii)         that the amount remaining in the Project Fund,
together with (A) moneys then on hand at the Company or committed to the
Company which are or will be available, and are anticipated by the Company to
be applied, to pay the Project Costs and (B) expected investment earnings
to be deposited into the Project Fund pursuant to this Indenture, will, after
payment of the amount requested in said requisition, be sufficient to pay the
costs of completing the Project substantially in accordance with the
construction contracts, plans and specifications and building permits therefor,
if any, then in effect; and

 

(viii)        that the amounts paid or to be paid as set forth in
the requisition are properly payable under the terms of this Indenture and that
all conditions precedent to payment as prescribed in this Indenture have been
satisfied.

 

The
Company shall attach to each requisition a list of invoices or bills of sale
covering all items for which payment is being requested in such requisition
issued by the manufacturers, suppliers or other sellers of such items.  The invoices or bills shall be available for
review by the Trustee in the offices of the Company; provided
that the Trustee shall have no duty or obligation to review such invoices and
may conclusively rely on such requisitions.

 

To
the extent that the Company leases from third parties or otherwise provides
items for the Project from sources other than funds on deposit in the Project
Fund, the costs thereof shall not be included in the Project Costs referred to
above.

 

The
Trustee will maintain adequate records pertaining to the proceeds of the Bonds
held by it and all disbursement from them made by the Trustee.

 

(b)             Completion
Date.  The Company is required to
deliver to the Authority and the Trustee within 90 days after the completion of
the Project a certificate as described below (the “Completion
Certificate”) signed by an Authorized Company Representative stating
the following:

 

(i)            All portions of the Project have been fully
completed in accordance with the plans and specifications therefor, as then
amended, and the Completion Date.

 

57

 

(ii)           Such person has made such investigation of such
sources of information as are deemed by such person to be necessary, including
pertinent records of the Company, and is of the opinion that the Project has
been fully paid for and no claim or claims exist against the Company or against
the properties of the Company or, to the best of such person’s knowledge,
against the Authority or against the properties of the Authority, out of which
a lien based on furnishing labor or material for the Project exists or might
ripen; provided, however, there may be excepted
from the foregoing statement any claim or claims out of which a lien exists or
might ripen in the event that the Company intends to contest such claim or
claims, in which event such claim or claims shall be described; provided, further, however, that in such event such
certificate shall state that funds are on deposit in the Project Fund which,
together with (i) moneys then on hand at the Company or committed to the
Company which are or will be available, and are anticipated by the Company to
be applied, to pay the Project Costs, and (ii) expected investment
earnings to be deposited into the Project Fund pursuant to this Indenture, are
sufficient to make payment of the full amount which might in any event be
payable in order to satisfy such claim or claims.  In the event such certificate shall state
that there is a claim or claims in controversy which create or might ripen into
a lien, there shall be filed with the Authority and the Trustee a certificate
of the Authorized Company Representative stating that such claim or claims have
been paid when the same has in fact occurred.

 

(iii)          The withdrawal of moneys from the Project Fund and
the use of the property financed or reimbursed therefrom has not and will not
result in a violation of any representation, term or covenant in the Tax
Agreement.

 

(iv)          All Favorable Opinions of Bond Counsel required to
be delivered as a result of changes made pursuant to Section 3.03 of the
Loan Agreement have been delivered to the Trustee and the Authority.

 

(c)             Disposition
of Fund Moneys after Project Is in Service or upon Determination Not to
Complete All Components of the Project.  Any moneys (“Excess
Funds”) (including investment proceeds) remaining in the Project
Fund or any other Bond proceeds (including investment earnings) not allocated
for federal income tax purposes to Project Costs on the earlier of the
following dates (the “Remedial Action Date”):
(i) the date on which the Company determines that all components of the
Project will not be completed; or (ii) the date on which all components of
the Project are placed in service (i.e., the date
the complete Project is operating at substantially the level for which it is
designed) (the “Placed in Service Date”), shall
be used in accordance with Treasury Regulation 1.144-2 for one or more of
the following purposes:

 

(i)         at the written direction of
the Authorized Company Representative, for the payment, in accordance with the
provisions of this Indenture, of any Project Costs not theretofore paid;

 

(ii)          at the written direction of
the Authorized Company Representative, for transfer, first to the Rebate Fund,
any amounts required by the Tax Agreement and Section 6.04 hereof; and
second, to the payment of costs of other facilities qualifying under the Act;

 

58

 

(iii)          at the written direction of the Authorized Company
Representative, for transfer to the Interest Account to pay interest on the
Bonds;

 

(iv)          at the written direction of
the Authorized Company Representative, (A) to pay, on or before
90 days following the Remedial Action Date, all or part of the price of
purchasing a portion of the Bonds in the open market or at private sale, at a
purchase price not in excess of 100% of the principal amount of such Bonds plus
accrued interest to the date of such purchase for the purpose of cancellation;

 

(B)          if the Bonds are callable
within 90 days following the Remedial Action Date, to pay, on or before
90 days following the Remedial Action Date, for transfer to the Bond Fund,
to pay all or part of the redemption price of a portion of the Bonds; or

 

(C)          if the Bonds are not
callable within 90 days following the Remedial Action Date, for transfer
into an escrow account established with the Trustee, upon filing by the Company
required notice to the Internal Revenue Service, such transfer and notice to be
on or before 90 days following the Remedial Action Date, to be used to
pay, on the first date on which Bonds may be redeemed,  but
in any event within ten and one-half years from the date of issuance of the
Bonds, all or part of the redemption price of a portion of the Bonds;

 

provided, that, except
for the purpose described in subparagraph (i) above, no money, including
earnings on the investment on such moneys, may be so used unless and until the
Trustee has been furnished with Favorable Opinion of Bond Counsel; provided, further, that the earnings on the investment of
the moneys on deposit in such escrow account described in
subparagraph (iv)(C) above shall be transferred on each Interest
Payment Date on the Bonds to the Interest Account and shall be used to pay
interest on the Bonds coming due on such Interest Payment Date; and provided, further, that, until used for the foregoing
purpose described in subparagraph (iv)(C) above, moneys on deposit in
such escrow account may be invested in investments authorized by
Section 6.01 hereof, but may not be invested to produce a yield on such
moneys (computed from the Placed in Service Date and taking into account any
investment of such moneys during the period from the Placed in Service Date
until such moneys were deposited in such escrow account) greater than the yield
on the Bonds from which such proceeds were derived, all as such terms are used
in and determined in accordance with the Code and regulations promulgated
thereunder.  A verification report with
respect to the calculation of such yield on the escrow account and the yield on
the Bonds by a firm of nationally recognized certified public accountants will
be provided to the Trustee.

 

(e)             Investment
of Project Fund Moneys.  Moneys
on deposit in the Project Fund may be invested in accordance with the
provisions of Article VI hereof.

 

(f)             Redemption;  Event of Default.  If
the Company is required to, or shall elect to redeem the Bonds in whole, any
balance in the Project Fund shall be deposited in the Bond Fund.  If an Event of Default occurs and the
maturity of the Bonds is accelerated, the Trustee will to the extent necessary
transfer moneys in the Project Fund to the Bond Fund, regardless of the other
provisions of this Section.

 

59

 

Section 5.03.       Deposits
into the Funds; Use of Moneys in the Funds. 
(a)  On each Interest Payment Date the Trustee shall pay out
of the Interest Account, the interest due on the Bonds, and further pay out of
the Interest Account any amounts required for the payment of accrued interest
upon any purchase or redemption of the Bonds.

 

(b)             The Trustee
shall on each redemption date or maturity date, pay out of the Principal
Account, the principal amount, if any, due on the Bonds, upon the presentation
and surrender of the requisite Bonds in accordance with the terms hereof.

 

(c)             In connection
with purchases of Bonds out of the Bond Fund as provided in this Section, the
Company shall arrange and the Trustee shall execute such purchases (through
brokers or otherwise, and with or without receiving tenders) at the written
direction of the Company; provided, however, that
the Trustee may not effect such purchases through a broker unless the Company
shall have previously approved in writing the use of such broker and the amount
of such broker’s fees.  The payment of
the purchase price shall be made out of the moneys deposited in the Principal
Account and the payment of accrued interest shall be made out of moneys
deposited in the Interest Account.

 

(d)             In the event
that a deficiency shall exist in any account of the Bond Fund on any Interest
Payment Date after giving effect to any transfers made pursuant to
Sections 5.02 and 5.03 hereof, the Trustee shall make demand on the
Company for such deficiency.

 

Section 5.04.       Bonds
Not Presented for Payment of Principal.  In the event
any Bonds shall not be presented for payment when the principal thereof becomes
due, either at maturity or at the date fixed for redemption thereof or the
acceleration of maturity, or in the event that any interest thereon is
unclaimed, if moneys sufficient to pay such Bonds or interest are held by the
Trustee, the Trustee shall segregate and hold such moneys in trust (but shall
not invest such moneys), without liability for interest thereon, for the
benefit of Owners of such Bonds who shall, except as provided in the following
paragraph, thereafter be restricted exclusively to such fund or funds for the
satisfaction of any claim of whatever nature on their part under this Indenture
or relating to said Bonds or interest. 
Such Bonds which shall not have been so presented for payment shall be
deemed paid for any purposes of this Indenture.

 

Any
moneys which the Trustee shall segregate and hold in trust for the payment of
the principal of or interest on any Bond and remaining unclaimed for two years
after such principal or interest has become due and payable shall be paid by
the Trustee to the Company upon written request of an Authorized Company Representative.  After the payment of such unclaimed moneys to
the Company, the Owner of such Bond shall look only to the Company for payment,
and then only to the extent of the amount so repaid to the Company, and the
Company shall not be liable for any interest thereon and shall not be regarded
as a trustee of such money, and all liability of the Authority and the Trustee
with respect to such moneys shall thereupon cease.

 

Neither
the Company nor the Authority shall have any right, title or interest in or to
any moneys held by the Trustee pursuant to this Section.  The Trustee shall not be liable to the
Authority or any Owner for interest on funds held by it for the payment and
discharge of the principal, interest, or premium on any of the Bonds to any
Owner.

 

60

 

Section 5.05.       Payment
to the Company.  After the
right, title and interest of the Trustee in and to the Trust Estate and all
covenants, agreements and other obligations of the Authority to the Owners shall
have ceased, terminated and become void and shall have been satisfied and
discharged in accordance with Section 5.04 and Article VII hereof,
and all fees, expenses and other amounts payable to the Registrar, the Trustee
and the Authority pursuant to any provision of this Indenture shall have been
paid, any moneys remaining in the Bond Fund and the Rebate Fund shall be paid
to the Company upon request of an Authorized Company Representative, other than
any unclaimed moneys held pursuant to Section 5.04.  The Trustee may conclusively rely on
certificates of the Registrar as to the amount of any fees, expenses and other
amounts owing to it.

 

ARTICLE VI

 

INVESTMENTS

 

Section 6.01.       Investment
of Moneys in Funds.  Subject to
Section 4.06 hereof and the provisions of the Tax Agreement, moneys in the
Bond Fund, the Project Fund and the Rebate Fund may be invested and reinvested
in Cash Equivalents.  Such investments
shall be made by the Trustee, as specifically directed and designated by the
Company in a certificate of an Authorized Company Representative.  Each such certificate shall contain a
statement that each investment so designated by the Company constitutes a Cash
Equivalent and can be made without violation of any provision hereof or of the
Loan Agreement, the Tax Agreement or applicable law.  The Trustee shall be entitled to rely on each
such certificate or advice and shall incur no liability for making any such
investment so designated or for any loss, fee, tax or other charge incurred in
selling such investment or for any action taken pursuant to this Section that
causes the Bonds to be treated as “arbitrage bonds” within the meaning of Section 148
of the Code.  No investment instructions
shall be given by the Company if the investments to be made pursuant thereto
would violate any covenant set forth in Section 4.06 hereof or the
provisions of the Loan Agreement or the Tax Agreement.  The Trustee is hereby authorized, in making
or disposing of any investment permitted by this Section 6.01, to deal
with itself (in its individual capacity) or with any one or more of its
affiliates, whether it or such affiliate is acting as an agent of the Trustee
or for any third person or dealing as principal for its own account.  The Trustee shall not be responsible for any
loss on any investment made in accordance herewith.  Absent the provision of investment
instructions hereunder, the Trustee shall invest such funds in the Prime Cash
Obligations Fund Institutional Shares under the Federate Fund (#851) or a money
market mutual fund registered under the Investment Company Act of 1940
(including those of an affiliate of the Trustee or for which the Trustee or any
of its affiliates provides management advisory or other services) which invests
in (i) short-term securities issued or guaranteed by the United States
Government, its agencies or instrumentalities and/or (ii) repurchase
agreements relating to such securities.

 

Section 6.02.       Conversion
of Investment to Cash.  As and when any
amounts so invested may be needed for disbursements from the Bond Fund, the
Project Fund or the Rebate Fund, the Trustee shall cause a sufficient amount of
such investments to be sold or otherwise converted into cash to the credit of
such fund.  As long as no Event of
Default shall have occurred and be

 

61

 

continuing, the Company shall have the right to designate the
investments to be sold and to otherwise direct the Trustee in the sale or
conversion to cash of such investments; provided that
the Trustee shall be entitled to conclusively assume the absence of any Event
of Default unless it has notice thereof within the meaning of Section 9.05
hereof.

 

Section 6.03.       Credit
for Gains and Charge for Losses.  Gains from
investments shall be credited to and held in, and losses shall be charged to,
the fund or account from which the investment is made.

 

Section 6.04.       Payments
into Rebate Fund; Application of Rebate Fund.  (a) The Rebate Fund and the amounts
deposited therein shall not be subject to a security interest, pledge,
assignment, lien or charge in favor of the Trustee or any Bondholder or any
other Person.

 

(b)             The Trustee
shall deposit funds into and disburse funds from the Rebate Fund as directed in
writing by the Company in accordance with the terms hereof and the Tax
Agreement.  The Trustee shall deposit
into the Rebate Fund any payments received from the Company for purposes of
ultimate rebate to the United States in respect of the Bonds.  The amount required to be held in the Rebate
Fund in respect of the Bonds at any point in time is determined pursuant to the
requirements of the Code, including particularly Section 148(f) of
the Code.  Moneys in the Rebate Fund
neither will be pledged to nor are expected to be used to pay debt service on
the Bonds.  Amounts in the Rebate Fund
may be invested without regard to yield.

 

(c)             The Company has
agreed in the Tax Agreement to calculate the Rebate Amount at least each
Computation Period, and annually at its discretion or as may be required for
the preparation of its annual financial statements.  In the event that the amounts available in
the Rebate Fund are insufficient to pay the required rebate payment, the
Company shall pay all amounts required to the Trustee for payment to the United
States of America.

 

ARTICLE VII

 

DEFEASANCE

 

Section 7.01.       Defeasance.  If the Authority shall pay or cause to be
paid to the Owner of any Bond secured hereby the principal of, and premium, if
any, and interest due and payable, and thereafter to become due and payable,
upon such Bond or any portion of such Bond in an Authorized Denomination
thereof, such Bond or portion thereof shall cease to be entitled to any lien,
benefit or security under this Indenture.

 

If
the Authority shall pay or cause to be paid the principal of, and premium if
any, and interest due and payable on, all Outstanding Bonds, and thereafter to
become due and payable thereon, and shall pay or cause to be paid all other
sums payable hereunder by the Authority, including any necessary and proper
fees, compensation and expenses of the Trustee and the Registrar, then, and in
that case, the right, title and interest of the Trustee in and to the Trust
Estate shall thereupon cease, terminate and become void.  In such event, the Trustee shall assign,
transfer and turn over the Trust Estate to the Company and any surplus in the
Bond Fund and any 

 

62

 

balance
remaining in any other fund created under this Indenture shall be paid to the
Company upon the request of an Authorized Company Representative, other than
any unclaimed moneys held pursuant to Section 5.04.  The Trustee may conclusively rely on
certificates of the Registrar as to the amount of any fees, expenses and other
amounts owing to it.

 

All
or any portion of Bonds (in Authorized Denominations) shall, prior to the
maturity or redemption date thereof, be deemed to have been paid within the
meaning of this Article VII and for all purposes of this Indenture when:

 

(a)          in the event said Bonds or
portions thereof have been selected for redemption in accordance with
Section 3.04 hereof, the Trustee shall have given, or the Company shall
have given to the Trustee in form satisfactory to the Trustee irrevocable
instructions to give, on a date in accordance with the provisions of
Section 3.05 hereof, notice of redemption of such Bonds or portions
thereof;

 

(b)         there shall have been
deposited with the Trustee moneys in an amount sufficient (without relying on
any investment income), in the opinion of a firm of nationally recognized
certified public accountants, to pay when due the principal of, and premium, if
any, and interest due and to become due (which amount of interest to become due
shall be calculated at the actual rate borne by such Bonds) on said Bonds or
portions thereof on and prior to the redemption date or maturity date thereof,
as the case may be;

 

(c)          in the event said Bonds or
portions thereof do not mature and are not to be redeemed within the next
succeeding 60 days, the Company on behalf of the Authority shall have given the
Trustee in form satisfactory to it irrevocable instructions to give, as soon as
practicable in the same manner as a notice of redemption is given pursuant to
Section 3.05 hereof, and a notice to the Owners of said Bonds or portions
thereof that the deposit required by clause (b) above has been made with,
and the opinion required by clause (b) above has been delivered to, the
Trustee and that said Bonds or portions thereof are deemed to have been paid in
accordance with this Article VII and stating the maturity date or
redemption date upon which moneys are to be available for the payment of the
principal of, and premium, if any, and interest on, said Bonds or portions
thereof; and

 

(d)         the Trustee shall have
received a Favorable Opinion of Bond Counsel with respect to such deposit.

 

Moneys
deposited with the Trustee pursuant to this Article VII shall not be
withdrawn or used for any purpose other than, and shall be held in trust for,
the payment of the principal of, premium, if any, and interest on said Bonds or
portions thereof; provided that such moneys, if
not then needed for such purpose, shall to the extent practicable, be invested
and reinvested in Government Obligations maturing on or prior to the Interest
Payment Date next succeeding the date of investment or reinvestment, and
interest earned from such investments shall be paid over to the Company, as
received by the Trustee, free and clear of any trust, lien or pledge.  If payment of less than all the Bonds is to
be provided for in the manner and with the effect provided in this Article VII,
the Trustee shall select such Bonds or portion of such Bonds in the 

 

63

 

manner
specified by Section 3.04 hereof for selection for redemption of less than
all Bonds in the principal amount permitted by Section 3.01(b) hereof.

 

Notwithstanding
that all or any portion of the Bonds are deemed to be paid within the meaning
of this Article VII, the provisions of this Indenture relating to (i) the
registration and exchange of Bonds, (ii) replacement of mutilated, lost,
destroyed or stolen Bonds, (iii) payment of the Bonds from the moneys
deposited as described in this Article and (iv) payment,
compensation, reimbursement and indemnification of the Trustee and the
Registrar shall remain in full force and effect with respect to all Bonds until
the maturity date thereof or the last date fixed for redemption of all Bonds
prior to maturity and, in the case of clause (iv), until payment, compensation,
reimbursement or indemnification, as the case may be, of the Trustee and the
Registrar.

 

ARTICLE VIII

 

DEFAULTS AND REMEDIES

 

Section 8.01.       Events
of Default.  Each of the
following events shall constitute and is referred to in this Indenture as an “Event of Default”:

 

(a)          a failure to pay the
principal of or premium, if any, on any of the Bonds when the same shall become
due and payable at maturity, upon redemption or otherwise;

 

(b)         a failure to pay an
installment of interest on any of the Bonds for a period of 30 days after the
date upon which such interest has become due and payable;

 

(c)          a failure by the Authority
to observe and perform any covenant, condition, agreement or provision (other
than as specified in this Section 8.01(a) and Section 8.01(b))
contained in the Bonds or in this Indenture on the part of the Authority to be
observed or performed, which failure shall continue for a period of 90 days
after written notice, specifying such failure and requesting that it be
remedied, shall have been given to the Authority and the Company by the Trustee
by registered or certified mail which shall give such notice at the written
request of the Owners of not less than a majority in principal amount of the
Bonds then Outstanding, unless the Trustee, or the Trustee and the Owners of a
principal amount of Bonds not less than the principal amount of Bonds the
Owners of which requested such notice, as the case may be, shall agree in
writing to an extension of such period prior to its expiration; provided,  however, that
the Trustee, or the Trustee and the Owners of such principal amount of Bonds,
as the case may be, shall be deemed to have agreed to an extension of such
period if corrective action is initiated by the Authority or the Company on
behalf of the Authority within such period and is being diligently pursued;

 

(d)         an “Event of Default”  under the Loan Agreement has occurred and is continuing; or

 

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(e)          an event of default under a
Subsidiary Bond Guarantee has occurred and is continuing.

 

Section 8.02.       Acceleration;
Other Remedies.  (a) If an
Event of Default described in Section 8.01(a) or
Section 8.01(b), an Event of Default described in Section 8.01(d) hereof
resulting from an “Event of Default”  under
Section 8.01(a) or Section 8.01(b) of the Loan Agreement;
or an event of default under a Subsidiary Bond Guarantee resulting from a
failure to pay principal of or interest on the Bonds, has occurred and has not
been cured or waived, then the Trustee may, or upon the written request of the
Owners of not less than a majority in principal amount of the Bonds then
Outstanding, the Trustee shall, by written notice by registered or certified
mail to the Authority and the Company, declare the Bonds to be immediately due
and payable, whereupon the Bonds shall without further action, become and be
immediately due and payable, anything in this Indenture or in the Bonds to the
contrary notwithstanding, and the Trustee shall give notice thereof by Mail to
all Owners of Outstanding Bonds.  Upon
any declaration of acceleration, the Trustee shall immediately exercise such
rights as it may have under the Loan Agreement or the Subsidiary Bond
Guarantees.  If an Event of Default
described in Section 8.01(d) hereof resulting from an “Event of Default”
under Section 8.01(g) or 8.01(h) of the Loan Agreement involving
the Company occurs, all unpaid principal of, premium, if any, and accrued and
unpaid interest on the Bonds then outstanding will ipso facto
become due and payable.

 

(b)             The provisions
of Section 8.02(a) hereof are subject further to the condition that
if, after the principal of the Bonds shall have been so declared to be due and
payable and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the Authority
shall cause the Company to deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all Bonds, any unpaid purchase price and
the principal of any and all Bonds which shall have become due otherwise than
by reason of such declaration (with interest upon such principal and, to the
extent permissible by law, on overdue installments of interest, at the rate per
annum then borne by the Bonds) and such amount as shall be sufficient to cover
reasonable compensation and reimbursement of expenses payable to the Trustee
and all Events of Default (other than nonpayment of the principal of Bonds
which shall have become due by said declaration) shall have been remedied,
then, in every such case, such Event of Default shall be deemed waived and such
declaration and its consequences rescinded and annulled; provided,
however, that  no such
waiver, rescission and annulment shall extend to or affect any other Event of
Default or subsequent Event of Default or impair any right, power or remedy
consequent thereon.  The Trustee shall
send notice of any rescission to the Company.

 

(c)             Upon the
occurrence and continuance of any Event of Default, then and in every such case
the Trustee in its discretion, may, and upon the written request of the Owners
of not less than a majority in principal amount of the Bonds then Outstanding
and receipt of indemnity to its satisfaction (except against its own negligence
or willful misconduct) shall in its own name and as the Trustee of an express
trust:

 

(i)         by mandamus, or other suit,
action or proceeding at law or in equity, enforce all rights of the Owners
under, and require the Authority or the Company to carry

 

65

 

out any agreements with or for the benefit of the Owners of Bonds and
to perform its or their duties under, the Act, the Loan Agreement and this
Indenture, provided that any such remedy may be
taken only to the extent permitted under the applicable provisions of the Loan
Agreement or this Indenture, as the case may be;

 

(ii)          bring suit upon the Bonds;

 

(iii)          by action or suit in equity require the Authority to
account as if it were the trustee of an express trust for the Owners of Bonds;
or

 

(iv)          by action or suit in equity
enjoin any acts or things which may be unlawful or in violation of the rights
of the Owners of Bonds.

 

In
exercising such rights and the rights given the Trustee under this
Article VIII, the Trustee will take such action as, in the judgment of the
Trustee applying the standards described in Section 9.17 hereof, would
best serve the interests of the Bondholders.

 

(d)             The Trustee
shall waive any Event of Default hereunder and its consequences and rescind any
declaration of acceleration of principal upon the written request of the Owners
of (i) a majority in principal amount of all Outstanding Bonds in respect
of which default in the payment of principal or purchase price of or interest
on the Bonds exists or (ii) a majority in principal amount of all
Outstanding Bonds in the case of any other Event of Default; provided, however, that (x) there shall not be waived
any Event of Default specified in Section 8.01(a) or
Section 8.01(b) hereof unless prior to such waiver or rescission the
Authority shall have caused to be deposited with the Trustee a sum sufficient
to pay all matured installments of interest upon all Bonds and the principal
and purchase price of any and all Bonds which shall have become due otherwise
than by reason of such declaration of acceleration (with interest upon such
principal and, to the extent permissible by law, on overdue installments of
interest, at the rate per annum then borne by the Bonds) and (y) no Event
of Default shall be waived unless (in addition to the applicable conditions as
aforesaid) there shall have been deposited with the Trustee such amount as
shall be sufficient to cover reasonable compensation and reimbursement of
expenses payable to the Trustee.  In case
of any waiver or rescission described above, or in case any proceeding taken by
the Trustee on account of any such Event of Default shall have been
discontinued or concluded or determined adversely, then and in every such case
the Authority, the Trustee and the Owners of Bonds shall be restored to their
former positions and rights hereunder, respectively; provided,
further, that  no such waiver
or rescission shall extend to any subsequent or other Event of Default, or
impair any right consequent thereon.

 

Section 8.03.       Restoration
to Former Position.  In the event
that any proceeding taken by the Trustee to enforce any right under this
Indenture shall have been discontinued or abandoned for any reason, or shall
have been determined adversely to the Trustee, then the Authority, the Trustee
and the Owners of Bonds shall be restored to their former positions and rights
hereunder, respectively, and all rights, remedies and powers of the Trustee
shall continue as though no such proceeding had been taken.

 

66

 

Section 8.04.       Owners’
Right to Direct Proceedings.  Anything in
this Indenture, the Loan Agreement or the Subsidiary Bond Guarantees to the
contrary notwithstanding, upon the occurrence and continuance of an Event of
Default, the Owners of a majority in principal amount of the Bonds then
Outstanding, shall have the right, by an instrument in writing executed and
delivered to the Trustee and upon furnishing to the Trustee indemnity
satisfactory to it (except against its own negligence or willful misconduct),
to direct the time, method and place of conducting all remedial proceedings
available to the Trustee under this Indenture, the Loan Agreement or the
Subsidiary Bond Guarantees or exercising any trust or power conferred on the
Trustee by this Indenture, the Loan Agreement or the Subsidiary Bond
Guarantees, provided that such direction shall not
be other than in accordance with the provisions of law, the Loan Agreement,
this Indenture and the Subsidiary Bond Guarantees and shall not result in any
personal liability of the Trustee.

 

Section 8.05.       Limitation
on Owners’ Right to Institute Proceedings. 
No Owner shall have any right to institute any suit, action or
proceeding in equity or at law for the execution of any trust or power
hereunder, or any other remedy hereunder or in the Bonds, unless such Owner
previously shall have given to the Trustee written notice of an Event of
Default as herein above provided and unless the Owners of not less than a
majority in principal amount of the Bonds then Outstanding shall have made
written request of the Trustee so to do after the right to institute said suit,
action or proceeding under Section 8.02 hereof shall have accrued, and
shall have afforded the Trustee a reasonable opportunity to proceed to
institute the same in either its or their name, and unless there also shall
have been offered to the Trustee security and indemnity satisfactory to it
against the costs, expenses and liabilities to be incurred therein or thereby
(except against its own negligence or willful misconduct), and the Trustee
shall not have complied with such request within a reasonable time; and such
notification, request and offer of indemnity are hereby declared in every such
case, at the option of the Trustee, to be conditions precedent to the
institution of said suit, action or proceeding, it being understood and
intended that no one or more of the Owners shall have any right in any manner
whatever by his or their action to affect, disturb or prejudice the security of
this Indenture or the rights of any other Owner, or to enforce any right
hereunder or under the Bonds, except in the manner herein provided, and that
all suits, actions and proceedings at law or in equity shall be instituted, had
and maintained in the manner herein provided and for the equal benefit of all
Owners (it being understood that the Trustee shall not have an affirmative duty
to ascertain whether or not such actions or forbearances are unduly prejudicial
to any Owners).

 

Section 8.06.       No
Impairment of Right to Enforce Payment.  Notwithstanding
any other provision in this Indenture, the right of any Owner to receive
payment of the principal or purchase price of, and premium, if any, and
interest on, its Bond, on or after the respective due dates expressed therein,
or to institute suit for the enforcement of any such payment on or after the
respective due dates expressed therein, or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Owner.

 

Section 8.07.       Proceedings
by Trustee Without Possession of Bonds.  All rights of
action under this Indenture or under any of the Bonds secured hereby which are
enforceable by the Trustee may be enforced by it without the possession of any
of the Bonds, or the production

 

67

 

thereof at the trial or other proceedings relative thereto, and any
such suit, action or proceeding instituted by the Trustee shall be brought in
its name for the equal and ratable benefit of the Owners, subject to the
provisions of this Indenture.

 

Section 8.08.       No
Remedy Exclusive.  Except as
provided in Section 2.07, no remedy herein conferred upon or reserved to
the Trustee or to the Owners is intended to be exclusive of any other remedy or
remedies, and each and every such remedy shall be cumulative, and shall be in
addition to every other remedy given hereunder or under the Loan Agreement, or
now or hereafter existing at law or in equity or by statute; provided, however, that any conditions set forth herein to
the taking of any remedy to enforce the provisions of this Indenture, the Bonds
or the Loan Agreement shall also be conditions to seeking any remedies at law
or in equity or by statute pursuant to this Section 8.08.

 

Section 8.09.       No
Waiver of Remedies.  No delay or
omission of the Trustee or of any Owner to exercise any right or power accruing
upon any Event of Default shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default, or an acquiescence
therein; and every power and remedy given by this Article VIII to the
Trustee and to the Owners, respectively, may be exercised from time to time and
as often as may be deemed expedient.

 

Section 8.10.       Application
of Moneys.  Any moneys
received by the Trustee, by any receiver or by any Owner pursuant to any right
given or action taken under the provisions of this Article VIII, after
payment of the fees, costs and expenses, liabilities and advances incurred or
made by the Trustee or its agents or Counsel (provided that  moneys held for Bonds not presented for payment or deemed
paid pursuant to Section 5.04 or Article VII hereof shall not be used
for purposes other than payment of such Bonds), shall be deposited in the Bond
Fund and all moneys so deposited in the Bond Fund during the continuance of an
Event of Default (other than moneys for the payment of Bonds which had matured
or otherwise become payable prior to such Event of Default or for the payment
of interest due prior to such Event of Default) shall be applied as follows:

 

(a)          Unless the principal of all
the Bonds shall have been declared due and payable, all such moneys shall be
applied (i) first, to the payment to the persons entitled thereto of all
installments of interest then due on each Bond, with interest on overdue
installments of interest, if lawful at the rate per annum then borne by such
Bond, in the order of maturity of the installments of such interest and, if the
amount available shall not be sufficient to pay in full any particular
installment of interest, then to the payment ratably, according to the amounts
due on such installment, and (ii) second, to the payment to the persons
entitled thereto of the unpaid principal of any of the Bonds which shall have
become due (other than Bonds called for redemption for the payment of which
money is held pursuant to the provisions of this Indenture) with interest on
each Bond at its rate from the respective dates upon which it became due and,
if the amount available shall not be sufficient to pay in full Bonds due on any
particular date, together with such interest, then to the payment ratably,
according to the amount of principal and interest due on such date, in each
case to the persons entitled thereto, without any discrimination or privilege.

 

68

 

(b)           If the principal of all the Bonds shall have been
declared due and payable, all such moneys shall be applied to the payment of
the principal and interest then due and unpaid upon the Bonds, with interest on
overdue interest and principal as aforesaid, without preference or priority of
principal over interest or interest over principal or of any installment of
interest over any other installment of interest, or of any Bond over any other
Bond, ratably, according to the amounts due respectively for principal and
interest, to the persons entitled thereto without any discrimination or
privilege.

 

(c)           If the principal of all the Bonds shall have been
declared due and payable, and if such declaration shall thereafter have been
rescinded and annulled under the provisions of this Article VIII then,
subject to the provisions of subparagraph (b) of this Section 8.10
which shall be applicable in the event that the principal of all the Bonds
shall later become due and payable, the moneys shall be applied in accordance
with the provisions of subparagraph (a) of this Section 8.10.

 

Whenever
the Trustee shall apply such funds, it shall fix the Bond Payment Date upon
which such application is to commence and upon such Bond Payment Date interest
on the amounts of principal and interest to be paid on such Bond Payment Date
shall cease to accrue.  The Trustee shall
give notice of the deposit with it of any such moneys and of the fixing of any
such Bond Payment Date by Mail to all Owners of Outstanding Bonds and shall not
be required to make payment to any Owner until such Bond shall be presented to
the Registrar for appropriate endorsement or cancellation if fully paid.

 

Section 8.11.       Severability
of Remedies.  It is the
purpose and intention of this Article VIII to provide rights and remedies
to the Trustee and the Owners which may be lawfully granted under the
provisions of the Act, but should any right or remedy herein granted be held to
be unlawful the Trustee and the Owners shall be entitled, as above set forth,
to every other right and remedy provided in this Indenture and by law.

 

ARTICLE IX

 

TRUSTEE; REGISTRAR

 

Section 9.01.       Acceptance
of Trusts; Representations, Warranties and Covenants of the Trustee.  The Authority has appointed
Citibank N.A., as Trustee (and paying agent for the Bonds).  The Trustee hereby accepts and agrees to
execute the trusts hereby created, but only upon the additional terms set forth
in this Article IX, to all of which the Authority agrees and the respective
Owners agree by their acceptance of delivery of any of the Bonds.  The Trustee, prior to the occurrence of an
Event of Default and after the curing of all Events of Default, undertakes to
perform such duties and only such duties as are specifically set forth herein,
and no implied covenant shall be read into this Indenture against the Trustee.

 

All
federal, State and local governmental, public, and regulatory authority
approvals, consents, notices, authorizations, registrations, licenses,
exemptions, and filings that are required to have been obtained or made by the
Trustee with respect to the authorization, execution, 

 

69

 

delivery,
and performance by, or the enforcement against or by, the Trustee of this
Indenture have been obtained and are in full force and effect and all
conditions of such approvals, consents, notices, authorizations, registrations,
licenses, exemptions and filings have been fully complied with.

 

The
Trustee is not (i) required to qualify or obtain any certificate of authority
to do business in the State of Illinois or (ii) subject to any filing
requirement to make any or to pay any fees or taxes required of foreign
entities doing business in the State of Illinois, in either case solely as a
result of executing, delivering or performing this Indenture.

 

The
Trustee has a combined capital and surplus of at least $50,000,000 or,
alternatively, a liability policy having the type of coverage and in an amount
acceptable to the Authority and the Company. 
The Trustee has an operations group of at least four experienced trust
officers, with primary responsibility for municipal bond issues.  The Trustee administers at least 25 municipal
bond indentures aggregating at least $25,000,000 under its administration.

 

Section 9.02.       No Responsibilities
for Recitals.  The recitals,
statements and representations contained in this Indenture or in the Bonds
shall not be taken and construed as made by or on the part of the Trustee, and
the Trustee does not assume, and shall not have, any responsibility or
obligation for the correctness of any thereof or for the validity, sufficiency
or priority of this Indenture or the Loan Agreement, or the perfection or the
maintenance of the perfection of any security interest granted hereby.

 

Section 9.03.       Limitations
on Liability.  The Trustee
may execute any of the trusts or powers hereof and perform the duties required
of it hereunder by or through attorneys, other professionals, agents, receivers
or employees, and shall be entitled to and may conclusively rely upon advice of
counsel concerning all matters of trust and its duties hereunder and shall not
be answerable for the conduct of any such attorney, agent, receiver or employee
if appointed by the Trustee with reasonable care, and the advice of any such counsel
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted hereunder in good faith and reliance thereon,
and may in all cases pay such reasonable compensation to such attorneys,
agents, receivers or employees as may be reasonably employed in connection with
the trusts hereof.  The Trustee shall not
be answerable for the exercise of any discretion or power under this Indenture
or for anything whatsoever in connection with the trusts created hereby, except
only for its own negligence or willful misconduct.

 

The
Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Owners of a
majority in aggregate principal amount of the Bonds Outstanding relating to the
time, method and place of conducting any proceeding or any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee under
this Indenture.

 

No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers.  The Trustee shall not be required to give any
bond or surety in respect to the execution of its trusts and powers hereunder.

 

70

 

The
permissive rights of the Trustee to do things enumerated in this Indenture
shall not be construed as a duty unless so specified herein.

 

The
Trustee shall not be liable for any error of judgment made in good faith by an
officer, director or employee unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts.

 

The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request, order or direction of any of the
Owners pursuant to the provisions of this Indenture unless there shall have
been provided to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby.

 

The
Trustee may conclusively rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties.

 

Any
request or direction of the Company mentioned herein shall be sufficiently
evidenced by a Company Request or Company Order and any resolution of the Board
of Directors may be sufficiently evidenced by a board resolution.

 

Whenever
in the administration of this Indenture the Trustee shall deem it desirable
that a matter be proved or established prior to taking, suffering or omitting
any action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of willful misconduct on its part, conclusively
rely upon an Officers’ Certificate.

 

The
Trustee may consult with counsel of its selection and the advice of such
counsel or any Opinion of Counsel or Favorable Opinion of Bond Counsel shall be
full and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.

 

The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney at the
sole cost of the Company and shall incur no liability or additional liability
of any kind by reason of such inquiry or investigation.

 

The
Trustee shall not be liable for any action taken, suffered, or omitted to be
taken by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture.

 

71

 

In
no event shall the Trustee be responsible or liable for special, indirect,
punitive or consequential loss or damage of any kind whatsoever (including, but
not limited to, loss of profit) irrespective of whether the Trustee has been
advised of the likelihood of such loss or damage and regardless of the form of
action.

 

The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder,
and each agent, custodian and other Person employed to act hereunder.

 

The
Trustee may request that the Company deliver a certificate setting forth the
names of individuals and/or titles of officers authorized at such time to take
specified actions pursuant to this Indenture.

 

In
situations where a Favorable Opinion of Bond Counsel or an opinion of Bond
Counsel is required or requested to be delivered under this Indenture, the Loan
Agreement or the Tax Agreement after the date of delivery of the Bonds, the
Trustee shall accept (unless otherwise directed by the Company) an opinion in
such form and with such disclosures as may be required so that such opinion
will not be treated as a “covered opinion” for purposes of the United States
Treasury Department regulations governing practice before the Internal Revenue
Service (Circular 230), 31 CFR Part 10.

 

Whether
or not expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of the Trustee shall be subject to the
provisions of this Article IX and shall extend to the Registrar and
employees and agents of the Trustee and the Registrar.  The Trustee shall have no liability or
responsibility for the action or inaction of the Registrar (that is not the
Trustee), the Authority or the Company. 
The provisions of this Section 9.03 shall survive the termination
of this Indenture and the replacement or resignation of the Trustee hereunder.

 

Section 9.04.       Compensation,
Expenses and Advances.  The Trustee,
the Authority and the Registrar shall be entitled to such compensation as shall
be agreed in writing with the Company for their services rendered hereunder
(not limited by any provision of law in regard to the compensation of the
trustee of an express trust) and to reimbursement for their out-of-pocket
expenses (including reasonable counsel fees and expenses) reasonably incurred
in connection with entering into this Indenture, including such fees and
expenses incurred in connection with action taken hereunder.  In no event shall the Trustee be liable for
any claims resulting from any decision on its part not to advance funds as
permitted in the immediately preceding sentence.  In the Loan Agreement, the Company has agreed
that it will pay to the Trustee and the Registrar compensation and
reimbursement of expenses and advances and certain indemnities, but the Company
may, without creating an Event of Default, contest in good faith the
reasonableness of any such expenses and advances.  If the Company shall have failed to make any
payment to the Trustee or the Registrar under the Loan Agreement, then each of
the Trustee and the Registrar shall have, in addition to any other rights
hereunder, a claim, prior to the claim of the Owners, for the payment of their
compensation and indemnities and the reimbursement of their expenses and any
advances made by them, as provided in this Section 9.04, upon the moneys
and

 

72

 

obligations in the Bond Fund, except for moneys or obligations
deposited with or paid to the Trustee for the redemption or payment of Bonds
which are deemed to have been paid in accordance with Article VII hereof,
or funds held pursuant to Section 5.04 hereof.

 

Notwithstanding
any other provision of this Indenture, in each instance in which this Indenture
shall provide for compensation, reimbursement or indemnification of the
Trustee, such provision shall be deemed to provide for, whether or not
expressly so stated, the payment of all related fees, costs, charges, advances
and reasonable expenses of the Trustee (including, without limitation,
reasonable attorneys’ fees and expenses), unless the context clearly indicates
otherwise.

 

Without
prejudice to any other rights available to the Trustee under applicable law,
when the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 8.01(g) or Section 8.01(h) of
the Loan Agreement, the expenses (including the reasonable charges and expenses
of its counsel) and the compensation for the services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.

 

The
provisions of this Section 9.04 shall survive the termination of this
Indenture.

 

Section 9.05.       Notice
of Events of Default and Determination of Taxability.  Notwithstanding anything otherwise provided
herein, the Trustee shall not be required to take notice, or be deemed to have
notice of any default or Event of Default, other than an Event of Default under
Section 8.01(a) or Section 8.01(b) hereof, unless the
Trustee shall have actual knowledge thereof or shall have been specifically
notified in writing at its notice address set forth in Section 12.08
hereof, of such Event of Default by the Owners of at least 25% in principal
amount of the Bonds then Outstanding, the Authority or the Company.  The Trustee may, however, at any time, in its
discretion, require of the Authority full information and cooperation as to the
performance of any of the covenants, conditions and agreements contained
herein.  Such inquiry shall not for the
purposes of this Section 9.05 constitute notice of any Event of
Default.  The Authority shall not be
required to take notice, or be deemed to have notice, of any Event of Default,
other than an Event of Default of which it shall have actual knowledge.  If an Event of Default occurs after the
Trustee has notice of the same as provided in this Section 9.05, or if a
Determination of Taxability occurs of which the Trustee has received notice as
provided in Section 9.02 of the Loan Agreement, then the Trustee shall
give notice thereof by Mail to the Company and the Owners of Outstanding Bonds.

 

Section 9.06.       Action
by Trustee.  Except as
provided in Section 8.02 and Section 8.04 hereof and except for the
payment of principal of, and premium, if any, and interest on, the Bonds when
due from moneys held by the Trustee as part of the Trust Estate, the Trustee
shall be under no obligation to take any action in respect of any Event of
Default or toward the execution or enforcement of any of the trusts hereby
created, or to institute, appear in or defend any suit or other proceeding in
connection therewith, unless requested in writing so to do by the Owners of at
least a majority in principal amount of the Bonds then Outstanding and, if in
its opinion such action may tend to involve it in expense or liability, unless
furnished, from time to time as often as it may require, with security and
indemnity satisfactory to it (except against its own

 

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negligence or willful misconduct); but the foregoing provisions are
intended only for the protection of the Trustee, and shall not affect any
discretion or power given by any provisions of this Indenture to the Trustee to
take action in respect of any Event of Default without such notice or request
from the Owners, or without such security or indemnity.

 

Section 9.07.       Good-Faith
Reliance.  The Trustee and
the Registrar shall be protected and shall incur no liability in acting or
proceeding in good faith upon any resolution, notice, telegram, e-mail, telex or
facsimile transmission, request, consent, waiver, certificate, statement,
affidavit, voucher, bond, requisition or other paper or document which it shall
in good faith believe to be genuine and to have been passed or signed by the
proper board, body or person or to have been prepared and furnished pursuant to
any of the provisions of this Indenture or the Loan Agreement, or upon the
written opinion of any attorney, engineer, accountant or other expert believed,
without independent investigation, by the Trustee or the Registrar, as the case
may be, to be qualified in relation to the subject matter.  The Trustee and the Registrar shall be under
no duty to make any investigation or inquiry as to any statements contained or
matters referred to in any such instrument, but may accept and rely upon the
same as conclusive evidence of the truth and accuracy of such statements; provided, however, that the Trustee may, in its discretion,
make, but shall in no case be required to make, such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation it shall be
entitled to examine the books, records and premises of the Company personally
or by agent or attorney.  Neither the
Trustee nor the Registrar shall be bound to recognize any person as an Owner or
to take any action at such person’s request unless satisfactory evidence of the
ownership of such Bond shall be furnished to such entity.

 

Whenever
in the administration of this Indenture the Trustee shall deem it desirable
that a matter be proved or established prior to taking, suffering or omitting
any action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of negligence or bad faith on its part, request
and conclusively rely upon a certificate of an Authorized Company
Representative or an Authorizing Representative, and, prior to the occurrence
of a default of which the Trustee has been notified as provided in Section 9.05
or of which by said section it is deemed to have notice, the Trustee shall also
be at liberty to accept a similar certificate to the effect that any particular
dealing, transaction or action is necessary or advisable, but shall in no case
be bound to secure the same.

 

The
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee
shall not be responsible for any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder.

 

Notwithstanding
anything elsewhere in this Indenture contained, the Trustee or the Registrar,
as the case may be, shall have the right, but shall not be required, to demand,
in respect of the authentication of any Bonds or the taking of any other action
whatsoever within the purview of this Indenture or the Loan Agreement, any
showings, certificates, opinions or other information, or corporate action or
evidence thereof, in addition to those by the terms hereof or thereof required
as a condition of such action which are reasonably deemed desirable 

 

74

 

by
the Trustee or the Registrar, as the case may be, for the purpose of
establishing the right of the Authority or the Company to request the taking of
such action by the Trustee or the Registrar.

 

Section 9.08.       Dealings
in Bonds; Allowance of Interest.  The Trustee and
the Registrar, in its individual capacity, may in good faith buy, sell, own,
hold and deal in any of the Bonds issued hereunder and may join in any action
which any Owner may be entitled to take with like effect as if it did not act
in any capacity hereunder.  The Trustee
or the Registrar, in its individual capacity, either as principal or agent, may
also engage in or be interested in any financial or other transaction with the
Authority or the Company, and may act as depositary, trustee or agent for any
committee or body of Owners secured hereby or other obligations of the
Authority or the Company as freely as if it did not act in any capacity
hereunder.

 

All
moneys received by the Trustee shall, until used or applied as herein provided,
be held in trust for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law.  The Trustee shall be under no liability for
interest on any moneys received hereunder except for accounting for income from
Cash Equivalents.

 

Section 9.09.       Several
Capacities.  Anything in
this Indenture to the contrary notwithstanding, with the consent of the
Company, the same entity may serve hereunder as the Trustee and the Registrar
and in any other combination of such capacities, to the extent permitted by
law.

 

Section 9.10.       Resignation
of Trustee.  The Trustee may
resign and be discharged of the trusts created by this Indenture by executing
any instrument in writing resigning such trust and specifying the date when
such resignation shall take effect, and filing the same with the Authority, the
Company and the Registrar not less than 30 days before the date specified
in such instrument when such resignation shall take effect, and by giving
notice of such resignation by Mail not less than three weeks prior to such
resignation date, to all Owners of Bonds. 
Such resignation shall take effect on the day specified in such
instrument and notice, unless previously a successor Trustee shall have been
appointed as hereinafter provided, in which event such resignation shall take
effect immediately upon the appointment of such successor Trustee, but in no
event shall a resignation take effect earlier than the date on which a
successor Trustee, acceptable to the Authority and the Company, has been
appointed and has accepted its appointment.

 

Section 9.11.       Removal
of Trustee.  (a) The
Trustee may be removed at any time by filing with the Trustee so removed and
with the Authority, the Company and the Registrar, an instrument or instruments
in writing executed by (x) the Company, if no default or Event of Default
or condition which with the giving of notice or the passage of time, or both,
would constitute a default or an Event of Default, shall have occurred and be
continuing, or (y) during the occurrence and continuation of a default or
an Event of Default or condition which with the giving of notice or the passage
of time, or both, would constitute a default or an Event of Default, the Owners
of not less than a majority in principal amount of the Bonds then Outstanding.

 

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(b)           The Authority
may, and, so long as no default or Event of Default is then existing under
Section 8.01 of the Loan Agreement or Section 8.01(a) or (b) of
this Indenture, at the request of the Company will, remove the Trustee
(i) if the Trustee fails to comply with Section 9.13 hereof,
(ii) the Trustee is adjudged a bankrupt or an insolvent, (iii) if a
receiver or other public officer takes charge of the Trustee or its property or
(iv) if the Trustee otherwise becomes incapable of acting.

 

(c)             In no event shall
a removal take effect earlier than the date on which a successor Trustee has
been appointed and has accepted its appointment.

 

Section 9.12.       Appointment
of Successor Trustee.  In the
event that the Trustee or Registrar shall give notice of resignation or be
removed, or be dissolved, or shall be in the course of dissolution or
liquidation, or otherwise become incapable of acting hereunder, or in case it
shall be taken under the control of any public office or offices, or of a
receiver appointed by a court, a successor may with the prior written consent
of the Authority (to the extent that no “Event of Default” shall have occurred
and be continuing under the Loan Agreement), be appointed by the Company or by
the owners of a majority in aggregate principal amount of Bonds then
Outstanding, by an instrument or concurrent instruments in writing signed by
the Company or such owners, or by their duly authorized attorneys in fact, a
copy of which shall be delivered personally or sent by Mail to the Authority, retiring
Trustee, successor Trustee, Registrar or successor Registrar and Company.  Pending such appointment by the Company or
the Bondholders, the Authority may, with the consent of the Company (to the
extent that no “Event of Default” shall have occurred and be continuing under
the Loan Agreement), appoint a temporary successor Trustee or Registrar by an
instrument in writing signed by an authorized officer of the Authority, a copy
of which shall be delivered personally or sent by first class mail, postage prepaid,
to the retiring Trustee, successor Trustee, Registrar or successor Registrar
and Company.  The Trustee shall have no
liability for any action or inaction of any successor Trustee.

 

If
the registered owners and the Company or the Authority fail to so appoint a
successor Trustee or Registrar hereunder within 30 days after the Trustee
or Registrar has given notice of its resignation, has been removed, has been
dissolved, has otherwise become incapable of acting hereunder or has been taken
under control by a public officer or receiver, the Trustee or Registrar shall
have the right to petition, at the expense of the Company, a court of competent
jurisdiction to appoint successor hereunder. 
Every such Trustee or Registrar appointed pursuant to the provisions of
this Section 9.12 shall be a trust company or bank organized and in good
standing under the laws of Illinois or any state or the District of Columbia
and have a combined capital and surplus of not less than $50,000,000 as set
forth in its most recent published annual report of condition.

 

Section 9.13.       Qualifications
of Successor Trustee.  Every successor
Trustee (a) shall be a national or state bank or trust company that is
authorized by law to perform all the duties imposed upon it by this Indenture
and to exercise corporate trust powers in the State, (b) shall have (or,
in the case of a corporation included in a bank holding company system, the
related bank holding company shall have) a combined capital and surplus of at
least $50,000,000 as set forth in its (or its related bank holding company’s)
most recent published annual report of

 

76

 

condition,
and (c) shall be permitted under the Act and the Authority’s rules to
perform the duties of Trustee, if there can be located, with reasonable effort,
such an institution willing and able to accept the trust on reasonable and
customary terms.

 

Section 9.14.       Judicial
Appointment of Successor Trustee.  In case at any
time the Trustee shall resign and no appointment of a successor Trustee shall
be made pursuant to the foregoing provisions of this Article IX prior to
the date specified in the notice of resignation as the date when such
resignation is to take effect, the resigning Trustee may forthwith apply, at the
expense of the Company, to a court of competent jurisdiction for the
appointment of a successor Trustee.  If
no appointment of a successor Trustee shall be made pursuant to the foregoing
provisions of this Article IX within six months after a vacancy shall have
occurred in the office of Trustee, any Owner may apply to any court of
competent jurisdiction to appoint a successor Trustee.  Such court may thereupon, after such notice,
if any, as it may deem proper, appoint a successor Trustee.

 

Section 9.15.       Acceptance
of Trusts by Successor Trustee.  Any successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Authority an instrument accepting such appointment hereunder, and thereupon
such successor Trustee, without any further act, deed or conveyance, shall
become duly vested with all the estates, property rights, powers, trusts,
duties and obligations of its predecessor in the trust hereunder, with like
effect as if originally named Trustee herein, and the duties and obligations of
the predecessor Trustee hereunder shall thereupon cease and terminate.  Upon request of such Trustee, such
predecessor Trustee and the Authority shall execute and deliver an instrument
transferring to such successor Trustee all the estates, property, rights,
powers and trusts hereunder of such predecessor Trustee and, subject to the
provisions of Section 9.04 hereof, such predecessor Trustee shall pay over
to the successor Trustee all moneys and other assets at the time held by it
hereunder.

 

Section 9.16.       Successor
by Merger or Consolidation.  Any corporation
into which any Trustee hereunder may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger or
consolidation to which any Trustee hereunder shall be a party, or to which all
or substantially all of its corporate trust business shall be transferred,
shall be the successor Trustee under this Indenture, without the execution or
filing of any paper or any further act on the part of the parties hereto, anything
in this Indenture to the contrary notwithstanding, provided,
however, if such successor corporation
is not a trust company or state or national bank that has trust powers, the
Trustee shall resign from the trusts hereby created prior to such merger, transfer
or consolidation or the successor corporation shall resign from such trusts as
soon as practicable after such merger, transfer or consolidation.

 

Section 9.17.       Standard
of Care.  Notwithstanding any other
provisions of this Article IX, the Trustee shall, during the existence and
prior to the curing of an Event of Default of which the Trustee has notice as
provided in Section 9.05 hereof, exercise such of the rights and powers
vested in it by this Indenture and use the same degree of skill and care in
their exercise as a prudent person would use and exercise under the
circumstances in the conduct of its own affairs.

 

Section 9.18.       Intervention
in Litigation of the Authority.  In any judicial
proceeding to which the Authority is a party and which in the opinion of the
Trustee and its Counsel has a

 

77

 

substantial bearing on the interests of the Owners of the Bonds, the
Trustee may and shall upon receipt of indemnity satisfactory to it (except
against its own negligence or willful misconduct) at the written request of the
Owners of at least 25% in principal amount of the Bonds then Outstanding and if
permitted by the court having jurisdiction in the premises, intervene in such
judicial proceeding.

 

Section 9.19.       Registrar.  Citibank N.A. is the
Registrar for the Bonds.  Any Registrar
shall designate to the Authority, the Company and the Trustee its office where
the registration books shall be kept and signify its acceptance of the duties
imposed upon it hereunder by a written instrument of acceptance delivered to
the Authority and the Trustee under which such Registrar will agree,
particularly, to keep such books and records as shall be consistent with
prudent industry practice and to make such books and records available for
inspection by the Authority, the Trustee and the Company at all reasonable
times.

 

The
Authority shall cooperate with the Trustee and the Company to cause the
necessary arrangements to be made and to be thereafter continued whereby Bonds,
executed by the Authority and authenticated by the Registrar, shall be made
available for exchange, registration and registration of transfer at the
Principal Office of the Registrar.  The
Authority shall cooperate with the Trustee, the Registrar and the Company to
cause the necessary arrangements to be made and thereafter continued whereby
the Trustee shall be furnished such records and other information, at such
times, as shall be required to enable the Trustee to perform the duties and
obligations imposed upon them hereunder.

 

Section 9.20.       Qualifications
of Registrar; Resignation; Removal.  The Registrar
shall be a corporation duly organized under the laws of the United States of
America or any state or territory thereof, having a combined capital surplus
and retained earnings of at least $10,000,000 and authorized by law to perform
all the duties imposed upon it by this Indenture.  The Registrar may at any time resign and be
discharged of the duties and obligations created by this Indenture by giving at
least 30 days’ notice to the Authority, the Trustee and the Company.  The Registrar may be removed at any time by
an instrument signed by the Authorized Company Representative and filed with
the Authority, the Registrar and the Trustee. 
Upon the resignation or removal of the Registrar, the Company shall
appoint a new Registrar.  The Registrar
shall have no liability for any action or inaction of any successor Registrar.

 

In
the event of the resignation or removal of the Registrar, the Registrar shall
deliver any Bonds held by it in such capacity to its successor or, if there be
no successor, to the Trustee.

 

In
the event that the Company shall fail to appoint a Registrar hereunder, or in
the event that the Registrar shall resign or be removed, or be dissolved, or if
the property or affairs of the Registrar shall be taken under the control of
any state or federal court or administrative body because of bankruptcy or
insolvency, or for any other reason, and the Company shall not have appointed
its successor as Registrar, the Trustee shall ipso facto
be deemed to be the Registrar for all purposes of this Indenture until the
appointment by the Company of the Registrar or successor Registrar, as the case
may be.

 

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Section 9.21.       Additional
Duties of Trustee.  (a) The
Trustee shall keep such books and records with respect to the Bonds as shall be
consistent with prudent industry practice and to make such books and records
available for inspection by the Authority, the Trustee and the Company at all
reasonable times.

 

(b)           The Trustee shall,
as long as a book-entry system is in effect for the Bonds, comply with the DTC
Representation Letter and perform all duties required of it thereunder.

 

(c)             The Trustee shall
keep, or cause to be kept, proper books of records and accounts in which
complete and accurate entries shall be made of all funds and accounts
established by or pursuant to this Indenture, which shall be at all reasonable
times be subject to the inspection by the Authority or Owners (or a designated
representative thereof) of not less than ten percent (10%) in aggregate
principal amount of the Bonds then Outstanding.

 

(d)             No later than 30
days after a principal and/or interest payment is made, the Trustee will prepare
and file with the Office of Comptroller of the State of Illinois a C-08, Notice
of Payment of Bond Interest and/or Principal, insubstantially the form attached
hereto as Exhibit C.  A copy of the C-08 should be forwarded to the
Authority by facsimile (312.651.1350), e-mail (jkuhn@il-fa.com) or mail
(Illinois Finance Authority, Two Prudential Plaza, 180 North Stetson Avenue, Suite 2555,
Chicago, Illinois, 60601, Attention: 
Accounting Department — Bond Indebtedness).

 

(e)             Not later than 30
days after the end of each January 1, April 1, July 1 and
October 1, commencing on January 1, 2011, the Trustee will prepare
and file with the Authority (with a copy to the Company) a statement setting
forth, with respect to the preceding bond year and the current bond year, (1) amounts
withdrawn from and deposited in each fund and account relating to the Bonds
hereunder, (2) the balance on deposit in each such fund or account
relating to the Bonds at the end of each period for which such statement is
prepared, (3) a brief description of all obligations held as investments
in each such fund or account relating to the Bonds, (4) the amount applied
to the redemption of the Bonds, a description of the Bonds or portions of Bonds
so redeemed, and an accounting of the Bonds of each maturity outstanding, and (5) any
other information that the Authority may be reasonably request or that the
Trustee may from time to time deem appropriate.

 

ARTICLE X

 

EXECUTION OF INSTRUMENTS BY OWNERS

AND PROOF OF OWNERSHIP OF BONDS

 

Any
request, direction, consent or other instrument in writing required or
permitted by this Indenture to be signed or executed by the Owners or on their
behalf by an attorney-in-fact may be in any number of concurrent instruments of
similar tenor and may be signed or executed by the Owners in person or by an
agent or attorney-in-fact appointed by an instrument in writing or as provided
in the Bonds.  Proof of the execution of
any such instrument and of the ownership of Bonds shall be sufficient for any
purpose of this Indenture and shall be conclusive in favor of 

 

79

 

the
Trustee with regard to any action taken by it under such instrument if made in
the following manner:

 

(a)          The fact and date of the execution by any person of any
such instrument may be proved by the certificate of any officer in any
jurisdiction who, by the laws thereof, has power to take acknowledgments within
such jurisdiction, to the effect that the person signing such instrument
acknowledged before him the execution thereof, or by an affidavit of a witness
to such execution.

 

(b)         The ownership of Bonds shall be proved by the registration
books kept under the provisions of Section 2.06 hereof.

 

Nothing
contained in this Article X shall be construed as limiting the Trustee to
such proof, it being intended that the Trustee may accept any other evidence of
matters herein stated which it may deem sufficient.  Any request by or consent of any Owner shall
bind every future Owner of the same Bond or any Bond or Bonds issued in lieu
thereof or upon registration of transfer thereof in respect of anything done by
the Trustee or the Authority in pursuance of such request or consent.

 

ARTICLE XI

 

MODIFICATION OF THIS INDENTURE
AND THE LOAN AGREEMENT

 

Section 11.01.       Supplemental
Indentures Without Owner Consent. The Authority and the
Trustee may, from time to time and at any time, without the consent of the
Owners, enter into a Supplemental Indenture as follows:

 

(a)          to cure any formal defect, omission, inconsistency or
ambiguity in this Indenture;

 

(b)         to add to the covenants and agreements of the Authority
contained in this Indenture or of the Company contained in any document, other
covenants or agreements thereafter to be observed, or to assign or pledge
additional security for any of the Bonds, or to surrender any right or power
reserved or conferred upon the Authority or the Company, which in the judgment
of the Trustee is not materially adverse to the Owners of the Bonds (in making
such determination, the Trustee may, but is not required to, rely conclusively
upon an opinion of counsel);

 

(c)          to confirm, as further assurance, any pledge of or lien on
the Trust Estate or any other moneys, securities or funds subject or to be
subjected to the lien of this Indenture;

 

(d)         to comply with the requirements of the Trust Indenture Act,
if applicable to this Indenture;

 

80

 

(e)          to modify, alter, amend or supplement this Indenture or any
Supplemental Indenture in any other respect which in the judgment of the
Trustee is not materially adverse to the Owners of the Bonds (in making such
determination, the Trustee may, but is not required to, rely conclusively upon
an opinion of counsel);

 

(f)         to modify, alter, amend or supplement or restate this
Indenture or any Supplemental Indenture in any and all respects necessary,
desirable or appropriate in connection with the delivery to the Trustee of bond
insurance or other security arrangements obtained or provided by the Company;

 

(g)         to provide for a depository to accept Bonds in lieu of DTC;

 

(h)         to modify or eliminate the book-entry registration system
for any of the Bonds;

 

(i)         to provide for uncertificated Bonds or for the issuance of
coupons and bearer Bonds or Bonds registered only as to principal but only to
the extent that such would not adversely affect the Tax-Exempt status of the
Bonds;

 

(j)         to secure or maintain ratings on the Bonds from Moody’s,
S&P and/or Fitch, Inc.;

 

(k)          to provide demand purchase obligations to cause the Bonds
to be authorized purchases for investment companies;

 

(l)         to provide for the appointment of a successor Trustee and
Registrar;

 

(m)          to provide the procedures required to permit any Owner to
separate the right to receive interest on the Bonds from the right to receive
principal thereof and to sell or dispose of such right as contemplated by
Section 1286 of the Code (or similar successor provision);

 

(n)         to make any change necessary (i) to establish or
maintain the Tax-Exempt status of the Bonds as a result of any modifications or
amendments to Section 148 of the Code (or any successor provision of law)
or interpretations thereof by the Internal Revenue Service, or (ii) to
comply with the provisions of Section 148(f) of the Code (or any
successor provision of law), including provisions for the payment of all or a
portion of the investment earnings of any of the funds established hereunder to
the United States of America; and

 

(o)         to conform to amendments made to the Loan Agreement or the
Subsidiary Bond Guarantees effected in compliance with this Indenture.

 

Before
the Authority and the Trustee shall enter into any Supplemental Indenture
pursuant to this Section 11.01, in all cases, there shall have been
delivered to the Trustee and the Company, a Favorable Opinion of Bond Counsel
and an Opinion of Counsel with respect to such 

 

81

 

modification,
alteration, amendment or supplement, and further stating that such Supplemental
Indenture is authorized or permitted by this Indenture and will, upon the
execution and delivery thereof, be valid and binding upon the Authority in
accordance with its terms.  Neither the
Authority nor the Trustee will be obligated to enter into any such Supplemental
Indenture that would materially alter their respective rights, duties or
immunities under this Indenture, the Loan Agreement or otherwise.

 

The
Trustee shall provide written notice of any Supplemental Indenture described in
this Section 11.01 to Moody’s, S&P and Fitch, Inc. (but only if
such corporations are then providing a rating for the Bonds) and to the Owners
of all Bonds then Outstanding at least 15 days prior to the effective date of
such Supplemental Indenture.  Such notice
shall state the effective date of such Supplemental Indenture and shall briefly
describe the nature of such Supplemental Indenture and shall state that a copy
thereof is on file at the Principal Office of the Trustee for inspection by the
parties mentioned in the preceding sentence.

 

Section 11.02.       Supplemental
Indentures Requiring Owner Consent.  (a) Except
for any Supplemental Indenture entered into pursuant to Section 11.01
hereof, subject to the terms and provisions contained in this
Section 11.02 and not otherwise, the Owners of not less than a majority in
aggregate principal amount of the Bonds then Outstanding shall have the right
from time to time to consent to and approve the execution and delivery by the
Authority and the Trustee of any Supplemental Indenture deemed necessary or
desirable by the Authority for the purposes of modifying, altering, amending,
supplementing or rescinding, any of the terms or provisions contained in this
Indenture; provided, however, that, unless approved
in writing by the Owners of all the Bonds then Outstanding, nothing herein
contained shall permit, or be construed as permitting (i) an extension of
the maturity of the principal of, or the time for payment of any redemption
premium or interest on, any Bond or a reduction in the principal amount of any
Bond, or the rate of interest or redemption premium thereon, or a reduction in
the amount of, or extension of the time of any payment required by, any Bond;
(ii) a privilege or priority of any Bond over any other Bond (except as
herein provided); (iii) a reduction in the aggregate principal amount of
the Bonds required for consent to such a Supplemental Indenture; (iv) the
deprivation of the owner of any Bond then Outstanding of the lien created by
this Indenture; or (v) the amendment of this Section 11.02.

 

(b)           If at any time the
Authority shall request the Trustee to enter into any Supplemental Indenture
for any of the purposes of this Section 11.02, the Trustee, upon being
satisfactorily indemnified for its expenses, shall cause notice of the proposed
Supplemental Indenture to be given by Mail to Moody’s, S&P and Fitch, Inc.
(but only if such corporations are then providing a rating for the Bonds) and
to all Owners of Outstanding Bonds.  Such
notice shall briefly set forth the nature of the proposed Supplemental Indenture
and shall state that a copy thereof is on file at the Principal Office of the
Trustee for inspection by the Owners, Moody’s and S&P.

 

(c)           Within two years
after the date of the mailing of such notice, the Authority and the Trustee may
enter into such Supplemental Indenture in substantially the form described in
such notice, but only if there shall have first been delivered to the Trustee
(i) the required consents, in writing, of the Owners and (ii) a
Favorable Opinion of Bond Counsel and Opinion of Counsel with respect to such
modification, alteration, amendment or supplement, and further stating that

 

82

 

such Supplemental Indenture is authorized or permitted by this
Indenture and will, upon the execution and delivery thereof, be valid and
binding upon the Authority in accordance with its terms.  Neither the Authority nor the Trustee will be
obligated to enter into any such Supplemental Indenture that would materially
alter their respective rights, duties or immunities under this Indenture, under
the Loan Agreement or otherwise.

 

(d)           If Owners of not
less than the percentage of Bonds required by this Section 11.02 shall
have consented to and approved the execution and delivery of a Supplemental
Indenture as herein provided, no Owner shall have any right to object to the
execution and delivery of such Supplemental Indenture, or to object to any of
the terms and provisions contained therein or the operation thereof, or in any
manner to question the propriety of the execution and delivery thereof, or to
enjoin or restrain the Authority or the Trustee from executing and delivering
the same or from taking any action pursuant to the provisions thereof.

 

Section 11.03.       Effect
of Supplemental Indenture.  Upon the execution
and delivery of any Supplemental Indenture pursuant to the provisions of this Article XI,
this Indenture shall be, and be deemed to be, modified and amended in
accordance therewith, and the respective rights, duties and obligations under
this Indenture shall thereafter be determined, exercised and enforced under
this Indenture subject in all respects to such modifications and amendments.

 

Section 11.04.       Consent
of the Company and Other Parties.  No Supplemental
Indenture under this Article XI and no amendment of the Loan Agreement
shall become effective unless the Company shall have consented thereto in
writing.

 

Any
provision of this Indenture expressly recognizing or granting rights in or to
the Registrar may not be amended in any manner which affects the rights of such
party hereunder without the prior written consent of such party.

 

Section 11.05.       Amendment
of Loan Agreement Without Owner Consent; Waivers.  Without the consent of or
notice to the Owners, the Authority and the Company may modify, amend or
supplement the Loan Agreement, or any provision thereof, or may consent to the
amendment or modification thereof, in any manner not inconsistent with the
terms and provisions of this Indenture, for any one or more of the following
purposes:  (a) to cure any ambiguity
or formal defect in the Loan Agreement; (b) to grant to or confer upon the
Authority or Trustee, for the benefit of the Bond Owners, any additional
rights, remedies, powers or authorities that lawfully may be granted to or
conferred upon the Authority or the Trustee; (c) to amend or modify the
Loan Agreement, or any part thereof, in any manner specifically required or
permitted by the terms thereof, including, without limitation, as may be
necessary to maintain the exclusion from gross income for purposes of federal
income taxation of the interest on the Bonds; (d) to provide that the
Bonds may be secured by a credit facility or other additional security not
otherwise provided for in this Indenture or the Loan Agreement; (e) to
modify, amend or supplement the Loan Agreement, or any part thereof, or any
supplement thereto, in such manner as the Trustee and the Company deem
necessary in order to comply with any statute, regulation, judicial decision or
other law relating to secondary market disclosure requirements with respect to
tax-exempt obligations of the type that includes the Bonds; (f) to provide
for the appointment of a successor securities depository; (g) to provide
for the

 

83

 

availability of certificated Bonds; and (h) to make any other
change which does not, in the opinion of the Trustee, have a material adverse
effect upon the interests of the Bondholders. 
In addition, the Trustee, may grant such waivers of compliance by the
Company with the provisions of the Loan Agreement as to which the Trustee may
deem necessary or desirable to effectuate the purposes of the intent of the
Loan Agreement and which, in the opinion of the Trustee, do not have a material
adverse effect upon the interests of the Bondholders, provided
that the Trustee shall file with the Authority any and all such waivers granted
by the Trustee within three Business Days thereof.

 

A
revision of Exhibit A to the Loan Agreement in accordance with
Section 3.03 of the Loan Agreement shall not be deemed a modification,
alteration, amendment or supplement to the Loan Agreement, or to this
Indenture, for any purpose of this Indenture.

 

Before
the Authority shall enter into, and the Trustee shall consent to, any
modification, alteration, amendment or supplement to the Loan Agreement
pursuant to this Section 11.05, there shall have been delivered to the
Authority and the Trustee a Favorable Opinion of Bond Counsel with respect to
such modification, alteration, amendment or supplement and further stating that
such modification, alteration, amendment or supplement is authorized or
permitted by the Loan Agreement or this Indenture and will, upon the execution
and delivery thereof, be valid and binding upon the Authority in accordance with
its terms and an opinion of counsel to the Company to the effect that such
modification, alteration, amendment or supplement will, upon execution and
delivery thereof, be valid and binding upon the Company in accordance with its
terms.  Neither the Authority nor the
Trustee will be obligated to enter into or consent to any such modifications,
alterations, amendments or supplements to the Loan Agreement that would
materially alter their respective rights, duties or immunities under this
Indenture, under the Loan Agreement or otherwise.

 

Section 11.06.       Amendment
of Loan Agreement Requiring Owner Consent. 
Except in the case of modifications, alterations, amendments or
supplements referred to in Section 11.05 hereof, the Authority shall not
enter into, and the Trustee shall not consent to, any amendment, alteration,
supplement or modification of the Loan Agreement without the written approval
or consent of the Owners of at least a majority in aggregate principal amount
of the Bonds then Outstanding given and procured as provided in
Section 11.02 hereof; provided, however, that,
unless approved in writing by the Owners of all Bonds affected thereby, nothing
herein contained shall permit, or be construed as permitting, a change in the
obligations of the Company under Section 6.01 or Section 6.02 of the
Loan Agreement.  If at any time the
Authority or the Company shall request the consent of the Trustee to any such
proposed modification, alteration, amendment or supplement permitted under this
Section 11.06, the Trustee shall cause notice thereof to be given in the
same manner as provided by Section 11.02 hereof with respect to
Supplemental Indentures.  Such notice
shall briefly set forth the nature of such proposed modification, alteration,
amendment or supplement and shall state that copies of the instrument embodying
the same are on file at the Principal Office of the Trustee for inspection by
all Owners.  The Authority may enter
into, and the Trustee may consent to, any such proposed modification,
alteration, amendment or supplement subject to the same conditions and with the
same effect as provided in Section 11.02 hereof with respect to
Supplemental Indentures.

 

84

 

Before
the Authority shall enter into, and the Trustee shall consent to, any
modification, alteration, amendment or supplement to the Loan Agreement
pursuant to this Section 11.06, there shall have been delivered to the
Authority and the Trustee a Favorable Opinion of Bond Counsel and/or an Opinion
of Counsel with respect to such modification, alteration, amendment or
supplement and further stating that such modification, alteration, amendment or
supplement is authorized or permitted by the Loan Agreement or this Indenture
and will, upon the execution and delivery thereof, be valid and binding upon
the Authority in accordance with its terms and an opinion of counsel to the
Company to the effect that such modification, alteration, amendment or
supplement will, upon execution and delivery thereof, be valid and binding upon
the Company in accordance with its terms. 
Neither the Authority nor the Trustee will be obligated to enter into
any such modification, alteration, amendment or supplement to the Loan
Agreement that would materially alter their respective rights, duties or
immunities under this Indenture, under the Loan Agreement or otherwise.

 

Section 11.07.       Amendment
of Bond Guarantee.  (a) The
Trustee, without the consent of or notice to any of the Bondholders, may enter
into any amendment, change or modification of the Bond Guarantee as may be
required (i) by the provisions of the Loan Agreement or the Bond
Guarantee, as the case may be, or this Indenture, (ii) for the purpose of
curing any ambiguity, formal defect or formal omission, (iii) in connection
with any other change therein, or (iv) so as to add additional rights
acquired in accordance with the provisions of the Loan Agreement or the Bond
Guarantee, as the case may be; provided that
no such action pursuant to clause (ii) or clause (iii) above
is to the material prejudice of the owners of the Bonds.

 

(b)           Except in the case
of modifications, alterations, amendments or supplements referred to in
Section 11.07(a) hereof, the Trustee shall not consent to, any
amendment, alteration, supplement or modification of the Bond Guarantee without
the written approval or consent of the Owners of at least a majority in
aggregate principal amount of the Bonds then Outstanding given and procured as
provided in Section 11.02 hereof; provided, however, that,
unless approved in writing by the Owners of all Bonds affected thereby, nothing
herein contained shall permit, or be construed as permitting, a change in the
obligations of the Guarantor under Section 2.1 of the Bond Guarantee.  If at any time the Guarantor shall request
the consent of the Trustee to any such proposed modification, alteration,
amendment or supplement permitted under this Section 11.07(b), the Trustee
shall cause notice thereof to be given in the same manner as provided by
Section 11.02 hereof with respect to Supplemental Indentures.  Such notice shall briefly set forth the
nature of such proposed modification, alteration, amendment or supplement and
shall state that copies of the instrument embodying the same are on file at the
Principal Office of the Trustee for inspection by all Owners.  The Trustee may consent to, any such proposed
modification, alteration, amendment or supplement subject to the same
conditions and with the same effect as provided in Section 11.02 hereof
with respect to Supplemental Indentures.

 

Before
the Trustee shall consent to, any modification, alteration, amendment or
supplement to the Bond Guarantee pursuant to this Section 11.07, there
shall have been delivered to the Authority and the Trustee (i) a Favorable
Opinion of Bond Counsel and/or Opinion of Counsel with respect to such
modification, alteration, amendment or supplement and further stating that such
modification, alteration, amendment or supplement is authorized or permitted 

 

85

 

by
the Bond Guarantee or this Indenture and (ii) an opinion of counsel to the
Guarantor to the effect that such modification, alteration, amendment or
supplement will, upon execution and delivery thereof, be valid and binding upon
the Guarantor in accordance with its terms. 
The Trustee will not be obligated to enter into any such modification,
alteration, amendment or supplement to the Bond Guarantee that would materially
alter its rights, duties or immunities under this Indenture, under the Bond
Guarantee or otherwise.

 

ARTICLE XII

 

MISCELLANEOUS

 

Section 12.01.       Successors
of the Authority.  In the event of
the dissolution of the Authority, all the covenants, stipulations, promises and
agreements in this Indenture contained, by or on behalf of, or for the benefit
of the Authority, shall bind or inure to the benefit of the successors of the
Authority from time to time and any entity, officer, board, commission, agency
or instrumentality to whom or to which any power or duty of the Authority shall
be transferred.

 

Section 12.02.       Parties
in Interest.  Except as
herein otherwise specifically provided, nothing in this Indenture expressed or
implied is intended or shall be construed to confer upon any person, firm,
corporation or entity other than the Authority, the Registrar, the Company, the
Guarantor, the Trustee and the Owners of Bonds any right, remedy or claim under
or by reason of this Indenture, this Indenture being intended to be for the
sole and exclusive benefit of the Authority, the Registrar, the Company, the
Trustee and the Owners of Bonds.  The
Trustee shall have no fiduciary duty to any entity other than the Owner of any
Bond as such and only in accordance with, into the extent of, the terms and provisions
hereunder.

 

Section 12.03.       Severability.  In case any one or more of
the provisions of this Indenture or of the Loan Agreement or of the Bonds shall
for any reason be held to be illegal or invalid, such illegality or invalidity
shall not affect any other provisions of this Indenture, the Loan Agreement or
the Bonds, and this Indenture, the Loan Agreement and the Bonds shall be
construed and enforced as if such illegal or invalid provisions had not been
contained herein or therein.

 

Section 12.04.       No
Personal Liability of Authority Officials. 
No representation, warranty, covenant or agreement contained in the
Bonds or in this Indenture or in any of the documents or certificates related
thereto shall be deemed to be the representation, warranty, covenant or
agreement of any official, officer, agent, counsel or employee of the Authority
in his or her individual capacity, and neither the members of the Authority nor
any official executing the Bonds shall be liable personally on the Bonds or be
subject to any personal liability or accountability by reason of the issuance
thereof.

 

Section 12.05.       Bonds
Owned by the Authority or the Company.  In determining
whether the Owners of the requisite aggregate principal amount of the Bonds
have concurred in any direction, consent or waiver under this Indenture, Bonds
which are owned by the Authority or the Company or by any person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company (unless the Authority, the Company or such

 

86

 

person owns all Bonds which are then Outstanding, determined without
regard to this Section 12.05) shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination, except that, for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only Bonds with respect to which the Trustee
has received written notice of such ownership shall be so disregarded.  Bonds so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee’s right so to act with respect to such
Bonds and that the pledgee is not the Authority or the Company or any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company.  In case
of a dispute as to such right, any decision by the Trustee taken upon the
advice of Counsel shall be full protection to the Trustee.

 

Section 12.06.       Counterparts.  This Indenture may be
executed in any number of counterparts, each of which, when so executed and
delivered, shall be an original; but such counterparts shall together
constitute but one and the same Indenture.

 

Section 12.07.       Governing
Law; Waiver of Jury Trial.  This Indenture
shall be governed by and construed in accordance with the laws of the State
without application of the conflicts of law provisions of any other state.  EACH OF THE COMPANY, THE AUTHORITY AND THE
TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION
CONTEMPLATED HEREBY.

 

Section 12.08.       Notices.  Except as otherwise provided
in this Indenture, all notices, demands, certificates, requests, requisitions,
directions or other communications by the Authority, the Company or the Trustee
or by the Bondholders pursuant to this Indenture shall be in writing and shall
be deemed to have been sufficiently given or made for all purposes if given or
served by being deposited postage prepaid by registered or certified mail in a
post office letter box, addressed (until a different or additional address is
filed with the Trustee) as follows:

 

	
  if
  to the Authority, to:

  	
  Illinois
  Finance Authority

  
	
   

  	
  Two
  Prudential Plaza

  
	
   

  	
  180
  North Stetson Avenue, Suite 2555

  
	
   

  	
  Chicago, Illinois  60601

  
	
   

  	
  Attention:

  	
  Executive
  Director with a copy to its General Counsel

  
	
   

  	
  Telephone:

  	
  (312)
  651-1300

  
	
   

  	
  Facsimile:

  	
  (312)
  651-1350

  
	
   

  	
   

  	
   

  
	
  if
  to the Trustee or the Registrar, to:

  	
  Citibank
  N.A., Agency & Trust

  
	
   

  	
  388
  Greenwich Street, 14th Floor

  
	
   

  	
  New
  York, New York  10013

  
	
   

  	
  Attention:

  	
  Miriam
  Molina

  
	
   

  	
  Telephone:

  	
  (212)
  816-5576

  
	
   

  	
  Facsimile:

  	
  (212)
  657-2762

  
	
   

  	
  Email:

  	
  miriam.molina@citi.com

  

 

87

 

	
  if
  to the Company, to:

  	
  Navistar
  International Corporation

  
	
   

  	
  4201
  Winfield Road

  
	
   

  	
  Warrenville, Illinois  60555

  
	
   

  	
  Attention:

  	
  Vice
  President and Treasurer

  
	
   

  	
  Telephone:

  	
  (630)
  753-2059

  
	
   

  	
  Facsimile:

  	
  (630)
  753-2305

  
	
   

  	
   

  	
   

  
	
  if
  to the Guarantor, to:

  	
  Navistar, Inc.

  
	
   

  	
  4201
  Winfield Road

  
	
   

  	
  Warrenville, Illinois  60555

  
	
   

  	
  Attention:

  	
  Vice
  President and Treasurer

  
	
   

  	
  Telephone:

  	
  (630)
  753-2059

  
	
   

  	
  Facsimile:

  	
  (630)
  753-2305

  

 

In
addition, the Trustee, the Authority and the Company agree to accept and act
upon instructions or directions pursuant to this Indenture sent by unsecured
e-mail, facsimile transmission or other similar unsecured electronic methods; provided, however, that (a) the party providing such
written instructions, subsequent to such transmission of written instructions,
shall provide the originally executed instructions or directions to such party
in a timely manner, and (b) such originally executed instructions or
directions shall be signed by an authorized representative of the party
providing such instructions or directions. 
If the party elects to give e-mail or facsimile instructions (or
instructions by a similar electronic method), the other party’s understanding
of such instructions shall be deemed controlling.  The Trustee, the Authority or the Company
shall not be liable for any losses, costs or expenses arising directly or
indirectly from such party’s reliance upon and compliance with such
instructions notwithstanding such instructions conflict or are inconsistent
with a subsequent written instruction. 
The party providing electronic instructions agrees to assume all risks
arising out of the use of such electronic methods to submit instructions and
directions, including without limitation the risk of the notified party acting
on unauthorized instructions, and the risk or interception and misuse by third
parties.

 

Any
notice or communication mailed to a Bondholder shall be mailed to it by Mail at
its address as it appears on the Register and shall be sufficiently given to it
if so mailed within the time prescribed.

 

Failure
to mail a notice or communication to a Bondholder or any defect in it shall not
affect its sufficiency with respect to other Bondholders.  If a notice or communication is mailed in the
manner provided above, it is duly given, whether or not the addressee receives
it.

 

In
case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice to Holders by Mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

 

Notwithstanding
any other provision of this Indenture or any Bond, whenever notice is required
to be given to a Beneficial Owner, such notice shall be sufficiently given if
given to the 

 

88

 

Securities
Depository for such Bond (or its designee), pursuant to customary procedures of
such Securities Depository.

 

Any
of the foregoing may, by notice given hereunder to each of the others,
designate any further or different addresses to which subsequent notices,
certificates, requests or other communications shall be sent hereunder.  Any communications required to be given
hereunder by the Company shall be given by an Authorized Company
Representative.  A copy of any notice
given to Bondholders shall be sent to the Company.

 

Section 12.09.       Holidays.  If the date for making any
payment or the last date for performance of any act or the exercising of any
right, as provided in this Indenture, shall not be a Business Day, such payment
may, unless otherwise provided in this Indenture or the Loan Agreement, be made
or act performed or right exercised on the next succeeding Business Day with
the same force and effect as if done on the nominal date provided in this
Indenture, and no interest shall accrue for the period after such nominal date.

 

Section 12.10.       Date for
Identification Purposes Only; Effective Date.  The date on this Indenture shall be for
identification purposes only and shall not be construed to imply that this
Indenture was executed on such date. 
This Indenture shall become effective upon the Closing Date.

 

Section 12.11.       Force
Majeure.  In no event
shall the Trustee be responsible or liable for any failure or delay in the
performance of its obligations hereunder arising out of or caused by, directly
or indirectly, forces beyond its control, including, without limitation,
strikes, work stoppages, accidents, acts of war or terrorism, civil or military
disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer
(software and hardware) services; it being understood that the Trustee shall
use reasonable efforts which are consistent with accepted practices in the
banking industry to resume performance as soon as practicable under the
circumstances.

 

Section 12.12.       U.S.A.
Patriot Act.  The parties
hereto acknowledge that in accordance with Section 326 of the U.S.A.
Patriot Act, the Trustee, like all financial institutions and in order to help
fight the funding of terrorism and money laundering, is required to obtain,
verify, and record information that identifies each person or legal entity that
establishes a relationship or opens an account with the Trustee.  The parties to this Indenture agree that they
will provide the Trustee with such information as it may request in order for
the Trustee to satisfy the requirements of the U.S.A. Patriot Act.

 

89

 

IN
WITNESS WHEREOF, the ILLINOIS FINANCE AUTHORITY has caused these presents to be
signed in its name and on its behalf by its Executive Director and its
corporate seal to be hereunto affixed and attested by its Secretary and to
evidence its acceptance of the trusts hereby created CITIBANK N.A., in its
capacity as Trustee, has caused these presents to be signed and attested in its
name and on its behalf by its duly authorized officers all as of the day and
year first above written.

 

	
   

  	
   

  	
  ILLINOIS FINANCE AUTHORITY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Christopher B. Meister

  
	
   

  	
   

  	
   

  	
  Executive
  Director

  
	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/ Brendan M.
  Cournane

  	
   

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CITIBANK N.A., Agency &
  Trust, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Miriam Molinda

  
	
   

  	
   

  	
   

  	
  Its

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/ Patricia
  Gallagher

  	
   

  	
   

  
	
   

  	
  Its

  	
  Vice President

  	
   

  	
   

  
									

 

90

 

EXHIBIT A

 

[FORM OF BOND]

 

	
  REGISTERED

  	
   

  	
  REGISTERED

  
	
  NO.
  R-    

  	
   

  	
  $135,000,000

  

 

UNITED STATES OF AMERICA

 

STATE OF ILLINOIS

 

ILLINOIS FINANCE AUTHORITY

RECOVERY ZONE FACILITY REVENUE BOND

(NAVISTAR INTERNATIONAL CORPORATION PROJECT) SERIES 2010

 

	
  INTEREST RATE

  	
   

  	
  MATURITY DATE

  	
   

  	
  DATED DATE

  	
   

  	
  CUSIP NO.

  
	
  6.50%

  	
   

  	
  October 15, 2040

  	
   

  	
  October 26, 2010

  	
   

  	
  42500F 6F1

  

 

	
  Registered Owner:

  	
   

  	
  CEDE & CO.

  
	
   

  	
   

  	
   

  
	
  Principal Amount:

  	
   

  	
  ONE HUNDRED THIRTY-FIVE MILLION DOLLARS

  

 

THIS
BOND AND THE OBLIGATION TO PAY PRINCIPAL, PREMIUM, IF ANY, AND INTEREST
HEREON, IS A SPECIAL, LIMITED OBLIGATION OF THE AUTHORITY, SECURED AS
PROVIDED HEREIN AND IN THE HEREINAFTER DEFINED INDENTURE AND PAYABLE SOLELY OUT
OF THE PAYMENTS MADE PURSUANT TO THE LOAN AGREEMENT AND THE SECURITY THEREFOR
(AS SUCH TERMS ARE HEREINAFTER DEFINED) AND AS OTHERWISE PROVIDED IN THE
INDENTURE AND THE LOAN AGREEMENT.  THIS
BOND, AND THE OBLIGATION TO PAY PRINCIPAL, PREMIUM, IF ANY, AND INTEREST
HEREON, SHALL NOT BE DEEMED TO CONSTITUTE AN INDEBTEDNESS OR AN OBLIGATION OF
THE AUTHORITY, THE STATE OF ILLINOIS OR ANY POLITICAL SUBDIVISION THEREOF,
WITHIN THE PURVIEW OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION OR PROVISION,
OR A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWERS, IF ANY, OF ANY OF
THEM.  THE AUTHORITY DOES NOT HAVE THE
POWER TO LEVY TAXES FOR ANY PURPOSES WHATSOEVER.  NO OWNER OF THIS BOND SHALL HAVE THE RIGHT TO
COMPEL ANY EXERCISE OF THE TAXING POWER, IF ANY, OF THE AUTHORITY, THE
STATE OF ILLINOIS OR ANY POLITICAL SUBDIVISION THEREOF TO PAY THE PRINCIPAL OF,
PREMIUM, IF ANY, OR INTEREST ON THIS BOND.

 

THE
ILLINOIS FINANCE AUTHORITY (the “Authority”), a
body politic and corporate created by the Illinois Finance Authority Act, as
amended (the “Act”), for value received,
hereby promises to pay (but only out of the source hereinafter provided) to the
registered owner identified above, or registered assigns, on the Maturity Date
set forth above (or if this Bond is called for earlier redemption as described
herein on the redemption date),  the Principal
Amount set forth above (the “Principal Amount”)
and to pay (but only out of the sources hereinafter provided) interest on the
balance of said Principal Amount from time to time remaining unpaid from the
Interest Payment Date next preceding the date of registration and authentication
hereof

 

A-1

 

unless
this Bond is registered and authenticated on or prior to the first Interest
Payment Date, in which event this Bond shall bear interest from the Dated Date
set forth above; provided, however, that if, as
shown by the records of the Trustee, interest on the Bonds shall be in default,
Bonds issued in exchange for Bonds surrendered for registration of transfer or
exchange shall bear interest from the last date to which interest has been paid
in full or duly provided for on the Bonds, or, if no interest has been paid or
duly provided for on the Bonds, from the Dated Date, until payment of said
Principal Amount has been made or duly provided for, at the interest rate
specified above, computed on the basis of a 360-day year consisting of twelve
30-day months, payable on April 15, 2011 and semi-annually thereafter on
each April 15 and October 15, and to pay (but only out of the sources
hereinafter provided) interest on overdue principal and, to the extent
permitted by law, on overdue interest at the rate then borne by this Bond,
except as the provisions hereinafter set forth with respect to redemption or
acceleration prior to maturity may become applicable hereto.  The principal of and premium, if any, on this
Bond are payable upon surrender thereof in lawful money of the United States of
America at the payment office in New York, New York, of Citibank N.A., or its
successors and assigns, as Trustee. 
Interest payments on this Bond shall be made by the Trustee to the
registered owner hereof as of the close of business on the Record Date (as
hereinafter defined) with respect to each Interest Payment Date (except that,
if and to the extent that there shall be a default in the payment of the
interest due on an Interest Payment Date, such defaulted interest shall be paid
to the Owners in whose name any such Bonds are registered as of a special
record date to be fixed by the Trustee, notice of which shall be given to such
Owners not less than ten days prior thereto) and shall be paid:

 

(a)           in respect of any Bond that is registered in the
book-entry system pursuant to the Indenture, in immediately available funds by
no later than 12:00 noon, New York City time, and

 

(b)           in respect of any Bond that is not registered in the
book-entry system, (i) by bank check mailed by first-class mail on the
Interest Payment Date to the registered owner hereof at its address as it
appears on the registration books of Citibank N.A., New York, New York, as
Registrar  or at such other address as is
furnished in writing by such registered owner to the Registrar, or (ii) by
wire transfer on the Interest Payment Date to any owner of at least $1,000,000
in aggregate principal amount of Bonds (or such lesser amount if such Bonds
constitute all of the Bonds then outstanding).

 

This
Bond is one of the duly authorized Recovery Zone Facility Revenue Bonds
(Navistar International Corporation Project) Series 2010 of the Authority,
originally issued in the aggregate principal amount of $135,000,000 (the “Bonds”), pursuant to
proper action duly adopted by the Authority on September 14, 2010, and
executed under an Indenture of Trust, dated as of October 1, 2010 (the “Indenture”), between the
Authority and Citibank N.A., as trustee (the “Trustee,” which
term shall include any successor trustee), for the purpose of loaning the
proceeds thereof to Navistar International Corporation (the “Company”) in order to provide funds (i) to finance a
portion of the costs of the Project, (ii) to pay a portion of the interest
accruing on the Bonds during construction of the Project and (iii) to pay
certain costs of issuance relating to the Bonds.  Pursuant to the Loan Agreement, dated as of
October 1, 2010 (the “Loan Agreement”), between the Authority and the Company,  the
proceeds of the Bonds have been loaned to the Company.  Any term used herein as a defined term but
not defined

 

A-2

 

herein
shall be defined as in the Indenture. 
Payment of the principal of and interest on the Bonds has been
guaranteed by Navistar, Inc. (the “Guarantor”)
directly to the Trustee for the benefit of the Owners of the Bonds pursuant to
a Bond Guarantee, dated as of October 1, 2010 (the “Bond
Guarantee”) from the Guarantor to the Trustee.

 

The
Bonds are payable solely from the amounts received by the Authority derived
pursuant to the Loan Agreement or the Bond Guarantee and any other Subsidiary
Bond Guarantees that may be delivered from time to time.

 

This
Bond and all other Bonds of the issue of which it forms a part are issued
pursuant to and in full compliance with the Constitution and laws of the State
of Illinois, particularly the Illinois Finance Act, as supplemented and amended
(the “Act”), and pursuant to a bond resolution
adopted by the Authority on September 14, 2010, which resolution
authorizes the execution and delivery of the Indenture.  THIS BOND AND THE OBLIGATION TO PAY INTEREST
HEREON AND PREMIUM WITH RESPECT HERETO ARE SPECIAL, LIMITED OBLIGATIONS OF THE
AUTHORITY PAYABLE SOLELY OUT OF THE PAYMENTS MADE PURSUANT TO THE LOAN
AGREEMENT AND THE BOND GUARANTEE AND THE SECURITY THEREFOR, AND AS OTHERWISE
PROVIDED IN THE INDENTURE, AND SHALL NOT BE DEEMED TO CONSTITUTE AN
INDEBTEDNESS OR AN OBLIGATION OF THE AUTHORITY, THE STATE OF ILLINOIS, OR ANY
POLITICAL SUBDIVISION THEREOF WITHIN THE PURVIEW OF ANY CONSTITUTIONAL
LIMITATION OR STATUTORY PROVISION.  THE
BONDS DO NOT NOW OR SHALL NEVER CONSTITUTE A CHARGE AGAINST THE GENERAL CREDIT
OF THE AUTHORITY.  THE BONDS ARE NOT IN
ANY RESPECT A GENERAL OBLIGATION OF THE AUTHORITY, NOR ARE THEY PAYABLE IN ANY
MANNER FROM REVENUES RAISED BY TAXATION.

 

The
Bonds shall be deliverable in the form of registered Bonds without coupons in
the denominations of $100,000 or any integral multiple of $5,000 in excess
thereof (the “Authorized Denomination”).

 

“Record Date” means the first day of the month in which
each Interest Payment Date occurs.

 

The
Bonds are subject to optional and mandatory redemption prior to maturity as
provided in the Indenture.

 

Notice
of any optional or mandatory redemption shall be given by first-class mail not
less than 30 days (except as provided in the Indenture) nor more than 60 days
prior to the date fixed for redemption to the Owners of Bonds at the address shown
on the registration books of the Registrar on the date such notice is
mailed.  Except as described in the
Indenture for partial redemptions upon a Determination of Taxability, if less
than all of the Bonds are called for redemption, the Trustee shall select the
Bonds or any given portion thereof from the outstanding Bonds or such given
portion thereof not previously called for redemption, by such method as the
Trustee may deem fair and appropriate. 
For the purpose of any such selection the Trustee shall assign a
separate number for each minimum Authorized Denomination of each Bond of a
denomination of more than such minimum; provided that,
following any such selection, both the portion of such Bond to be redeemed and
the portion remaining shall be in Authorized Denominations.

 

A-3

 

Any
notice of optional redemption of Bonds may state that such redemption is
conditioned upon the receipt by the Trustee, on or prior to the date fixed for
such redemption, of moneys sufficient to pay the principal of, and premium, if
any, and interest on, such Bonds to be redeemed.  In the event such moneys are not so received,
the redemption shall not be made and the Trustee shall within a reasonable time
thereafter give notice, in the manner in which the notice of redemption was
given, that such redemption will not take place.

 

Subject
to the limitations and upon payment of the charges, if any, provided in the
Indenture, Bonds may be exchanged at the Principal Office of the Registrar for
a like aggregate principal amount of Bonds of the same tenor and of Authorized
Denominations.

 

This
Bond is transferable by the person in whose name it is registered, in person,
or by its attorney duly authorized in writing, at the Principal Office of the
Registrar, but only in the manner, subject to the limitations and upon payment
of the charges, if any, provided in the Indenture, and upon surrender and
cancellation of this Bond accompanied by a written instrument of transfer in a
form approved by the Registrar, duly executed. 
Upon such transfer a new fully registered Bond or Bonds in Authorized
Denominations, for the same aggregate principal amount, will be issued to the
transferee in exchange therefor.

 

The
Authority, the Registrar, the Trustee and any agent of the Authority, the
Registrar or the Trustee may treat the person in whose name this Bond is
registered as the owner hereof for the purpose of receiving payment as herein
provided and for all other purposes, whether or not this Bond be overdue, and
neither the Authority, the Registrar, the Trustee nor any such agent shall be
affected by notice to the contrary.

 

The
Bonds are equally and ratably secured, to the extent provided in the Indenture,
by the pledge thereunder of the Trust Estate.  The Authority has also pledged and assigned to
the Trustee as security for the Bonds all other rights and interests of the
Authority under the Loan Agreement (other than its rights to indemnification,
exemption from personal liability and certain administration expenses and
certain other rights).

 

The
Owner of this Bond shall have no right to enforce the provisions of the
Indenture, or to institute action to enforce the covenants therein, or to take
any action with respect to any Event of Default under the Indenture, or to
institute, appear in or defend any suit or other proceeding with respect
thereto, except as provided in the Indenture.

 

With
certain exceptions as provided therein, the Indenture, the Loan Agreement and
the Bond Guarantee may be modified or amended by the Owners of not less than a
majority in aggregate principal amount of all Bonds then Outstanding under the
Indenture.

 

Reference
is hereby made to the Indenture, the Loan Agreement, the Bond Guarantee and the
Tax Agreement, copies of which are on file with the Trustee, for the
provisions, among others, with respect to the nature and extent of the rights,
duties and obligations of the Authority, the Company, the Trustee, the
Guarantor, the Registrar and the Owners of the Bonds.  The Owner of this Bond, by the acceptance
hereof, is deemed to have agreed and consented to and to

 

A-4

 

be
bound by the terms and provisions of the Indenture, the Loan Agreement, the
Bond Guarantee and the Tax Agreement.

 

The
Indenture prescribes the manner in which it may be discharged, including
(a) a provision that the Bonds shall be deemed to be paid if moneys
sufficient to pay the principal of, premium, if any, and interest on the Bonds
and all necessary and proper fees, compensation and expenses of the Trustee and
the Registrar, shall have been deposited with the Trustee, after which the
Bonds shall no longer be secured by or entitled to the benefits of the
Indenture, except for the purposes of registration and exchange of Bonds and of
delivery of the Bonds to the Trustee for purchase, and (b) a provision
that, if the Bonds mature or are called for redemption pursuant to the
Indenture, the Bonds shall be deemed to be paid if Government Obligations, as
defined in the Indenture, maturing as to principal and interest in such amounts
and at such times as to insure the availability of sufficient moneys to pay the
principal of, premium, if any, and interest on the Bonds on and prior to the
redemption date or maturity date thereof, and all necessary and proper fees,
compensation and expenses of the Authority, the Trustee and the Registrar,
shall have been deposited with the Trustee, after which the Bonds shall no
longer be secured by or entitled to the benefits of the Indenture, except for
the purposes of registration and exchange of Bonds and of such payment.

 

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

 

IT
IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things
required to exist, happen and be performed precedent to and in the execution
and delivery of the Indenture and the issuance of this Bond do exist, have
happened and have been performed in due time, form and manner as required by
law, and that the issuance of this Bond and the issue of which it forms a part,
together with all other obligations of the Authority, does not exceed or
violate any constitutional or statutory limitation of indebtedness.

 

This
Bond shall not be entitled to any security or benefit under the Indenture, or
be valid or become obligatory for any purpose, until this Bond shall have been
authenticated by the execution by the Registrar of the certificate of
authentication inscribed hereon.

 

A-5

 

IN
WITNESS WHEREOF, as provided by the Act, the ILLINOIS FINANCE AUTHORITY has
caused this Bond to be executed in its name and on its behalf by the manual or
duly authorized facsimile signature of its Chairman and its corporate seal to
be hereunto affixed manually or by facsimile and attested to by the manual or
duly authorized facsimile signature of its Secretary.

 

	
   

  	
   

  	
  ILLINOIS
  FINANCE AUTHORITY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
   

  

 

 

[FORM OF REGISTRAR’S CERTIFICATE]

 

CERTIFICATE OF AUTHENTICATION

 

This
is to certify that this Bond is one of the Bonds of the series described in the
within-mentioned Indenture.

 

	
   

  	
  CITIBANK N.A., as
  Registrar

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date of registration and
  authentication:

  	
   

  	
   

  
						

 

 

[FORM OF ASSIGNMENT]

 

The
following abbreviations, when used in the inscription on the face of the within
Bond shall be construed as though they were written out in full according to
applicable laws or regulations:

 

	
  TEN
  COM

  	
  —

  	
  as
  tenants in common

  	
  UNIF GIFT MIN ACT—

  
	
  TEN
  ENT

  	
  —

  	
  as
  tenants by the entirety

  	
   

  	
   

  	
  Custodian

  	
   

  	
   

  
	
  JT
  TEN

  	
  —

  	
  as
  joint tenants with right

  	
   

  	
  (Cust)

  	
   

  	
  (Minor)

  	
   

  
	
   

  	
   

  	
  of
  survivorship and not as

  	
  under Uniform Gifts to Minors Act of

  
	
   

  	
   

  	
  tenants
  in common

  	
   

  
	
   

  	
   

  	
   

  	
  (State)

  

 

Additional abbreviations may also be used though not in the list above.

 

For
value received
                                                                                          
hereby sells, assigns and transfers unto

 

	
  INSERT
  SOCIAL SECURITY OR

  	
   

  
	
  OTHER
  IDENTIFYING NUMBER OF ASSIGNEE

  	
   

  
	
   

  	
   

  

 

	
   

  
	
  (Please Print or Typewrite Name and Address of Assignee)

  

 

the
within Bond of ILLINOIS FINANCE AUTHORITY, and hereby irrevocably constitutes
and appoints
                                            
attorney to register the transfer of said Bond on the books kept for
registration thereof with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  

 

	
  SIGNATURE
  GUARANTEED:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

NOTICE:  Signature(s) must be guaranteed by an “eligible
guarantor institution” that is a member of or a participant in a “signature
guarantee program” (e.g., the
Securities Transfer Agents Medallion Program, the Stock Exchange Medallion
Program or the New York Stock Exchange, Inc. Medallion Signature Program).

 

NOTICE:  The
signature to this assignment must correspond with the name as it appears upon
the face of the within Bond in every particular, without alteration or
enlargement or any change whatever.

 

 

SCHEDULE I

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If
you want to elect to have this Bond purchased by the Company pursuant to
Section 4.09 or Section 4.14 of the Loan Agreement, please check the
appropriate box:

 

o    Section 4.09                   o    Section 4.14

 

If
you want to have only part of the Bond purchased by the Company pursuant to
Section 4.09 or Section 4.14 of the Loan Agreement, state the amount
you elect to have purchased:

 

$          

 

	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
  Your
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Sign
  exactly as your name appears on the face of this Note)

  
	
   

  	
   

  
	
  Tax
  Identification No.:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature
  Guarantee*:

  	
   

  	
   

  
					

 

* Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor acceptable to the Trustee).

 

 

EXHIBIT B

 

[Form of Requisition]

 

Citibank
N.A., Agency & Trust

388
Greenwich Street, 14th Floor

New
York, New York  10013

Attention:  Miriam Molina

 

This
Requisition is submitted pursuant to the provisions of Section 5.02 of the
Indenture of Trust dated as of October 1, 2010 (the “Indenture”)
between the Illinois Finance Authority (the “Authority”)
and Citibank N.A., as trustee (the “Trustee”),
relating to Illinois Finance Authority Recovery Zone Facility Revenue Bonds
(Navistar International Corporation Project) Series 2010.  Capitalized terms used herein have the same
meanings herein as when used in the Indenture (except where the context
otherwise requires).

 

The
undersigned is an Authorized Company Representative and hereby certifies as
follows:

 

(1)           that the name and address of the person, firm or
corporation to whom payment is due or has been made (which may include the
Company) is set forth on Schedule I attached hereto;

 

(2)           that the amount to be or which has been paid is set
forth on Schedule I attached  hereto;

 

(3)           that the costs of an aggregate amount set forth in
this Requisition have been or will be made or incurred or financed and were or
will be necessary for the Project and were made or incurred in accordance with
the construction contracts, plans and specifications and building permits
therefor then in effect;

 

(4)           that the amount paid or to be paid, as set forth on
Schedule I attached hereto, represents either a part of the amount that is or
will be due and payable for Project Costs and was or will be made in accordance
with the terms of any contracts applicable thereto and in accordance with usual
and customary practice under existing conditions;

 

(5)           that no part of the Project Costs was included
within the costs referred to in any requisition previously filed with the
Trustee under the provisions of the Indenture;

 

(6)           that (i) the withdrawal of moneys from the
Project Fund and the use of the property financed or reimbursed therefrom has
not and will not result in a violation of any representation, term or covenant
in the Tax Agreement or the Project Certificate and (ii) any Favorable
Opinion of Bond Counsel required to be delivered as a result of

 

B-1

 

changes in the use of Project Fund moneys pursuant to Section 3.04
of the Loan Agreement has been delivered to the Trustee and the Authority;

 

(7)           that the amount remaining in the Project Fund,
together with (i) moneys then on hand at the Company or committed to the
Company which are or will be available, and are anticipated by the Company to
be applied, to pay the Project Costs and (ii) expected investment earnings
to be deposited into the Project Fund pursuant to the Indenture, will, after
payment of the amount requested on Schedule I attached hereto, be sufficient to
pay the costs of completing the Project substantially in accordance with the
construction contracts, plans and specifications and building permits therefor,
if any, then in effect; and

 

(8)           that the amounts paid or to be paid as set forth in
this Requisition are properly payable under the terms of the Indenture and that
all conditions precedent to payment as prescribed in the Indenture have been
satisfied.

 

You
are authorized and directed to make the disbursements pursuant to this
Requisition from the Project Fund as provided in Section 5.02 of the
Indenture.  In making such disbursements,
you are entitled to rely on this Requisition as provided in Section 5.02
of the Indenture.

 

B-2

 

IN
WITNESS WHEREOF, the undersigned Authorized Company Representative has caused this
Requisition to be executed as of the day first above written.

 

	
   

  	
  NAVISTAR
  INTERNATIONAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized
  Company Representative

  
	
   

  	
   

  
	
  Date:
                  ,
  20  

  	
   

  

 

B-3

 

SCHEDULE I

 

	
  PAYEE

  	
   

  	
  PAYEE ADDRESS AND/OR

  WIRE INSTRUCTIONS

  	
   

  	
  AMOUNT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT C

 

	
  

  	
   

  	
  Notice of
  Payment of Bond Interest and/or Principal

   

  
	
   

  	
   

  	
   

  
	
  To:

  	
  Office
  of the Comptroller

  	
   

  	
  Illinois Finance
  Authority

  
	
   

  	
  Financial
  Reporting

  	
   

  	
  Bond/Trustee Correspondence

  
	
   

  	
  Bond
  Indebtedness Section

  	
   

  	
  Two Prudential Plaza

  
	
   

  	
  325
  West Adams Street

  	
   

  	
  180 N. Stetson, Suite 2555

  
	
   

  	
  Springfield, Illinois
  62704-1858

  	
   

  	
  Chicago, Illinois 60601

  
	
   

  	
   

  	
   

  	
   

  
	
  FAX:

  	
  217-524-5877

  	
   

  	
  FAX to:

  	
  312-651-1350

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Email:

  	
  bondpayments@mail.ioc.state.il.us

  	
   

  	
  Email:

  	
  bondpayments@il-fa.com

  
						

 

 

By:

 

On Behalf Of:             Illinois Finance Authority

 

To
Paying Agent

 

	
  For
  Principal In The Amount Of:

  	
  $

  
	
   

  	
   

  
	
  For
  Interest In The Amount Of:

  	
  $

  
	
   

  	
   

  
	
  For
  Premium In The Amount Of:

  	
  $

  

 

	
  Due
  On:

  	
   

  	
   

  	
  Paid
  On:

  	
   

  

 

Bond
Issue Titled:

 

Amount
of Bond Principal Outstanding

 

 

	
  Comptroller’s Use Only

  	
   

  
	
   

  	
  By:

  	
   

  
	
  Rec’d

  	
   

  	
   

  	
  Email:

  	
   

  
	
  Refer
  No.

  	
   

  	
   

  	
  Title:

  	
   

  
	
  Posted
  To

  	
   

  	
   

  	
  Date:

  	
   

  
	
  Posted
  By

  	
   

  	
   

  	
  Telephone
  Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  
							

 

C-1Exhibit 10.1b

 

 

LOAN AGREEMENT

 

between

THE COUNTY OF COOK, ILLINOIS

 

and

 

NAVISTAR INTERNATIONAL CORPORATION

 

Dated as of October 1,
2010

 

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

 

 

 

TABLE OF CONTENTS

 

	
  SECTION

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Preliminary
  Statement

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I            DEFINITIONS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
   

  	
  Terms Defined

  	
   

  	
  2

  
	
  Section 1.02.

  	
   

  	
  Rules of Interpretation

  	
   

  	
  2

  
	
  Section 1.03.

  	
   

  	
  Exhibit

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II           PARTICULAR COVENANTS,
  REPRESENTATIONS, WARRANTIES AND AGREEMENTS

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
   

  	
  Representations and Warranties

  	
   

  	
  3

  
	
  Section 2.02.

  	
   

  	
  Tax-Exempt Status

  	
   

  	
  8

  
	
  Section 2.03.

  	
   

  	
  Annual Certificate

  	
   

  	
  9

  
	
  Section 2.04.

  	
   

  	
  Taxes, Charges and Assessments; Permitted Contests

  	
   

  	
  9

  
	
  Section 2.05.

  	
   

  	
  Compliance with Laws

  	
   

  	
  10

  
	
  Section 2.06.

  	
   

  	
  Use of the Project

  	
   

  	
  10

  
	
  Section 2.07.

  	
   

  	
  Access to Project

  	
   

  	
  11

  
	
  Section 2.08.

  	
   

  	
  Maintenance and Repair; Insurance

  	
   

  	
  11

  
	
  Section 2.09.

  	
   

  	
  Indemnification of the Issuer and the Trustee

  	
   

  	
  11

  
	
  Section 2.10.

  	
   

  	
  [Reserved]

  	
   

  	
  13

  
	
  Section 2.11.

  	
   

  	
  Recording and Maintenance of Liens

  	
   

  	
  13

  
	
  Section 2.12.

  	
   

  	
  Indenture Provisions

  	
   

  	
  14

  
	
  Section 2.13.

  	
   

  	
  Exemption from Personal Liability

  	
   

  	
  14

  
	
  Section 2.14.

  	
   

  	
  No Recourse to Issuer

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
   

  	
  Loan of Proceeds of Bonds

  	
   

  	
  15

  
	
  Section 3.02.

  	
   

  	
  Agreement to Renovate, Expand, Equip and Complete Project

  	
   

  	
  15

  
	
  Section 3.03.

  	
   

  	
  Plans and Specifications

  	
   

  	
  17

  
	
  Section 3.04.

  	
   

  	
  Project Records

  	
   

  	
  17

  
	
  Section 3.05.

  	
   

  	
  Authorized Company Representative

  	
   

  	
  17

  
	
  Section 3.06.

  	
   

  	
  Guarantor

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV          ADDITIONAL COVENANTS OF THE COMPANY

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
   

  	
  Application of Certain Covenants

  	
   

  	
  18

  
	
  Section 4.02.

  	
   

  	
  Corporate Existence

  	
   

  	
  19

  
	
  Section 4.03.

  	
   

  	
  Reports by the Company

  	
   

  	
  19

  
	
  Section 4.04.

  	
   

  	
  Notice of Defaults or Events of Default

  	
   

  	
  19

  
	
  Section 4.05.

  	
   

  	
  Books of Record and Account

  	
   

  	
  20

  

 

i

 

	
  Section 4.06.

  	
   

  	
  Limitation on Liens

  	
   

  	
  20

  
	
  Section 4.07.

  	
   

  	
  Limitation on Incurrence of Indebtedness

  	
   

  	
  21

  
	
  Section 4.08.

  	
   

  	
  Limitation on Restricted Payments

  	
   

  	
  25

  
	
  Section 4.09.

  	
   

  	
  Limitation
  on Certain Asset Dispositions

  	
   

  	
  30

  
	
  Section 4.10.

  	
   

  	
  Limitation on Sale/Leaseback Transactions

  	
   

  	
  32

  
	
  Section 4.11.

  	
   

  	
  Limitation on Payment Restrictions Affecting
  Restricted Subsidiaries

  	
   

  	
  32

  
	
  Section 4.12.

  	
   

  	
  Limitation on Transactions with Affiliates

  	
   

  	
  34

  
	
  Section 4.13.

  	
   

  	
  Limitation on Guarantees by Restricted Subsidiaries

  	
   

  	
  36

  
	
  Section 4.14.

  	
   

  	
  Consolidation, Merger or Sale of Assets Permitted

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V           ISSUANCE OF BONDS; LOAN TO COMPANY;
  OTHER OBLIGATIONS

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
   

  	
  Issuance of Bonds; Loan to Company

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI          LOAN PAYMENTS; ADDITIONAL PAYMENTS

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
   

  	
  Loan Payments; Additional Payments

  	
   

  	
  40

  
	
  Section 6.02.

  	
   

  	
  Assignment and Pledge of Issuer’s Rights;
  Unconditional Obligation

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII        ASSIGNMENT

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
   

  	
  Conditions

  	
   

  	
  42

  
	
  Section 7.02.

  	
   

  	
  Documents Furnished to Trustee

  	
   

  	
  42

  
	
  Section 7.03.

  	
   

  	
  Limitation

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII       EVENTS OF DEFAULT AND REMEDIES

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
   

  	
  Events of Default

  	
   

  	
  43

  
	
  Section 8.02.

  	
   

  	
  Remedies

  	
   

  	
  44

  
	
  Section 8.03.

  	
   

  	
  No Remedy Exclusive

  	
   

  	
  45

  
	
  Section 8.04.

  	
   

  	
  Reimbursement of Attorneys’ Fees

  	
   

  	
  45

  
	
  Section 8.05.

  	
   

  	
  Waiver of Breach

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX         REDEMPTION OF BONDS; REPURCHASE OF
  BONDS

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
   

  	
  Redemption of Bonds

  	
   

  	
  45

  
	
  Section 9.02.

  	
   

  	
  Obligation to Prepay

  	
   

  	
  46

  
	
  Section 9.03.

  	
   

  	
  Compliance with Indenture

  	
   

  	
  47

  
	
  Section 9.04.

  	
   

  	
  Offer to Repurchase Upon a Change of Control

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X           DEFEASANCE

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
   

  	
  Defeasance

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI         SUBSIDIARY BOND GUARANTEES

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
   

  	
  Subsidiary Bond Guarantees

  	
   

  	
  49

  
	
  Section 11.02.

  	
   

  	
  Obligations of Subsidiary Guarantors Unconditional

  	
   

  	
  51

  

 

ii

 

	
  Section 11.03.

  	
   

  	
  Limitation on Subsidiary Guarantors’ Liability

  	
   

  	
  52

  
	
  Section 11.04.

  	
   

  	
  Releases of Subsidiary Bond Guarantees

  	
   

  	
  52

  
	
  Section 11.05.

  	
   

  	
  Application of Certain Terms and Provisions to Subsidiary
  Guarantors

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII        MISCELLANEOUS

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.01.

  	
   

  	
  Term of Loan Agreement

  	
   

  	
  53

  
	
  Section 12.02.

  	
   

  	
  Notices

  	
   

  	
  54

  
	
  Section 12.03.

  	
   

  	
  Parties in Interest

  	
   

  	
  54

  
	
  Section 12.04.

  	
   

  	
  Amendments

  	
   

  	
  54

  
	
  Section 12.05.

  	
   

  	
  Counterparts

  	
   

  	
  54

  
	
  Section 12.06.

  	
   

  	
  Severability

  	
   

  	
  54

  
	
  Section 12.07.

  	
   

  	
  Governing Law

  	
   

  	
  54

  
	
  Section 12.08.

  	
   

  	
  Date for Identification Purposes Only; Effective Date

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signatures

  	
   

  	
   

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A        —

  	
   

  	
  Project
  Description

  	
   

  	
   

  

 

iii

 

LOAN AGREEMENT

 

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

 

PRELIMINARY STATEMENT:

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

ARTICLE I

 

DEFINITIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

EXHIBIT A:              Description of Project.

 

2

 

ARTICLE II

 

PARTICULAR COVENANTS, REPRESENTATIONS, WARRANTIES AND AGREEMENTS

 

Section 2.01.       Representations
and Warranties.

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

Section 2.10.       [Reserved].

 

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

 

13

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

ARTICLE III

 

LOAN PROCEEDS; RENOVATION, EXPANSION, EQUIPPING,

COMPLETION AND OPERATION OF PROJECT

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

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

 

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

 

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

 

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

 

17

 

ARTICLE IV

 

ADDITIONAL COVENANTS OF THE COMPANY

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

(c)           Permitted
Liens;

 

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

 

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

 

20

 

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

 

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

 

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

 

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

 

(b)           Indebtedness
outstanding on the Closing Date;

 

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

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

22

 

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

 

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

 

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

 

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

 

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

 

(n)           [Reserved];

 

23

 

(o)           [Reserved];

 

(p)           the
consummation of any Qualified Securitization Transaction;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

24

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 4.08.       Limitation on
Restricted Payments.

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

if
at the time thereof:

 

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

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

27

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

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

 

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

 

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

 

31

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

32

 

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

 

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

 

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

 

(i)            applicable
law, regulations or order;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

33

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 4.12.       Limitation
on Transactions with Affiliates.

 

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

 

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

 

(ii)           purchase any property or assets from,

 

(iii)          make any Investment in, or

 

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

 

34

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

35

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

36

 

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

 

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

 

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

 

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

 

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

 

37

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)      Notwithstanding
paragraph (a) above:

 

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

 

38

 

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

 

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

 

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

 

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

 

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

 

(ii)           either:

 

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

 

39

 

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

 

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

 

ARTICLE V

 

ISSUANCE OF BONDS; LOAN TO COMPANY; OTHER OBLIGATIONS

 

Section 5.01.       Issuance
of Bonds; Loan to Company.  In
order to finance a portion of the costs of the Project, the Issuer will issue,
sell and deliver the Bonds to the initial purchasers thereof and deposit the
proceeds of the Bonds with the Trustee as provided in Section 5.02 of the
Indenture.  Such deposit shall constitute
a loan by the Issuer to the Company under this Loan Agreement.  The obligations of the Company under this
Loan Agreement, including specifically the obligation to make Loan Payments as
provided in Section 5.01(a) hereof are absolute and
unconditional.  The Issuer authorizes the
Trustee to disburse the proceeds of the Bonds in accordance with
Section 5.02 of the Indenture.  The
Company hereby approves the Indenture and the issuance by the Issuer of the
Bonds and all of the terms and conditions thereof.

 

ARTICLE VI

 

LOAN PAYMENTS; ADDITIONAL PAYMENTS

 

Section 6.01.       Loan
Payments; Additional Payments.  (a) In consideration of and in repayment
of the Loan, the Company shall make or cause to be made, as Loan Payments, to
the Trustee for the account of the Issuer, payments in immediately available
funds which correspond, as to time, and are equal in amount as of the Loan
Payment date, to the corresponding payment of principal of, premium, if any,
and interest due on the Bonds.  All Loan
Payments received by the Trustee shall be held and disbursed in accordance with
the provisions of the Indenture and this Loan Agreement for the application to
the payment of principal of, premium, if any, and interest on the Bonds.  Any amount held by the Trustee in the Bond
Fund on any due date for a Loan Payment shall be credited against the Loan
Payment due on such date, to the extent available for such purpose.  Notwithstanding the foregoing, if on any date
the amount held by the Trustee in the Bond Fund is insufficient to make any
required payments on the Bonds as such payments become due, the Company shall
pay such deficiency as a Loan Payment under this Loan Agreement.

 

(b)(i)         The Company agrees
to pay directly to the Trustee (A) an amount equal to the annual fee of
the Trustee for the ordinary services rendered by the Trustee, as trustee, and
its ordinary expenses and all advances, Counsel fees and other expenses
necessarily made or incurred under the Indenture, as and when the same become
due, (B) the reasonable fees, charges and expenses (including advances and
Counsel fees) of the Trustee, as Bond Registrar and paying agent, and any other
paying agent on the Bonds acting as paying agent as provided in the Indenture,
as and when the same become due, (C) the reasonable fees, charges and
expenses

 

40

 

(including
advances and Counsel fees) of the Trustee for the necessary extraordinary
services rendered by it and extraordinary expenses incurred by it under the
Indenture, as and when the same become due, including the costs of any exchange
or transfer of Bonds described in Section 2.05 of the Indenture or which
is expressed to be at the sole cost and expense of the Company, and
(D) all other amounts payable to the Trustee under this Loan Agreement
and/or the Indenture, as applicable, forthwith upon the giving of notice by the
Trustee.

 

(ii)       The Company further
covenants to pay directly to the Issuer an issuance fee of $693,000, and the
fee of its Counsel, and its Pricing Agent, prior to or contemporaneously with
the issuance of the Bonds or as otherwise agreed by the Company and the Issuer,
and within 30 days after receipt of a bill therefor, the reasonable fees and
expenses of the Issuer in connection with and as provided in this Loan
Agreement and the Bonds, such fees and expenses to be paid directly to the
Issuer or as otherwise directed in writing by the Issuer.

 

(c)       In the event the Company
shall fail to make any Loan Payment, the payment so in default shall continue
as an obligation of the Company under this Loan Agreement until the amount in
default shall have been fully paid, and the Company will pay interest on any
overdue amount with respect to principal of the Bonds and, to the extent
permitted by law, on any overdue amount with respect to premium, if any, and
interest on the Bonds, at the interest rate then borne by the Bonds until paid.

 

(d)      If the Company has
deposited moneys and/or Government Obligations pursuant to Section 7.01 of
the Indenture, and thereafter the Bonds become subject to mandatory redemption
upon a Determination of Taxability (as defined in Section 9.02(b) herein)
and there are insufficient moneys available under the Indenture to effect such
redemption, the Company covenants and agrees to pay to the Trustee under the
Indenture any such deficiency amount as is necessary to redeem such Bonds on
the date fixed for redemption.

 

(e)       The foregoing provisions
of this Section 6.01 notwithstanding, the Company agrees that the moneys
and securities, if any, on deposit or to be deposited in the Rebate Fund are
not part of the Trust Estate and are not available to make payments of the
principal, premium, if any, and interest on the Bonds.

 

Section 6.02.       Assignment
and Pledge of Issuer’s Rights; Unconditional Obligation.  As security for the payment of the Bonds, the
Issuer will assign and pledge to the Trustee for its benefit and the benefit of
the Holders, all right, title and interest of the Issuer in and to this Loan
Agreement, including the right to receive payments hereunder and thereunder
(except its Unassigned Rights, including without limitation, the right to
receive payment of expenses, fees, indemnification and the rights to make
determinations and receive notices as herein provided) and hereby directs the
Company to make such payments directly to the Trustee without defense or
set-off by reason of any dispute between the Company and the Issuer or the
Trustee, and hereby agrees that its obligation to make payments hereunder and
to perform its other agreements contained herein are absolute and
unconditional.  The Company herewith
assents to such assignment and pledge and will make payments directly to the
Trustee. The Company and the Issuer agree that only the Trustee may enforce the
rights, remedies and privileges granted to the Issuer hereunder, other than the
Unassigned Rights.

 

41

 

Notwithstanding
the foregoing, neither the Issuer nor the Trustee shall have any obligation to
advance or expend funds under this Loan Agreement beyond the extent of moneys
in the Funds established under the Indenture available therefor.  Until the principal of and interest on the
Bonds shall have been fully paid or provision for the payment of the Bonds made
in accordance with the Indenture, the Company (a) will not suspend or
discontinue any payments provided for in this Loan Agreement, (b) will
perform all its other duties and responsibilities called for by this Loan
Agreement, and (c) will not terminate this Loan Agreement for any cause
including any acts or circumstances that may constitute failure of
consideration, destruction of or damage to the Project, commercial frustration
or purpose, any change in the laws of the United States or of the State or any
political subdivision of either or any failure of the Issuer to perform any of
its agreements, whether express or implied, or any duty, liability or
obligation arising from or connected with this Loan Agreement.

 

This
Loan Agreement and the obligations of the Company to make payments hereunder
are general obligations of the Company payable from any available funds of the
Company.

 

ARTICLE VII

 

ASSIGNMENT

 

Section 7.01.       Conditions.  The Company’s interest in this Loan Agreement
may be assigned in whole or in part by the Company to another entity, subject,
however, to the conditions that (a) such assignment shall not relieve
(other than as described in Section 4.14 hereof) (i) the Company from
primary liability for its obligations to make the Loan Payments or for any
other of its obligations hereunder and (ii) the Subsidiary Guarantors from
primary liability for their obligations under the Subsidiary Bond Guarantees;
and (b) the assignee or its parent or subsidiary assumes in writing the
obligations of the Subsidiary Guarantors under the Subsidiary Bond Guarantees.

 

Section 7.02.       Documents
Furnished to Trustee.  The Company
shall, within 30 days after the delivery of the agreements or other documents
effectuating any assignment pursuant to Section 7.01 hereof, furnish to
the Issuer and the Trustee a true and complete copy thereof.

 

Section 7.03.       Limitation.  This Loan Agreement shall not be assigned in
whole or in part, except as provided in this Article VII or in
Section 6.02 herein.

 

42

 

ARTICLE VIII

 

EVENTS OF DEFAULT AND REMEDIES

 

Section 8.01.       Events of
Default.  Each of the following events
shall constitute and is referred to in this Loan Agreement as an “Event of Default” (whether it shall be voluntary or involuntary
or be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body):

 

(a)           default in the
payment of principal of, or premium, if any, on any Loan Payment when due at
maturity, upon repurchase, upon acceleration or otherwise, (including, without
limitation, failure of the Company to repurchase any Bond on the date required
following a Change of Control), which failure shall have resulted in an “Event
of Default” under Section 8.01(a) of the Indenture; or

 

(b)           default in the
payment of any installment of interest on any Loan Payment when due and
continuance of such Default for 30 days or more, which failure shall have
resulted in an “Event of Default” under Section 8.01(b) of the
Indenture; or

 

(c)           failure to observe,
perform or comply with Section 4.14; or

 

(d)           default (other than
a default set forth in paragraphs (a), (b) and (c) above) in the
performance of, or breach of, any other covenant or warranty of the Company or
of any Restricted Subsidiary in this Loan Agreement and failure to remedy such
default or breach within a period of 30 days after written notice from the
Trustee or the Holders of at least 25% in aggregate principal amount of the then
outstanding Bonds; provided however,
that such default or breach and failure to remedy with respect to any covenant
or warranty in Section 2.05 hereof shall not be an “Event of Default” for
purposes of this paragraph (d) unless such default or breach is a material
default or breach of the applicable covenant or warranty; or

 

(e)           default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any Subsidiary of the Company (other than a Securitization
Subsidiary) (or the payment of which is guaranteed by the Company or any
Restricted Subsidiary of the Company), which default is caused by a failure to
pay principal of or premium, if any, on such Indebtedness upon its stated
maturity or which default results in the acceleration of such Indebtedness
prior to its express maturity and the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
the maturity of which has been so accelerated, aggregates $50.0 million or
more and such acceleration has not been rescinded or annulled or such
Indebtedness discharged in full within 30 days; or

 

(f)            the entry by a
court of competent jurisdiction of one or more judgments, orders or decrees
against the Company or any Subsidiary of the Company (other than a
Securitization Subsidiary) or any of their respective property or assets in an
aggregate

 

43

 

amount
in excess of $50.0 million, which judgments, orders or decrees have not
been vacated, discharged, satisfied or stayed pending appeal within
30 days from the entry thereof and with respect to which legal enforcement
proceedings have been commenced;

 

(g)           the
Company, any Subsidiary Guarantor or any Significant Subsidiary, pursuant to or
within the meaning of any Bankruptcy Law, (i) commences a voluntary case
or proceeding, (ii) consents to the entry of an order for relief against
it in an involuntary case or proceeding, (iii) consents to the appointment
of a Custodian of it or for all or substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors,
(v) makes an admission in writing of its inability to pay its debts
generally as they become due or (vi) takes corporate action in furtherance
of any such action; or

 

(h)           a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that (i) is for relief against the Company, any Subsidiary Guarantor
or any Significant Subsidiary, in an involuntary case, (ii) adjudges the
Company, any Subsidiary Guarantor or any Significant Subsidiary as bankrupt or
insolvent, or approves as properly filed a petition seeking reorganization,
arrangement, and adjustment or composition of or in respect of the Company, any
Subsidiary Guarantor or any Significant Subsidiary, or appoints a Custodian of
the Company, any Subsidiary Guarantor or any Significant Subsidiary, or for all
or substantially all of its property, or (iii) orders the liquidation of
the Company, any Subsidiary Guarantor or any Significant Subsidiary and the
decree remains unstayed and in effect for 60 days.

 

The
Company shall deliver to the Trustee, as soon as practicable (and in any event
within five Business Days), written notice in the form of an Officers’
Certificate of any Default, its status and what action the Company is taking or
proposes to take with respect thereto.

 

As
used in this Loan Agreement, the term “Bankruptcy Law” means Title 11, U.S.
Code, or any similar federal or state bankruptcy, insolvency, reorganization or
other law for the relief of debtors.  As
used in this Loan Agreement, the term “Custodian” means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.

 

Section 8.02.       Remedies.  (a) Upon the occurrence and continuance
of any Event of Default described in Section 8.01(g) or
Section 8.01(h) hereof involving the Company, and further upon the
condition that, in accordance with the terms of the Indenture, the Bonds shall
have been declared to be immediately due and payable pursuant to any provision
of the Indenture, the Loan Payments shall without further action, become and be
immediately due and payable and the Trustee may take whatever action may appear
necessary or desirable to collect the payment then due and to become due.

 

(b)      Any waiver of any “Event
of Default” under the Indenture and a rescission and annulment of its
consequences shall constitute a waiver of the corresponding Event or Events of
Default under this Loan Agreement and a rescission and annulment of the
consequences thereof.

 

44

 

(c)       Upon the occurrence and
continuance of any Event of Default, the Trustee (or the Issuer, but only with
respect to the enforcement of Unassigned Rights) may take any action at law or
in equity to collect any payments then due and thereafter to become due
hereunder or to seek injunctive relief or specific performance of any
obligation, agreement or covenant of the Company hereunder, of the Guarantor
under the Bond Guarantee or of any other Subsidiary Guarantor under any other
Subsidiary Bond Guarantee.

 

(d)      Any amounts collected
from the Company pursuant to this Section 8.02 shall be applied in
accordance with the Indenture.  No action
taken pursuant to this Section 8.02 shall relieve the Company from the
Company’s obligations pursuant to Section 6.01 hereof.

 

Section 8.03.       No Remedy
Exclusive.  No remedy
conferred upon or reserved to the Issuer or the Trustee hereby is intended to
be exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
under this Loan Agreement and the Indenture, now or hereafter existing at law
or in equity or by statute.  No delay or
omission to exercise any right or power accruing upon any Event of Default
shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right or power may be exercised from time to time and as
often as may be deemed expedient.

 

Section 8.04.       Reimbursement
of Attorneys’ Fees.  If the
Company shall default under any of the provisions hereof and the Issuer or the
Trustee shall employ attorneys or incur other reasonable and proper expenses
for the collection of payments due hereunder or for the enforcement of
performance or observance of any obligation or agreement on the part of the
Company contained herein, the Company will on demand therefor reimburse the
Issuer or the Trustee, as the case may be, for the reasonable and proper fees
and expenses of such attorneys and such other reasonable and proper expenses so
incurred.

 

Section 8.05.       Waiver of
Breach.  In the event any obligation
created hereby shall be breached by either of the parties hereto and such
breach shall thereafter be waived by the other party, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive any
other breach hereunder.  In view of the
assignment of certain of the Issuer’s rights and interest hereunder to the
Trustee, the Issuer shall have no power to waive any Event of Default hereunder
by the Company in respect of such rights and interest without the consent of
the Trustee, and the Trustee may exercise any of such rights of the Issuer.

 

ARTICLE IX

 

REDEMPTION OF BONDS; REPURCHASE OF BONDS

 

Section 9.01.       Redemption
of Bonds.  The Company
shall have the option to prepay in whole or in part the amounts payable
hereunder by paying an amount equal to the redemption price of Bonds which may
be redeemed under Section 3.02 of the Indenture.  The Issuer shall take or cause to be taken
the actions required by the Indenture (other than the payment of money) to
discharge the lien thereof through the redemption, or provision for payment or
redemption, of all Bonds then Outstanding, or to effect the redemption, or
provision for payment or redemption,

 

45

 

of
less than all the Bonds then Outstanding, upon receipt by the Issuer and the
Trustee from an Authorized Company Representative of a written notice
designating the principal amount of the Bonds to be redeemed and specifying the
date of redemption (which, unless waived by the Issuer and the Trustee, shall
not be less than 45 days from the date such notice is given, or such
shorter period as the Trustee and the Company may agree from time to time) and
the applicable redemption provision of the Indenture.  Unless otherwise stated therein and except
with respect to a redemption under Section 3.03 of the Indenture, such
notice shall be revocable by the Company at any time prior to the time at which
the Bonds to be redeemed, or for the payment or redemption of which provision
is to be made, are first deemed to be paid in accordance with Article VII
of the Indenture.  The Company shall
furnish any moneys required by the Indenture to be deposited with the Trustee
or otherwise paid by the Issuer in connection with any of the foregoing
purposes.

 

Section 9.02.       Obligation
to Prepay. 
(a) The Company shall be obligated to prepay in whole or in part
the amounts payable hereunder upon the occurrence of the events giving rise to
a mandatory redemption of the Bonds pursuant to Section 3.03 of the
Indenture, by paying an amount equal to the aggregate principal amount of the
Bonds to be redeemed pursuant to the Indenture plus accrued interest to the
redemption date.

 

(b)      The Company shall cause a
mandatory redemption to occur within 60 days after this Loan Agreement is
determined to be invalid or a Determination of Taxability (as defined below)
shall have occurred.  A “Determination of Taxability” means a determination that,
due to the untruth or inaccuracy of any representation or warranty made by the
Company in this Loan Agreement or the breach of any covenant or warranty of the
Company contained in this Loan Agreement, interest on the Bonds, or any of
them, is determined not to be Tax-exempt by (i) a final administrative
determination of the Internal Revenue Service or a final judicial decision of a
court of competent jurisdiction in a proceeding of which the Company received
notice and in which the Company was afforded an opportunity to participate to
the full extent permitted by law or (ii) an opinion of Bond Counsel
obtained by the Company and delivered to the Trustee.  A determination or decision will not be
considered final for purposes of clause (i) of the preceding sentence
unless (A) the Issuer or the holder or holders of the Bonds involved in
the proceeding in which the issue is raised (i) shall have given the
Company and the Trustee prompt written notice of the commencement thereof, and
(ii) shall have offered the Company the opportunity to control the
proceeding; provided the Company agrees to pay all expenses and costs in
connection therewith and to indemnify the Issuer and such holder or holders
against all liability for such expenses and costs (except that any such holder
may engage separate counsel for the holder or holders of the Bonds, and the
Company shall not be liable for the fees or expenses of such counsel but shall
be liable for the fees and expenses of counsel to the Issuer); and
(B) such proceeding shall not be subject to a further right of appeal or
shall not have been timely appealed.

 

(c)       At the time of any such
prepayment of the amounts payable hereunder pursuant to this Section 9.02,
the prepayment amount shall be applied to the redemption of the Bonds on the
date specified in the notice as provided in the Indenture, whether or not such
date is an Interest Payment Date, to the Trustee’s fees and expenses under the
Indenture accrued to such redemption of the Bonds, and to all sums due to the
Issuer under this Loan Agreement.

 

46

 

Whenever
the Company shall have given any notice of prepayment of the amounts payable
hereunder pursuant to this Article IX, which includes a notice for
redemption of the Bonds pursuant to the Indenture, all amounts payable under
the first paragraph of Section 9.02(a) herein shall become due and
payable on the date fixed for redemption of such Bonds.

 

Section 9.03.       Compliance
with Indenture.  Anything in
this Loan Agreement to the contrary notwithstanding, the Issuer and the Company
shall take all actions required by this Loan Agreement and the Indenture in
order to comply with the provisions of Article III of the Indenture.

 

Section 9.04.       Offer to
Repurchase Upon a Change of Control.  (a) If a Change of Control occurs, each
Holder shall have the right to require the Company to repurchase all or any
part of that Holder’s Bonds (which, if in part, shall be in an amount equal to
an Authorized Denomination and the non-purchased portion shall also be in an
amount equal to an Authorized Denomination) pursuant to the Change of Control
offer on the terms set forth in this Loan Agreement (a “Change of
Control Offer”).  In the
Change of Control Offer, the Company shall offer a Change of Control Payment in
cash equal to 101% of the aggregate principal amount of Bonds repurchased plus
accrued and unpaid interest on the Bonds repurchased to the date of
purchase.  Within 30 days following
any Change of Control, the Trustee, at the direction of the Company shall mail
a notice to each Holder stating:

 

(i)            the
transaction or transactions that constitute the Change of Control;

 

(ii)           that
the Change of Control Offer is being made pursuant to this Section 9.04
and that all Bonds tendered shall be accepted for payment;

 

(iii)          the
purchase price and the purchase date, which date shall be no earlier than 30
days and no later than 60 days from the date the notice is mailed (the “Change of Control Payment Date”);

 

(iv)          that
any Bond not tendered shall continue to accrue interest;

 

(v)           that,
unless the Company defaults in the payment of the Change of Control Payment,
all Bonds accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date;

 

(vi)          that
Holders electing to have any Bonds (or portions thereof in Authorized
Denominations) purchased pursuant to a Change of Control Offer shall deliver an
irrevocable notice in writing by the Direct Participant having the ownership
interest in such Bonds, in the form set forth as the “Option of Holder to Elect
Purchase” attached as Schedule I to the form of Bonds in Exhibit A to
the Indenture, to the Trustee at the address specified in the notice, and shall
transfer on the registration books of DTC the ownership interest in such Bonds
(or portions thereof in Authorized Denominations), to the Trustee, prior to the
close of business on the third Business Day preceding the Change of Control
Payment Date;

 

47

 

(vii)         that
Holders shall be entitled to withdraw their election if the Trustee receives,
not later than the close of business on the second Business Day preceding the
Change of Control Payment Date, a telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Bonds delivered
for purchase, and a statement that such Holder is withdrawing his election to
have the Bonds purchased; and

 

(viii)        that
Holders whose Bonds are being purchased only in part shall be issued new Bonds
equal in principal amount to the unpurchased portion of the Bonds surrendered,
which unpurchased portion must be equal to an Authorized Denomination.

 

The
Company shall comply with the requirements of Section 14(e) and Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent those laws and regulations are applicable in connection with the
repurchase of the Bonds as a result of a Change of Control.  To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control provisions
of this Loan Agreement, the Company shall comply with the applicable securities
laws and regulations and will not be deemed to have breached its obligations
under the Change of Control provisions of this Loan Agreement by virtue of such
conflict.

 

(b)      On the Change of Control
Payment Date, the Company shall, to the extent lawful:

 

(i)            accept
for payment all Bonds or portions of Bonds properly tendered pursuant to the
Change of Control offer;

 

(ii)           deposit
with the Trustee an amount equal to the Change of Control Payment in respect of
all Bonds or portions of Bonds properly tendered; and

 

(iii)          deliver
or cause to be delivered to the Trustee the Bonds so accepted together with an
Officers’ Certificate stating the aggregate principal amount of Bonds or
portions of Bonds being purchased by the Company.

 

The
Trustee shall promptly mail to each Holder of Bonds properly tendered the
Change of Control Payment for such Bonds, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Bond equal in principal amount to any unpurchased portion of the Bonds
surrendered, if any; provided that
each new Bond will be in a principal amount equal to an Authorized
Denomination.

 

The
Company shall publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.

 

The
provisions described above that require the Company to make a Change of Control
Offer following a Change of Control will be applicable regardless of whether
any other provisions of this Loan Agreement are applicable.

 

The
Company will not be required to make a Change of Control Offer upon a Change of
Control if (1) a third party makes the Change of Control Offer in the
manner, at the times and 

 

48

 

otherwise
in compliance with the requirements described herein applicable to a Change of
Control Offer made by the Company and purchases all Bonds validly tendered and
not withdrawn under such Change of Control Offer or (2) a notice of
redemption has been given pursuant to the Indenture as described under
Section 3.02 of the Indenture, unless and until there is a default in the
payment of the applicable redemption price. 
A Change of Control Offer may be made in advance of a Change of Control
and may be conditional upon the occurrence of a Change of Control if a
definitive agreement is in place for the Change of Control at the time the
Change of Control Offer is made.

 

ARTICLE X

 

DEFEASANCE

 

Section 10.01.    Defeasance.  If (a) the Company shall pay and
discharge or provide, in a manner satisfactory to the Issuer, for the payment
and discharge of the whole amount of the principal of, premium, if any, and
interest on the Loan, and shall pay or cause to be paid all other sums payable
hereunder, or shall make arrangements satisfactory to the Issuer for such
payment and discharge, (b) provision shall have been made for the satisfaction
and discharge of the Indenture as provided for in Article VII therein and
(c) the Company shall (i) have paid or caused to be paid all other
sums then accrued and unpaid under this Loan Agreement and the Indenture and
(ii) not be in default of any covenant which has resulted, or with the
passage of time or the giving of notice, or both, gives rise to a reasonable
likelihood of resulting, in the invalidity of the Bonds or the inclusion of
interest on any Bond in the gross income of the owner thereof for purposes of
federal income taxation under the Code, then and in that case all property,
rights, and interest hereby conveyed or assigned or pledged shall revert to the
Company, and the estate, right, title and interest of the Issuer therein shall
thereupon cease, terminate and become void; and, except to the extent necessary
to assure the maintenance of the exclusion of interest on the Bonds from gross
income of the owners thereof for federal income tax purposes, in the opinion of
Bond Counsel acceptable to the Issuer, this Loan Agreement, and the rights
hereby granted, shall cease, determine and be discharged and the Issuer in such
case on demand of the Company and at the Company’s cost and expense, shall
execute and deliver to the Company a proper instrument or proper instruments
acknowledging the satisfaction and termination of this Loan Agreement and shall
convey, assign and transfer or cause to be conveyed, assigned or transferred,
and shall deliver or cause to be delivered, to the Company, all property,
including money, then held by the Issuer, other than moneys held in the Rebate
Fund or deposited with the Trustee for the payment of the principal of and
premium, if any, or interest on the Bonds.

 

ARTICLE XI

 

SUBSIDIARY BOND GUARANTEES

 

Section 11.01.    Subsidiary
Bond Guarantees.  (a) Subject
to the provisions of this Article XI, and only to the extent a Subsidiary
Guarantor executes a Subsidiary Guarantee, each Subsidiary Guarantor upon
written request of the Company, jointly and severally, will irrevocably and
unconditionally guarantee to each Holder of Bonds and to the Trustee for itself

 

49

 

and
on behalf of the Holders (i) the due and punctual payment of principal of,
premium, if any, and interest in full on each Bond when and as the same shall
become due and payable whether at Stated Maturity, by declaration of
acceleration or otherwise, (ii) the due and punctual payment of interest
on the overdue principal of, premium, if any, and interest, in full on the
Bonds, to the extent permitted by law, and (iii) the due and punctual
performance of all other Obligations of the Company and the other Subsidiary
Guarantors to the Holders or the Trustee, including without limitation the
payment of fees, expenses, indemnification or other amounts, all in accordance
with the terms of the Bonds and this Loan Agreement.  In case of the failure of the Company punctually
to make any such principal or interest payment or the failure of the Company or
any other Subsidiary Guarantor to perform any such other Obligation, each
Subsidiary Guarantor hereby agrees to cause any such payment to be made
punctually when and as the same shall become due and payable, whether at Stated
Maturity, by declaration of acceleration or otherwise, and as if such payment
were made by the Company and to perform any such other Obligation of the
Company immediately.  Each Subsidiary
Guarantor hereby further agrees to pay any and all expenses (including
reasonable counsel fees and expenses) incurred by the Trustee or the Holders in
enforcing any rights under such Subsidiary Bond Guarantees.  The Subsidiary Bond Guarantees delivered in
accordance with this Article XI will be guarantees of payment and not of
collection.

 

(b)      In connection with the
execution and delivery of a Subsidiary Bond Guarantee, each of the Company and
the Subsidiary Guarantors hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of merger, insolvency or
bankruptcy of the Company or any other Subsidiary Guarantor, any right to
require a proceeding first against the Company or any other Subsidiary
Guarantor, protest or notice with respect to the Bonds or the indebtedness
evidenced thereby and all demands whatsoever, and covenants that the Subsidiary
Bond Guarantees will not be discharged except by complete performance of the
Obligations contained in the Bonds and in this Loan Agreement, or as otherwise
specifically provided therein and herein.

 

(c)       Each Subsidiary
Guarantor hereby waives and relinquishes:

 

(i)            any
right to require the Trustee, the Holders or the Company (each, a “Benefited Party”) to proceed against the Company, the
Subsidiaries of the Company or any other Person or to proceed against or
exhaust any security held by a Benefited Party at any time or to pursue any
other remedy in any secured party’s power before proceeding against the
Subsidiary Guarantors;

 

(ii)           any
defense that may arise by reason of the incapacity, lack of authority, death or
disability of any other Person or Persons or the failure of a Benefited Party
to file or enforce a claim against the estate (in administration, bankruptcy or
any other proceeding) of any other Person or Persons;

 

(iii)          demand,
protest and notice of any kind (except as expressly required by this Loan
Agreement), including but not limited to notice of the existence, creation or
incurring of any new or additional indebtedness or obligation or of any action
or non-action on the part of the Subsidiary Guarantors, the Company, the
Subsidiaries of the

 

50

 

Company,
any Benefited Party, any creditor of the Subsidiary Guarantors, the Company or
the Subsidiaries of the Company or on the part of any other Person whomsoever
in connection with any obligations the performance of which are hereby
guaranteed;

 

(iv)          any
defense based upon an election of remedies by a Benefited Party, including but
not limited to an election to proceed against the Subsidiary Guarantors for
reimbursement;

 

(v)           any
defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal;

 

(vi)          any
defense arising because of a Benefited Party’s election, in any proceeding
instituted under the Bankruptcy Law, of the application of Section 1111(b)(2) of
the Bankruptcy Law; and

 

(vii)         any
defense based on any borrowing or grant of a security interest under Section 364
of the Bankruptcy Law.

 

(d)      Each Subsidiary Guarantor
further agrees that, as between such Subsidiary Guarantor, on the one hand, and
Holders and the Trustee, on the other hand, (i) for purposes of the
relevant Subsidiary Bond Guarantee, the maturity of the Obligations guaranteed
by such Subsidiary Bond Guarantee may be accelerated as provided in Article VIII
herein, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the Obligations guaranteed thereby, and (ii) in
the event of any acceleration of such Obligations (whether or not due and
payable) such Obligations shall forthwith become due and payable by such
Subsidiary Guarantor for purposes of such Subsidiary Bond Guarantee.

 

(e)       The Subsidiary Bond
Guarantees shall continue to be effective or shall be reinstated, as the case
may be, if at any time any payment, or any part thereof, of principal of,
premium, if any, or interest on any of the Bonds is rescinded or must otherwise
be returned by the Holders or the Trustee upon the insolvency, bankruptcy or
reorganization of the Company or any of the Subsidiary Guarantors, all as
though such payment had not been made.

 

(f)       Each Subsidiary
Guarantor shall be subrogated to all rights of the Holders against the Company
in respect of any amounts paid by such Subsidiary Guarantor pursuant to the
provisions of the Subsidiary Bond Guarantees or this Loan Agreement; provided, however, that a Subsidiary Guarantor shall not be
entitled to enforce or to receive any payments until the principal of, premium,
if any, and interest on all Bonds shall have been paid in full.

 

Section 11.02.    Obligations
of Subsidiary Guarantors Unconditional.  Each Subsidiary Guarantor hereby agrees that
its Obligations under the Subsidiary Bond Guarantees shall be guarantees of
payment and shall be unconditional, irrespective of and unaffected by the
validity, regularity or enforceability of the Bonds or this Loan Agreement, or
of any amendment thereto or hereto, the absence of any action to enforce the
same, the waiver or consent by any Holder or by the Trustee with respect to any
provisions thereof or of this Loan Agreement, the entry of any

 

51

 

judgment
against the Company or any other Subsidiary Guarantor or any action to enforce
the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Subsidiary Guarantor.

 

Section 11.03.    Limitation
on Subsidiary Guarantors’ Liability.  Each Subsidiary Guarantor and by its
acceptance hereof each Holder, hereby confirms that it is the intention of all
such parties that a Subsidiary Bond Guarantee by such Subsidiary Guarantor
pursuant to its Subsidiary Bond Guarantee not constitute a fraudulent transfer
or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law.  To effectuate the foregoing
intention, the Holders and such Subsidiary Guarantor hereby irrevocably agree
that the Obligations of such Subsidiary Guarantor under this Article XI
shall be limited to the maximum amount as will, after giving effect to all
other contingent and fixed liabilities of such Subsidiary Guarantor and after
giving effect to any collections from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the Obligations of such other
Subsidiary Guarantor under this Article XI, result in the Obligations of
such Subsidiary Guarantor under its Subsidiary Bond Guarantee not constituting
a fraudulent transfer or conveyance under applicable federal or state law.

 

Section 11.04.    Releases of
Subsidiary Bond Guarantees.  A Subsidiary Bond Guarantee of a Subsidiary
Guarantor will be automatically and unconditionally released (and thereupon
shall terminate and be discharged and be of no further force and effect):

 

(1)           in
connection with any sale or other disposition (including by merger or
otherwise) of the Capital Stock of the Subsidiary Guarantor after which such
Subsidiary Guarantor is no longer a Subsidiary of the Company to a Person that
is not (either before or after giving effect to such transaction) an Affiliate
of the Company, if the sale of all such Capital Stock of that Subsidiary
Guarantor complies with the applicable provisions of this Loan Agreement;

 

(2)           if
the Company properly designates the Subsidiary Guarantor as an Unrestricted
Subsidiary as described in the definition of “Unrestricted Subsidiary” in the
Indenture;

 

(3)           solely
in the case of a Subsidiary Bond Guarantee created pursuant to the covenant
described under Section 4.13, upon the release or discharge of the
guarantee that resulted in the creation of such Subsidiary Bond Guarantee
pursuant to that covenant, except a discharge or release by or as a result of
payment under such guarantee;

 

(4)           upon
a Legal Defeasance or satisfaction and discharge of this Loan Agreement that
complies with the provisions under Article X; or

 

(5)           upon
payment in full of the aggregate principal amount of all Bonds then outstanding
and all other financial obligations under this Loan Agreement, the Indenture
and the Bonds then due and owing.

 

52

 

Upon
any occurrence giving rise to a release of a Subsidiary Bond Guarantee as
specified above, the Trustee will execute any documents reasonably required in
order to evidence or effect such release, discharge and termination in respect
of such Subsidiary Bond Guarantee. 
Neither the Company nor any Subsidiary Guarantor will be required to
make a notation on the Bonds to reflect any such Subsidiary Bond Guarantee or
any such release, termination or discharge.

 

Section 11.05.    Application
of Certain Terms and Provisions to Subsidiary Guarantors.  (a) For purposes of any provision of
this Loan Agreement or the Indenture which provides for the delivery by any
Subsidiary Guarantor of an Officers’ Certificate or an Opinion of Counsel or
both, the definitions of such terms in Section 1.01 of the Indenture shall
apply to such Subsidiary Guarantor as if references therein to the Company were
references to such Subsidiary Guarantor.

 

(b)      Any request, direction,
order or demand which by any provision of this Loan Agreement or the Indenture
is to be made by any Subsidiary Guarantor shall be sufficient if evidenced by a
Company Order; provided that the definition of
such term in Section 1.01 of the Indenture shall apply to such Subsidiary
Guarantor as if references therein to the Company were references to such
Subsidiary Guarantor.

 

(c)       Any notice or demand
which by any provision of this Loan Agreement or the Indenture is required or
permitted to be given or served by the Trustee or by the Holders of Bonds to or
on any Subsidiary Guarantor may be given or served as described in Section 12.08
of the Indenture.

 

(d)      Upon any demand, request
or application by any Subsidiary Guarantor to the Trustee to take any action
under this Loan Agreement or the Indenture, such Subsidiary Guarantor shall
furnish to the Trustee such certificates and opinions as are required in this
Loan Agreement or the Indenture as if all references therein to the Company
were references to such Subsidiary Guarantor.

 

ARTICLE XII

 

MISCELLANEOUS

 

Section 12.01.    Term of
Loan Agreement.  This Loan
Agreement shall be in full force and effect from the date hereof, and shall
continue in effect until the payment in full of all principal of, premium, if
any, and interest on the Bonds, or provision for the payment thereof shall have
been made pursuant to Article VII of the Indenture; all fees, charges,
indemnities and expenses of the Issuer and Trustee, have been fully paid or
provision made for such payment (the payment of which fees, charges,
indemnities and expenses shall be evidenced by a written certification of the
Company that it has fully paid or provided for all such fees, charges,
indemnities and expenses); and all other amounts due hereunder have been duly
paid or provision made for such payment. 
All representations, certifications and covenants by the Company as to
the indemnification of various parties and the payment of fees and expenses of
the Issuer as described in Section 6.01(b)(ii) hereof, and all matter
affecting the tax-exempt status of the Bonds, shall survive the termination of
this Loan Agreement.

 

53

 

Section 12.02.    Notices.  Except as otherwise provided in this Loan
Agreement, all notices, certificates, requests, requisitions and other communications
hereunder shall be in writing and shall be sufficiently given and shall be
deemed given when delivered or mailed as provided in the Indenture.

 

Section 12.03.    Parties in
Interest.  This Loan
Agreement shall inure to the benefit of and shall be binding upon the Issuer,
the Company and their respective successors and assigns, and no other person,
firm or corporation shall have any right, remedy or claim under or by reason of
this Loan Agreement except for rights of payment and indemnification hereunder
of the Trustee and the Registrar. 
Section 12.05 hereof to the contrary notwithstanding, for purposes
of perfecting a security interest in this Loan Agreement by the Trustee, only
the counterpart delivered, pledged and assigned to the Trustee shall be deemed
the original.  No security interest in
this Loan Agreement may be created by the transfer of any counterpart thereof
other than the original counterpart delivered, pledged and assigned to the
Trustee.

 

Section 12.04.    Amendments.  This Loan Agreement may be amended only by
written agreement of the Company and the Issuer and with the written consent of
the Trustee in accordance with the provisions of Section 11.05 or
Section 11.06 of the Indenture, as applicable; provided,
however, that Exhibit A
to this Loan Agreement may be amended upon compliance only with the
requirements of Section 3.03 hereof.

 

Section 12.05.    Counterparts.  This Loan Agreement may be executed in any
number of counterparts, each of which, when so executed and delivered, shall be
an original (except as expressly provided in Section 12.03 hereof), and
such counterparts shall together constitute but one and the same Loan
Agreement.

 

Section 12.06.    Severability.  If any clause, provision or Section of
this Loan Agreement shall, for any reason, be held invalid or unenforceable by
any court of competent jurisdiction, such holding shall not invalidate or
render unenforceable any other provision hereof.

 

Section 12.07.    Governing
Law.  This Loan Agreement shall be
governed exclusively by and construed in accordance with the laws of the State
without application of the conflicts of law provisions of any other state.

 

Section 12.08.    Date for
Identification Purposes Only; Effective Date.  The date on this Loan Agreement shall be for
identification purposes only and shall not be construed to imply that this Loan
Agreement was executed on such date. 
This Loan Agreement shall become effective upon the Closing Date.

 

54

 

IN
WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly
executed as of the day and year first above written. 

 

 

	
   

  	
   

  	
  THE
  COUNTY OF COOK, ILLINOIS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Jaye
  Morgan Williams

  
	
   

  	
   

  	
   

  	
  Name:
  Jaye Morgan Williams

  
	
   

  	
   

  	
   

  	
   Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ David
  D. Orr 

  	
   

  	
   

  
	
   

  	
  Name:
  David D. Orr

  	
   

  	
   

  
	
   

  	
   County
  Clerk

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NAVISTAR
  INTERNATIONAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Jim
  Moran

  
	
   

  	
   

  	
   

  	
  Name:
  Jim Moran

  
	
   

  	
   

  	
   

  	
  Title: Vice
  President and Treasurer

  

 

55

 

EXHIBIT A

 

PROJECT DESCRIPTION

 

The
Project consists of the renovation, expansion and equipping of the existing
office and manufacturing plant of the Company or the Guarantor located at 10400
West North Avenue, Melrose Park, Illinois 60160-1028, including but
not limited to space and facilities to be used for research, development and
project testing, all as more fully described in the Project Certificate.

 

 

 

INDENTURE OF TRUST

 

between

 

THE COUNTY OF COOK, ILLINOIS

 

and

 

CITIBANK N.A., as Trustee

 

 providing for the issuance of

 

$90,000,000

THE COUNTY OF COOK, ILLINOIS

RECOVERY ZONE FACILITY REVENUE BONDS

(NAVISTAR INTERNATIONAL CORPORATION PROJECT) SERIES 2010

 

Dated as of October 1,
2010

 

 

 

TABLE OF CONTENTS

 

	
  SECTION

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  Granting Clauses

  	
   

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS AND RULES OF CONSTRUCTION

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
   

  	
  General Definitions

  	
  3

  
	
  Section 1.02.

  	
   

  	
  Rules of Construction

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  THE BONDS

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
   

  	
  Authorization of Bonds

  	
  42

  
	
  Section 2.02.

  	
   

  	
  Date, Denomination, Interest Rates, and Maturities

  	
  42

  
	
  Section 2.03.

  	
   

  	
  Form of Bonds

  	
  43

  
	
  Section 2.04.

  	
   

  	
  Execution of Bonds

  	
  43

  
	
  Section 2.05.

  	
   

  	
  Transfer and Exchange of Bonds

  	
  43

  
	
  Section 2.06.

  	
   

  	
  Bond Register

  	
  44

  
	
  Section 2.07.

  	
   

  	
  Bonds Mutilated, Lost, Destroyed or Stolen

  	
  44

  
	
  Section 2.08.

  	
   

  	
  Bonds; Limited Obligations

  	
  45

  
	
  Section 2.09.

  	
   

  	
  Disposal of Bonds

  	
  46

  
	
  Section 2.10.

  	
   

  	
  Book-Entry System

  	
  46

  
	
  Section 2.11.

  	
   

  	
  CUSIP Numbers

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  REDEMPTION OF BONDS

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
   

  	
  Redemption of Bonds Generally

  	
  47

  
	
  Section 3.02.

  	
   

  	
  Redemption upon Optional Prepayment

  	
  48

  
	
  Section 3.03.

  	
   

  	
  Mandatory Redemption upon Determination of Taxability

  	
  48

  
	
  Section 3.04.

  	
   

  	
  Selection of Bonds for Redemption

  	
  49

  
	
  Section 3.05.

  	
   

  	
  Notice of Redemption

  	
  49

  
	
  Section 3.06.

  	
   

  	
  Partial Redemption or Purchase of Bonds

  	
  50

  
	
  Section 3.07.

  	
   

  	
  No Partial Redemption after Default

  	
  50

  
	
  Section 3.08.

  	
   

  	
  Payment of Redemption Price

  	
  50

  
	
  Section 3.09.

  	
   

  	
  Effect of Redemption

  	
  50

  
	
  Section 3.10.

  	
   

  	
  Purchase in Lieu of Optional Redemption

  	
  51

  
	
  Section 3.11.

  	
   

  	
  Company’s Offer to Purchase

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  GENERAL COVENANTS

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
   

  	
  Payment of Bonds

  	
  52

  
	
  Section 4.02.

  	
   

  	
  Performance of Covenants by Issuer; Issuer; Due Execution

  	
  52

  
	
  Section 4.03.

  	
   

  	
  Defense of Issuer’s Rights

  	
  53

  
	
  Section 4.04.

  	
   

  	
  Recordation and Other Instruments

  	
  54

  
	
  Section 4.05.

  	
   

  	
  Rights under Loan Agreement

  	
  54

  
	
  Section 4.06.

  	
   

  	
  Prohibited Activities

  	
  54

  
	
  Section 4.07.

  	
   

  	
  No Disposition of Trust Estate

  	
  55

  
	
  Section 4.08.

  	
   

  	
  Access to Books

  	
  55

  
	
  Section 4.09.

  	
   

  	
  Source of Payment of Bonds

  	
  55

  
	
  Section 4.10.

  	
   

  	
  Provisions for Payment of Expenses

  	
  55

  

 

i

 

	
  SECTION

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  FUND AND ACCOUNTS; DEPOSIT AND APPLICATION OF BOND PROCEEDS

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
   

  	
  Creation of Bond Fund and Accounts; Rebate Fund

  	
  55

  
	
  Section 5.02.

  	
   

  	
  Application of Bond Proceeds

  	
  56

  
	
  Section 5.03.

  	
   

  	
  Deposits into the Funds; Use of Moneys in the Funds

  	
  59

  
	
  Section 5.04.

  	
   

  	
  Bonds Not Presented for Payment of Principal

  	
  60

  
	
  Section 5.05.

  	
   

  	
  Payment to the Company

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  INVESTMENTS

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
   

  	
  Investment of Moneys in Funds

  	
  61

  
	
  Section 6.02.

  	
   

  	
  Conversion of Investment to Cash

  	
  61

  
	
  Section 6.03.

  	
   

  	
  Credit for Gains and Charge for Losses

  	
  61

  
	
  Section 6.04.

  	
   

  	
  Payments into Rebate Fund; Application of Rebate Fund

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  DEFEASANCE

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
   

  	
  Defeasance

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  DEFAULTS AND REMEDIES

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
   

  	
  Events of Default

  	
  64

  
	
  Section 8.02.

  	
   

  	
  Acceleration; Other Remedies

  	
  64

  
	
  Section 8.03.

  	
   

  	
  Restoration to Former Position

  	
  66

  
	
  Section 8.04.

  	
   

  	
  Owners’ Right to Direct Proceedings

  	
  66

  
	
  Section 8.05.

  	
   

  	
  Limitation on Owners’ Right to Institute Proceedings

  	
  67

  
	
  Section 8.06.

  	
   

  	
  No Impairment of Right to Enforce Payment

  	
  67

  
	
  Section 8.07.

  	
   

  	
  Proceedings by Trustee Without Possession of Bonds

  	
  67

  
	
  Section 8.08.

  	
   

  	
  No Remedy Exclusive

  	
  67

  
	
  Section 8.09.

  	
   

  	
  No Waiver of Remedies

  	
  68

  
	
  Section 8.10.

  	
   

  	
  Application of Moneys

  	
  68

  
	
  Section 8.11.

  	
   

  	
  Severability of Remedies

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  TRUSTEE; REGISTRAR

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
   

  	
  Acceptance of Trusts; Representations, Warranties and
  Covenants of the Trustee

  	
  69

  
	
  Section 9.02.

  	
   

  	
  No Responsibilities for Recitals

  	
  70

  
	
  Section 9.03.

  	
   

  	
  Limitations on Liability

  	
  70

  
	
  Section 9.04.

  	
   

  	
  Compensation, Expenses and Advances

  	
  72

  
	
  Section 9.05.

  	
   

  	
  Notice of Events of Default and Determination of Taxability

  	
  73

  
	
  Section 9.06.

  	
   

  	
  Action by Trustee

  	
  73

  
	
  Section 9.07.

  	
   

  	
  Good-Faith Reliance

  	
  73

  
	
  Section 9.08.

  	
   

  	
  Dealings in Bonds; Allowance of Interest

  	
  74

  
	
  Section 9.09.

  	
   

  	
  Several Capacities

  	
  75

  
	
  Section 9.10.

  	
   

  	
  Resignation of Trustee

  	
  75

  
	
  Section 9.11.

  	
   

  	
  Removal of Trustee

  	
  75

  
	
  Section 9.12.

  	
   

  	
  Appointment of Successor Trustee

  	
  75

  

 

ii

 

	
  SECTION

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.13.

  	
   

  	
  Qualifications of Successor Trustee

  	
  76

  
	
  Section 9.14.

  	
   

  	
  Judicial Appointment of Successor Trustee

  	
  76

  
	
  Section 9.15.

  	
   

  	
  Acceptance of Trusts by Successor Trustee

  	
  77

  
	
  Section 9.16.

  	
   

  	
  Successor by Merger or Consolidation

  	
  77

  
	
  Section 9.17.

  	
   

  	
  Standard of Care

  	
  77

  
	
  Section 9.18.

  	
   

  	
  Intervention in Litigation of the Issuer

  	
  77

  
	
  Section 9.19.

  	
   

  	
  Registrar

  	
  77

  
	
  Section 9.20.

  	
   

  	
  Qualifications of Registrar; Resignation; Removal

  	
  78

  
	
  Section 9.21.

  	
   

  	
  Additional Duties of Trustee

  	
  78

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  EXECUTION OF INSTRUMENTS BY OWNERS AND PROOF OF OWNERSHIP
  OF BONDS

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  MODIFICATION OF THIS INDENTURE AND THE LOAN AGREEMENT

  	
  80

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
   

  	
  Supplemental Indentures Without Owner Consent

  	
  80

  
	
  Section 11.02.

  	
   

  	
  Supplemental Indentures Requiring Owner Consent

  	
  81

  
	
  Section 11.03.

  	
   

  	
  Effect of Supplemental Indenture

  	
  82

  
	
  Section 11.04.

  	
   

  	
  Consent of the Company and Other Parties

  	
  83

  
	
  Section 11.05.

  	
   

  	
  Amendment of Loan Agreement Without Owner Consent; Waivers

  	
  83

  
	
  Section 11.06.

  	
   

  	
  Amendment of Loan Agreement Requiring Owner Consent

  	
  84

  
	
  Section 11.07.

  	
   

  	
  Amendment of Bond Guarantee

  	
  84

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  MISCELLANEOUS

  	
  85

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 12.01.

  	
   

  	
  [Reserved]

  	
  85

  
	
  Section 12.02.

  	
   

  	
  Parties in Interest

  	
  85

  
	
  Section 12.03.

  	
   

  	
  Severability

  	
  86

  
	
  Section 12.04.

  	
   

  	
  No Personal Liability of Issuer Officials

  	
  86

  
	
  Section 12.05.

  	
   

  	
  Bonds Owned by the Issuer or the Company

  	
  86

  
	
  Section 12.06.

  	
   

  	
  Counterparts

  	
  86

  
	
  Section 12.07.

  	
   

  	
  Governing Law; Waiver of Jury Trial

  	
  86

  
	
  Section 12.08.

  	
   

  	
  Notices

  	
  87

  
	
  Section 12.09.

  	
   

  	
  Holidays

  	
  88

  
	
  Section 12.10.

  	
   

  	
  Date for Identification Purposes Only; Effective Date

  	
  88

  
	
  Section 12.11.

  	
   

  	
  Force Majeure

  	
  88

  
	
  Section 12.12.

  	
   

  	
  U.S.A. Patriot Act

  	
  89

  
	
   

  	
   

  	
   

  	
   

  
	
  Signatures

  	
   

  	
   

  	
  90

  

 

EXHIBIT A—FORM OF
BOND

EXHIBIT B—FORM OF
REQUISITION

 

iii

 

INDENTURE OF TRUST

 

THIS
INDENTURE OF TRUST, made and entered into as of October 1, 2010, between
The COUNTY OF COOK, ILLINOIS, a home rule unit under Section 6(a) of
Article VII of the 1970 Constitution of the State of Illinois (the “Issuer”), and CITIBANK N.A., duly organized, existing and
authorized to accept and execute trusts of the character herein set out, with
its designated corporate trust office in New York, New York, and being
qualified to accept and administer the trusts hereby created, as trustee (the “Trustee”),

 

W I T N E S S E T H :

 

WHEREAS,
under the power granted by Section 6(a) of Article VII of the
1970 Constitution of the State of Illinois, as supplemented by the Local
Government Debt Reform Act, as amended, and the other Omnibus Bond Acts, as
amended, the Issuer is authorized to issue recovery zone facility bonds for
qualifying projects within the Issuer, which has been designated as a “recovery
zone” for purposes of Section 1400U-1 of the Internal Revenue Code of
1986, as amended; and

 

WHEREAS,
Navistar International Corporation, a Delaware corporation (the “Company”), desires to (i) finance, refinance or be
reimbursed for all or a portion of the costs of the renovation, expansion and
equipping of certain capital improvements as more fully described in Exhibit A to the Loan Agreement (as hereinafter defined)
(the “Project”), (ii) pay a portion of
the interest accruing on the Bonds (as hereinafter defined) during the
construction period and (iii) pay certain costs relating to the issuance
of the Bonds; and

 

WHEREAS,
the Company desires to achieve the foregoing by borrowing funds from the Issuer
pursuant to the Loan Agreement dated as of October 1, 2010 (the “Loan Agreement”), between the Company and the Issuer; and

 

WHEREAS,
it has been determined that in order to obtain such funds to lend to the
Company, the Issuer will issue $90,000,000 in aggregate principal amount of its
Recovery Zone Facility Revenue Bonds (Navistar International Corporation
Project) Series 2010 (the “Bonds”), under
this Indenture; and

 

WHEREAS,
the execution and delivery of this Indenture and the issuance of the Bonds have
been in all respects duly and validly authorized by a resolution duly passed
and approved by the Issuer; and

 

WHEREAS,
the Trustee has agreed to accept the trusts herein created upon the terms
herein set forth; and

 

WHEREAS,
all things necessary to make the Bonds, when issued as provided in this
Indenture, the valid, binding and legal limited obligations of the Issuer
according to the import thereof, and to constitute this Indenture a valid
assignment of the amounts pledged to the payment of the principal of, premium,
if any, and interest on the Bonds and a valid assignment of the rights of the
Issuer under the Loan Agreement have been done and performed, and the 

 

 

creation,
execution and delivery of this Indenture and the execution and issuance of the
Bonds, subject to the terms hereof, in all respects have been duly authorized;

 

NOW,
THEREFORE, the Issuer, in consideration of the premises and the acceptance by
the Trustee of the trusts hereby created, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and in order to secure the payment of the principal of, premium, if any, and
interest on the Bonds according to their tenor and effect, and to secure the performance
and observance by the Issuer of all of the covenants and obligations expressed
or implied herein and in the Bonds, does hereby irrevocably grant, alienate,
bargain, sell, convey, transfer, assign and pledge unto the Trustee (to the
extent of its legal capacity to hold the same for the purposes hereof), and the
successors in trust and assigns of the Trustee forever:

 

GRANTING CLAUSES

 

DIVISION I

 

All
right, title and interest of the Issuer (a) in, to and under the Loan
Agreement (except its Unassigned Rights); (b) in the amounts payable to
the Issuer under the Loan Agreement (excluding Unassigned Rights); and
(c) to do any and all other things which the Issuer is or may become
entitled to do under the Loan Agreement; provided, however,
that the assignment made pursuant to this clause shall not impair or diminish
any obligation of the Issuer under the Loan Agreement or alter the rights,
duties and obligations of the Trustee under the remaining terms of this
Indenture; and

 

DIVISION II

 

All
right, title and interest of the Issuer in and to all moneys and other
obligations which are, from time to time, deposited or required to be deposited
with or held or required to be held by or on behalf of the Trustee in trust
under any of the provisions of this Indenture (except moneys or obligations
deposited with or paid to the Trustee for payment or redemption of Bonds that
are deemed no longer Outstanding hereunder); and

 

DIVISION III

 

Any
and all property, rights and interests of every kind or description which, from
time to time hereafter, may be sold, transferred, conveyed, assigned, pledged,
mortgaged or delivered to the Trustee as additional security hereunder; the
Trustee is hereby authorized to receive all such property at any time and to
hold and apply it subject to the terms hereof;

 

EXCEPTED PROPERTY

 

There
is, however, expressly excepted and excluded from the lien and operation of
this Indenture amounts held by the Trustee in the Rebate Fund (as hereinafter
defined) established hereunder;

 

2

 

TO
HAVE AND TO HOLD all and singular the Trust Estate (as hereinafter defined),
whether now owned or hereafter acquired, irrevocably unto the Trustee and its
successors in trust and assigns forever;

 

IN
TRUST, NEVERTHELESS, upon the terms and trusts herein set forth, to secure the
payment of the Bonds to be issued hereunder, and premium, if any, payable upon
redemption or prepayment thereof, and the interest payable thereon, and to
secure also the observance and performance of all the terms, provisions,
covenants and conditions of this Indenture, and for the equal and ratable
benefit and security of all and singular the Owners of all Bonds issued
hereunder, without preference, priority or distinction as to lien or otherwise,
except as otherwise hereinafter provided, of any one Bond over any other Bond
or as between principal and interest, and it is hereby mutually covenanted and
agreed that the terms and conditions upon which the Bonds are to be issued,
authenticated, delivered, secured and accepted by all persons who shall from
time to time be or become the Owners thereof, and the trusts and conditions
upon which the pledged moneys and revenues are to be held and disbursed, are as
follows;

 

PROVIDED, HOWEVER, that if the Issuer, its
successors or assigns, shall well and truly pay, or cause to be paid, the
principal of the Bonds and the interest and premium, if any, due or to become
due thereon at the times and in the manner mentioned in the Bonds according to
the true intent and meaning thereof, and shall cause the payments to be made
into the Bond Fund as required under Article V hereof, or shall provide,
as permitted by Article VII hereof, for the payment thereof, and for the
payment of certain excess investment earnings to the United States of America
as required under Article V hereof, and shall well and truly keep, perform
and observe all of the covenants and conditions pursuant to the terms of this
Indenture to be kept, performed and observed by it, and shall pay or cause to
be paid to the Trustee all sums of money due or to become due in accordance
with the terms and provisions hereof, and the rights hereby granted shall cease
and terminate; otherwise this Indenture is to be and remain in full force and
effect.

 

THIS
INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all Bonds
issued and secured hereunder are to be issued, authenticated and delivered, and
all said property, rights and interests, including, without limitation, the
amounts hereby assigned, are to be dealt with and disposed of under, upon and
subject to the terms, conditions, stipulations, covenants, agreements, trusts,
uses and purposes hereinafter expressed, and that the Issuer has agreed and
covenanted, and hereby does agree and covenant, with the Trustee and the
Owners, from time to time, of the Bonds, or any part thereof, as follows:

 

ARTICLE I

 

DEFINITIONS AND RULES OF CONSTRUCTION

 

Section 1.01.       General Definitions.  The terms defined in this
Section 1.01 shall have the meanings provided herein for all purposes of
this Indenture and the Loan Agreement, unless the context clearly requires
otherwise.

 

3

 

“Acquired Indebtedness” of any specified Person
means Indebtedness of any other Person and its Restricted Subsidiaries existing
at the time such other Person merged with or into or became a Restricted
Subsidiary of such specified Person or assumed by the specified Person in
connection with the acquisition of assets from such other Person and not
incurred by the specified Person in connection with or in anticipation of
(a) such other Person and its Restricted Subsidiaries being merged with or
into or becoming a Restricted Subsidiary of such specified Person or
(b) such acquisition by the specified Person.

 

“Affiliate” means, when used with reference to any Person, any
other Person directly or indirectly controlling, controlled by, or under direct
or indirect common control with, the referent Person, as the case may be.  For the purposes of this definition, “control”
when used with respect to any specified Person means the power to direct or
cause the direction of management or policies of the referent Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms “controlling” and “controlled” have meanings
correlative of the foregoing.

 

“Asset Disposition” means any sale, transfer or
other disposition (including, without limitation, by merger, consolidation or
sale-and-leaseback transaction) of:

 

(1)           shares of Capital Stock of a Restricted Subsidiary of the
Company (other than directors’ qualifying shares) or

 

(2)           property or assets of the Company or any of its Restricted
Subsidiaries (other than shares of Capital Stock of the Company).

 

Notwithstanding
the foregoing, an Asset Disposition shall not include:

 

(1)           any sale, transfer or other disposition of shares of
Capital Stock, property or assets by a Restricted Subsidiary of the Company to
the Company or to any Restricted Subsidiary of the Company;

 

(2)           any sale, transfer or other disposition of defaulted
receivables for collection or any sale, transfer or other disposition of
property or assets in the ordinary course of business, including, without
limitation, sales of inventory in the ordinary course of its business and the
granting of any option or other right to purchase, lease or otherwise acquire
inventory in the ordinary course of its business;

 

(3)           dispositions of assets or shares of Capital Stock of a
Restricted Subsidiary in a single market transaction or series of related
transactions with an aggregate fair market value less than $10.0 million;

 

(4)           the grant in the ordinary course of business of any
license of patents, trademarks, registrations therefor and other similar
intellectual property;

 

4

 

(5)           the granting of any Lien (or foreclosure thereon) securing
Indebtedness to the extent that such Lien is granted in compliance with
Section 4.06 of the Loan Agreement;

 

(6)           any sale, transfer or other disposition constituting a
Permitted Investment or Restricted Payment permitted by Section 4.08 of
the Loan Agreement;

 

(7)           any disposition of assets or property in the ordinary
course of business to the extent such property or assets are surplus,
negligible, obsolete, uneconomical, worn-out or no longer useful in the Company’s
or any of its Subsidiaries’ business;

 

(8)           the sale, lease, conveyance or disposition or other
transfer of all or substantially all of the assets of the Company as permitted
by Section 4.14 of the Loan Agreement;

 

(9)           sales of accounts receivable, equipment and related assets
(including contract rights) of the type specified in the definition of “Qualified
Securitization Transaction” to a Securitization Subsidiary for the fair market
value thereof;

 

(10)         transfers of accounts receivable, equipment and related
assets (including contract rights) of the type specified in the definition of “Qualified
Securitization Transaction” (or a fractional undivided interest therein) by a
Securitization Subsidiary in a Qualified Securitization Transaction.

 

(11)         any sale, transfer or other disposition of Capital Stock of,
or Indebtedness or other securities of, any Unrestricted Subsidiary that was
formed or designated as an Unrestricted Subsidiary after the Original
Securities Issuance Date;

 

(12)         sale, transfer or other disposition of cash or Cash
Equivalents or any amounts received pursuant to an Interest Rate Agreement,
Currency Agreement or Commodity Price Agreement; and

 

(13)         the surrender or waiver of contract rights or the
settlement, release or surrender of contract, tort or other claims of any kind.

 

“Asset Sale Offer Trigger Date” has the meaning set forth
in Section 4.09 of the Loan Agreement.

 

“Attributable Indebtedness” in respect of a
Sale/Leaseback Transaction involving an operating lease means, as at the time
of determination, the present value (discounted at the implied interest rate in
such transaction compounded annually) of the total obligations of the lessee
for rental payments during the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which such lease has been
extended).

 

“Authorized Company Representative” means each person at the
time designated to act on behalf of the Company by written certificate
furnished to the Issuer and the Trustee 

 

5

 

containing
the specimen signature of such person and signed on behalf of the Company by
its President, any Vice President, its Secretary or any Assistant
Secretary.  Such certificate may
designate an alternate or alternates.

 

“Authorized Denomination” means $100,000 or any
integral multiple of $5,000 in excess thereof.

 

“Average Life” means, as of the date of determination, with
respect to any Indebtedness for borrowed money or Preferred Stock, the quotient
obtained by dividing

 

(1)           the sum of the products of the number of years from the
date of determination to the dates of each successive scheduled principal or
liquidation value payments of such Indebtedness or Preferred Stock,
respectively, and the amount of such principal or liquidation value payments,
by

 

(2)           the sum of all such principal or liquidation value
payments.

 

“Beneficial Owner” is defined in
Section 2.10.

 

“Board of Directors” means (i) with respect
to a corporation, the board of directors of the corporation, (ii) with
respect to a partnership, the board of directors of the general partner of the
partnership, and (iii) with respect to any other Person, the board or
committee of such Person serving a similar function.

 

“Bond” or “Bonds” means
the Issuer’s Recovery Zone Facility Revenue Bonds (Navistar International
Corporation Project) Series 2010, issued pursuant to this Indenture in the
aggregate principal amount of $90,000,000.

 

“Bondholder” or “Bondowner”:  See definition of “Holder” herein.

 

“Bond Counsel” means Chapman and Cutler LLP or any other
firm of nationally recognized bond counsel familiar with the type of
transactions contemplated under this Indenture selected by the Company and
acceptable to the Trustee.

 

“Bond Documents” means this Indenture, the Loan Agreement, the
Bond Guarantee, the Tax Agreement, the Project Certificate and the Bonds.

 

“Bond Fund” means the trust fund by that name created pursuant
to Section 5.01(a) hereof.

 

“Bond Guarantee” means the Bond Guarantee from the Guarantor
to Citibank N.A. dated as of October 1, 2010 relating to the Bonds, as it
may be amended or supplemented in accordance with its terms.  The Bond Guarantee is a Subsidiary Bond
Guarantee.

 

“Bond Payment Date” means any Interest Payment
Date, any redemption date, any maturity date and any other date on which the
principal of, and premium, if any, and interest on, 

 

6

 

the
Bonds is to be paid to the Owners thereof, whether upon redemption, at maturity
or upon acceleration of maturity of the Bonds.

 

“Bond Ordinance” means the Ordinance adopted by the Board of
Commissioners of the Issuer on October 5, 2010, authorizing the issuance,
delivery and sale of the Bonds.

 

“Business Day” means a day (other than Saturday or Sunday)
on which the Trustee and the banks in New York are open for business.

 

“Canadian Subsidiary” means any Foreign
Subsidiary having its principal operations in Canada.

 

“Capital Stock” means, with respect to any Person, any and
all shares, interests, participations, rights in, or other equivalents (however
designated and whether voting or non-voting) of, such Person’s capital stock
(or other ownership or profits interest, including, without limitation,
partnership, member or trust interest), including each class of Common or
Preferred Stock of such Person, whether outstanding on the Original Securities
Issuance Date or issued after the Original Securities Issuance Date, and any
and all rights, warrants or options exchangeable for or convertible into such
capital stock (other than any debt securities convertible or exchangeable into
such capital stock).

 

“Capitalized Lease Obligation” means obligations under a
lease that are required to be classified and accounted for as capital lease
obligations under GAAP and, for purposes of this Indenture and the Loan
Agreement, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with
GAAP.  The Stated Maturity of such
obligation shall be the date of the last payment of rent or any other amount
due under such lease prior to the first date upon which such lease may be terminated
by the lessee without penalty.

 

“Cash Equivalents” means:

 

(1)           United States dollars or in the case of any Foreign
Subsidiary, such local currencies held by it from time to time in the ordinary
course of business;

 

(2)           securities issued or directly and fully guaranteed or
insured by the United States government (or, in the case of a Canadian
Subsidiary, Canadian government (federal or provincial)) or any agency or
instrumentality of the United States government (or Canadian government)
(provided that the full faith and credit of the United States or Canada
(federal or provincial, as the case may be), as the case may be, is pledged in
support of those securities) having maturities of not more than twenty-four
months from the date of acquisition;

 

(3)           certificates of deposit and eurodollar time deposits with
maturities of twenty-four months or less from the date of acquisition, bankers’
acceptances with maturities not exceeding twenty-four months and overnight bank
deposits, in each case, with any commercial bank incorporated under the laws of
the United States, any state

 

7

 

thereof,
the District of Columbia, Canada or any province or territory thereof and
having capital and surplus in excess of $500.0 million and a Thomson Bank
Watch Rating of “B” or better;

 

(4)           repurchase obligations or securities lending arrangements
for underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;

 

(5)           commercial paper having a rating of at least “A-2” from
S&P or “P-2” from Moody’s and in each case maturing within 270 days after
the date of acquisition or asset backed securities having a rating of at least “A”
from S&P or “A2” from Moody’s and in each case maturing within thirty-six
months after the date of acquisition;

 

(6)           demand or time deposit accounts used in the ordinary
course of business with overseas branches of commercial banks incorporated
under the laws of the United States of America, any state thereof or the
District of Columbia (or in the case of a Canadian Subsidiary, Canada or any
province or territory thereof), provided that
such commercial bank has, at the time of the Company’s or such Restricted
Subsidiary’s Investment therein, (1) capital, surplus and undivided
profits (as of the date of such institution’s most recently published financial
statements) in excess of $100 million and (2) the long-term unsecured debt
obligations (other than such obligations rated on the basis of the credit of a
Person other than such institution) of such institution, at the time of the
Company’s or any Restricted Subsidiary’s Investment therein, are rated at least
“A” from S&P or “A2” from Moody’s;

 

(7)           obligations (including, but not limited to demand or time
deposits, bankers’ acceptances and certificates of deposit) issued or
guaranteed by a depository institution or trust company incorporated under the
laws of the United States of America, any state thereof or the District of
Columbia (or in the case of a Canadian Subsidiary, Canada or any province or
territory thereof), provided that
(A) such instrument has a final maturity not more than one year from the
date of purchase thereof by the Company or any Restricted Subsidiary of the
Company and (B) such depository institution or trust company has at the
time of the Company’s or such Restricted Subsidiary’s Investment therein or
contractual commitment providing for such Investment, (x) capital, surplus
and undivided profits (as of the date of such institution’s most recently
published financial statements) in excess of $100 million and (y) the
long-term unsecured debt obligations (other than such obligations rated on the
basis of the credit of a Person other than such institution) of such
institution, at the time of the Company’s or such Restricted Subsidiary’s
Investment therein or contractual commitment providing for such Investment, are
rated at least “A” from S&P or “A2” from Moody’s;

 

(8)           in the case of any Foreign Subsidiary, securities issued
or directly and fully guaranteed or insured by the Federal Government of the
country where the Foreign Subsidiary is located, money market funds, demand or
time deposits accounts, certificate of deposits, in each case denominated and
payable in local currency and used in the

 

8

 

ordinary
course of the business with reputable commercial banks located in the
jurisdiction of organization of such Foreign Subsidiary; and

 

(9)           money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through (5) of
this definition.

 

Notwithstanding
the foregoing, Investments which would otherwise constitute Cash
Equivalents of the kinds described in clauses (2), (3), (4) and (5) that
are permitted to have maturities in excess of twelve months shall only be
deemed to be Cash Equivalents under this definition if and only if the total
weighted average maturity of all Cash Equivalents of the kinds described in
clauses (2), (3), (4) and (5) does not exceed twelve months on an
aggregate basis.

 

“Change of Control” means the occurrence of one
or more of the following events:

 

(1)           any “person” or “group” (as such terms are used in
Section 13(d) and 14(d) of the Exchange Act), other than
employee or retiree benefit plans or trusts sponsored or established by the
Company or Navistar, Inc., is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 35% or more of the combined voting power
of the Company’s then outstanding Voting Stock;

 

(2)           the following individuals cease for any reason to
constitute more than a majority of the number of directors then serving on the
Board of Directors of the Company: 
individuals who, on the Original Securities Issuance Date, constituted
the Board of Directors and any new director whose appointment or election by
the Board of Directors or nomination for election by the Company’s stockholders
was approved (a) by the vote of at least a majority of the directors then
still in office or whose appointment, election or nomination was previously so
approved or recommended or (b) with respect to directors whose appointment
of election to the Board of Directors was made by the holders of the Company’s
nonconvertible junior preference stock, series B, by the holders of such
preference stock;

 

(3)           the shareholders of the Company shall approve any Plan of
Liquidation (whether or not otherwise in compliance with the provisions of the
Loan Agreement);

 

(4)           the Company consolidates with or merges with or into
another Person, other than a merger or consolidation of the Company in which
the holders of the Common Stock of the Company outstanding immediately prior to
the consolidation or merger hold, directly or indirectly, at least a majority
of the Common Stock of the surviving corporation immediately after such
consolidation or merger; or

 

(5)           the Company or any Restricted Subsidiary of the Company,
directly or indirectly, sells, assigns, conveys, transfers, leases or otherwise
disposes of, in one transaction or a series of related transactions, all or
substantially all of the property or assets of the Company and the Restricted
Subsidiaries of the Company (determined on a

 

9

 

consolidated
basis) to any Person; provided, that
neither (a) the merger of a Restricted Subsidiary of the Company into the
Company or into any Restricted Subsidiary of the Company nor (b) a series
of transactions involving the sale of Receivables or interests therein in the
ordinary course of business by a Securitization Subsidiary in connection with a
Qualified Securitization Transaction nor (c) the grant (but not the
foreclosure or realization) of a Lien on assets of the Company or any
Restricted Subsidiary in connection with Indebtedness permitted pursuant to
clause (c) under Section 4.07 of the Loan Agreement shall be deemed
to be a Change of Control.

 

For
purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.

 

“Closing” and “Closing Date” means
the date of the first authentication and delivery of fully executed and
authenticated Bonds under this Indenture being October 26, 2010.

 

“Code” means the Internal Revenue Code of 1986, as
amended.  Each reference to a section of
the Code herein shall be deemed to include the United States Treasury
Regulations, including temporary and proposed regulations, relating to such
section which is applicable to the Bonds or the use of the proceeds thereof.

 

“Commission” means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.

 

“Commodity Agreement” means any commodity price/index
swap, futures or option contract or similar agreement or arrangement.

 

“Common Stock” of any Person means any and all shares,
interests or other participations in, and other equivalents (however designated
and whether voting or non-voting) of such Person’s common stock, whether
outstanding on the Original Securities Issuance Date or issued after the
Original Securities Issuance Date, and includes, without limitation, all series
and classes of such common stock.

 

“Company” means Navistar International Corporation, a
Delaware corporation, or a successor Person.

 

“Company’s Certificate” means a certificate signed
on behalf of the Company by an Authorized Company Representative.

 

“Company Order” and “Company Request”
mean, respectively, a written order or request signed in the name of the
Company by two Officers, one of whom must be the Chairman 

 

10

 

of
the Board, the President, the Chief Financial Officer, any Executive Vice
President, Senior Vice President or Vice President of the Company.

 

“Completion Certificate” means the certificate of
that name defined in Section 5.02(b) hereof.

 

“Completion Date” means the date when all portions of the
Project have been fully completed in accordance with the plans and
specifications therefor, as then amended, and as identified in the Completion
Certificate.

 

“Consolidated Cash Flow Available For Fixed Charges” of any Person
means for any period the Consolidated Net Income of such Person for such period
plus (to the extent Consolidated Net Income for such period has been reduced
thereby):

 

(1)           Consolidated Fixed Charges of such Person for such period;
plus

 

(2)           Consolidated Tax Expense of such Person for such period;
plus

 

(3)           the consolidated depreciation and amortization expense
included in the income statement of such Person prepared in accordance with
GAAP for such period; plus

 

(4)           any non-recurring fees, expenses or charges related to any
offering of Qualified Capital Stock, Permitted Investment, acquisition, recapitalization,
disposition or incurrence of Indebtedness permitted under the Loan Agreement
(in each case, whether or not successful); plus

 

(5)           any non-recurring or unusual charges or expenses of such
Person or its Restricted Subsidiaries (which, for the avoidance of doubt, shall
include the following items: 
restructuring, plant closure and consolidation, severance, relocation,
contract termination, retention costs, employee termination and similar type
items); plus

 

(6)           [Reserved]

 

(7)           any other non-cash charges to the extent deducted from or
reflected in Consolidated Net Income except for any non-cash charges that
represent accruals of, or reserves for, cash disbursements to be made in any
future accounting period; minus

 

(8)           any non-cash items increasing Consolidated Net Income for
such period, (other than the reversal of a prior accrual or reserve for cash
items previously excluded from Consolidated Cash Flow Available For Fixed
Charges); minus

 

(9)           all cash payments during such period relating to non-cash
charges that were added back in determining Consolidated Cash Flow Available
For Fixed Charges in any prior period; minus

 

11

 

(10)         non-recurring or unusual gains or income of such Person and
its Restricted Subsidiaries.

 

“Consolidated Cash Flow Ratio” of any Person means, for
any period, the ratio of:

 

(1)           Consolidated Cash Flow Available for Fixed Charges of such
Person for such period to

 

(2)           Consolidated Fixed Charges for such period.

 

In
the event that the Company or any Restricted Subsidiary incurs, assumes,
guarantees, redeems, retires or extinguishes any Indebtedness (other than
Indebtedness incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) or issues
or redeems Disqualified Stock or Preferred Stock subsequent to the commencement
of the period for which the Consolidated Cash Flow Ratio is being calculated
but prior to or simultaneously with the event for which the calculation of the
Consolidated Cash Flow Ratio is made (the “Consolidated Cash Flow
Ratio Calculation Date”), then the Consolidated Cash Flow Ratio
shall be calculated giving pro forma effect to such incurrence, assumption,
guarantee, redemption, retirement or extinguishment of Indebtedness, or such
issuance or redemption of Disqualified Stock or Preferred Stock, as if the same
had occurred at the beginning of the applicable four-quarter period.

 

For
purposes of making the computation referred to above, Investments, acquisitions,
dispositions, mergers, consolidations and discontinued operations (as
determined in accordance with GAAP) that have been made by the Company or any
of its Restricted Subsidiaries during the four-quarter reference period or
subsequent to such reference period and on or prior to or simultaneously with
the Consolidated Cash Flow Ratio Calculation Date shall be calculated on a pro
forma basis assuming that all such Investments, acquisitions, dispositions,
mergers, consolidations and discontinued operations (and the change in any
associated fixed charge obligations and the change in Consolidated Cash Flow
Available for Fixed Charges resulting therefrom) had occurred on the first day
of the four-quarter reference period.  If
since the beginning of such period any Person that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any of its
Restricted Subsidiaries since the beginning of such period shall have made any
Investment, acquisition, disposition, merger, consolidation or discontinued
operation that would have required adjustment pursuant to this definition, then
the Consolidated Cash Flow Ratio shall be calculated giving pro forma effect
thereto for such period as if such Investment, acquisition, disposition, merger,
consolidation or discontinued operation had occurred at the beginning of the
applicable four-quarter period.

 

Calculations
of pro forma amounts in accordance with this definition shall be done in good
faith by a responsible financial or accounting officer of the Company and may
give pro forma effect to any cost savings, operating expense reductions or
synergies that have been realized during such period as if such actions had
been implemented at the beginning of such period and, except as otherwise provided
herein, in accordance with Article 11 of Regulation S-X under the
Securities Act or any successor provision.

 

12

 

If
any Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest on such Indebtedness shall be calculated as if the rate in
effect on the Consolidated Cash Flow Ratio Calculation Date had been the
applicable rate for the entire period (taking into account any Interest Rate
Protection Agreement applicable to such Indebtedness).  Interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably determined by a
responsible financial or accounting officer of the Company to be the rate of
interest implicit in such Capitalized Lease Obligation in accordance with
GAAP.  For purposes of making the
computation referred to above, interest on any Indebtedness under a revolving
credit facility computed on a pro forma basis shall be computed based upon the
average daily balance of such Indebtedness during the applicable period except
as set forth in the first paragraph of this definition.  Interest on Indebtedness that may optionally
be determined at an interest rate based upon a factor of a prime or similar
rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to
have been based upon the rate actually chosen, or, if none, then based upon
such optional rate chosen as the Company may designate.

 

“Consolidated Fixed Charges” means, with respect to any
Person for any period, the sum of, without duplication, the amounts for such
period, taken as a single accounting period, of:

 

(1)         Consolidated
Interest Expense; and

 

(2)         all
dividends or other distributions paid or accrued on Disqualified Capital Stock
of such Person or Preferred Stock of such Person’s Restricted Subsidiaries
(except dividends payable in shares of Qualified Capital Stock).

 

In
calculating “Consolidated Fixed Charges” for purposes of determining the
denominator (but not the numerator) of this “Consolidated Fixed Charge Coverage
Ratio,”

 

(1)         interest
on Indebtedness determined on a fluctuating basis as of the date of
determination and which will continue to be so determined thereafter shall be
deemed to have accrued at a fixed rate per annum equal to the rate of interest
on such Indebtedness in effect on the date of determination;

 

(2)         if
interest on any Indebtedness actually incurred on the date of determination may
be optionally determined at an interest rate based upon a factor of a prime or
similar rate, a eurocurrency interbank offered rate or other rates, then the
interest rate in effect on the date of determination will be deemed to have
been in effect during the relevant four-quarter period reference; and

 

(3)         notwithstanding
the foregoing, interest on Indebtedness determined on a fluctuating basis, to
the extent such interest is covered by agreements relating to interest swap
agreements, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.

 

“Consolidated Interest Expense” means, with respect to any
Person for any period, the aggregate of the net interest expense of such Person
and its Consolidated Subsidiaries for such 

 

13

 

period
(after giving effect to any interest income), on a consolidated basis, as
determined in accordance with GAAP, including:

 

(1)         all
amortization of original issue discount;

 

(2)         the
interest component of Capitalized Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by such Person during such period;

 

(3)         net
cash payments, if any, made (less any net payments, if any, received) under all
Interest Rate Protection Agreements (including amortization of fees);

 

(4)         all
capitalized interest;

 

(5)         the
interest portion of any deferred payment obligations for such period; and

 

(6)         any
interest expense on Indebtedness of another Person (other than Indebtedness
incurred under Section 4.07(u) of the Loan Agreement unless the
Company or any of its Restricted Subsidiaries makes a payment with respect to
such guarantees in which case the interest expense associated with such
underlying Indebtedness shall be included) that is guaranteed by the Company or
any of its Restricted Subsidiaries or secured by a Lien on assets of the
Company or any of its Restricted Subsidiaries, whether or not such guarantees
or Liens is called upon;

 

and
excluding:

 

(a)         amortization
or write-off of deferred financing fees, debt issuance costs, commissions, fees
and expenses; and

 

(b)         any
non-cash interest imputed on any convertible debt securities (including the
Convertible Subordinated Notes) as in accordance with FSP APB 14-1.

 

“Consolidated Net Income” means, with respect to any
Person for any period, the consolidated net income (or deficit) of such Person
and its Restricted Subsidiaries for such period, on a consolidated basis, as
determined in accordance with GAAP and before any reduction in respect of
dividends accrued or paid on any Preferred Stock, if any; provided,
that any amounts received from any other Person (other than a Restricted
Subsidiary) shall be included in Consolidated Net Income for that period to the
extent of the amount that has been actually received by the referent Person or
a Restricted Subsidiary of the referent Person in the form of cash dividends or
other cash distributions (other than payments in respect of debt obligations),
and provided, further, that there shall be
excluded:

 

(1)         any
restoration to income of any contingency reserve, except to the extent that
provision for such contingency reserve was made out of Consolidated Net Income
accrued at any time following the Original Securities Issuance Date;

 

14

 

(2)         any
gain or loss, together with any related provisions for taxes, realized upon the
sale or other disposition (including, without limitation, dispositions pursuant
to sale-leaseback transactions) of any property or assets which are not sold or
otherwise disposed of in the ordinary course of business (provided
that sales of Receivables or interests therein pursuant to Qualified
Securitization Transactions shall be deemed to be in the ordinary course of
business) and upon the sale or other disposition of any Capital Stock of any
Subsidiary of the referent Person;

 

(3)         any
extraordinary gain or extraordinary loss together with any related provision
for taxes and any one time gains or losses (including, without limitation, those
related to the adoption of new accounting standards) realized by the referent
Person or any of its Restricted Subsidiaries during the period for which such
determination is made;

 

(4)         income
or loss attributable to discontinued operations (including, without limitation,
operations disposed of during such period whether or not such operations were
classified as discontinued);

 

(5)         in
the case of a successor to the referent Person by consolidation or merger or as
a transferee of the referent Person’s assets, any earnings of the successor
corporation prior to such consolidation, merger or transfer of assets;

 

(6)         for
purposes of the covenant described under Section 4.08 of the Loan
Agreement, the net income of any Restricted Subsidiary of such Person (other
than a Subsidiary Guarantor) which is subject to restrictions which prevent or
limit the payment of dividends or the making of distributions to such Person to
the extent of such restrictions (except to the extent of the amount of
dividends or distributions that have been paid to such Person or one or more
Restricted Subsidiary not subject to any such restriction during the relevant
period);

 

(7)         non-cash
compensation charges resulting from the application of Statement of Financial
Accounting Standards No. 123(R), including any such charges resulting from
stock options, restricted stock grants, stock appreciation rights or other
equity-incentive programs;

 

(8)         effects
of adjustments in such Person’s consolidated financial statements pursuant to
GAAP resulting from the application of recapitalization accounting or, if
applicable, purchase accounting in relation to any consummated acquisition or
the amortization or write-off of any amounts thereof, net of taxes;

 

(9)         any
non-cash impairment charge or asset write-off or write-down, including
impairment charges or asset write-offs or write-downs related to intangible
assets, long-lived assets, investments in debt and equity securities or as a
result of a change in law or regulation, in each case, pursuant to GAAP, and
the amortization of intangibles arising pursuant to GAAP; and

 

15

 

(10)          (a) any
net unrealized gain or loss (after any offset) resulting in such period from
Commodity Agreements, Currency Agreements, Interest Rate Protection
Agreements or other derivative instruments and the application of Statement of
Financial Accounting Standards No. 133; and (b) any net unrealized
gain or loss (after any offset) resulting in such period from currency
translation gains or losses including those related to currency remeasurements
of Indebtedness (including any net loss or gain resulting from Currency
Agreements for currency exchange risk).

 

“Consolidated Net Tangible Assets” as of any date of
determination means the total amount of assets of the Company and its
Consolidated Subsidiaries after deducting therefrom all current liabilities
(excluding any current liabilities that by their terms are extendable or
renewable at the option of the obligor thereon to a time more than twelve
months after the time as of which the amount thereof is being computed); total
prepaid expenses and deferred charges; and all goodwill, trade names,
trademarks, patents, licenses, copyrights and other intangible assets, all as
set forth, or on a pro forma basis would be set forth, on the consolidated
balance sheet of the Company and its Consolidated Subsidiaries for the Company’s
most recently completed fiscal quarter, prepared in accordance with GAAP.

 

“Consolidated Subsidiary” of any Person means a
Restricted Subsidiary which for financial reporting purposes is or, in
accordance with GAAP, should be, accounted for by such Person as a consolidated
Subsidiary.

 

“Consolidated Tax Expense” means, with respect to any
Person for any period, the aggregate of the U.S. Federal, state and local tax
expense attributable to taxes based on income and foreign income tax expenses
of such Person and its Consolidated Subsidiaries for such period (net of any
income tax benefit), determined in accordance with GAAP other than taxes
(either positive or negative) attributable to extraordinary or unusual gains or
losses or taxes attributable to sales or dispositions of assets.

 

“Convertible Subordinated Notes” means the Company’s
convertible subordinated notes issued on the Original Securities Issuance Date
in the principal amount of $570,000,000, including convertible subordinated
notes issued pursuant to the exercise of the over-allotment with respect to the
convertible subordinated notes issued on the Original Securities Issuance Date.

 

“Costs of Issuance” means (a) payment of
all reasonable costs incurred by the Company in connection with the issuance of
the Bonds including, but not limited to, legal and accounting fees and
expenses, printing expenses, financial consultants’ fees, financing charges
(including underwriting fees and discounts), printing and engraving costs, the
fees and expenses of the Rating Agencies and Fitch, Inc., preparation of
the financing statements, preparation of any disclosure document and any other
documents necessary for the issuance of the Bonds; and (b) payment of the
fees and reasonable expenses of the Trustee, the Issuer and the Registrar and
the reasonable expenses of their Counsel properly incurred under or in
connection with the issuance of the Bonds.

 

16

 

“Counsel” means an attorney or firm whose members are
attorneys duly admitted to practice law before the highest court of any state
and, without limitation, may include legal counsel for the Company, the Trustee
or the Issuer.

 

“Credit Agreement” means that certain ABL
Credit Agreement, dated as of June 15, 2007, by and among Navistar, Inc
(formerly International Truck and Engine Corporation), IC Bus LLC, SST
Truck Company LP, IC Bus of Oklahoma, LLC, Navistar Diesel of Alabama,
LLC, Credit Suisse, as Administrative Agent, and the other lenders named
therein, providing for up to $200 million of revolving credit borrowings,
including any related notes, Guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
restated, modified, renewed, refunded, replaced or refinanced from time to
time, regardless of whether such amendment, restatement, modification, renewal,
refunding, replacement or refinancing is with the same financial institutions
or otherwise.

 

“Credit Facilities” means, with respect to the
Company or any of its Restricted Subsidiaries, one or more debt facilities,
including, without limitation, the Credit Agreement, or other financing
arrangements (including, without limitation, commercial paper facilities or
indentures) providing for revolving credit loans, term loans, receivables
financing (including through the sale of receivables), letters of credit or
other long-term indebtedness, including any notes, mortgages, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, and any amendments, supplements, modifications, extensions,
renewals, restatements or refundings thereof and any indentures or credit
facilities or commercial paper facilities or receivables financings that
replace, refund or refinance any part of the loans, notes, other credit
facilities or commitments thereunder, including any such replacement, refunding
or refinancing facility or indenture that increases the amount permitted to be
borrowed thereunder or alters the maturity thereof (provided
that such increase in borrowings is permitted under Section 4.07 of the
Loan Agreement) or adds Restricted Subsidiaries as additional borrowers or
guarantors thereunder and whether by the same or any other agent, lender or
group of lenders.

 

“Currency Agreement” means any foreign exchange
contract, currency swap agreement, currency forward, future or option contract
or other similar agreement or arrangement.

 

“Dated Date” means the date of initial issuance of the Bonds.

 

“DealCor Subsidiaries” means any Subsidiaries
owned as of the Original Securities Issuance Date by the Company or one of its
Subsidiaries or acquired by the Company or one of its Subsidiaries after the
Original Securities Issuance Date whose principal business is owning or
operating a dealership of that sells products manufactured by the Company or
any of its Restricted Subsidiaries.

 

“Default” means any event which is, or after notice or
passage of time or both would be, an Event of Default.

 

“Determination of Taxability” shall have the meaning set
forth in Section 9.02(b) of the Loan Agreement.  The Trustee shall give notice of a
Determination of Taxability as provided in Section 9.05 hereof.

 

17

 

“Disqualified Capital Stock” means any Capital Stock
that, other than solely at the option of the issuer thereof, by its terms (or
by the terms of any security into which it is convertible or exchangeable) is,
or upon the happening of an event or the passage of time would be, required to
be redeemed or repurchased, in whole or in part, prior to the first anniversary
of the maturity date of the Senior Notes or has, or upon the happening of an
event or the passage of time would have, a redemption or similar payment due on
or prior to the first anniversary of the Maturity Date, or is convertible into
or exchangeable for debt securities at the option of the holder thereof at any time
prior to the first anniversary of the maturity date of the Senior Notes.

 

“DTC” means The Depository Trust Company and its
successors and assigns.

 

“DTC Participants” means those brokers,
securities dealers, banks, trust companies, clearing corporations and certain
other organizations from time to time for which DTC holds Bonds as securities
depository.

 

“DTC Representation Letter” has the meaning assigned
thereto in Section 2.10(c) hereof.

 

“Event of Default” (i) under this
Indenture, means any occurrence or event specified in Section 8.01 hereof
and (ii) under the Loan Agreement, as defined in Section 8.01 of the
Loan Agreement.

 

“Exchange Act” means the Securities Exchange Act of 1934,
as amended.

 

“Favorable Opinion of Bond Counsel” means an opinion of Bond
Counsel addressed to the Issuer and the Trustee to the effect that the proposed
action is not prohibited by this Indenture or the Loan Agreement, as
applicable, and will not adversely affect the Tax-Exempt status of the Bonds.  Bond Counsel, with the consent of the
Company, may take such actions as it deems necessary in order to enable it to
deliver a Favorable Opinion of Bond Counsel, including, but not limited to, the
filing of a Form 8038 with the Internal Revenue Service.  See Section 9.03 herein.

 

“Financial Services Segment” means the business of the
Company and its Subsidiaries consisting of (1) the offer and sale of
retail, wholesale and lease financing and/or other financial services products
to finance the purchase or lease of products sold by the Company and its
Restricted Subsidiaries or other manufacturers whose products are from time to
time sold through the dealer network of the Company and its Restricted
Subsidiaries (2) the financing of wholesale and retail accounts receivable
and (3) captive insurance business.

 

“Foreign Subsidiary” means any Restricted
Subsidiary of the Company that is not organized under the laws of the United
States, any state thereof or the District of Columbia and any Subsidiary of
such Restricted Subsidiary.

 

“GAAP” means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants, the opinions and
pronouncements of the Public Company Accounting Oversight Board and statements
and pronouncements of the Financial Accounting Standards Board or in 

 

18

 

such
other statements by such other entity as may be approved by a significant
segment of the accounting profession of the United States, which are in effect
as of the Original Securities Issuance Date.

 

Notwithstanding
the foregoing, under one or more of the following circumstances, “GAAP” shall mean such above-described generally accepted
accounting principles which are in effect as of the date of the applicable
calculation or report (for purposes of this definition, “Current
GAAP”):

 

(a)         If
the Senior Note Indenture is (i) modified to permit the use of Current
GAAP for a particular covenant or calculation or (ii) replaced in
connection with the refinancing of the Senior Notes and the replacement
indenture permits the use of Current GAAP for a particular covenant or
calculation, then in either case Current GAAP will also be used for the same
covenant or calculation under the Loan Agreement; or

 

(b)         There
are no longer any Senior Notes outstanding under the Senior Note Indenture (or
senior obligations outstanding under a replacement indenture), in which case,
upon the election of the Company, Current GAAP may be used for purposes of any
covenant or calculation that the Company may elect.

 

If
any of the provisions above become applicable, the Company shall deliver an
Officer’s Certificate to the Trustee describing the change in circumstances and
the provisions of the Loan Agreement to which Current GAAP will thereafter
apply.  Once the Company makes an
election under clause (b) above to apply Current GAAP to a particular
covenant or calculation, the Company cannot thereafter elect to use GAAP for
such calculation.

 

“Government Obligations” means securities which are
(i) direct obligations of the United States, for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States, the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States, which are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depositary receipt issued by a bank or trust company as custodian with respect
to any such Government Obligation or a specific payment of interest on or
principal of any such Government Obligation held by such custodian for the
account of the holder of a depositary receipt, provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt from
any amount received by the custodian in respect of the Government Obligation
evidenced by such depositary receipt.

 

“guarantee” means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person:

 

(1)         to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness of such other Person (whether arising by agreement to

 

19

 

keepwell,
to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or

 

(2)         entered
into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), provided that
the term “guarantee” shall not include endorsements for collection or deposit
in the ordinary course of business or customary contractual indemnities or
warranties not in connection with borrowing money. The term “guarantee” used as
a verb has a corresponding meaning.

 

“Guarantor” means Navistar, Inc., a Delaware corporation,
or a successor Person as permitted under Section 2.9 of the Bond
Guarantee.  The Guarantor is also a
Subsidiary Guarantor.

 

“Holder,” “Bondholder,” “Bondowner,” “Owner” and “Registered Owner” when used in reference to the Bonds,
means the person or persons in whose name or names a Bond shall be registered
in the books of Issuer maintained by the Registrar in accordance with the terms
of this Indenture.

 

“IFA Bond Guarantee” means the Bond Guarantee
from the Guarantor to Citibank N.A. dated as of October 1, 2010 relating
to the IFA Bonds, as it may be amended or supplemented in accordance with its
terms.

 

“IFA Bonds” means the Illinois Finance Authority Recovery Zone
Facility Bonds (Navistar International Corporation Project) Series 2010 in
the aggregate principal amount of $135,000,000.

 

“IFA Loan Agreement” means the Loan Agreement
between the Company and the Illinois Finance Authority dated as of
October 1, 2010 relating to the IFA Bonds, as it may be amended or
supplemented in accordance with its terms.

 

“incur” means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and “incurrence,” “incurred,” “incurable” and “incurring” shall
have meanings correlative to the foregoing), provided
that:

 

(1)         any
Indebtedness or Capital Stock of a Person existing at the time such Person
becomes (after the Original Securities Issuance Date) a Restricted Subsidiary
(whether by merger, consolidation, acquisition or otherwise) of the Company
shall be deemed to be incurred or issued, as the case may be, by such
Restricted Subsidiary at the time it becomes a Restricted Subsidiary of the
Company; and

 

(2)         any
amendment, modification or waiver of any document pursuant to which
Indebtedness was previously incurred shall not be deemed to be an incurrence of

 

20

 

Indebtedness
unless and then only to the extent such amendment, modification or waiver
increases the principal or premium thereof or interest rate thereon (including
by way of original issue discount).

 

“Indebtedness” means, with respect to any Person, at any
date, any of the following, without duplication:

 

(1)         any
liability, contingent or otherwise, of such Person (a) for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of
such Person or only to a portion thereof), (b) evidenced by a note, bond,
debenture or similar instrument or letters of credit (including a purchase
money obligation) or (c) for the payment of money relating to a
Capitalized Lease Obligation or other obligation (whether issued or assumed)
relating to the accrued purchase price of property or services, but excluding
trade accounts payable, deferred expenses, deferred compensation and similar
obligations of such Person arising in the ordinary course of business;

 

(2)         all
conditional sale obligations and all obligations under any title retention
agreement (even if the rights and remedies of the seller under such agreement
in the event of default are limited to repossession or sale of such property),
but excluding trade accounts payable, deferred expenses, deferred compensation
and similar obligations of such Person arising in the ordinary course of
business or earn-out obligation until such obligation becomes a liability on
the balance sheet of such Person in accordance with GAAP;

 

(3)         all
obligations for the reimbursement of any obligor on any letter of credit,
banker’s acceptance or similar credit transaction entered into in the ordinary
course of business;

 

(4)         all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien
(other than in connection with property subject to a Qualified Securitization
Transaction) on any asset or property (including, without limitation, leasehold
interests and any other tangible or intangible property) of such Person,
whether or not such Indebtedness is assumed by such Person or is not otherwise
such Person’s legal liability; provided, that
if the obligations so secured have not been assumed by such Person or are
otherwise not such Person’s legal liability, the amount of such Indebtedness
for the purposes of this definition shall be limited to the lesser of the
amount of such Indebtedness secured by such Lien or the fair market value of
the assets or property securing such Lien;

 

(5)         all
Indebtedness of others (including all dividends of other Persons the payment of
which is) guaranteed, directly or indirectly, by such Person or that is
otherwise its legal liability or which such Person has agreed to purchase or repurchase
or in respect of which such Person has agreed contingently to supply or advance
funds;

 

(6)         all
Disqualified Capital Stock issued by such Person and Preferred Stock of such
Person’s Restricted Subsidiary with the amount of Indebtedness represented by

 

21

 

such
Disqualified Capital Stock or Preferred Stock being equal to the greater of its
voluntary or involuntary liquidation preference and its maximum fixed
repurchase price, but excluding accrued dividends if any;

 

(7)         all
net amounts owing under Interest Rate Protection Agreements, Currency
Agreements or Commodity Agreements; and

 

(8)         all
Attributable Indebtedness in respect of Sale/Leaseback Transactions entered
into by such person.

 

For
purposes hereof, the “maximum fixed repurchase price” of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to the Loan Agreement, and if such
price is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in
good faith by the Board of Directors of the issuer of such Disqualified Capital
Stock. Notwithstanding the foregoing, Indebtedness shall not include:
(i) any guarantees of obligations of suppliers to the Company or any of
its Restricted Subsidiaries that ensure timely delivery of products, tooling
and other materials used in the production process or (ii) any customary
contractual indemnities or warranties.

 

The
amount of Indebtedness of any Person at any date shall be the outstanding
balance without duplication at such date of all unconditional obligations as
described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at
such date; provided that the amount outstanding at
any time of any Indebtedness issued with original issue discount is the full
amount of such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as determined in
accordance with GAAP.

 

“Indenture” means this Indenture of Trust between the Issuer and
the Trustee relating to issuance of the Bonds, as amended or supplemented from
time to time as permitted herein.

 

“Initial Subsidiary Guarantor” means the Guarantor, a
direct subsidiary of the Company that has guaranteed the Bonds as of the
Closing Date pursuant to the Bond Guarantee.

 

“Interest Account” means the trust account by
that name established within the Bond Fund pursuant to Section 5.01(a) hereof.

 

“Interest Payment Date” means April 15, 2011
and each April 15 and October 15 thereafter on which interest is due
and payable with respect to the Bonds.

 

“Interest Rate Protection Agreement” means any credit default
swap or option agreement, interest rate protection agreement, interest rate
future agreement, interest rate option agreement, interest rate swap agreement
(whether from fixed to floating or from floating to 

 

22

 

fixed),
interest rate cap agreement, interest rate collar agreement, interest rate
hedge agreement or other similar agreement or arrangement.

 

“Investment” by any Person means any direct or indirect:

 

(1)         loan,
advance or other extension of credit or capital contribution (by means of
transfers of cash or other property (valued at the fair market value thereof as
of the date of transfer) to others or payments for property or services for the
account or use of others, or otherwise other than in the ordinary course of
business) and any guarantee of Indebtedness of any other Person;

 

(2)         purchase
or acquisition of Capital Stock, bonds, notes, debentures or other securities
or evidences of Indebtedness issued by any other Person (whether by merger,
consolidation, amalgamation or otherwise and whether or not purchased directly from
the issuer of such securities or evidences of Indebtedness); and

 

(3)         all
other items that would be classified as investments (including, without
limitation, purchases of assets outside the ordinary course of business) on a
balance sheet of such Person prepared in accordance with GAAP.

 

If
the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Capital Stock of a direct or indirect Restricted Subsidiary
such that, after giving effect to such sale or disposition, such Person is no
longer a Restricted Subsidiary of the Company, the Company will be deemed to
have made an Investment on the date of any such sale or other disposition equal
to the fair market value of the Investment in such Subsidiary not sold or
disposed of. For purposes of the definition of “Unrestricted Subsidiary” and
Section 4.08 of the Loan Agreement only,

 

(1)         “Investment” shall include the portion (proportionate to the
Company’s equity interest in such Subsidiary) of the fair market value of the
net assets of any Subsidiary of the Company at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided, that
if such designation is made in connection with the acquisition of such
Subsidiary or the assets owned by such Subsidiary, the “Investment” in such
Subsidiary shall be deemed to be the consideration paid in connection with such
acquisition; provided, further, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent “Investment” in an Unrestricted
Subsidiary in an amount (if positive) equal to (a) the Company’s “Investment”
in such Subsidiary at the time of such redesignation less (b) the portion
(proportionate to the Company’s equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time of such
redesignation and

 

(2)         any
property transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer, in each case as determined
in good faith by the Board of Directors.

 

23

 

“Investment Grade” means:

 

(1)         with
respect to S&P any of the long-term rating categories from and including
AAA to and including BBB-; and

 

(2)         with
respect to Moody’s any of the long-term rating categories from and including
Aaa to and including Baa3.

 

“Issuer” means The County of Cook, Illinois, a home rule unit
under Section 6(a) of Article VII of the 1970 Constitution of
the State of Illinois, and its successors and assigns.

 

“Issuer Representative” means the Chief Financial
Officer of the Issuer, or any other member or officer of the Issuer designated
by the Issuer to act on behalf of the Issuer.

 

“Lien” means, with respect to any Person, any mortgage,
pledge, lien, encumbrance, easement, restriction, covenant, right-of-way,
charge or adverse claim affecting tide or resulting in an encumbrance against
real or personal property of such Person, or a security interest of any kind,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option, right of first refusal or other similar
agreement to sell, in each case securing obligations of such Person and any
filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statute or statutes) of any jurisdiction but excluding
any such filing or agreement which reflects ownership by a third party of

 

(1)         property
leased to the referent Person or any of its Restricted Subsidiaries under a
lease that is not in the nature of a conditional sale or title retention
agreement or

 

(2)         accounts,
general intangibles or chattel paper sold to the referent Person.

 

“Limited Offering Memorandum” means the Limited Offering
Memorandum dated October 19, 2010 of the Company, as supplemented and
amended, prepared in connection with the issuance and sale of the Bonds.

 

“Loan” means the loan by the Issuer to the Company of the
proceeds received from the sale of the Bonds.

 

“Loan Agreement” means the Loan Agreement, dated as of the
date hereof, between the Issuer and the Company, as amended and supplemented
from time to time as permitted therein.

 

“Loan Payments” means the payments required to be made by the
Company pursuant to Section 6.01(a) of the Loan Agreement.

 

“Mail” means by first-class mail postage prepaid.

 

“Master Intercompany Agreements” means:  (i) the Amended and Restated Master
Intercompany Agreement, dated as of April 1, 2007, between Navistar
Financial Corporation and Navistar, Inc. (formerly known as International
Truck and Engine Corporation), and its related 

 

24

 

manufacturing
subsidiaries and affiliates, as amended to the Original Securities Issuance
Date; (ii) the agreement, dated as of December 18, 1986, among
Navistar International Corporation Canada, Navistar Financial Corporation
Canada Inc. and General Electric Canadian Holdings Limited; (iii) the
Operating Agreement, dated March 5, 2010, among General Electric Capital
Corporation, GE Capital Commercial, Inc., Navistar International
Corporation, Navistar, Inc. and Navistar Financial Corporation,
(iv) the Intercompany Operating and Partnership Agreement, dated as of
December 1, 2008, by and among Navistar Financial, Inc. De C.V.,
Sociedad Financiera De Objeto Múltiple, E.N.R. and Navistar México, S.A. De
C.V., (v) one or more agreements serving some or all of the same purposes
of the agreements listed in clauses (i) through (iv) above
entered into after the Original Securities Issuance Date among the Company or
one of its Restricted Subsidiaries and one or more other Persons (including one
or more Unrestricted Subsidiaries) in the ordinary course of business on terms
no less favorable to the Company and its Restricted Subsidiaries than the
agreements in clauses (i), (ii), (iii) and (iv) and
(vi) any amendment, modification, supplement or restatement from time to
time of the agreements in clauses (i) through (v); provided
that none of the aforementioned agreements shall be amended, modified,
supplemented or restated in a manner adverse in any material respect to the
interests of the Company and its Restricted Subsidiaries taken as a whole.

 

“Moody’s” means Moody’s Investors Service, a corporation
organized and existing under the laws of the State of Delaware, its successors
and assigns, and, if such corporation shall for any reason no longer perform
the functions of a securities rating agency, “Moody’s” shall
be deemed to refer to any other nationally recognized rating agency designated
by the Company by notice to the Issuer and the Trustee.

 

“Net Available Proceeds” from any Asset Disposition
by any Person means Cash Equivalents received (including by way of sale or
discounting of a note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquirer of Indebtedness or other obligations relating to such properties or
assets or received in any other non-cash form) therefrom by such Person,
including any cash received by way of deferred payment or upon the monetization
or other disposition of any non-cash consideration (including notes or other
securities) received in connection with such Asset Disposition, net of:

 

(1)         all
legal, title and recording tax expenses, commissions and other fees and
expenses incurred (including, without limitation, fees and expenses of accountants,
brokers, printers and other similar entities) and all federal, state, foreign
and local taxes required to be accrued as a liability as a consequence of such
Asset Disposition;

 

(2)         all
payments made by such Person or its Restricted Subsidiaries on any Indebtedness
which is secured by such assets in accordance with the terms of any Lien upon
or with respect to such assets or which must by the terms of such Lien, or in
order to obtain a necessary consent to such Asset Disposition or by applicable law,
be repaid out of the proceeds from such Asset Disposition;

 

(3)         all
payments made with respect to liabilities associated with the assets which are
the subject of the Asset Disposition, including, without limitation, trade
payables and other accrued liabilities;

 

25

 

(4)         appropriate
amounts to be provided by such Person or any Restricted Subsidiary thereof, as
the case may be, as a reserve in accordance with GAAP against any liabilities
associated with such assets and retained by such Person or any Restricted
Subsidiary thereof, as the case may be, after such Asset Disposition,
including, without limitation, liabilities under any indemnification
obligations and severance and other employee termination costs associated with
such Asset Disposition (but excluding any indemnification obligations and
severance and other employee termination costs that, by their terms, will not
be made prior to the maturity date of the Bonds, until such time as such
amounts are no longer reserved or such reserve is no longer necessary (at which
time any remaining amounts will become Net Available Proceeds to be allocated
in accordance with the provisions of Section 4.09(c) of the Loan
Agreement; and

 

(5)         all
distributions and other payments made to minority interest holders, if any, in
Restricted Subsidiaries of such Person or joint ventures as a result of such
Asset Disposition.

 

“Net Cash Proceeds” with respect to any
issuance or sale of Capital Stock, means the cash proceeds of such issuance or
sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement
agents’ fees, listing fees, discounts or commissions and brokerage, consultant
and other fees and charges actually incurred in connection with such issuance
or sale and net of taxes paid or payable as a result of such issuance or sale
(after taking into account any available tax credit or deductions and any tax
sharing arrangements).

 

“Obligations” means any principal, premiums, interest,
penalties, fees, indemnifications, reimbursements, damages, and other
liabilities payable under the documentation governing any indebtedness.

 

“Offer to Purchase” means a written offer (the “Offer”) sent by the Trustee at the direction of the Company
by Mail to each Holder at its address appearing in the register for the Bonds
on the date of the Offer, offering to purchase up to the principal amount of
the Bonds in such Offer at the purchase price specified in such Offer (as
determined pursuant to the Loan Agreement). 
Unless otherwise required by applicable law, the Offer shall specify an
expiration date (the “Expiration Date”)
of the Offer to Purchase which shall be not less than 30 days nor more
than 60 days after the date of such Offer and a settlement date (the “Purchase Date”) for purchase of such Bonds within five
Business Days after the Expiration Date. 
The Company shall notify the Trustee at least 15 Business Days (or
such shorter period as is acceptable to such Trustee) prior to the mailing of
the Offer of the Company’s obligation to make an Offer to Purchase, and the
Offer shall be mailed by the Trustee in the name and at the expense of the
Company.  The Offer shall contain all the
information required by applicable law to be included therein.  The Offer shall contain all instructions and
materials necessary to enable such Holders to tender such Bonds pursuant to the
Offer to Purchase. The Offer shall also state:

 

(1)         the
section of the Loan Agreement pursuant to which the Offer to Purchase is being
made;

 

(2)         the
Expiration Date and the Purchase Date;

 

26

 

(3)         the
aggregate principal amount of the outstanding Bonds offered to be purchased by
the Company pursuant to the Offer to Purchase (including, if less than 100%,
the manner by which such amount has been determined pursuant to
Section 4.09 of the Loan Agreement) (the “Purchase
Amount”);

 

(4)         the
purchase price to be paid by the Company for each $1,000 aggregate principal
amount of Bonds accepted for payment (as specified pursuant to the Loan
Agreement) (the “Purchase Price”);

 

(5)         that
the Holder may tender all or any portion of the Bonds registered in the name of
such Holder and that any portion of a Bond tendered must be tendered in
Authorized Denominations and the remaining non-tendered portion shall also be
in an Authorized Denomination;

 

(6)         the
place or places where Bonds are to be surrendered for tender pursuant to the
Offer to Purchase;

 

(7)         that
interest on any Bond not tendered or tendered but not purchased by the Company
pursuant to the Offer to Purchase will continue to accrue;

 

(8)         that
on the Purchase Date the Purchase Price will become due and payable upon each
Bond being accepted for payment pursuant to the Offer to Purchase and that
interest thereon shall cease to accrue on and after the Purchase Date;

 

(9)         that
each Holder electing to tender all or any portion of a Bond pursuant to the
Offer to Purchase will be required to surrender such Bond at the place or
places specified in the Offer or transfer such Holder’s beneficial interest to
the Company, prior to the close of business on the Expiration Date (any such
Bond not in Book Entry form being, if the Company or the Trustee so requires,
duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory
to the Company and the Trustee duly executed by the Holder thereof or his
attorney duly authorized in writing);

 

(10)          that
Holders will be entitled to withdraw all or any portion of Bonds tendered if
the Company (or the Trustee) receives, not later than the close of business on
the fifth Business Day next preceding the Expiration Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Bonds the Holder tendered, the certificate number of
the Bond the Holder tendered and a statement that such Holder is withdrawing
all or a portion of his tender;

 

(11)          that
(I) if Bonds in an aggregate principal amount less than or equal to the
Purchase Amount are duly tendered and not withdrawn pursuant to the Offer to
Purchase, the Company shall purchase all such Bonds and (II) if Bonds in
an aggregate principal amount in excess of the Purchase Amount are tendered and
not withdrawn pursuant to the Offer to Purchase, the Company shall purchase
Bonds having an aggregate principal amount equal to the Purchase Amount on a
pro rata basis (with such adjustments as may be deemed appropriate so that only
Bonds in Authorized Denominations shall be

 

27

 

purchased
and the unpurchased portion of the Bonds shall be in Authorized Denominations);
and

 

(12)          that
in the case of any Holder whose Bond is purchased only in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Bond without service charge, a new Bond or Bonds of any Authorized
Denomination as requested by such Holder, in all aggregate principal amount
equal to and in exchange for the unpurchased portion of the Bond or Bonds so
tendered.

 

An
Offer to Purchase shall be governed by and effected in accordance with the
provisions above pertaining to any Offer.

 

“Officer” means the Chairman of the Board, the President, the
Chief Financial Officer, any Executive Vice President, Senior Vice President or
Vice President, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Assistant Secretary.

 

“Officers’ Certificate,” when used with respect to
the Company, means a certificate signed by the Chairman of the Board, the
President, the Chief Financial Officer, any Executive Vice President, Senior
Vice President and any Vice President, the Treasurer, any Assistant Treasurer,
the Controller of the Company, the Secretary or Assistant Secretary.

 

“Opinion of Counsel” means a written opinion
from legal counsel.  Such counsel may be
an employee of or counsel to the Company.

 

“Original Securities Issuance Date” means October 28,
2009, being the date of the issuance of the Senior Notes.

 

“Outstanding” or “Bonds Outstanding” or “Outstanding Bonds” means, as of any given date, all Bonds
which have been authenticated and delivered by the Registrar under this
Indenture, except:

 

(a)         Bonds
canceled or purchased by or delivered to the Trustee for cancellation;

 

(b)         Bonds
that have become due (at maturity or upon redemption, acceleration or
otherwise) and for the payment, including premium if any, and interest accrued
to the due date, of which sufficient moneys are held by the Trustee;

 

(c)          Bonds
deemed paid in accordance with Article VII hereof;

 

(d)         Bonds
in lieu of which others have been authenticated under Section 2.05 hereof
(relating to transfer and exchange of Bonds) or Section 2.07 hereof
(relating to mutilated, lost, stolen or destroyed Bonds) or Bonds paid pursuant
to this Indenture; and

 

(e)          for
purposes of any direction, consent or waiver under this Indenture, Bonds owned
as described in Section 12.05 hereof.

 

28

 

“Owner”:  See
definition of “Holder” herein.

 

“Pari Passu Debt” means any Indebtedness of the Company or a
Subsidiary Guarantor that ranks in right of equal payment with the Senior
Notes, the Bonds, the IFA Bonds and the related Subsidiary Guarantees, as the
case may be.

 

“Permitted Business” means (1) the lines of
business conducted by the Company and its Restricted Subsidiaries on the
Original Securities Issuance Date and businesses reasonably related, ancillary
or complementary thereto, including reasonably related extensions or expansions
thereof, and (2) any unrelated business, to the extent that it is not
material in size.

 

“Permitted Investments” means:

 

(1)         Investments
in Cash Equivalents;

 

(2)         guarantees
of Indebtedness otherwise permitted under Section 4.07 of the Loan
Agreement (other than clause (y) thereof);

 

(3)         any
Investment by the Company or any Restricted Subsidiary in or relating to a
Securitization Subsidiary that, in the good faith determination of the Company,
are necessary or advisable to effect any Qualified Securitization Transaction
or any repurchase obligation in connection therewith;

 

(4)         deposits,
including interest-bearing deposits, maintained in the ordinary course of
business in banks;

 

(5)         any
acquisition of the Capital Stock of any Person and any Investment in another
Person if as a result of such Investment such other Person is merged with or
consolidated into, or transfers or conveys all or substantially all of its
assets to, the Company or a Restricted Subsidiary of the Company; provided, that after giving effect to any such acquisition
or Investment such Person shall become a Restricted Subsidiary of the Company
or another Restricted Subsidiary of the Company;

 

(6)         trade
receivables and prepaid expenses, in each case arising in the ordinary course
of business; provided, that such receivables
and prepaid expenses would be recorded as assets of such Person in accordance
with GAAP;

 

(7)         endorsements
for collection or deposit in the ordinary course of business by such Person of
bank drafts and similar negotiable instruments of such other Person received as
payment for ordinary course of business trade receivables;

 

(8)         any
swap, hedging or other derivative obligation with an unaffiliated Person
otherwise permitted by the Loan Agreement (including, without limitation, any
Currency Agreement, Commodity Agreement and any Interest Rate Protection
Agreement otherwise permitted by the Loan Agreement);

 

29

 

(9)         Investments
received as consideration for an Asset Disposition in compliance with
Section 4.09 of the Loan Agreement;

 

(10)          Investments
acquired in exchange for the issuance of Capital Stock (other than Disqualified
Capital Stock) of the Company or acquired with the Net Cash Proceeds received
by the Company after the Original Securities Issuance Date from the issuance
and sale of Capital Stock (other than Disqualified Capital Stock) of the
Company; provided that such Net Cash Proceeds are
used to make such Investment within 60 days of the receipt thereof and the
amount of all such Net Cash Proceeds will be excluded from clause (3)(B) of
Section 4.08(a) of the Loan Agreement;

 

(11)          loans
and advances to employees made in the ordinary course of business in an
aggregate amount not to exceed $10.0 million at any one time outstanding;

 

(12)          Investments
outstanding on the Original Securities Issuance Date;

 

(13)          Investments
in the Company or a Restricted Subsidiary;

 

(14)          Investments
in securities of trade creditors, suppliers or customers received pursuant to
any plan of reorganization, restructuring, workout or similar arrangement of
such trade creditor, supplier or customer or upon the compromise of any debt
created in the ordinary course of business owing to the Company or a
Subsidiary, whether through litigation, arbitration or otherwise;

 

(15)          Investments
in any Person after the Original Securities Issuance Date having an aggregate
fair market value (measured on the date each Investment was made without giving
effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (15) that are at that time outstanding
(after giving effect to any net cash proceeds received from any sale, transfer
or other disposition) not to exceed $75.0 million;

 

(16)          Investments
in Navistar Financial Corporation, having an aggregate fair market value
(measured on the date each Investment was made without giving effect to
subsequent changes in value), when taken together with all other Investments
made pursuant to this clause (16) that are at that time outstanding not to
exceed $100.0 million;

 

(17)          Investments
made pursuant to the Support Agreement or Master Intercompany Agreements;

 

(18)          extensions
of loans, trade credit and advances to, and guarantees in favor of customers
and suppliers and lease, utility and similar deposits to the extent made in the
ordinary course of business; and

 

(19)          Investments
consisting of the licensing or contribution of intellectual property pursuant
to joint marketing arrangement with other Persons.

 

30

 

“Permitted Joint Venture” means any Person which is,
directly or indirectly, through its subsidiaries or otherwise, engaged
principally in any business in which the Company is engaged, or a reasonably
related, ancillary or complimentary business, and the Capital Stock of which is
owned, or acquired in compliance with the terms of the Loan Agreement, by the
Company or a Restricted Subsidiary and owned by one or more Persons other than
the Company or any Affiliate of the Company.

 

“Permitted Liens” mean:

 

(1)         Liens
for taxes, assessments and governmental charges (other than any Lien imposed by
the Employee Retirement Income Security Act of 1974, as amended) that are not
yet delinquent or are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and for which adequate reserves
have been established or other provisions have been made in accordance with
generally accepted accounting principles;

 

(2)         statutory
mechanics’, workmen’s, materialmen’s, operators’ or similar Liens imposed by
law and arising in the ordinary course of business for sums which are not yet
overdue for a period of more than 30 days or are being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted
and for which adequate reserves have been established or other provisions have
been made in accordance with generally accepted accounting principles;

 

(3)         minor
imperfections of, or encumbrances on, title that do not impair the value of
property for its intended use;

 

(4)         Liens
(other than any Lien under the Employee Retirement Income Security Act of 1974,
as amended) incurred or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types
of social security;

 

(5)         Liens
incurred or deposits made to secure the performance of tenders, bids, trade
contracts, leases, statutory or regulatory obligations, bankers’ acceptances,
surety and appeal bonds, government contracts, performance and return of money
bonds and other obligations of a similar nature incurred in the ordinary course
of business (exclusive of obligations for the payment of borrowed money);

 

(6)         easements,
rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
adversely affect the use of the subject to property for its present purposes;

 

31

 

(7)         Liens
(including extensions, replacements and renewals thereof) upon real or tangible
personal property acquired after the Original Securities Issuance Date; provided, that

 

(a)         (i) such
Lien is created solely for the purpose of securing Indebtedness that is
incurred in accordance with the Loan Agreement to finance the cost (including
the cost of improvement or construction) of the item of property or assets
subject thereto and such Lien is created prior to, at the time of or within
180 days after the later of the acquisition, the completion of
construction or the commencement of full operation of such property or
(ii) such Lien exists on any such property or assets at the time of
acquisition (other than any such Liens created in contemplation of such
acquisition that do not secure the purchase price),

 

(b)         the
principal amount of the Indebtedness secured by such Lien does not exceed 100%
of such cost and

 

(c)          any
such Lien shall not extend to or cover any property or assets of the Company or
of any Restricted Subsidiary of the Company other than such item of property or
assets and any improvements on such item;

 

(8)         leases
or subleases, licenses and sublicenses granted to others that do not materially
interfere with the ordinary course of business of the Company or of any
Restricted Subsidiary of the Company;

 

(9)         any
interest or title of a lessor in the property subject to any Capitalized Lease
Obligation; provided that any transaction related
thereto otherwise complies with the Loan Agreement;

 

(10)          Liens
arising from filing Uniform Commercial Code financing statements regarding
leases;

 

(11)          Liens
securing judgments or orders, or securing appeal or other surety bonds related
to such judgments or orders, against the Company or any Restricted Subsidiary
of the Company that does not give rise to an Event of Default;

 

(12)          Liens
securing reimbursement obligations with respect to letters of credit incurred
in accordance with the Loan Agreement that encumber documents and other
property relating to such letters of credit and the products and proceeds
thereof;

 

(13)          Liens
in favor of the Trustee arising under this Indenture or the Loan Agreement;
Liens in favor of the trustee for the Senior Notes arising under the Senior
Notes Indenture; and Liens in favor of the trustee for the IFA Bonds arising
under the indenture for the IFA Bonds or the IFA Loan Agreement;

 

32

 

(14)          any
Lien (including extensions, replacements and renewals thereof) existing on
property, shares of stock or Indebtedness of a Person at the time such Person
becomes a Restricted Subsidiary of the Company or is merged with or
consolidated into the Company or a Restricted Subsidiary of the Company or at
the time of sale, lease or other disposition of the properties of any Person as
an entirety or substantially as an entirety to the Company or any Restricted
Subsidiary of the Company;

 

(15)          Liens
on property of any Subsidiary of the Company to secure Indebtedness for
borrowed money owed to the Company or to another Restricted Subsidiary of the
Company;

 

(16)          Liens
in favor of the Company or any Restricted Subsidiary;

 

(17)          Liens
existing on the Original Securities Issuance Date including extensions,
replacements and renewals thereof, provided that
the Lien so extended, replaced or renewed does not extend to any additional
property or assets;

 

(18)          Liens
in favor of custom and revenue authorities arising as a matter of law to secure
payment of nondelinquent customs duties in connection with the importation of
goods;

 

(19)          Liens
encumbering customary initial deposits and margin deposits, and other Liens
incurred in the ordinary course of business that are within the general
parameters customary in the industry, in each case securing Indebtedness under
any Interest Rate Protection Agreement, Commodity Agreement or Currency
Agreement;

 

(20)          Liens
encumbering deposits made in the ordinary course of business to secure
nondelinquent obligations arising from statutory, regulatory, contractual or
warranty requirements of the Company or its Restricted Subsidiaries for which a
reserve or other appropriate provision, if any, as shall be required by GAAP
shall have been made;

 

(21)          Liens
arising out of consignment or similar arrangements for the sale of goods
entered into by the Company or any Restricted Subsidiary in the ordinary course
of business in accordance with industry practice;

 

(22)          other
Liens securing Indebtedness outstanding in an aggregate principal amount not to
exceed $50.0 million at any time;

 

(23)          Liens
incurred pursuant to the Master Intercompany Agreements or Support Agreement;

 

(24)          Liens
securing Indebtedness otherwise permitted to be incurred under clause (m) under
Section 4.07 of the Loan Agreement where the Indebtedness being refunded
was secured by a Lien, or amendments or renewals of Liens that were permitted

 

33

 

to
be incurred; provided that the Lien so
extended, renewed or replaced does not extend to any additional property or
assets;

 

(25)          Liens
under licensing agreements for use of intellectual property entered into in the
ordinary course of business; and

 

(26)          Liens
securing Indebtedness incurred pursuant to Section 4.07(h) of the
Loan Agreement; provided such Liens do not extend to any property or assets of
the Company or any Restricted Subsidiary of the Company other than the assets
so acquired.

 

“Person” means any individual, corporation, partnership,
limited liability company, joint stock company, joint venture, trust, estate,
unincorporated organization or other entity or government or any agency or
political subdivision thereof.

 

“Plan of Liquidation” means, with respect to any
Person, a plan (including by operation of law) that provides for, contemplates
or the effectuation of which is preceded or accompanied by (whether or not
substantially contemporaneously):

 

(1)         the
sale, lease, conveyance or other disposition of all or substantially all of the
assets of the referent Person; and

 

(2)         the
distribution of all or substantially all of the proceeds of such sale, lease,
conveyance or other disposition and all or substantially all of the remaining
assets of the referent Person to holders of Capital Stock of the referent
Person.

 

“Preferred Stock” means, as applied to the Capital Stock of
any Person, the Capital Stock of such Person (other than the Common Stock of
such Person) of any class or classes (however designated) that ranks prior, as
to the payment of dividends or as to the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding-up of such Person,
to shares of Capital Stock of any other class of such Person.

 

“Principal Account” means the trust account by
that name established within the Bond Fund pursuant to Section 5.01(a) hereof.

 

“Principal Office of the Registrar” means the office or offices
designated as such by the Registrar in writing to the Trustee, the Company and
the Issuer, which may be changed from time to time by a writing delivered to
the Issuer, the Trustee and the Company.

 

“Principal Office of the Trustee” means the office designated
as such by the Trustee in writing to the Registrar, the Issuer and the Company,
which may be changed from time to time by a writing delivered to the Registrar,
the Issuer and the Company.

 

“Project” means the facilities financed from the proceeds of
the Bonds and described in Exhibit A to the Loan Agreement, as Exhibit A
may be modified in accordance with Section 3.03 of the Loan Agreement.

 

34

 

“Project Certificate” means the certificate or
certificates, delivered by the Company on the Closing Date, with respect to
certain facts which are within the knowledge of the Company to enable Bond
Counsel to determine whether interest on the Bonds is includible in the gross
income of the owners thereof under applicable provisions of the Code.

 

“Project Costs” means all costs properly chargeable to the
acquisition, construction, installation or equipping of the Project or to its
financing, as more specifically set forth in the Project Certificate.

 

“Project Fund” means the trust fund of that name created
pursuant to Section 5.02(a) hereof.

 

“Qualified Capital Stock” means, with respect to any
Person, any Capital Stock of such Person that is not Disqualified Capital Stock
or convertible into or exchangeable or exercisable for Disqualified Capital
Stock.

 

“Qualified Non-Cash Proceeds” means any of the following
or any combination of the following:

 

(1)           non-current assets that are used or usable in the Permitted
Business and

 

(2)           Capital Stock of any Person engaged primarily in the
Permitted Business if, in connection with the receipt by the Company or any
Restricted Subsidiary of such Capital Stock (a) such Person becomes a
Restricted Subsidiary or (b) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or any Restricted Subsidiary.

 

“Qualified Securitization Transaction” means any transaction or
series of transactions that have been or may be entered into by any of the
Restricted Subsidiaries of the Company in connection with or reasonably related
to a transaction or series of transactions in which any of the Restricted
Subsidiaries of the Company may sell, convey or otherwise transfer to

 

(1)           a Securitization Subsidiary or

 

(2)           any other Person, or may grant a security interest in, any
Receivables or interests therein secured by the merchandise or services
financed thereby (whether such Receivables are then existing or arising in the
future) of any of the Restricted Subsidiaries of the Company, and any assets
related thereto including, without limitation, all security or ownership
interests in merchandise or services financed thereby, the proceeds of such Receivables,
and other assets which are customarily sold or in respect of which security
interests are customarily granted in connection with securitization
transactions involving such assets.

 

“Rating Agency” means each of S&P and Moody’s.

 

35

 

“Rebate Fund” means the trust fund by that name created
pursuant to Section 5.01(b) hereof.

 

“Receivables” means any right of payment from or on behalf
of any obligor, whether constituting an account, chattel paper, instrument,
general intangible or otherwise, arising from the financing by any Restricted
Subsidiary of the Company of merchandise or services, and monies due
thereunder, security or ownership interests in the merchandise and services
financed thereby, records related thereto, and the right to payment of any
interest or finance charges and other obligations with respect thereto,
proceeds from claims on insurance policies related thereto, any other proceeds
related thereto, and any other related rights.

 

“Record Date” means the first day of the month in which
each Interest Payment Date occurs.

 

“Registered Owner”:  See definition of “Holder” herein.

 

“Registrar” means Citibank N.A., New York, New York, or any
successor Registrar appointed in accordance with Section 9.20.

 

“Responsible Officer,” when used with respect to
the Trustee, shall mean any officer within the corporate trust department of
the Trustee, including any vice president, any assistant vice president, any
assistant treasurer, any trust officer, or any other officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred because of such officer’s knowledge of and familiarity
with a particular subject and who shall have direct responsibility for the
administration of this Indenture.

 

“Restricted Subsidiary” means any Subsidiary of the
Company that is not an Unrestricted Subsidiary.

 

“S&P” means Standard & Poor’s Ratings Services, a
division of The McGraw-Hill Companies, Inc., a corporation organized and
existing under the laws of the State of New York, its successors and assigns,
and, if such corporation shall for any reason no longer perform the functions
of a securities rating agency, “S&P” shall
be deemed to refer to any other nationally recognized securities rating agency
designated by the Company by notice to the Issuer and the Trustee.

 

“Sale/Lease-back Transaction” means an arrangement
relating to property now owned or hereafter acquired whereby the Company or a
Restricted Subsidiary transfers such property to a Person and the Company or a
Restricted Subsidiary leases it from such Person.

 

“Securities Act” means the Securities Act of 1933, as
amended.

 

“Securities Depositories” means The Depository Trust
Company, Call Notification Department, 711 Stewart Avenue, Garden City, New
York 11530, Telephone:  (516) 227-4070,
Fax:  (516) 227-4190, or, in accordance
with then-current guidelines of the Commission, such 

 

36

 

other
addresses and/or such other securities depositories, or no such depositories,
as the Company may designate in a certificate delivered to the Trustee.

 

“Securitization Subsidiary” means a Subsidiary of the
Company existing on the Original Securities Issuance Date or formed or acquired
thereafter which engages principally in securitization transactions and in
activities reasonably related to or in connection with the entering into of
securitization transactions and:

 

(1)           no portion of the Indebtedness or any other obligations
(contingent or otherwise) of which

 

(a)           is guaranteed by the Company or any Restricted Subsidiary
of the Company,

 

(b)           is recourse to or obligates the Company or any Restricted Subsidiary
of the Company in any way other than pursuant to representations, warranties
and covenants (including those related to servicing) entered into in the
ordinary course of business in connection with a Qualified Securitization
Transaction or

 

(c)           subjects any property or asset of the Company or any
Restricted Subsidiary of the Company, directly or indirectly, contingently or
otherwise, to any Lien or to the satisfaction thereof, other than pursuant to
representations, warranties and covenants (including those related to
servicing) entered into in the ordinary course of business in connection with a
Qualified Securitization Transaction;

 

(2)           with which neither the Company nor any Restricted
Subsidiary of the Company

 

(a)           provides any credit support or

 

(b)           has any contract, agreement, arrangement or understanding
other than on terms that are fair and reasonable and that are no less favorable
to the Company or such Restricted Subsidiary than could be obtained from an
unrelated Person (other than, in the case of subclauses (a) and (b) of
this clause (2), representations, warranties and covenants (including
those relating to servicing) entered into in the ordinary course of business in
connection with a Qualified Securitization Transaction and intercompany notes
relating to the sale of Receivables to such Securitization Subsidiary); and

 

(3)           with which neither the Company nor any Restricted
Subsidiary of the Company has any obligation to maintain or preserve such
Subsidiary’s financial condition or to cause such Subsidiary to achieve certain
levels of operating results.  For
purposes of the foregoing, Navistar Inc. shall not be deemed to be providing
credit support to any Subsidiary of Navistar Financial Corporation that would
otherwise qualify

 

37

 

as
a Securitization Subsidiary as a result of the terms of the Support Agreement
in which Navistar Inc. agrees to provide credit support directly to Navistar
Financial Corporation for the benefit of its lenders (but not any other
provisions).

 

“Senior Notes” means the Company’s outstanding 8.25% Senior
Notes due 2021 in the aggregate principal amount of $1,000,000,000.

 

“Senior Notes Indenture” means the Indenture dated
as of October 28, 2009 among the Company, the Initial Subsidiary Guarantor
and The Bank of New York Mellon Trust Company, N.A., as trustee, as
amended or supplemented in accordance with its terms.

 

“Shy Settlement” means that certain Amended and Restated
Settlement Agreement dated June 30, 1993 in reference to the class action
of Shy et al. v. Navistar, Civil Action
No. C-3-92-333 (S.D. Ohio).

 

“Significant Subsidiary” means any Subsidiary, or
group of Subsidiaries, that would, taken together, be a “Significant Subsidiary”
of the Company as defined in Article 1, Rule 1-02 of
Regulation S-X promulgated under the Securities Act, as such regulation is
in effect on the Closing Date.

 

“State” means the State of Illinois.

 

“Stated Maturity” means, with respect to any security or
Indebtedness of a Person, the date specified therein as the fixed date on which
any principal of such security or Indebtedness is due and payable, including
pursuant to any mandatory redemption provision (but excluding any provision
providing for the repurchase thereof at the option of the holder thereof).

 

“Subsidiary” of any Person means

 

(1)           a corporation a majority of whose Voting Stock is at the
time, directly or indirectly, owned by such Person, by one or more Restricted
Subsidiaries of such Person or by such Person and one or more Restricted
Subsidiaries of such Person or

 

(2)           any other Person (other than a trust formed in connection
with a Qualified Securitization Transaction) in which such Person, a Restricted
Subsidiary of such Person or such Person and one or more Restricted Subsidiaries
of such Person, directly or indirectly, at the date of determination thereof,
have at least a majority ownership interest.

 

“Subsidiary Bond Guarantee” means the Bond Guarantee
and each other Subsidiary Guarantee of the Bonds issued pursuant to Section 4.13
of the Loan Agreement.

 

“Subsidiary Guarantee” means either a Subsidiary
Bond Guarantee, a Subsidiary IFA Bond Guarantee or a Subsidiary Note Guarantee
and “Subsidiary Guarantees” collectively
means the Subsidiary Bond Guarantees, the Subsidiary IFA Bond Guarantees and
the Subsidiary Note Guarantees.

 

38

 

“Subsidiary Guarantor” means the Initial
Subsidiary Guarantor and each Restricted Subsidiary of the Company that becomes
a guarantor of (i) the Bonds pursuant to Section 4.13 of the Loan
Agreement; (ii) the IFA Bonds pursuant to Section 4.13 of the IFA
Loan Agreement; or (iii) the Senior Notes pursuant to the Senior Notes
Indenture.

 

“Subsidiary IFA Bond Guarantee” means the IFA Bond
Guarantee and each Subsidiary Guarantee of the IFA Bonds issued pursuant to
Section 4.13 of the loan agreement relating to the IFA Bonds.

 

“Subsidiary Note Guarantee” means the guarantee of the
Senior Notes by the Initial Subsidiary Guarantor and each Subsidiary Guarantee
of the Senior Notes issued pursuant to the Senior Notes Indenture.

 

“Supplemental Indenture” means any indenture
supplemental to this Indenture entered into between the Issuer and the Trustee
pursuant to the provisions of Section 11.01 or Section 11.02 hereof.

 

“Support Agreement” means the Side Agreement
dated as of July 1, 2005, as amended to the Original Securities Issuance
Date between the Company and Navistar, Inc. (formerly known as
International Truck and Engine Corporation), as it may be amended, modified,
supplemented, restated or renewed from time to time; provided that
such agreement shall not be amended, modified, supplemented, restated or
renewed in a manner adverse in any material respect to the interests of the
Company and its Restricted Subsidiaries taken as a whole.

 

“Tax Agreement” means the Tax Exemption Certificate and
Agreement relating to the Bonds, dated the Closing Date, among the Company, the
Trustee and the Issuer, as amended and supplemented from time to time as
permitted therein.

 

“Tax Allocation Agreement” means the Tax Allocation
Agreement among the Company and its Subsidiaries, effective as of
April 14, 2008, as it may be amended and/or supplemented from time to
time; provided that no such amendment or
supplement shall be adverse in any material respect to the interests of the
Company and its Restricted Subsidiaries taken as a whole.

 

“Tax-Exempt” means, with respect to interest on any obligations
of a state or local government, including the Bonds, that such interest is not
includible in gross income of the owners of such obligations for federal income
tax purposes, except for interest on any such obligations for any period during
which such obligations are owned by a person who is a “substantial user” of any
facilities financed with such obligations or a “related person” within the
meaning of Section 147(a) of the Code, whether or not such interest
is includible as an item of tax preference or otherwise includible directly or
indirectly for purposes of calculating other tax liabilities, including any
alternative minimum tax under the Code.

 

“Treasury Regulations” means the United States
Treasury Regulations dealing with the tax-exempt bond provisions of the Code.

 

39

 

“Trust Estate” means the property conveyed to the Trustee
pursuant to the Granting Clauses of this Indenture.

 

“Trust Indenture Act” means the Trust Indenture
Act of 1939 as in effect on the date of this Indenture.

 

“Trustee” means Citibank N.A., as trustee and paying agent
under this Indenture, and any successor Trustee appointed hereunder.

 

“Unassigned Rights” means the rights of the
Issuer under Section 6.01(b)(ii) (relating to fees and expenses),
Section 2.14 (relating to no recourse to the Issuer), Section 2.09
(relating to indemnification), Section 2.13 (relating to exemption from
personal liability) and Section 8.04 (relating to expenses of collection)
of the Loan Agreement and any rights of the Issuer to receive notices,
certificates, requests, requisitions, directions and other communications under
the Loan Agreement.

 

“United States” means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.

 

“Unrestricted Subsidiary” means:

 

(1)           each of Navistar Financial Corporation; Navistar Financial
S.A. de C.V. SOFOM E.N.R.; Navistar Comercial, S.A. de C.V.; Servicios
Corporativos NFC, S. de R.L. de C.V.; Transproteccion Agente de Seguros,
S.A. de C.V. Harbour Assurance Company of Bermuda Limited; Navistar Leasing
Services Corporation f/k/a Harco Leasing Company, Inc.;  Navistar Acceptance Corporation Limited;
International Truck and Engine Corporation US Holding Company, LLC;
International Truck and Engine Corporation Cayman Islands Holding Company;
International Truck and Engine Investments Corporation; Blue Diamond Truck, S.
de R.L. de C.V.; Blue Diamond Parts, LLC, International Dealcor Operations, Ltd.;
Diamond Force Engineering LLC; International Truck and Engine Mauritius Holding
Ltd.; International Truck Leasing Corp.; Navistar Financial Retail Receivables
Corporation; Navistar Financial Securities Corporation; Truck Engine
Receivables Financing Co.; Truck Retail Accounts Corporation; Truck Retail
Installment Paper Corp.; Westco Holdings, LLC; Navistar Cayman Islands
Intellectual Property Company; Navistar Luxembourg Intellectual Property
Company; World Truck Rapid Service, LLC; Cumberland Servicenter, Inc.;
Custom Chassis Products, LLC (in bankruptcy); Navistar Cayman Islands Sourcing
Company; Navistar China Sourcing LLC; Navistar International Hong Kong Limited;
Navistar Investment Hong Kong Limited; Navistar Hong Kong Holding Company
Limited; Navistar (Shanghai) Trading Co. Ltd.; NC2 Global LLC; Mahindra Navistar
Automotives Limited; Mahindra Navistar Engines Private Limited; all DealCor
Subsidiaries and all Securitization Subsidiaries in existence as of the
Original Securities Issuance Date and their respective Subsidiaries until such
time as it is designated a Restricted Subsidiary pursuant to the second
succeeding sentence;

 

40

 

(2)           any Subsidiary of the Company (other than Navistar, Inc.
as long as its Subsidiary Guarantee is in effect) that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors in the
manner provided below; and

 

(3)           any Subsidiary of an Unrestricted Subsidiary.

 

The
Board of Directors may designate any Subsidiary of the Company (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary or any of its Subsidiaries owns any Capital Stock of, or
holds any Lien on any property of, the Company or any other Restricted
Subsidiary of the Company; provided, that
either

 

(1)           the Subsidiary to be so designated has total assets of
$1,000 or less or

 

(2)           if such Subsidiary has assets greater than $1,000, such
designation would be permitted under Section 4.08 of the Loan Agreement.

 

The
Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, that immediately after giving
effect to such designation (a) if such Unrestricted Subsidiary at such
time has Indebtedness, the Company could incur $1.00 of additional Indebtedness
under paragraph (a) of Section 4.07 of the Loan Agreement and
(b) no Default shall have occurred and be continuing. Any such designation
by the Board of Directors shall be evidenced by the Company to the Trustee by
promptly filing with the Trustee a copy of the board resolution giving effect
to such designation and an Officers’ Certificate certifying that such
designation complied with the foregoing provisions.

 

“Voting Stock” means, with respect to any Person,
securities of any class or classes of Capital Stock in such Person entitling
the holders thereof (whether at all times or only so long as no senior class of
stock has voting power by reason of any contingency) to vote in the election of
members of the Board of Directors or other governing body of such Person.

 

Section 1.02.       Rules of Construction.  Unless the context otherwise requires:

 

(a)           a term has the meaning assigned to it;

 

(b)           an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;

 

(c)           references to Articles and Sections are to the Articles
and Sections of this Indenture or the Loan Agreement, as the case may be;

 

(d)           words importing the singular number shall include the
plural number and vice versa and words importing the masculine shall include
the feminine and vice versa;

 

(e)           “or” is not exclusive;

 

41

 

(f)            “including” means including without limitation; and

 

(g)           the headings and Table of Contents herein are solely for
convenience of reference and shall not constitute a part of this Indenture nor
shall they affect its meanings, construction or effect.

 

ARTICLE II

 

THE BONDS

 

Section 2.01.       Authorization of Bonds.  There is hereby authorized and created under
this Indenture an issue of bonds designated as “The County of Cook, Illinois
Recovery Zone Facility Revenue Bonds (Navistar International Corporation
Project) Series 2010”.  The total
aggregate principal amount of Bonds that may be issued and Outstanding under
this Indenture is expressly limited to $90,000,000, exclusive of Bonds executed
and authenticated as provided in Section 2.07 hereof; provided,
however, that no Bonds shall be delivered hereunder until the
Registrar receives a request and authorization of the Issuer signed by the
Issuer Representative to authenticate and deliver the principal amount of the
Bonds therein specified to the purchaser or purchasers therein identified upon
payment to the Trustee, for the account of the Issuer, of the sum specified in
such request and authorization.

 

Section 2.02.       Date, Denomination, Interest Rates,
and Maturities. 
(a)  The Bonds shall be dated as
of the Dated Date.  The Bonds shall be
issued as registered bonds without coupons. 
The Bonds shall be issued only in Authorized Denominations.  The Bonds shall be numbered consecutively
from R-1 upwards.

 

The Bonds shall mature on October 15, 2040 and bear interest at the rate of 6.50% per annum.  The Bonds shall bear interest from the Dated
Date or from and including the most recent Interest Payment Date with respect
to which interest has been paid or duly provided for.  Interest shall be calculated on the basis of
a 360-day year consisting of twelve 30-day months.

 

(b)             Each
Bond shall bear interest from the Interest Payment Date next preceding the date
of registration and authentication thereof unless it is registered and
authenticated on or prior to the first Interest Payment Date, in which event it
shall bear interest from the Dated Date; provided, however, that
if, as shown by the records of the Trustee, interest on the Bonds shall be in
default, Bonds issued in exchange for Bonds surrendered for registration of
transfer or exchange shall bear interest from the last date to which interest
has been paid in full or duly provided for on the Bonds, or, if no interest has
been paid or duly provided for on the Bonds, from the Dated Date.  Payment of the interest on any Bond shall be
made to the person appearing on the bond registration books of the Registrar as
the registered Owner thereof on the Record Date (except that, if and to the
extent that there shall be a default in the payment of the interest due on an
Interest Payment Date, such defaulted interest shall be paid to the Owners in
whose name any such Bonds are registered as of a special record date to be
fixed by the Trustee, notice of which shall be given to such Owners not less
than ten days prior thereto), such interest to be paid by the Trustee to such
registered Owner, as follows:

 

42

 

(1)           in respect of any Bond which is registered in the
book-entry system pursuant to Section 2.10 hereof, in immediately
available funds by no later than 12:00 noon, New York City time, and

 

(2)           in respect of any Bond which is not registered in the
book-entry system pursuant to Section 2.10 hereof, (i) by bank check
mailed by Mail on the Interest Payment Date, to such Owner’s address as it
appears on the registration books of the Registrar or at such other address as
has been furnished to the Registrar in writing by such Owner, or (ii) by
wire transfer on the Interest Payment Date to any owner of at least $1,000,000
in aggregate principal amount of Bonds (or such lesser amount if such Bonds
constitute all of the Bonds then outstanding).

 

Both
the principal of and premium, if any, on the Bonds shall be payable upon
surrender thereof in lawful money of the United States of America at the
Principal Office of the Trustee.

 

Section 2.03.       Form of Bonds.  The Bonds and the
certificate of authentication to be executed thereon shall be in substantially
the form attached hereto as Exhibit A,
with such appropriate variations, omissions and insertions as are permitted or
required by this Indenture.

 

Section 2.04.       Execution of Bonds.  The Bonds shall be executed on behalf of the
Issuer with the official manual or facsimile signature of its President and
attested with the official manual or facsimile signature of its County Clerk,
and shall have impressed or printed thereon the corporate seal of the
Issuer.  All authorized facsimile
signatures shall have the same force and effect as if manually signed.  In case any officer whose signature or
facsimile of whose signature shall appear on the Bonds shall cease to be such
officer before the delivery of such Bonds, such signature or such facsimile
shall nevertheless be valid and sufficient for all purposes, the same as if he
had remained in office until delivery. 
The Bonds may be signed on behalf of the Issuer by such persons who, at
the time of execution of such Bonds, are duly authorized to hold appropriate
offices of the Issuer, although on the date of the Bonds such persons were not
so authorized or did not hold such offices.

 

Only
such of the Bonds as shall bear thereon a certificate of authentication in the
form set forth in Exhibit A hereto, manually
executed by an authorized signatory of the Registrar, shall be valid or
obligatory for any purpose or entitled to the benefits of this Indenture, and
such certificate of the Registrar shall be conclusive evidence that the Bonds
so authenticated have been duly authenticated and delivered hereunder and are
entitled to the benefits of this Indenture. 
Upon authentication of any Bond, the Registrar shall set forth on such
Bond the date of such authentication.

 

Section 2.05.       Transfer and Exchange of Bonds.  Registration of any Bond
may, in accordance with the terms of this Indenture, be transferred at the
Principal Office of the Registrar, upon the books of the Registrar required to
be kept pursuant to the provisions of Section 2.06 hereof, by the Person in
whose name it is registered, in person or by its attorney duly authorized in
writing, upon surrender of such Bond for cancellation, accompanied by a written
instrument of transfer in a form approved by the Registrar, duly executed.  The Registrar shall require the payment by
the Owner of the Bond requesting such transfer of any tax or other

 

43

 

governmental
charge required to be paid and there shall be no other charge to any Owners for
any such transfer.  Whenever any Bond
shall be surrendered for registration of transfer, the Issuer shall execute and
the Registrar shall authenticate and deliver a new Bond or Bonds of the same
tenor and of Authorized Denominations. 
No registration of transfer of Bonds shall be required to be made for a
period of 15 days next preceding the date on which the Trustee sends by Mail
any notice of redemption, nor shall any registration of transfer of Bonds
called for redemption be required, except the unredeemed portion of any Bond being
redeemed in part.

 

In
the event any Owner fails to provide a correct taxpayer identification number
to the Trustee, the Trustee may make a charge, or other security, against the
Owner sufficient to pay any government charge required to be paid as a result
of such failure.  In compliance with Section 3406
of the Code, this amount may be deducted by the Trustee from amounts payable to
the Owner under this Indenture or the Bonds.

 

Bonds
may be exchanged at the Principal Office of the Registrar for a like aggregate
principal amount of Bonds of the same tenor and of Authorized
Denominations.  The Registrar shall
require the payment by the Owner of the Bond requesting such exchange of any
tax or other governmental charge required to be paid with respect to such exchange,
and there shall be no other charge to any Owners for any such exchange.  No exchange of Bonds shall be required to be
made for a period of 15 days next preceding the date on which the Trustee Mails
notice of redemption, nor shall any exchange of Bonds called for redemption be
required, except the unredeemed portion of any Bond being redeemed in part.

 

The
Issuer, the Registrar, the Trustee and any agent of the Issuer, the Registrar
or the Trustee may treat the person in whose name the Bond is registered as the
owner thereof for the purpose of receiving payment as herein provided and for
all other purposes, whether or not the Bond be overdue, and neither the Issuer,
the Registrar, the Trustee, nor any such agent shall be affected by notice to
the contrary.

 

Section 2.06.       Bond Register.  The Registrar will keep or
cause to be kept at its Principal Office sufficient books for the registration
and the registration of transfer of the Bonds, which shall at all times, during
regular business hours, be open to inspection by the Issuer, the Trustee and
the Company; and, upon presentation for such purpose, the Registrar shall under
such reasonable regulations as it may prescribe, register the transfer or cause
to be registered the transfer, on said books, Bonds as hereinbefore provided.

 

Section 2.07.       Bonds Mutilated, Lost, Destroyed or
Stolen.  If  any
Bond shall become mutilated, the Issuer, upon the request and at the expense of
the Owner of said Bond, shall execute, and the Registrar shall thereupon
authenticate and deliver, a new Bond of like tenor and number in exchange and
substitution for the Bond so mutilated, but only upon surrender to the
Registrar of the Bond so mutilated. 
Every mutilated Bond so surrendered to the Registrar shall be canceled
by it and delivered to the Company.  If
any Bond issued hereunder shall be lost, destroyed or stolen, evidence of such
loss, destruction or theft may be submitted to the Issuer, the Company and the
Registrar, and if such evidence shall be satisfactory to them and indemnity
satisfactory to them shall be given, the Issuer, at the expense of the Owner,
shall execute, and the Registrar shall thereupon authenticate and deliver, a
new Bond of like tenor in lieu of and in

 

44

 

substitution
for the Bond so lost, destroyed or stolen (or if any such Bond shall have
matured or shall be about to mature, instead of issuing a substitute Bond the
Registrar may pay the same without surrender thereof).  The Issuer may require payment of a
reasonable fee for each new Bond issued under this Section and payment of
the expenses which may be incurred by the Issuer and the Registrar.  Any Bond issued under the provisions of this Section in
lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an
original additional contractual obligation on the part of the Issuer whether or
not the Bond so alleged to be lost, destroyed or stolen be at any time
enforceable by anyone, and shall be equally and proportionately entitled to the
benefits of this Indenture with all other Bonds secured by this Indenture.

 

To
the extent permitted by law, the provisions of this Section are exclusive
and shall preclude all other rights and remedies with respect to the
replacement or payment of mutilated, lost, destroyed or stolen Bonds.

 

Section 2.08.       Bonds; Limited Obligations.  The Bonds, together with all principal and
interest thereon, and premium, if any, with respect thereto are special,
limited obligations of the Issuer secured by the Loan Agreement, and shall
always be payable solely from the revenues and income derived from the Loan
Agreement and the security therefor, and from certain funds and accounts
pledged to the Trustee under this Indenture (except to the extent paid out of
money attributable to proceeds of the Bonds or the income from the temporary
investment thereof), are and shall be a valid claim of the respective Owners
thereof only against the revenues and income derived from the Loan Agreement
and such other instruments assigned to or held by the Trustee, which revenues
and income shall be used for no other purpose than to pay the principal of,
premium, if any, and interest on the Bonds, except as may be otherwise
expressly authorized in this Indenture, the Bond Ordinance and in the Loan
Agreement.

 

The
Bonds and the obligation to pay principal and interest thereon and any premium
with respect thereto do not now and shall never constitute an indebtedness or
general obligation of the Issuer, or a charge against its general credit or the
taxing powers of the Village or the State, but shall be secured as aforesaid,
and shall be, and shall never give rise to any pecuniary liability of the
Issuer, and neither the Issuer, the State nor any other political subdivision
thereof shall be liable for the payments of principal of and premium, if any,
and interest on the Bonds and the Bonds are payable solely from the revenues
and income derived from the Loan Agreement and the security therefor.  No owner of the Bonds shall have the right to
demand payment out of any funds to be raised by taxation or from any source
other than those specified above.

 

No
recourse shall be had for the payment of the principal of, or premium, if any,
or interest on any of the Bonds or for any claim based thereon or upon any
obligation, covenant or agreement contained in this Indenture, the Bonds, the
Loan Agreement or any other related documents, against any past, present or
future member of the Board of Commissioners, officer, agent or employee of the
Issuer, or any officer, director, employee, trustee or member of any successor
entity, as such, either directly or through the Issuer or any successor entity,
under any rule of law or equity, statute or constitution or by the
enforcement of any assessment or penalty or otherwise, and all such liability
of any such officer, director, employee, agent, trustee or member as such is
hereby expressly waived and released as a condition of and in consideration for
the execution of this Indenture and the issuance of any of the Bonds.

 

45

 

Section 2.09.      Disposal
of Bonds.  Upon payment of
the principal of, premium, if any, and interest represented thereby or transfer
or exchange pursuant to Section 2.05 hereof or replacement pursuant to
Section 2.07 hereof, any Bond shall be canceled and such Bond shall be
disposed of by the Registrar in accordance with its customary procedures and
the Registrar, upon written request of the Company, shall provide evidence
satisfactory to the Company of such cancellation and disposition.

 

Section 2.10.      Book-Entry
System.  (a) Unless otherwise
determined by the Issuer, the Bonds shall be issued in the form of a single
certificated fully-registered Bond, registered in the name of Cede & Co.,
as nominee of DTC, or any successor nominee (the “Nominee”).  The actual owners of
the Bonds (the “Beneficial Owners”)  will not receive physical delivery of Bond certificates
except as provided herein.  Except as
provided in paragraph (d) below, all of the outstanding Bonds shall be so
registered in the registration books kept by the Registrar, and the provisions
of this Section shall apply thereto.

 

(b)           With respect to
Bonds registered on the registration books kept by the Registrar in the name of
the Nominee, the Issuer, the Company, the Registrar and the Trustee shall have no
responsibility or obligation to any DTC Participant or the Beneficial
Owners.  Without limiting the immediately
preceding sentence, the Issuer, the Company, the Registrar and the Trustee
shall have no responsibility or obligation to DTC, any DTC Participant or any
Beneficial Owner with respect to (1) the accuracy of the records of DTC, the
Nominee or any DTC Participant with respect to any ownership interest in the
Bonds, (2) the delivery by DTC or any DTC Participant of any notice with
respect to the Bonds, including any notice of redemption, or (3) the payment to
any DTC Participant or Beneficial Owner of any amount with respect to principal
or purchase price of, or premium, if any, or interest on, the Bonds.  The Issuer, the Company, the Registrar and the
Trustee may treat and consider the person in whose name each Bond is registered
in the registration books kept by the Registrar as the absolute owner of such
Bond for the purpose of payment of principal, purchase price, premium and
interest with respect to such Bond, for the purpose of giving notices of
redemption and other matters with respect to such Bond, for the purpose of
registering transfers with respect to such Bond, and for all other purposes
whatsoever.  The Trustee shall pay all
principal of and premium if any, and interest on, the Bonds only to or upon the
order of the respective Owners, as shown in the registration books kept by the
Registrar, or their respective attorneys duly authorized in writing, and all
such payments shall be valid and effective to fully satisfy and discharge the
Issuer’s obligations with respect to payment of principal of, and premium, if
any, and interest on, the Bonds to the extent of the sum or sums so paid.  No person other than an Owner, as shown in
the registration books kept by the Registrar, shall receive a certificated Bond
evidencing the obligation of the Issuer to make payments of principal, premium,
if any, and interest pursuant to this Indenture.

 

(c)           The Issuer has
executed and delivered to DTC a letter of representations in customary form
with respect to the Bonds in book-entry form (the “DTC
Representation Letter”).

 

(d)           DTC may determine to
discontinue providing its services with respect to the Bonds at any time by
giving reasonable notice to the Issuer or the Trustee and discharging its
responsibilities with respect thereto under applicable law.  The Issuer, with the consent of the 

 

46

 

Company,
may terminate the services of DTC with respect to the Bonds.  Upon the discontinuance or termination of the
services of DTC with respect to the Bonds, unless a substitute securities
depository is appointed to undertake the functions of DTC hereunder, the
Issuer, at the expense of the Company, is obligated to deliver Bond
certificates to the Beneficial Owners of such Bonds, as described in this
Indenture, and such Bonds shall no longer be restricted to being registered in
the registration books kept by the Registrar in the name of the Nominee, but
may be registered in whatever name or names Owners transferring or exchanging
Bonds shall designate, in accordance with the provisions of this
Indenture.  The Trustee, the Registrar
and the Issuer may conclusively rely on information provided by DTC and DTC
Participants as to the identity of the Owners and the amount owed.

 

(e)           Notwithstanding any
other provision of this Indenture to the contrary, so long as any Bond is
registered in the name of the Nominee, all payments with respect to principal
of, or premium, if any, and interest on, such Bond and all notices with respect
to such Bond shall be made and given, respectively, in the manner provided in
the DTC Representation Letter.  Owners
shall have no lien or security interest in any rebate or refund paid by DTC to
the Trustee which arises from the payment by the Trustee of principal of, or
premium, if any, or interest on, the Bonds in immediately available funds to
DTC.

 

Section 2.11.      CUSIP
Numbers.  The Issuer in issuing the
Bonds may use “CUSIP” numbers (if then generally
in use), and, if so, the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Owners; provided that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Bonds or as contained in any notice of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Bonds, and any such redemption shall not be affected by
any defect in or omission of such numbers. 
The Issuer or the Company will promptly notify the Trustee and the
Registrar of any change in any CUSIP number(s).

 

None
of the Issuer, the Registrar nor the Trustee shall have any responsibility for
any defect in the CUSIP number that appears on any Bond, check, advice of
payment or redemption notice, and any such document may contain a statement to
the effect that CUSIP numbers have been assigned by an independent service for
convenience of reference and that none of the Issuer, the Registrar nor the
Trustee shall be liable for any inaccuracy in such matters.

 

ARTICLE III

 

REDEMPTION OF BONDS

 

Section 3.01.      Redemption
of Bonds Generally.  (a) The
Bonds are subject to redemption if and to the extent the Company is entitled or
required to make and makes a prepayment pursuant to Article IX of the Loan
Agreement.  Except as specifically
provided in Section 3.03 hereof, the Trustee shall not give notice of any
redemption under Section 3.05 hereof unless the Company has so directed in
accordance with Section 9.01 of the Loan Agreement; provided
that the Trustee may require prepayment of Loan Payments under
Section 6.01 of the Loan Agreement in the case of mandatory redemption.

 

47

 

(b)           If the Bonds are to
be redeemed in part, they shall only be redeemed in Authorized Denominations
and in such manner that the unredeemed portion shall also be in Authorized
Denominations.

 

Section 3.02.      Redemption
upon Optional Prepayment.  (a) Extraordinary Optional Redemption.  The Bonds shall be redeemed in whole or in
part, and if in part by such method as the Trustee may deem fair and
appropriate, at any time at a redemption price equal to 100% of the principal
amount thereof plus accrued interest to the redemption date, upon receipt by
the Trustee of a written notice from the Company stating that any of the
following events has occurred and that the Company therefore intends to
exercise its option to prepay the payments due under the Loan Agreement in
whole or in part pursuant to Section 9.01 of the Loan Agreement and
thereby effect the redemption of Bonds in whole or in part:

 

(i)            the
Company shall have determined or concurred in a determination that the
continued operation of the Project is impracticable, uneconomical or
undesirable for any reason;

 

(ii)           all
or substantially all of the Project shall have been condemned or taken by
eminent domain;

 

(iii)          the
operation of the Project shall have been enjoined or shall have otherwise been
prohibited by, or shall conflict with, any order, decree, rule or regulation of
any court or of any federal, State or local regulatory body, administrative
agency or other governmental body; or

 

(iv)          unreasonable
burdens or excessive liabilities shall have been imposed upon the Company in
respect of all or a part of the Project including, without limitation, federal,
State or other ad valorem, property, income or other taxes not being imposed on
the date of the Loan Agreement, as well as any statute or regulation enacted or
promulgated after the date of the Loan Agreement that prevents the Company from
deducting interest in respect of the Loan Agreement for federal income tax
purposes.

 

(b)           Optional
Redemption.  The Bonds shall
be subject to redemption in whole, or in part by lot, prior to their maturity,
at the redemption price of 100% of the principal amount thereof, together with
accrued interest to the date of redemption, following receipt by the Issuer and
the Trustee of a written notice from the Company pursuant to Section 9.01 of
the Loan Agreement and upon prepayment of the related Loan Payments at the
option of the Company, on or after October 15, 2020.

 

Section 3.03.      Mandatory
Redemption upon Determination of Taxability.  The Bonds shall be subject to mandatory
redemption in whole on any date from amounts which are to be prepaid by the
Company under Section 9.02(b) of the Loan Agreement, at a redemption price
equal to 100% of the principal amount thereof plus interest accrued, if any, to
the redemption date within 60 days following a Determination of Taxability; provided that if, in the opinion of Bond Counsel delivered
to the Trustee, the redemption of a specified portion of the Bonds outstanding
would have the result that interest payable on the Bonds remaining outstanding
after such redemption would remain Tax-Exempt, then the Bonds shall be redeemed
in part by such method 

 

48

 

as
the Trustee may deem fair and appropriate (in Authorized Denominations), in
such amount as Bond Counsel in such opinion shall have determined, and as is
set forth in such opinion, necessary to accomplish that result.

 

Section 3.04.      Selection
of Bonds for Redemption.  Except as
described in Section 3.03 hereof for partial redemptions upon a
Determination of Taxability, if  less than all
of the Bonds are called for redemption the Trustee shall select the Bonds or
any given portion thereof to be redeemed, from the outstanding Bonds or such
given portion thereof not previously called for redemption, by such method as
the Trustee may deem fair and appropriate. 
For the purpose of any such selection the Trustee shall (to the extent
practicable) assign a separate number for each minimum Authorized Denomination
of each Bond of a denomination of more than such minimum; provided
that, following any such selection, both the portion of such Bond to be
redeemed and the portion remaining shall be in Authorized Denominations.  The Trustee shall promptly notify the Issuer
and the Company in writing of the numbers of the Bonds or portions thereof so
selected for redemption.

 

Section 3.05.      Notice of
Redemption.  (a) The
Trustee, for and on behalf of the Issuer, shall give notice of the redemption
of any Bond by Mail, postage prepaid, not less than 30 days nor more than
60 days prior to the redemption date, to the Owner of such Bond at the address
shown on the registration books of the Registrar on the date such notice is
mailed and to the Securities Depositories. 
Notice of redemption shall also be given to DTC in accordance with the DTC
Representation Letter.  The Trustee shall
deliver the notice of redemption at the written direction of the Company.  Such written direction is to be received by
the Trustee not less than 45 days prior to the date of the mailing of any
redemption notice, or such shorter period as is permitted by the Trustee.  Notice of redemption to the Securities
Depositories shall be given electronically in accordance with the Securities
Depositories standard procedures along with a notice delivered by Mail.  Each notice of redemption shall state the
date of such notice, the date of issue of the Bonds to be redeemed, the
redemption date, the redemption price, the place of redemption (including the
name and appropriate address or addresses of the Trustee), the principal
amount, the CUSIP number (if any) of the maturity and, if less than all, the
distinctive certificate numbers of the Bonds to be redeemed and, in the case of
Bonds to be redeemed in part only, the respective portions of the principal
amount thereof to be redeemed.  Each such
notice shall also state that the interest on the Bonds designated for
redemption shall cease to accrue from and after such redemption date and that
on said date there will become due and payable on each of said Bonds the
principal amount thereof to be redeemed, interest accrued thereon, if any, to
the redemption date and the premium, if any, thereon (such premium to be
specified) and shall require that such Bonds be then surrendered at the address
or addresses of the Trustee specified in the redemption notice.  Notwithstanding the foregoing, failure by the
Trustee to give notice pursuant to this Section 3.05 to any one or more of
the Securities Depositories or the insufficiency of any such notices shall not
affect the sufficiency of the proceedings for redemption.  Failure to give any required notice of
redemption as to any particular Bond shall not affect the validity of the call
for redemption of any Bonds in respect of which no such failure has occurred.

 

(b)           With respect to any
notice of optional redemption of Bonds in accordance with Section 3.02(b)
hereof, unless, upon the giving of such notice, such Bonds shall be deemed to 

 

49

 

have
been paid within the meaning of Article VII hereof, such notice may state that
such redemption is conditioned upon the receipt by the Trustee, on or prior to
the date fixed for such redemption, of moneys sufficient to pay the principal
of, and premium, if any, and interest on, such Bonds to be redeemed.  In the event such moneys are not so received,
the redemption shall not be made and the Trustee shall within a reasonable time
thereafter give notice, in the manner in which the notice of redemption was
given, that such redemption will not take place.

 

Section 3.06.      Partial
Redemption or Purchase of Bonds.  Upon surrender
of any Bond redeemed or purchased in part only, the Registrar shall exchange
the Bond redeemed or purchased for a new Bond of like tenor and in an
Authorized Denomination without charge to the Owner in the principal amount of
the portion of the Bond not redeemed or purchased.  In the event of any partial redemption or
purchase of a Bond which is registered in the name of Cede & Co., DTC may
elect to make a notation on the Bond certificate which reflects the date and
amount of the reduction in the principal amount of said Bond in lieu of
surrendering the Bond certificate to the Registrar for exchange.  The Issuer, the Company and the Trustee shall
be fully released and discharged from all liability to the extent of payment of
the redemption or purchase price for such partial redemption or purchase.

 

Section 3.07.      No Partial
Redemption after Default.  Anything in
this Indenture to the contrary notwithstanding, if there shall have occurred
and be continuing an Event of Default (other than an Event of Default described
in Section 8.01(c) hereof) of which an authorized officer of the corporate
trust department of the Trustee has actual knowledge, there shall be no
redemption of less than all of the Bonds at the time Outstanding.

 

Section 3.08.      Payment of
Redemption Price.  For the
redemption of any of the Bonds, the Trustee shall deposit in the Principal
Account of the Bond Fund solely out of the revenues and income derived pursuant
to the Loan Agreement and the security therefor, and any other moneys
constituting the Trust Estate, an amount sufficient to pay the principal of,
and premium, if any, and interest to become due on, the Bonds called for
redemption on the date fixed for such redemption.  Such deposit shall be reduced by the amount of
moneys in the Principal Account of the Bond Fund and used on such redemption
date for payment of the principal of, and premium, if any, and accrued interest
on, the Bonds to be redeemed.

 

Section 3.09.      Effect of
Redemption.  Notice of
redemption having been duly given as aforesaid, and moneys for payment of the
redemption price being held by the Trustee if such redemption was conditioned
thereon, the Bonds so called for redemption shall, on the redemption date
designated in such notice, become due and payable at the redemption price
specified in such notice, interest on the Bonds so called for redemption shall
cease to accrue, said Bonds shall cease to be entitled to any lien, benefit or
security under this Indenture, and the Owners of said Bonds shall have no
rights in respect thereof except to receive payment of the redemption price
thereof, without interest accrued on any funds held to pay such redemption
price accruing after the date of redemption.

 

All
Bonds fully redeemed pursuant to the provisions of this Article III shall be
canceled upon surrender thereof to the Trustee, which shall upon the written
request of the Company, deliver to the Company a certificate evidencing such
cancellation.

 

50

 

Section 3.10.      Purchase
in Lieu of Optional Redemption.  The Company shall have the option to cause
the Bonds to be purchased in lieu of redemption pursuant to
Section 3.02(b) hereof.  Such option
shall be exercised by the Company by delivering to the Trustee on or prior to
the Business Day preceding the redemption date a written direction of the
Company specifying that the Bonds shall not be redeemed, but instead shall be
subject to purchase pursuant to this Section. 
Upon delivery of such notice, the Bonds shall not be redeemed but shall
instead be subject to mandatory tender for purchase at a purchase price equal
to the redemption price at which the Bonds would have been redeemed hereunder
on the date that would have been the redemption date; provided
that funds in an amount equal to the purchase price shall be made available to
the Trustee on or prior to the purchase date. 
Anything herein to the contrary notwithstanding, in no event shall the
purchase of Bonds pursuant to this Section 3.10 be deemed to constitute a
redemption of such Bonds, except upon the written notice by the Company to the
Trustee that the Company has elected to treat such Bonds as paid and retired in
full, accompanied by the surrender of said Bonds to the Trustee for
cancellation.

 

Section 3.11.      Company’s
Offer to Purchase.  The Company
is obligated to make an offer to purchase Bonds upon the occurrence of the
following events:

 

(a)           If
the Company or any Restricted Subsidiary consummates a permitted Asset
Disposition and on the 361st day after such Asset Disposition, the aggregate
amount of Unutilized Net Available Proceeds exceeds $25.0 million, the Company
is required to direct the Trustee to notify the Bondholders of an Offer to
Purchase all or a portion of the Bonds (in an amount determined in accordance
with Section 4.09 of the Loan Agreement) for a price equal to 100% of the
principal amount thereof, plus accrued interest to the purchase date.  If the amount of Bonds tendered for purchase
exceeds the amount required to be used to purchase Bonds, the Trustee shall
select the Bonds or any given portion thereof to be purchased from the tendered
Bonds by such method as the Trustee may deem fair and appropriate.  For the purpose of any such selection the Trustee
shall (to the extent practicable) assign a separate number for each minimum
Authorized Denomination of each Bond of a denomination of more than such
minimum; provided that, following any such
selection, both the portion of such Bond to be redeemed and the portion
remaining shall be in Authorized Denominations. 
The Trustee shall promptly notify the Issuer and the Company in writing
of the numbers of the Bonds or portions thereof so selected for purchase.

 

(b)           If
a Change of Control occurs, each Bondholder shall have the right to require the
Company to purchase all or any part of such Holder’s Bonds pursuant to a Change
of Control Offer, in an amount equal to 101% of the aggregate principal amount
of the Bonds plus accrued interest to the purchase date.  The Company is required to direct the Trustee
to notify the Bondholders of the occurrence of the Change of Control and the
purchase price and the purchase date as set forth in Section 9.04 of the
Loan Agreement.

 

51

 

ARTICLE IV

 

GENERAL COVENANTS

 

Section 4.01.      Payment of
Bonds.  (a) The Issuer
covenants that it will promptly pay or cause to be paid the principal of, and
premium, if any, and interest on, every Bond issued under this Indenture at the
place, on the dates and in the manner provided herein and in the Bonds, provided that the principal, premium if any, and interest
are payable by the Issuer solely from amounts payable under the Loan Agreement,
the Bond Guarantee and certain funds and account pledged to the Trustee under
this Indenture and nothing in the Bonds or this Indenture shall be considered
as assigning or pledging any other funds or assets of the Issuer other than the
Trust Estate.  Pursuant to
Article XI of the Loan Agreement, the Bonds may also be secured from time
to time by the delivery of additional Subsidiary Bond Guarantees.

 

(b)           Each and every
covenant made herein by the Issuer is predicated upon the condition that the
Issuer shall not in any event be liable for the payment of the principal of, or
premium, if any, or interest on the Bonds, or the performance of any pledge,
obligation or agreement created by or arising under this Indenture or the Bonds
from any property other than the Trust Estate; and, further, that neither the
Bonds nor any such obligation or agreement of the Issuer shall be construed to
constitute an indebtedness or a lending of credit of the Issuer within the
meaning of any constitutional or statutory provision whatsoever, or constitute
or give rise to a pecuniary liability of the Issuer or a charge against its
general credit.

 

(c)           For the payment of
interest on the Bonds, the Trustee shall deposit in the Interest Account on or
prior to each Interest Payment Date, all moneys designated as payments for
interest on the Bonds and paid on behalf of the Company pursuant to the Loan
Agreement or paid by the Guarantor pursuant to the Bond Guarantee (or paid by
any other Subsidiary Guarantor pursuant to any other Subsidiary Bond
Guarantee), an amount sufficient to pay the interest to become due on such
Interest Payment Date.  Such deposit
shall be reduced by the amount of moneys in the Interest Account available on
the Interest Payment Date for the payment of the interest on the Bonds.

 

(d)           For payment of the
principal of the Bonds upon redemption, maturity or acceleration of maturity,
the Trustee shall deposit in the Principal Account, on or prior to the
redemption date or the maturity date (whether accelerated or not) of the Bonds,
all moneys designated as payments of principal of the Bonds and paid on behalf
of the Company pursuant to the Loan Agreement or paid by the Guarantor pursuant
to the Bond Guarantee (or paid by any other Subsidiary Guarantor pursuant to
any other Subsidiary Bond Guarantee). 
Such deposit shall be reduced by the amount of moneys in the Principal
Account available on the redemption date or the maturity date (whether
accelerated or not) for the payment of the principal of the Bonds.

 

Section 4.02.      Performance
of Covenants by Issuer; Issuer; Due Execution. 
The Issuer covenants that it will faithfully perform at all times any
and all covenants, undertakings, stipulations and provisions contained in this
Indenture, in any and every Bond executed, authenticated and delivered
hereunder and in all of its proceedings pertaining thereto; provided, 

 

52

 

however, that except
for the matters set forth in any documents hereof relating to payment of the
Bonds, the Issuer shall not be obligated to take any action or execute any
instrument pursuant to any provision hereof until it shall have been requested
to do so by the Company or by the Trustee, or shall have received the
instrument to be executed and at the option of the Issuer shall have received
from the party requesting such action or execution assurance satisfactory to
the Issuer that the Issuer shall be reimbursed for its reasonable expenses,
including legal counsel fees, incurred or to be incurred in connection with
taking such action or executing such instrument.

 

The
Issuer represents that it is duly authorized under the Constitution and laws of
the State, including particularly the Bond Ordinance, to issue the Bonds and to
execute this Indenture, to execute and deliver the Loan Agreement, to grant the
security interest herein provided, to assign and pledge the Loan Agreement and
amounts payable thereunder, and to assign and pledge the amounts hereby
assigned and pledged in the manner and to the extent herein set forth, that all
action on its part for the issuance of the Bonds and the execution and delivery
of this Indenture has been duly and effectively taken, and that the Bonds in
the hands of the Owners are and will be valid and enforceable obligations of
the Issuer according to the terms thereof and hereof.

 

The
Issuer shall fully cooperate with the Trustee and with the Owners of the Bonds
to the end of fully protecting the rights and security of the Owners of any
Bonds.

 

Except
to the extent otherwise provided in this Indenture, the Issuer shall not enter
into any contract or take any action by which the rights of the Trustee or the
Owners of the Bonds may be impaired and shall, from time to time, execute and
deliver such further instruments and take such further action as may be
reasonably required to carry out the purposes of this Indenture.

 

Anything
contained in this Indenture to the contrary notwithstanding, it is hereby
understood and agreed that all of the representations and warranties or
covenants of the Issuer contained in this Indenture are subject to the
limitations set forth in Section 2.08 hereof and are not intended to and do not
create a general or primary obligation of the Issuer.  The Bonds do not and shall never become
general obligations of the Issuer, but are limited obligations payable solely and
only from the Trust Estate, and as authorized by the Bond Ordinance and
provided herein. No covenant or agreement contained in the Bonds, in this
Indenture or in any other agreement referred in this Indenture shall be deemed
to be the covenant or agreement of any member of the Board of Commissioners,
officer, agent or employee of the Issuer in his or her individual capacity, and
neither such persons nor any official executing the Bonds shall be liable
personally on the Bonds or be subject to any personal liability or
accountability by reason of the issuance thereof.

 

Section 4.03.      Defense of
Issuer’s Rights.  The Issuer
agrees that the Trustee may defend the Issuer’s rights to the payments and
other amounts due under the Loan Agreement, for the benefit of the Owners of
the Bonds, against the claims and demands of all persons whomsoever.  The Issuer covenants that it will do,
execute, acknowledge and deliver, or cause to be done, executed, acknowledged
and delivered, such indentures supplemental hereto and such further 

 

53

 

acts,
instruments and transfers as the Trustee may reasonably require for the better
assuring, transferring, pledging, assigning and confirming to the Trustee all
and singular the rights assigned hereby and the amounts pledged hereby to the
payment of the principal of, and premium, if any, and interest on, the
Bonds.  The Issuer covenants and agrees
that, except as herein and in the Loan Agreement provided, it will not sell,
convey, assign, pledge, encumber or otherwise dispose of any part of the Trust
Estate.

 

Section 4.04.      Recordation
and Other Instruments.  In
order to perfect the security interest of the Trustee in the Trust Estate, the
Issuer, to the extent permitted by law, will execute such financing statements,
naming the Trustee as assignee and pledgee of the Trust Estate assigned and
pledged under this Indenture for the payment of the principal of, premium, if
any, and interest on the Bonds and as otherwise provided herein, and the
Trustee will cause the same to be duly filed and recorded, as the case may be,
in the appropriate State and county offices as required by the provisions of
the Uniform Commercial Code or other similar law as adopted in the State, as
from time to time amended.  To continue
the security interest evidenced by such financing statements, the Trustee shall
file and record or cause to be filed and recorded such necessary continuation
statements or supplements thereto and other instruments from time to time as
may be required pursuant to the provisions of the said Uniform Commercial Code
or other similar law to fully preserve and protect the security interest of the
Trustee in the Trust Estate.  The Issuer,
to the extent permitted by law, at the expense of the Company, shall execute
and cause to be executed any and all further instruments as shall be reasonably
required by the Trustee for such protection and perfection of the interests of
the Trustee, the registered owners and the Trustee shall file and refile or
cause to be filed and refiled such continuation statements which shall be
necessary to preserve and perfect the lien of this Indenture upon the Trust
Estate until the principal of, premium, if any, and interest on the Bonds
issued hereunder shall have been paid or provision for their payment shall be
made as herein provided.

 

Section 4.05.      Rights
under Loan Agreement.  The Loan
Agreement, a duly executed counterpart of which has been filed with the
Trustee, sets forth the covenants and obligations of the Issuer and the
Company, including provisions that, subsequent to the issuance of the Bonds and
prior to the payment in full or provision for payment thereof in accordance
with the provisions hereof, the Loan Agreement (except as expressly provided
therein) may not be effectively amended, changed, modified, altered or
terminated without the concurring written consent of the Trustee, as evidenced
by an Opinion of Counsel, as provided in Article XI hereof, and reference is
hereby made to the Loan Agreement for a detailed statement of such covenants
and obligations of the Company, and the Issuer agrees that the Trustee in its
name or (to the extent required by law) in the name of the Issuer may enforce
all rights of the Issuer and all obligations of the Company under and pursuant
to the Loan Agreement, whether or not the Issuer is in default hereunder.  The Issuer shall cooperate with the Trustee
in enforcing the obligations of the Company to pay or cause to be paid all
amounts payable by the Company under the Loan Agreement.

 

Section 4.06.      Prohibited
Activities.  Subject to the
limitations on its liability as stated herein and to the extent permitted by
law, the Issuer covenants and agrees that it has not knowingly engaged and will
not knowingly engage in any activities and that it has not knowingly taken and
will not knowingly take any action which might result in any interest on the
Bonds 

 

54

 

becoming
includable in the gross income of the owners thereof for purposes of federal
income taxation.

 

Section 4.07.      No
Disposition of Trust Estate.  Except as
permitted by this Indenture, the Issuer shall not sell lease, pledge, assign or
otherwise encumber or dispose of its interest in the Trust Estate and will
promptly pay (but only from the revenues and income derived pursuant to the
Loan Agreement and the security therefor, and any other moneys constituting the
Trust Estate) or cause to be discharged, or make adequate provision to
discharge, any lien or charge on any part thereof not permitted hereby.

 

Section 4.08.      Access to
Books.  All books and documents in
the possession of the Issuer relating to the revenues and income derived
pursuant to the Loan Agreement and the security therefor, and any other moneys
constituting the Trust Estate shall at all reasonable times be open to
inspection by such accountants or other agencies as the Trustee may from time
to time designate.  If requested by the
Trustee, such inspection shall occur annually at a time convenient for the
Issuer and the Trustee.

 

Section 4.09.      Source of Payment
of Bonds.  The Bonds are
not general obligations of the Issuer, nor are they payable in any manner from
revenues raised by taxation, but are limited obligations payable solely from
the revenues and income derived pursuant to the Loan Agreement and the security
therefor, the Bond Guarantee and any other Subsidiary Bond Guarantees delivered
from time to time and any other moneys constituting the Trust Estate.  The revenues and income derived pursuant to
the Loan Agreement and the security therefor, and any other moneys constituting
the Trust Estate have been pledged and assigned as security for the equal and
ratable payment of the Bonds and shall be used for no other purpose than to pay
the principal of, and premium, if any, and interest on, the Bonds, except as
may be otherwise expressly authorized in this Indenture or the Loan Agreement.

 

Section 4.10.      Provisions
for Payment of Expenses.  The
Issuer shall not be obligated to execute any documents or take any other action
under or pursuant to this Indenture, the Loan Agreement, or any other document
in connection with the Bonds unless and until provision for the payment of
expenses of the Issuer, including legal counsel fees, shall have been
made.  Provision for expenses shall be
deemed to have been made upon arrangements reasonably satisfactory to the
Issuer for the provision of expenses being agreed upon by the Issuer and the
party requesting such execution.

 

ARTICLE V

 

FUND AND ACCOUNTS; DEPOSIT AND
APPLICATION OF BOND PROCEEDS

 

Section 5.01.      Creation of Bond Fund and Accounts; Rebate
Fund.  (a) There is
hereby created by the Issuer and ordered established a separate Bond Fund, to
be held by the Trustee and to be designated “The County of Cook, Illinois
Recovery Zone Facility Revenue Bonds (Navistar International Corporation
Project) Series 2010 Bond Fund” and therein created (i) a Principal
Account and (ii) an Interest Account.

 

55

 

(b)           For purposes of
complying with the requirements of Section 148 of the Code, there is hereby
created by the Issuer and ordered established a separate Rebate Fund, to be
held by the Trustee and to be designated “The County of Cook, Illinois Recovery
Zone Facility Revenue Bonds (Navistar International Corporation Project) Series
2010 Rebate Fund,” to make arbitrage payments as contemplated by the Tax
Agreement.

 

Section 5.02.      Application
of Bond Proceeds. 
(a) The Issuer shall loan all proceeds from the sale of the Bonds
to the Company and the Issuer shall cause the proceeds of the initial sale of
the Bonds to be deposited with the Trustee in the “Project Fund,”
which is hereby created with the Trustee. 
The Trustee will hold those proceeds in trust for the benefit of the
Company and the Bondholders and will apply the proceeds in accordance with this
Section 5.02.

 

Moneys
in the Project Fund will be allocated for federal income tax purposes to the
payment of the Project Costs, or to the reimbursement of the Company for
Project Costs paid by it.  The Trustee
shall disburse moneys in the Project Fund upon receipt of a requisition,
substantially in the form as attached hereto as Exhibit B,
signed by an Authorized Company Representative stating with respect to each
disbursement to be made, the following:

 

(i)            the
name and address of the person, firm or corporation to whom payment is due or
has been made (which may include the Company) is set forth on Schedule I
attached thereto;

 

(ii)           the
amount to be or which has been paid is set forth on Schedule I attached thereto;

 

(iii)          that
the costs of an aggregate amount set forth in such requisition have been or
will be made or incurred or financed and were or will be necessary for the
Project and were made or incurred in accordance with the construction
contracts, plans and specifications and building permits therefor then in
effect;

 

(iv)          that
the amount paid or to be paid, as set forth in such requisition, represents a
part of the amount that is or will be due and payable for Project Costs and was
or will be made in accordance with the terms of any contracts applicable
thereto and in accordance with usual and customary practice under existing
conditions;

 

(v)           that
no part of the Project Costs was included within the costs referred to in any
requisition previously filed with the Trustee under the provisions of this
Indenture;

 

(vi)          that
(A) the withdrawal of moneys from the Project Fund and the use of the
property financed or reimbursed therefrom has not and will not result in a
violation of any representation, term or covenant in the Tax Agreement or
Project Certificate and (B) any Favorable Opinion of Bond Counsel required
to be delivered as a result of changes in the use of Project Fund moneys
pursuant to Section 3.04 of the Loan Agreement has been delivered to the
Trustee and the Issuer;

 

56

 

(vii)         that the amount remaining in the Project Fund, together with
(A) moneys then on hand at the Company or committed to the Company which
are or will be available, and are anticipated by the Company to be applied, to
pay the Project Costs and (B) expected investment earnings to be deposited
into the Project Fund pursuant to this Indenture, will, after payment of the
amount requested in said requisition, be sufficient to pay the costs of
completing the Project substantially in accordance with the construction
contracts, plans and specifications and building permits therefor, if any, then
in effect; and

 

(viii)        that the amounts paid or to be paid as
set forth in the requisition are properly payable under the terms of this
Indenture and that all conditions precedent to payment as prescribed in this
Indenture have been satisfied.

 

The
Company shall attach to each requisition a list of invoices or bills of sale
covering all items for which payment is being requested in such requisition
issued by the manufacturers, suppliers or other sellers of such items.  The invoices or bills shall be available for
review by the Trustee in the offices of the Company; provided
that the Trustee shall have no duty or obligation to review such invoices and
may conclusively rely on such requisitions.

 

To
the extent that the Company leases from third parties or otherwise provides
items for the Project from sources other than funds on deposit in the Project
Fund, the costs thereof shall not be included in the Project Costs referred to
above.

 

The
Trustee will maintain adequate records pertaining to the proceeds of the Bonds
held by it and all disbursement from them made by the Trustee.

 

(b)           Completion
Date.  The Company is required
to deliver to the Issuer and the Trustee within 90 days after the completion of
the Project a certificate as described below (the “Completion
Certificate”) signed by an Authorized Company Representative stating
the following:

 

(i)            All portions of the Project have been fully completed in
accordance with the plans and specifications therefor, as then amended, and the
Completion Date.

 

(ii)           Such person has made such investigation of such sources of
information as are deemed by such person to be necessary, including pertinent
records of the Company, and is of the opinion that the Project has been fully
paid for and no claim or claims exist against the Company or against the
properties of the Company or, to the best of such person’s knowledge, against
the Issuer or against the properties of the Issuer, out of which a lien based
on furnishing labor or material for the Project exists or might ripen; provided, however, there may be excepted from the foregoing
statement any claim or claims out of which a lien exists or might ripen in the
event that the Company intends to contest such claim or claims, in which event
such claim or claims shall be described; provided, further,
however, that in such event such certificate shall state that funds
are on deposit in the Project Fund which, together with (i) moneys then on
hand at the Company or committed to the Company which are or will be available,
and are anticipated by the

 

57

 

Company
to be applied, to pay the Project Costs, and (ii) expected investment
earnings to be deposited into the Project Fund pursuant to this Indenture, are
sufficient to make payment of the full amount which might in any event be
payable in order to satisfy such claim or claims.  In the event such certificate shall state
that there is a claim or claims in controversy which create or might ripen into
a lien, there shall be filed with the Issuer and the Trustee a certificate of
the Authorized Company Representative stating that such claim or claims have
been paid when the same has in fact occurred.

 

(iii)          The withdrawal of moneys from the Project Fund and the use
of the property financed or reimbursed therefrom has not and will not result in
a violation of any representation, term or covenant in the Tax Agreement.

 

(iv)          All Favorable Opinions of Bond Counsel required to be
delivered as a result of changes made pursuant to Section 3.03 of the Loan
Agreement have been delivered to the Trustee and the Issuer.

 

(c)           Disposition
of Fund Moneys after Project Is in Service or upon Determination Not to
Complete All Components of the Project.  Any moneys (“Excess
Funds”) (including investment proceeds) remaining in the Project
Fund or any other Bond proceeds (including investment earnings) not allocated
for federal income tax purposes to Project Costs on the earlier of the
following dates (the “Remedial Action Date”):
(i) the date on which the Company determines that all components of the
Project will not be completed; or (ii) the date on which all components of
the Project are placed in service (i.e., the date
the complete Project is operating at substantially the level for which it is
designed) (the “Placed in Service Date”), shall
be used in accordance with Treasury Regulation 1.144-2 for one or more of
the following purposes:

 

(i)            at the written direction of the Authorized Company
Representative, for the payment, in accordance with the provisions of this
Indenture, of any Project Costs not theretofore paid;

 

(ii)           at the written direction of the Authorized Company
Representative, for transfer, first to the Rebate Fund, any amounts required by
the Tax Agreement and Section 6.04 hereof; and second, to the payment of
costs of other facilities qualifying under the Bond Ordinance;

 

(iii)          at the written direction of the Authorized Company
Representative, for transfer to the Interest Account to pay interest on the
Bonds;

 

(iv)          at the written direction of the Authorized Company
Representative, (A) to pay, on or before 90 days following the
Remedial Action Date, all or part of the price of purchasing a portion of the
Bonds in the open market or at private sale, at a purchase price not in excess
of 100% of the principal amount of such Bonds plus accrued interest to the date
of such purchase for the purpose of cancellation;

 

(B)           if the Bonds are callable within 90 days following the
Remedial Action Date, to pay, on or before 90 days following the Remedial
Action Date, for transfer to the Bond Fund, to pay all or part of the
redemption price of a portion of the Bonds; or

 

58

 

(C)           if the Bonds are not callable within 90 days
following the Remedial Action Date, for transfer into an escrow account
established with the Trustee, upon filing by the Company required notice to the
Internal Revenue Service, such transfer and notice to be on or before
90 days following the Remedial Action Date, to be used to pay, on the
first date on which Bonds may be redeemed,  but in any
event within ten and one-half years from the date of issuance of the Bonds, all
or part of the redemption price of a portion of the Bonds;

 

provided, that, except
for the purpose described in subparagraph (i) above, no money, including
earnings on the investment on such moneys, may be so used unless and until the
Trustee has been furnished with Favorable Opinion of Bond Counsel; provided, further, that the earnings on the investment of
the moneys on deposit in such escrow account described in
subparagraph (iv)(C) above shall be transferred on each Interest
Payment Date on the Bonds to the Interest Account and shall be used to pay interest
on the Bonds coming due on such Interest Payment Date; and provided,
further, that, until used for the foregoing purpose described in
subparagraph (iv)(C) above, moneys on deposit in such escrow account
may be invested in investments authorized by Section 6.01 hereof, but may
not be invested to produce a yield on such moneys (computed from the Placed in
Service Date and taking into account any investment of such moneys during the
period from the Placed in Service Date until such moneys were deposited in such
escrow account) greater than the yield on the Bonds from which such proceeds
were derived, all as such terms are used in and determined in accordance with
the Code and regulations promulgated thereunder.  A verification report with respect to the
calculation of such yield on the escrow account and the yield on the Bonds by a
firm of nationally recognized certified public accountants will be provided to
the Trustee.

 

(e)           Investment
of Project Fund Moneys. 
Moneys on deposit in the Project Fund may be invested in accordance with
the provisions of Article VI hereof.

 

(f)            Redemption;  Event of Default.  If the Company is required to, or shall elect
to redeem the Bonds in whole, any balance in the Project Fund shall be
deposited in the Bond Fund.  If an Event
of Default occurs and the maturity of the Bonds is accelerated, the Trustee
will to the extent necessary transfer moneys in the Project Fund to the Bond
Fund, regardless of the other provisions of this Section.

 

Section 5.03.       Deposits into the Funds; Use of Moneys in
the Funds.  (a)  On
each Interest Payment Date the Trustee shall pay out of the Interest Account,
the interest due on the Bonds, and further pay out of the Interest Account any
amounts required for the payment of accrued interest upon any purchase or
redemption of the Bonds.

 

(b)           The Trustee shall on
each redemption date or maturity date, pay out of the Principal Account, the
principal amount, if any, due on the Bonds, upon the presentation and surrender
of the requisite Bonds in accordance with the terms hereof.

 

(c)           In connection with
purchases of Bonds out of the Bond Fund as provided in this Section, the
Company shall arrange and the Trustee shall execute such purchases (through
brokers or otherwise, and with or without receiving tenders) at the written
direction of the

 

59

 

Company;
provided, however, that the Trustee may
not effect such purchases through a broker unless the Company shall have
previously approved in writing the use of such broker and the amount of such
broker’s fees.  The payment of the
purchase price shall be made out of the moneys deposited in the Principal
Account and the payment of accrued interest shall be made out of moneys
deposited in the Interest Account.

 

(d)           In the event that a
deficiency shall exist in any account of the Bond Fund on any Interest Payment
Date after giving effect to any transfers made pursuant to Sections 5.02
and 5.03 hereof, the Trustee shall make demand on the Company for such
deficiency.

 

Section 5.04.       Bonds Not Presented for Payment of
Principal.  In the event
any Bonds shall not be presented for payment when the principal thereof becomes
due, either at maturity or at the date fixed for redemption thereof or the
acceleration of maturity, or in the event that any interest thereon is
unclaimed, if moneys sufficient to pay such Bonds or interest are held by the
Trustee, the Trustee shall segregate and hold such moneys in trust (but shall
not invest such moneys), without liability for interest thereon, for the
benefit of Owners of such Bonds who shall, except as provided in the following
paragraph, thereafter be restricted exclusively to such fund or funds for the
satisfaction of any claim of whatever nature on their part under this Indenture
or relating to said Bonds or interest. 
Such Bonds which shall not have been so presented for payment shall be
deemed paid for any purposes of this Indenture.

 

Any
moneys which the Trustee shall segregate and hold in trust for the payment of
the principal of or interest on any Bond and remaining unclaimed for two years
after such principal or interest has become due and payable shall be paid by
the Trustee to the Company upon written request of an Authorized Company
Representative.  After the payment of
such unclaimed moneys to the Company, the Owner of such Bond shall look only to
the Company for payment, and then only to the extent of the amount so repaid to
the Company, and the Company shall not be liable for any interest thereon and
shall not be regarded as a trustee of such money, and all liability of the
Issuer and the Trustee with respect to such moneys shall thereupon cease.

 

Neither
the Company nor the Issuer shall have any right, title or interest in or to any
moneys held by the Trustee pursuant to this Section.  The Trustee shall not be liable to the Issuer
or any Owner for interest on funds held by it for the payment and discharge of
the principal, interest, or premium on any of the Bonds to any Owner.

 

Section 5.05.       Payment to the Company.  After the right, title and
interest of the Trustee in and to the Trust Estate and all covenants,
agreements and other obligations of the Issuer to the Owners shall have ceased,
terminated and become void and shall have been satisfied and discharged in
accordance with Section 5.04 and Article VII hereof, and all fees,
expenses and other amounts payable to the Registrar, the Trustee and the Issuer
pursuant to any provision of this Indenture shall have been paid, any moneys
remaining in the Bond Fund and the Rebate Fund shall be paid to the Company
upon request of an Authorized Company Representative, other than any unclaimed
moneys held pursuant to Section 5.04. 
The Trustee may conclusively rely on certificates of the Registrar as to
the amount of any fees, expenses and other amounts owing to it.

 

60

 

ARTICLE VI

 

INVESTMENTS

 

Section 6.01.       Investment of Moneys in Funds.  Subject to Section 4.06
hereof and the provisions of the Tax Agreement, moneys in the Bond Fund, the
Project Fund and the Rebate Fund may be invested and reinvested in Cash
Equivalents.  Such investments shall be
made by the Trustee, as specifically directed and designated by the Company in
a certificate of an Authorized Company Representative.  Each such certificate shall contain a
statement that each investment so designated by the Company constitutes a Cash
Equivalent and can be made without violation of any provision hereof or of the
Loan Agreement, the Tax Agreement or applicable law.  The Trustee shall be entitled to rely on each
such certificate or advice and shall incur no liability for making any such
investment so designated or for any loss, fee, tax or other charge incurred in
selling such investment or for any action taken pursuant to this Section that
causes the Bonds to be treated as “arbitrage bonds” within the meaning of Section 148
of the Code.  No investment instructions
shall be given by the Company if the investments to be made pursuant thereto
would violate any covenant set forth in Section 4.06 hereof or the
provisions of the Loan Agreement or the Tax Agreement.  The Trustee is hereby authorized, in making
or disposing of any investment permitted by this Section 6.01, to deal
with itself (in its individual capacity) or with any one or more of its
affiliates, whether it or such affiliate is acting as an agent of the Trustee
or for any third person or dealing as principal for its own account.  The Trustee shall not be responsible for any
loss on any investment made in accordance herewith.  Absent the provision of investment
instructions hereunder, the Trustee shall invest such funds in the Cash
Management Institutional Shares under the Dreyfus Fund (#288) or a money market
mutual fund registered under the Investment Company Act of 1940 (including
those of an affiliate of the Trustee or for which the Trustee or any of its
affiliates provides management advisory or other services) which invests in
(i) short-term securities issued or guaranteed by the United States
Government, its agencies or instrumentalities and/or (ii) repurchase
agreements relating to such securities.

 

Section 6.02.       Conversion of Investment to Cash.  As and when any amounts so
invested may be needed for disbursements from the Bond Fund, the Project Fund
or the Rebate Fund, the Trustee shall cause a sufficient amount of such
investments to be sold or otherwise converted into cash to the credit of such
fund.  As long as no Event of Default
shall have occurred and be continuing, the Company shall have the right to
designate the investments to be sold and to otherwise direct the Trustee in the
sale or conversion to cash of such investments; provided
that the Trustee shall be entitled to conclusively assume the absence of any
Event of Default unless it has notice thereof within the meaning of
Section 9.05 hereof.

 

Section 6.03.       Credit for Gains and Charge for
Losses.  Gains from investments shall
be credited to and held in, and losses shall be charged to, the fund or account
from which the investment is made.

 

Section 6.04.       Payments into Rebate Fund; Application of
Rebate Fund.  (a) The
Rebate Fund and the amounts deposited therein shall not be subject to a
security interest, pledge, assignment, lien or charge in favor of the Trustee
or any Bondholder or any other Person.

 

61

 

(b)           The Trustee shall
deposit funds into and disburse funds from the Rebate Fund as directed in
writing by the Company in accordance with the terms hereof and the Tax
Agreement.  The Trustee shall deposit
into the Rebate Fund any payments received from the Company for purposes of
ultimate rebate to the United States in respect of the Bonds.  The amount required to be held in the Rebate
Fund in respect of the Bonds at any point in time is determined pursuant to the
requirements of the Code, including particularly Section 148(f) of
the Code.  Moneys in the Rebate Fund
neither will be pledged to nor are expected to be used to pay debt service on
the Bonds.  Amounts in the Rebate Fund
may be invested without regard to yield.

 

(c)           The Company has
agreed in the Tax Agreement to calculate the Rebate Amount at least each
Computation Period, and annually at its discretion or as may be required for
the preparation of its annual financial statements.  In the event that the amounts available in
the Rebate Fund are insufficient to pay the required rebate payment, the
Company shall pay all amounts required to the Trustee for payment to the United
States of America.

 

ARTICLE VII

 

DEFEASANCE

 

Section 7.01.       Defeasance.  If the Issuer shall pay or cause to be paid
to the Owner of any Bond secured hereby the principal of, and premium, if any,
and interest due and payable, and thereafter to become due and payable, upon
such Bond or any portion of such Bond in an Authorized Denomination thereof,
such Bond or portion thereof shall cease to be entitled to any lien, benefit or
security under this Indenture.

 

If
the Issuer shall pay or cause to be paid the principal of, and premium if any,
and interest due and payable on, all Outstanding Bonds, and thereafter to
become due and payable thereon, and shall pay or cause to be paid all other
sums payable hereunder by the Issuer, including any necessary and proper fees,
compensation and expenses of the Trustee and the Registrar, then, and in that
case, the right, title and interest of the Trustee in and to the Trust Estate
shall thereupon cease, terminate and become void.  In such event, the Trustee shall assign,
transfer and turn over the Trust Estate to the Company and any surplus in the
Bond Fund and any balance remaining in any other fund created under this
Indenture shall be paid to the Company upon the request of an Authorized
Company Representative, other than any unclaimed moneys held pursuant to
Section 5.04.  The Trustee may
conclusively rely on certificates of the Registrar as to the amount of any
fees, expenses and other amounts owing to it.

 

All
or any portion of Bonds (in Authorized Denominations) shall, prior to the
maturity or redemption date thereof, be deemed to have been paid within the
meaning of this Article VII and for all purposes of this Indenture when:

 

(a)           in the event said Bonds or portions thereof have been
selected for redemption in accordance with Section 3.04 hereof, the
Trustee shall have given, or the Company shall have given to the Trustee in
form satisfactory to the Trustee irrevocable

 

62

 

instructions
to give, on a date in accordance with the provisions of Section 3.05
hereof, notice of redemption of such Bonds or portions thereof;

 

(b)           there shall have been deposited with the Trustee moneys in
an amount sufficient (without relying on any investment income), in the opinion
of a firm of nationally recognized certified public accountants, to pay when
due the principal of, and premium, if any, and interest due and to become due
(which amount of interest to become due shall be calculated at the actual rate
borne by such Bonds) on said Bonds or portions thereof on and prior to the
redemption date or maturity date thereof, as the case may be;

 

(c)           in the event said Bonds or portions thereof do not mature
and are not to be redeemed within the next succeeding 60 days, the Company on
behalf of the Issuer shall have given the Trustee in form satisfactory to it
irrevocable instructions to give, as soon as practicable in the same manner as
a notice of redemption is given pursuant to Section 3.05 hereof, and a
notice to the Owners of said Bonds or portions thereof that the deposit
required by clause (b) above has been made with, and the opinion required
by clause (b) above has been delivered to, the Trustee and that said Bonds
or portions thereof are deemed to have been paid in accordance with this Article VII
and stating the maturity date or redemption date upon which moneys are to be
available for the payment of the principal of, and premium, if any, and
interest on, said Bonds or portions thereof; and

 

(d)           the Trustee shall have received a Favorable Opinion of
Bond Counsel with respect to such deposit.

 

Moneys
deposited with the Trustee pursuant to this Article VII shall not be
withdrawn or used for any purpose other than, and shall be held in trust for,
the payment of the principal of, premium, if any, and interest on said Bonds or
portions thereof; provided that such moneys, if
not then needed for such purpose, shall to the extent practicable, be invested
and reinvested in Government Obligations maturing on or prior to the Interest
Payment Date next succeeding the date of investment or reinvestment, and
interest earned from such investments shall be paid over to the Company, as
received by the Trustee, free and clear of any trust, lien or pledge.  If payment of less than all the Bonds is to
be provided for in the manner and with the effect provided in this Article VII,
the Trustee shall select such Bonds or portion of such Bonds in the manner
specified by Section 3.04 hereof for selection for redemption of less than
all Bonds in the principal amount permitted by Section 3.01(b) hereof.

 

Notwithstanding
that all or any portion of the Bonds are deemed to be paid within the meaning
of this Article VII, the provisions of this Indenture relating to (i) the
registration and exchange of Bonds, (ii) replacement of mutilated, lost,
destroyed or stolen Bonds, (iii) payment of the Bonds from the moneys
deposited as described in this Article and (iv) payment,
compensation, reimbursement and indemnification of the Trustee and the
Registrar shall remain in full force and effect with respect to all Bonds until
the maturity date thereof or the last date fixed for redemption of all Bonds
prior to maturity and, in the case of clause (iv), until payment, compensation,
reimbursement or indemnification, as the case may be, of the Trustee and the
Registrar.

 

63

 

ARTICLE VIII

 

DEFAULTS AND REMEDIES

 

Section 8.01.       Events of Default.  Each of the following events shall constitute
and is referred to in this Indenture as an “Event of Default”:

 

(a)           a failure to pay the principal of or premium, if any, on
any of the Bonds when the same shall become due and payable at maturity, upon
redemption or otherwise;

 

(b)           a failure to pay an installment of interest on any of the
Bonds for a period of 30 days after the date upon which such interest has
become due and payable;

 

(c)           a failure by the Issuer to observe and perform any
covenant, condition, agreement or provision (other than as specified in this
Section 8.01(a) and Section 8.01(b)) contained in the Bonds or
in this Indenture on the part of the Issuer to be observed or performed, which
failure shall continue for a period of 90 days after written notice, specifying
such failure and requesting that it be remedied, shall have been given to the
Issuer and the Company by the Trustee by registered or certified mail which
shall give such notice at the written request of the Owners of not less than a
majority in principal amount of the Bonds then Outstanding, unless the Trustee,
or the Trustee and the Owners of a principal amount of Bonds not less than the
principal amount of Bonds the Owners of which requested such notice, as the
case may be, shall agree in writing to an extension of such period prior to its
expiration; provided,  however, that
the Trustee, or the Trustee and the Owners of such principal amount of Bonds,
as the case may be, shall be deemed to have agreed to an extension of such
period if corrective action is initiated by the Issuer or the Company on behalf
of the Issuer within such period and is being diligently pursued;

 

(d)           an “Event of Default”  under the Loan
Agreement has occurred and is continuing; or

 

(e)           an event of default under a Subsidiary Bond Guarantee has
occurred and is continuing.

 

Section 8.02.       Acceleration; Other Remedies.  (a) If an Event of
Default described in Section 8.01(a) or Section 8.01(b), an
Event of Default described in Section 8.01(d) hereof resulting from
an “Event of Default”  under
Section 8.01(a) or Section 8.01(b) of the Loan Agreement;
or an event of default under a Subsidiary Bond Guarantee resulting from a
failure to pay principal of or interest on the Bonds, has occurred and has not
been cured or waived, then the Trustee may, or upon the written request of the
Owners of not less than a majority in principal amount of the Bonds then
Outstanding, the Trustee shall, by written notice by registered or certified
mail to the Issuer and the Company, declare the Bonds to be immediately due and
payable, whereupon the Bonds shall without further action, become and be
immediately due and payable, anything in this Indenture or in the Bonds to the
contrary notwithstanding, and the Trustee shall give notice thereof by Mail to
all Owners of Outstanding Bonds.  Upon
any

 

64

 

declaration
of acceleration, the Trustee shall immediately exercise such rights as it may
have under the Loan Agreement or the Subsidiary Bond Guarantees.  If an Event of Default described in
Section 8.01(d) hereof resulting from an “Event of Default” under
Section 8.01(g) or 8.01(h) of the Loan Agreement involving the
Company occurs, all unpaid principal of, premium, if any, and accrued and
unpaid interest on the Bonds then outstanding will ipso facto
become due and payable.

 

(b)           The provisions of
Section 8.02(a) hereof are subject further to the condition that if,
after the principal of the Bonds shall have been so declared to be due and
payable and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the Issuer shall
cause the Company to deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all Bonds, any unpaid purchase price and
the principal of any and all Bonds which shall have become due otherwise than
by reason of such declaration (with interest upon such principal and, to the
extent permissible by law, on overdue installments of interest, at the rate per
annum then borne by the Bonds) and such amount as shall be sufficient to cover
reasonable compensation and reimbursement of expenses payable to the Trustee
and all Events of Default (other than nonpayment of the principal of Bonds
which shall have become due by said declaration) shall have been remedied,
then, in every such case, such Event of Default shall be deemed waived and such
declaration and its consequences rescinded and annulled; provided,
however, that  no such
waiver, rescission and annulment shall extend to or affect any other Event of
Default or subsequent Event of Default or impair any right, power or remedy
consequent thereon.  The Trustee shall
send notice of any rescission to the Company.

 

(c)           Upon the occurrence
and continuance of any Event of Default, then and in every such case the
Trustee in its discretion, may, and upon the written request of the Owners of
not less than a majority in principal amount of the Bonds then Outstanding and
receipt of indemnity to its satisfaction (except against its own negligence or
willful misconduct) shall in its own name and as the Trustee of an express
trust:

 

(i)            by mandamus, or other suit, action or proceeding at law
or in equity, enforce all rights of the Owners under, and require the Issuer or
the Company to carry out any agreements with or for the benefit of the Owners
of Bonds and to perform its or their duties under, the Bond Ordinance, the Loan
Agreement and this Indenture, provided that
any such remedy may be taken only to the extent permitted under the applicable
provisions of the Loan Agreement or this Indenture, as the case may be;

 

(ii)           bring suit upon the Bonds;

 

(iii)          by action or suit in equity require the Issuer to account
as if it were the trustee of an express trust for the Owners of Bonds; or

 

(iv)          by action or suit in equity enjoin any acts or things which
may be unlawful or in violation of the rights of the Owners of Bonds.

 

65

 

In
exercising such rights and the rights given the Trustee under this
Article VIII, the Trustee will take such action as, in the judgment of the
Trustee applying the standards described in Section 9.17 hereof, would
best serve the interests of the Bondholders.

 

(d)           The Trustee shall
waive any Event of Default hereunder and its consequences and rescind any
declaration of acceleration of principal upon the written request of the Owners
of (i) a majority in principal amount of all Outstanding Bonds in respect
of which default in the payment of principal or purchase price of or interest
on the Bonds exists or (ii) a majority in principal amount of all
Outstanding Bonds in the case of any other Event of Default; provided, however, that (x) there shall not be waived
any Event of Default specified in Section 8.01(a) or
Section 8.01(b) hereof unless prior to such waiver or rescission the
Issuer shall have caused to be deposited with the Trustee a sum sufficient to
pay all matured installments of interest upon all Bonds and the principal and
purchase price of any and all Bonds which shall have become due otherwise than
by reason of such declaration of acceleration (with interest upon such
principal and, to the extent permissible by law, on overdue installments of
interest, at the rate per annum then borne by the Bonds) and (y) no Event
of Default shall be waived unless (in addition to the applicable conditions as
aforesaid) there shall have been deposited with the Trustee such amount as
shall be sufficient to cover reasonable compensation and reimbursement of
expenses payable to the Trustee.  In case
of any waiver or rescission described above, or in case any proceeding taken by
the Trustee on account of any such Event of Default shall have been
discontinued or concluded or determined adversely, then and in every such case
the Issuer, the Trustee and the Owners of Bonds shall be restored to their
former positions and rights hereunder, respectively; provided,
further, that  no such waiver
or rescission shall extend to any subsequent or other Event of Default, or
impair any right consequent thereon.

 

Section 8.03.       Restoration to Former Position.  In the event that any
proceeding taken by the Trustee to enforce any right under this Indenture shall
have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee, then the Issuer, the Trustee and the
Owners of Bonds shall be restored to their former positions and rights
hereunder, respectively, and all rights, remedies and powers of the Trustee
shall continue as though no such proceeding had been taken.

 

Section 8.04.       Owners’ Right to Direct Proceedings.  Anything in this Indenture,
the Loan Agreement or the Subsidiary Bond Guarantees to the contrary
notwithstanding, upon the occurrence and continuance of an Event of Default,
the Owners of a majority in principal amount of the Bonds then Outstanding,
shall have the right, by an instrument in writing executed and delivered to the
Trustee and upon furnishing to the Trustee indemnity satisfactory to it (except
against its own negligence or willful misconduct), to direct the time, method
and place of conducting all remedial proceedings available to the Trustee under
this Indenture, the Loan Agreement or the Subsidiary Bond Guarantees or
exercising any trust or power conferred on the Trustee by this Indenture, the
Loan Agreement or the Subsidiary Bond Guarantees, provided that
such direction shall not be other than in accordance with the provisions of
law, the Loan Agreement, this Indenture and the Subsidiary Bond Guarantees and
shall not result in any personal liability of the Trustee.

 

66

 

Section 8.05.       Limitation
on Owners’ Right to Institute Proceedings. 
No Owner shall have any right to institute any suit, action or
proceeding in equity or at law for the execution of any trust or power
hereunder, or any other remedy hereunder or in the Bonds, unless such Owner
previously shall have given to the Trustee written notice of an Event of
Default as herein above provided and unless the Owners of not less than a
majority in principal amount of the Bonds then Outstanding shall have made
written request of the Trustee so to do after the right to institute said suit,
action or proceeding under Section 8.02 hereof shall have accrued, and
shall have afforded the Trustee a reasonable opportunity to proceed to
institute the same in either its or their name, and unless there also shall
have been offered to the Trustee security and indemnity satisfactory to it
against the costs, expenses and liabilities to be incurred therein or thereby
(except against its own negligence or willful misconduct), and the Trustee
shall not have complied with such request within a reasonable time; and such
notification, request and offer of indemnity are hereby declared in every such
case, at the option of the Trustee, to be conditions precedent to the
institution of said suit, action or proceeding, it being understood and
intended that no one or more of the Owners shall have any right in any manner
whatever by his or their action to affect, disturb or prejudice the security of
this Indenture or the rights of any other Owner, or to enforce any right
hereunder or under the Bonds, except in the manner herein provided, and that
all suits, actions and proceedings at law or in equity shall be instituted, had
and maintained in the manner herein provided and for the equal benefit of all Owners
(it being understood that the Trustee shall not have an affirmative duty to
ascertain whether or not such actions or forbearances are unduly prejudicial to
any Owners).

 

Section 8.06.       No
Impairment of Right to Enforce Payment.  Notwithstanding
any other provision in this Indenture, the right of any Owner to receive
payment of the principal or purchase price of, and premium, if any, and
interest on, its Bond, on or after the respective due dates expressed therein,
or to institute suit for the enforcement of any such payment on or after the
respective due dates expressed therein, or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Owner.

 

Section 8.07.       Proceedings
by Trustee Without Possession of Bonds.  All rights of
action under this Indenture or under any of the Bonds secured hereby which are
enforceable by the Trustee may be enforced by it without the possession of any
of the Bonds, or the production thereof at the trial or other proceedings
relative thereto, and any such suit, action or proceeding instituted by the
Trustee shall be brought in its name for the equal and ratable benefit of the
Owners, subject to the provisions of this Indenture.

 

Section 8.08.       No Remedy
Exclusive.  Except as
provided in Section 2.07, no remedy herein conferred upon or reserved to
the Trustee or to the Owners is intended to be exclusive of any other remedy or
remedies, and each and every such remedy shall be cumulative, and shall be in
addition to every other remedy given hereunder or under the Loan Agreement, or
now or hereafter existing at law or in equity or by statute; provided, however, that any conditions set forth herein to
the taking of any remedy to enforce the provisions of this Indenture, the Bonds
or the Loan Agreement shall also be conditions to seeking any remedies at law
or in equity or by statute pursuant to this Section 8.08.

 

67

 

Section 8.09.       No Waiver
of Remedies.  No delay or
omission of the Trustee or of any Owner to exercise any right or power accruing
upon any Event of Default shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default, or an acquiescence
therein; and every power and remedy given by this Article VIII to the
Trustee and to the Owners, respectively, may be exercised from time to time and
as often as may be deemed expedient.

 

Section 8.10.       Application
of Moneys.  Any moneys
received by the Trustee, by any receiver or by any Owner pursuant to any right
given or action taken under the provisions of this Article VIII, after
payment of the fees, costs and expenses, liabilities and advances incurred or
made by the Trustee or its agents or Counsel (provided that  moneys held for Bonds not presented for payment or deemed
paid pursuant to Section 5.04 or Article VII hereof shall not be used
for purposes other than payment of such Bonds), shall be deposited in the Bond
Fund and all moneys so deposited in the Bond Fund during the continuance of an
Event of Default (other than moneys for the payment of Bonds which had matured
or otherwise become payable prior to such Event of Default or for the payment
of interest due prior to such Event of Default) shall be applied as follows:

 

(a)           Unless
the principal of all the Bonds shall have been declared due and payable, all
such moneys shall be applied (i) first, to the payment to the persons
entitled thereto of all installments of interest then due on each Bond, with
interest on overdue installments of interest, if lawful at the rate per annum
then borne by such Bond, in the order of maturity of the installments of such
interest and, if the amount available shall not be sufficient to pay in full
any particular installment of interest, then to the payment ratably, according
to the amounts due on such installment, and (ii) second, to the payment to
the persons entitled thereto of the unpaid principal of any of the Bonds which
shall have become due (other than Bonds called for redemption for the payment
of which money is held pursuant to the provisions of this Indenture) with
interest on each Bond at its rate from the respective dates upon which it
became due and, if the amount available shall not be sufficient to pay in full
Bonds due on any particular date, together with such interest, then to the
payment ratably, according to the amount of principal and interest due on such
date, in each case to the persons entitled thereto, without any discrimination
or privilege.

 

(b)         If the principal of all the Bonds shall have been declared
due and payable, all such moneys shall be applied to the payment of the
principal and interest then due and unpaid upon the Bonds, with interest on
overdue interest and principal as aforesaid, without preference or priority of
principal over interest or interest over principal or of any installment of
interest over any other installment of interest, or of any Bond over any other
Bond, ratably, according to the amounts due respectively for principal and
interest, to the persons entitled thereto without any discrimination or
privilege.

 

(c)          If the principal of all the Bonds shall have been declared
due and payable, and if such declaration shall thereafter have been rescinded
and annulled under the provisions of this Article VIII then, subject to
the provisions of subparagraph (b) of this Section 8.10 which shall
be applicable in the event that the principal of all the Bonds

 

68

 

shall later become due and payable, the moneys shall be applied in
accordance with the provisions of subparagraph (a) of this
Section 8.10.

 

Whenever
the Trustee shall apply such funds, it shall fix the Bond Payment Date upon
which such application is to commence and upon such Bond Payment Date interest
on the amounts of principal and interest to be paid on such Bond Payment Date
shall cease to accrue.  The Trustee shall
give notice of the deposit with it of any such moneys and of the fixing of any
such Bond Payment Date by Mail to all Owners of Outstanding Bonds and shall not
be required to make payment to any Owner until such Bond shall be presented to
the Registrar for appropriate endorsement or cancellation if fully paid.

 

Section 8.11.       Severability
of Remedies.  It is the purpose
and intention of this Article VIII to provide rights and remedies to the
Trustee and the Owners which may be lawfully granted under the provisions of
the Bond Ordinance, but should any right or remedy herein granted be held to be
unlawful the Trustee and the Owners shall be entitled, as above set forth, to
every other right and remedy provided in this Indenture and by law.

 

ARTICLE IX

 

TRUSTEE; REGISTRAR

 

Section 9.01.       Acceptance
of Trusts; Representations, Warranties and Covenants of the Trustee.  The Issuer has appointed
Citibank N.A., as Trustee (and paying agent for the Bonds).  The Trustee hereby accepts and agrees to
execute the trusts hereby created, but only upon the additional terms set forth
in this Article IX, to all of which the Issuer agrees and the respective
Owners agree by their acceptance of delivery of any of the Bonds.  The Trustee, prior to the occurrence of an
Event of Default and after the curing of all Events of Default, undertakes to
perform such duties and only such duties as are specifically set forth herein,
and no implied covenant shall be read into this Indenture against the Trustee.

 

All
federal, State and local governmental, public, and regulatory authority
approvals, consents, notices, authorizations, registrations, licenses,
exemptions, and filings that are required to have been obtained or made by the
Trustee with respect to the authorization, execution, delivery, and performance
by, or the enforcement against or by, the Trustee of this Indenture have been
obtained and are in full force and effect and all conditions of such approvals,
consents, notices, authorizations, registrations, licenses, exemptions and
filings have been fully complied with.

 

The
Trustee is not (i) required to qualify or obtain any certificate of authority
to do business in the State of Illinois or (ii) subject to any filing
requirement to make any or to pay any fees or taxes required of foreign
entities doing business in the State of Illinois, in either case solely as a
result of executing, delivering or performing this Indenture.

 

The
Trustee has a combined capital and surplus of at least $50,000,000 or,
alternatively, a liability policy having the type of coverage and in an amount
acceptable to the Issuer and the 

 

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Company.  The Trustee has an operations group of at
least four experienced trust officers, with primary responsibility for
municipal bond issues.  The Trustee
administers at least 25 municipal bond indentures aggregating at least $25,000,000
under its administration.

 

Section 9.02.       No
Responsibilities for Recitals.  The recitals,
statements and representations contained in this Indenture or in the Bonds
shall not be taken and construed as made by or on the part of the Trustee, and
the Trustee does not assume, and shall not have, any responsibility or
obligation for the correctness of any thereof or for the validity, sufficiency
or priority of this Indenture or the Loan Agreement, or the perfection or the
maintenance of the perfection of any security interest granted hereby.

 

Section 9.03.       Limitations
on Liability.  The Trustee
may execute any of the trusts or powers hereof and perform the duties required
of it hereunder by or through attorneys, other professionals, agents, receivers
or employees, and shall be entitled to and may conclusively rely upon advice of
counsel concerning all matters of trust and its duties hereunder and shall not
be answerable for the conduct of any such attorney, agent, receiver or employee
if appointed by the Trustee with reasonable care, and the advice of any such
counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted hereunder in good faith and reliance
thereon, and may in all cases pay such reasonable compensation to such
attorneys, agents, receivers or employees as may be reasonably employed in
connection with the trusts hereof.  The
Trustee shall not be answerable for the exercise of any discretion or power
under this Indenture or for anything whatsoever in connection with the trusts
created hereby, except only for its own negligence or willful misconduct.

 

The
Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Owners of a
majority in aggregate principal amount of the Bonds Outstanding relating to the
time, method and place of conducting any proceeding or any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee under
this Indenture.

 

No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers.  The Trustee shall not be required to give any
bond or surety in respect to the execution of its trusts and powers hereunder.

 

The
permissive rights of the Trustee to do things enumerated in this Indenture
shall not be construed as a duty unless so specified herein.

 

The
Trustee shall not be liable for any error of judgment made in good faith by an
officer, director or employee unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts.

 

The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request, order or direction of any of the
Owners pursuant to the provisions of this Indenture unless there shall have
been provided to the Trustee reasonable 

 

70

 

security
or indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.

 

The
Trustee may conclusively rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties.

 

Any
request or direction of the Company mentioned herein shall be sufficiently
evidenced by a Company Request or Company Order and any resolution of the Board
of Directors may be sufficiently evidenced by a board resolution.

 

Whenever
in the administration of this Indenture the Trustee shall deem it desirable
that a matter be proved or established prior to taking, suffering or omitting
any action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of willful misconduct on its part, conclusively
rely upon an Officers’ Certificate.

 

The
Trustee may consult with counsel of its selection and the advice of such
counsel or any Opinion of Counsel or Favorable Opinion of Bond Counsel shall be
full and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.

 

The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney at the
sole cost of the Company and shall incur no liability or additional liability
of any kind by reason of such inquiry or investigation.

 

The
Trustee shall not be liable for any action taken, suffered, or omitted to be
taken by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture.

 

In
no event shall the Trustee be responsible or liable for special, indirect,
punitive or consequential loss or damage of any kind whatsoever (including, but
not limited to, loss of profit) irrespective of whether the Trustee has been
advised of the likelihood of such loss or damage and regardless of the form of
action.

 

The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder,
and each agent, custodian and other Person employed to act hereunder.

 

71

 

The
Trustee may request that the Company deliver a certificate setting forth the
names of individuals and/or titles of officers authorized at such time to take
specified actions pursuant to this Indenture.

 

In
situations where a Favorable Opinion of Bond Counsel or an opinion of Bond
Counsel is required or requested to be delivered under this Indenture, the Loan
Agreement or the Tax Agreement after the date of delivery of the Bonds, the
Trustee shall accept (unless otherwise directed by the Company) an opinion in
such form and with such disclosures as may be required so that such opinion
will not be treated as a “covered opinion” for purposes of the United States
Treasury Department regulations governing practice before the Internal Revenue
Service (Circular 230), 31 CFR Part 10.

 

Whether
or not expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of the Trustee shall be subject to the
provisions of this Article IX and shall extend to the Registrar and
employees and agents of the Trustee and the Registrar.  The Trustee shall have no liability or
responsibility for the action or inaction of the Registrar (that is not the
Trustee), the Issuer or the Company.  The
provisions of this Section 9.03 shall survive the termination of this
Indenture and the replacement or resignation of the Trustee hereunder.

 

Section 9.04.       Compensation,
Expenses and Advances.  The Trustee,
the Issuer and the Registrar shall be entitled to such compensation as shall be
agreed in writing with the Company for their services rendered hereunder (not
limited by any provision of law in regard to the compensation of the trustee of
an express trust) and to reimbursement for their out-of-pocket expenses (including
reasonable counsel fees and expenses) reasonably incurred in connection with
entering into this Indenture, including such fees and expenses incurred in
connection with action taken hereunder. 
In no event shall the Trustee be liable for any claims resulting from
any decision on its part not to advance funds as permitted in the immediately
preceding sentence.  In the Loan
Agreement, the Company has agreed that it will pay to the Trustee and the
Registrar compensation and reimbursement of expenses and advances and certain
indemnities, but the Company may, without creating an Event of Default, contest
in good faith the reasonableness of any such expenses and advances.  If the Company shall have failed to make any
payment to the Trustee or the Registrar under the Loan Agreement, then each of
the Trustee and the Registrar shall have, in addition to any other rights
hereunder, a claim, prior to the claim of the Owners, for the payment of their
compensation and indemnities and the reimbursement of their expenses and any
advances made by them, as provided in this Section 9.04, upon the moneys
and obligations in the Bond Fund, except for moneys or obligations deposited
with or paid to the Trustee for the redemption or payment of Bonds which are
deemed to have been paid in accordance with Article VII hereof, or funds
held pursuant to Section 5.04 hereof.

 

Notwithstanding
any other provision of this Indenture, in each instance in which this Indenture
shall provide for compensation, reimbursement or indemnification of the
Trustee, such provision shall be deemed to provide for, whether or not
expressly so stated, the payment of all related fees, costs, charges, advances
and reasonable expenses of the Trustee (including, without limitation,
reasonable attorneys’ fees and expenses), unless the context clearly indicates
otherwise.

 

72

 

Without
prejudice to any other rights available to the Trustee under applicable law,
when the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 8.01(g) or Section 8.01(h) of
the Loan Agreement, the expenses (including the reasonable charges and expenses
of its counsel) and the compensation for the services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.

 

The
provisions of this Section 9.04 shall survive the termination of this
Indenture.

 

Section 9.05.       Notice of
Events of Default and Determination of Taxability.  Notwithstanding anything otherwise provided
herein, the Trustee shall not be required to take notice, or be deemed to have
notice of any default or Event of Default, other than an Event of Default under
Section 8.01(a) or Section 8.01(b) hereof, unless the
Trustee shall have actual knowledge thereof or shall have been specifically
notified in writing at its notice address set forth in Section 12.08
hereof, of such Event of Default by the Owners of at least 25% in principal
amount of the Bonds then Outstanding, the Issuer or the Company.  The Trustee may, however, at any time, in its
discretion, require of the Issuer full information and cooperation as to the
performance of any of the covenants, conditions and agreements contained
herein.  Such inquiry shall not for the
purposes of this Section 9.05 constitute notice of any Event of
Default.  The Issuer shall not be
required to take notice, or be deemed to have notice, of any Event of Default,
other than an Event of Default of which it shall have actual knowledge.  If an Event of Default occurs after the
Trustee has notice of the same as provided in this Section 9.05, or if a
Determination of Taxability occurs of which the Trustee has received notice as
provided in Section 9.02 of the Loan Agreement, then the Trustee shall
give notice thereof by Mail to the Company and the Owners of Outstanding Bonds.

 

Section 9.06.       Action by
Trustee.  Except as provided in
Section 8.02 and Section 8.04 hereof and except for the payment of
principal of, and premium, if any, and interest on, the Bonds when due from
moneys held by the Trustee as part of the Trust Estate, the Trustee shall be
under no obligation to take any action in respect of any Event of Default or
toward the execution or enforcement of any of the trusts hereby created, or to
institute, appear in or defend any suit or other proceeding in connection
therewith, unless requested in writing so to do by the Owners of at least a
majority in principal amount of the Bonds then Outstanding and, if in its
opinion such action may tend to involve it in expense or liability, unless
furnished, from time to time as often as it may require, with security and
indemnity satisfactory to it (except against its own negligence or willful
misconduct); but the foregoing provisions are intended only for the protection
of the Trustee, and shall not affect any discretion or power given by any
provisions of this Indenture to the Trustee to take action in respect of any
Event of Default without such notice or request from the Owners, or without
such security or indemnity.

 

Section 9.07.       Good-Faith
Reliance.  The Trustee and
the Registrar shall be protected and shall incur no liability in acting or
proceeding in good faith upon any resolution, notice, telegram, e-mail, telex
or facsimile transmission, request, consent, waiver, certificate, statement,
affidavit, voucher, bond, requisition or other paper or document which it shall
in good faith believe to be genuine and to have been passed or signed by the
proper board, body or person or to have been prepared and furnished pursuant to
any of the provisions of this Indenture or the

 

73

 

Loan Agreement, or upon the written opinion of any attorney, engineer,
accountant or other expert believed, without independent investigation, by the
Trustee or the Registrar, as the case may be, to be qualified in relation to
the subject matter.  The Trustee and the
Registrar shall be under no duty to make any investigation or inquiry as to any
statements contained or matters referred to in any such instrument, but may
accept and rely upon the same as conclusive evidence of the truth and accuracy
of such statements; provided, however,
that the Trustee may, in its discretion, make, but shall in no case be required
to make, such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further inquiry
or investigation it shall be entitled to examine the books, records and
premises of the Company personally or by agent or attorney.  Neither the Trustee nor the Registrar shall
be bound to recognize any person as an Owner or to take any action at such
person’s request unless satisfactory evidence of the ownership of such Bond
shall be furnished to such entity.

 

Whenever
in the administration of this Indenture the Trustee shall deem it desirable
that a matter be proved or established prior to taking, suffering or omitting
any action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of negligence or bad faith on its part, request
and conclusively rely upon a certificate of an Authorized Company
Representative or an Authorizing Representative, and, prior to the occurrence
of a default of which the Trustee has been notified as provided in
Section 9.05 or of which by said section it is deemed to have notice, the
Trustee shall also be at liberty to accept a similar certificate to the effect
that any particular dealing, transaction or action is necessary or advisable,
but shall in no case be bound to secure the same.

 

The
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee
shall not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.

 

Notwithstanding
anything elsewhere in this Indenture contained, the Trustee or the Registrar,
as the case may be, shall have the right, but shall not be required, to demand,
in respect of the authentication of any Bonds or the taking of any other action
whatsoever within the purview of this Indenture or the Loan Agreement, any
showings, certificates, opinions or other information, or corporate action or
evidence thereof, in addition to those by the terms hereof or thereof required
as a condition of such action which are reasonably deemed desirable by the
Trustee or the Registrar, as the case may be, for the purpose of establishing
the right of the Issuer or the Company to request the taking of such action by
the Trustee or the Registrar.

 

Section 9.08.       Dealings
in Bonds; Allowance of Interest.  The Trustee and
the Registrar, in its individual capacity, may in good faith buy, sell, own,
hold and deal in any of the Bonds issued hereunder and may join in any action
which any Owner may be entitled to take with like effect as if it did not act
in any capacity hereunder.  The Trustee
or the Registrar, in its individual capacity, either as principal or agent, may
also engage in or be interested in any financial or other transaction with the
Issuer or the Company, and may act as depositary, trustee or agent for any
committee or body of Owners secured hereby or other obligations of the Issuer
or the Company as freely as if it did not act in any capacity hereunder.

 

74

 

All
moneys received by the Trustee shall, until used or applied as herein provided,
be held in trust for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law.  The Trustee shall be under no liability for
interest on any moneys received hereunder except for accounting for income from
Cash Equivalents.

 

Section 9.09.       Several
Capacities.  Anything in
this Indenture to the contrary notwithstanding, with the consent of the
Company, the same entity may serve hereunder as the Trustee and the Registrar
and in any other combination of such capacities, to the extent permitted by
law.

 

Section 9.10.       Resignation
of Trustee.  The Trustee may
resign and be discharged of the trusts created by this Indenture by executing
any instrument in writing resigning such trust and specifying the date when
such resignation shall take effect, and filing the same with the Issuer, the
Company and the Registrar not less than 30 days before the date specified
in such instrument when such resignation shall take effect, and by giving
notice of such resignation by Mail not less than three weeks prior to such
resignation date, to all Owners of Bonds. 
Such resignation shall take effect on the day specified in such
instrument and notice, unless previously a successor Trustee shall have been
appointed as hereinafter provided, in which event such resignation shall take
effect immediately upon the appointment of such successor Trustee, but in no
event shall a resignation take effect earlier than the date on which a
successor Trustee, acceptable to the Issuer and the Company, has been appointed
and has accepted its appointment.

 

Section 9.11.       Removal
of Trustee.  (a) The
Trustee may be removed at any time by filing with the Trustee so removed and
with the Issuer, the Company and the Registrar, an instrument or instruments in
writing executed by (x) the Company, if no default or Event of Default or
condition which with the giving of notice or the passage of time, or both,
would constitute a default or an Event of Default, shall have occurred and be
continuing, or (y) during the occurrence and continuation of a default or
an Event of Default or condition which with the giving of notice or the passage
of time, or both, would constitute a default or an Event of Default, the Owners
of not less than a majority in principal amount of the Bonds then Outstanding.

 

(b)           The Issuer may, and,
so long as no default or Event of Default is then existing under
Section 8.01 of the Loan Agreement or Section 8.01(a) or (b) of
this Indenture, at the request of the Company will, remove the Trustee
(i) if the Trustee fails to comply with Section 9.13 hereof,
(ii) the Trustee is adjudged a bankrupt or an insolvent, (iii) if a
receiver or other public officer takes charge of the Trustee or its property or
(iv) if the Trustee otherwise becomes incapable of acting.

 

(c)           In no event shall a
removal take effect earlier than the date on which a successor Trustee has been
appointed and has accepted its appointment.

 

Section 9.12.       Appointment
of Successor Trustee.  In the
event that the Trustee or Registrar shall give notice of resignation or be
removed, or be dissolved, or shall be in the course of dissolution or
liquidation, or otherwise become incapable of acting hereunder, or in case it
shall

 

75

 

be taken under the control of any public office or offices, or of a
receiver appointed by a court, a successor may (to the extent that no “Event of
Default” shall have occurred and be continuing under the Loan Agreement) be
appointed by the Company or by the owners of a majority in aggregate principal
amount of Bonds then Outstanding, by an instrument or concurrent instruments in
writing signed by the Company or such owners, or by their duly authorized
attorneys in fact, a copy of which shall be delivered personally or sent by
Mail to the Issuer, retiring Trustee, successor Trustee, Registrar or successor
Registrar and Company.  Pending such
appointment by the Company or the Bondholders, the Issuer may, with the consent
of the Company (to the extent that no “Event of Default” shall have occurred
and be continuing under the Loan Agreement), appoint a temporary successor
Trustee or Registrar by an instrument in writing signed by an authorized
officer of the Issuer, a copy of which shall be delivered personally or sent by
first class mail, postage prepaid, to the retiring Trustee, successor Trustee,
Registrar or successor Registrar and Company. 
The Trustee shall have no liability for any action or inaction of any
successor Trustee.

 

If
the registered owners and the Company or the Issuer fail to so appoint a
successor Trustee or Registrar hereunder within 30 days after the Trustee
or Registrar has given notice of its resignation, has been removed, has been
dissolved, has otherwise become incapable of acting hereunder or has been taken
under control by a public officer or receiver, the Trustee or Registrar shall
have the right to petition, at the expense of the Company, a court of competent
jurisdiction to appoint successor hereunder. 
Every such Trustee or Registrar appointed pursuant to the provisions of
this Section 9.12 shall be a trust company or bank organized and in good
standing under the laws of Illinois or any state or the District of Columbia
and have a combined capital and surplus of not less than $50,000,000 as set
forth in its most recent published annual report of condition.

 

Section 9.13.       Qualifications
of Successor Trustee.  Every successor
Trustee (a) shall be a national or state bank or trust company that is
authorized by law to perform all the duties imposed upon it by this Indenture
and to exercise corporate trust powers in the State, (b) shall have (or,
in the case of a corporation included in a bank holding company system, the
related bank holding company shall have) a combined capital and surplus of at
least $50,000,000 as set forth in its (or its related bank holding company’s)
most recent published annual report of condition, and (c) shall be
permitted under the Issuer’s rules to perform the duties of Trustee, if
there can be located, with reasonable effort, such an institution willing and
able to accept the trust on reasonable and customary terms.

 

Section 9.14.       Judicial
Appointment of Successor Trustee.  In case at any
time the Trustee shall resign and no appointment of a successor Trustee shall
be made pursuant to the foregoing provisions of this Article IX prior to
the date specified in the notice of resignation as the date when such
resignation is to take effect, the resigning Trustee may forthwith apply, at
the expense of the Company, to a court of competent jurisdiction for the
appointment of a successor Trustee.  If
no appointment of a successor Trustee shall be made pursuant to the foregoing
provisions of this Article IX within six months after a vacancy shall have
occurred in the office of Trustee, any Owner may apply to any court of
competent jurisdiction to appoint a successor Trustee.  Such court may thereupon, after such notice,
if any, as it may deem proper, appoint a successor Trustee.

 

76

 

Section 9.15.                    Acceptance
of Trusts by Successor Trustee.  Any successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Issuer an instrument accepting such appointment hereunder, and thereupon such
successor Trustee, without any further act, deed or conveyance, shall become
duly vested with all the estates, property rights, powers, trusts, duties and
obligations of its predecessor in the trust hereunder, with like effect as if
originally named Trustee herein, and the duties and obligations of the
predecessor Trustee hereunder shall thereupon cease and terminate.  Upon request of such Trustee, such
predecessor Trustee and the Issuer shall execute and deliver an instrument
transferring to such successor Trustee all the estates, property, rights,
powers and trusts hereunder of such predecessor Trustee and, subject to the
provisions of Section 9.04 hereof, such predecessor Trustee shall pay over
to the successor Trustee all moneys and other assets at the time held by it
hereunder.

 

Section 9.16.                    Successor
by Merger or Consolidation.  Any corporation
into which any Trustee hereunder may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger or
consolidation to which any Trustee hereunder shall be a party, or to which all
or substantially all of its corporate trust business shall be transferred,
shall be the successor Trustee under this Indenture, without the execution or
filing of any paper or any further act on the part of the parties hereto,
anything in this Indenture to the contrary notwithstanding, provided,  however, if
such successor corporation is not a trust company or state or national bank
that has trust powers, the Trustee shall resign from the trusts hereby created
prior to such merger, transfer or consolidation or the successor corporation
shall resign from such trusts as soon as practicable after such merger,
transfer or consolidation.

 

Section 9.17.                    Standard
of Care.  Notwithstanding any other
provisions of this Article IX, the Trustee shall, during the existence and
prior to the curing of an Event of Default of which the Trustee has notice as
provided in Section 9.05 hereof, exercise such of the rights and powers
vested in it by this Indenture and use the same degree of skill and care in
their exercise as a prudent person would use and exercise under the
circumstances in the conduct of its own affairs.

 

Section 9.18.                    Intervention
in Litigation of the Issuer.  In any judicial
proceeding to which the Issuer is a party and which in the opinion of the
Trustee and its Counsel has a substantial bearing on the interests of the
Owners of the Bonds, the Trustee may and shall upon receipt of indemnity
satisfactory to it (except against its own negligence or willful misconduct) at
the written request of the Owners of at least 25% in principal amount of the
Bonds then Outstanding and if permitted by the court having jurisdiction in the
premises, intervene in such judicial proceeding.

 

Section 9.19.                    Registrar.  Citibank N.A. is the
Registrar for the Bonds.  Any Registrar
shall designate to the Issuer, the Company and the Trustee its office where the
registration books shall be kept and signify its acceptance of the duties
imposed upon it hereunder by a written instrument of acceptance delivered to
the Issuer and the Trustee under which such Registrar will agree, particularly,
to keep such books and records as shall be consistent with prudent industry
practice and to make such books and records available for inspection by the
Issuer, the Trustee and the Company at all reasonable times.

 

77

 

The
Issuer shall cooperate with the Trustee and the Company to cause the necessary
arrangements to be made and to be thereafter continued whereby Bonds, executed
by the Issuer and authenticated by the Registrar, shall be made available for
exchange, registration and registration of transfer at the Principal Office of
the Registrar.  The Issuer shall
cooperate with the Trustee, the Registrar and the Company to cause the
necessary arrangements to be made and thereafter continued whereby the Trustee
shall be furnished such records and other information, at such times, as shall
be required to enable the Trustee to perform the duties and obligations imposed
upon them hereunder.

 

Section 9.20.                    Qualifications
of Registrar; Resignation; Removal.  The Registrar
shall be a corporation duly organized under the laws of the United States of
America or any state or territory thereof, having a combined capital surplus
and retained earnings of at least $10,000,000 and authorized by law to perform
all the duties imposed upon it by this Indenture.  The Registrar may at any time resign and be
discharged of the duties and obligations created by this Indenture by giving at
least 30 days’ notice to the Issuer, the Trustee and the Company.  The Registrar may be removed at any time by
an instrument signed by the Authorized Company Representative and filed with
the Issuer, the Registrar and the Trustee. 
Upon the resignation or removal of the Registrar, the Company shall
appoint a new Registrar.  The Registrar
shall have no liability for any action or inaction of any successor Registrar.

 

In
the event of the resignation or removal of the Registrar, the Registrar shall
deliver any Bonds held by it in such capacity to its successor or, if there be
no successor, to the Trustee.

 

In
the event that the Company shall fail to appoint a Registrar hereunder, or in
the event that the Registrar shall resign or be removed, or be dissolved, or if
the property or affairs of the Registrar shall be taken under the control of
any state or federal court or administrative body because of bankruptcy or
insolvency, or for any other reason, and the Company shall not have appointed
its successor as Registrar, the Trustee shall ipso facto
be deemed to be the Registrar for all purposes of this Indenture until the
appointment by the Company of the Registrar or successor Registrar, as the case
may be.

 

Section 9.21.                    Additional
Duties of Trustee.  (a) The
Trustee shall keep such books and records with respect to the Bonds as shall be
consistent with prudent industry practice and to make such books and records
available for inspection by the Issuer, the Trustee and the Company at all
reasonable times.

 

(b)                                 The Trustee
shall, as long as a book-entry system is in effect for the Bonds, comply with
the DTC Representation Letter and perform all duties required of it thereunder.

 

(c)                                  The Trustee
shall keep, or cause to be kept, proper books of records and accounts in which
complete and accurate entries shall be made of all funds and accounts
established by or pursuant to this Indenture, which shall be at all reasonable
times be subject to the inspection by the Issuer or Owners (or a designated
representative thereof) of not less than ten percent (10%) in aggregate
principal amount of the Bonds then Outstanding.

 

78

 

(d)                                 Not later than
30 days after the end of each January 1, April 1, July 1 and
October 1, commencing on January 1, 2011, the Trustee will prepare
and file with the Company a statement setting forth, with respect to the
preceding bond year and the current bond year, (1) amounts withdrawn from
and deposited in each fund and account relating to the Bonds hereunder, (2) the
balance on deposit in each such fund or account relating to the Bonds at the
end of each period for which such statement is prepared, (3) a brief
description of all obligations held as investments in each such fund or account
relating to the Bonds, (4) the amount applied to the redemption of the
Bonds, a description of the Bonds or portions of Bonds so redeemed, and an
accounting of the Bonds of each maturity outstanding, and (5) any other
information that the Issuer may be reasonably request or that the Trustee may
from time to time deem appropriate.

 

ARTICLE X

 

EXECUTION OF INSTRUMENTS BY OWNERS

AND PROOF OF OWNERSHIP OF BONDS

 

Any
request, direction, consent or other instrument in writing required or
permitted by this Indenture to be signed or executed by the Owners or on their
behalf by an attorney-in-fact may be in any number of concurrent instruments of
similar tenor and may be signed or executed by the Owners in person or by an
agent or attorney-in-fact appointed by an instrument in writing or as provided
in the Bonds.  Proof of the execution of
any such instrument and of the ownership of Bonds shall be sufficient for any
purpose of this Indenture and shall be conclusive in favor of the Trustee with
regard to any action taken by it under such instrument if made in the following
manner:

 

(a)                                  The fact and
date of the execution by any person of any such instrument may be proved by the
certificate of any officer in any jurisdiction who, by the laws thereof, has
power to take acknowledgments within such jurisdiction, to the effect that the
person signing such instrument acknowledged before him the execution thereof,
or by an affidavit of a witness to such execution.

 

(b)                                 The ownership
of Bonds shall be proved by the registration books kept under the provisions of
Section 2.06 hereof.

 

Nothing
contained in this Article X shall be construed as limiting the Trustee to
such proof, it being intended that the Trustee may accept any other evidence of
matters herein stated which it may deem sufficient.  Any request by or consent of any Owner shall
bind every future Owner of the same Bond or any Bond or Bonds issued in lieu
thereof or upon registration of transfer thereof in respect of anything done by
the Trustee or the Issuer in pursuance of such request or consent.

 

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ARTICLE XI

 

MODIFICATION OF THIS INDENTURE
AND THE LOAN AGREEMENT

 

Section 11.01.                     Supplemental
Indentures Without Owner Consent. The Issuer and the Trustee
may, from time to time and at any time, without the consent of the Owners,
enter into a Supplemental Indenture as follows:

 

(a)                                  to cure any
formal defect, omission, inconsistency or ambiguity in this Indenture;

 

(b)                                 to add to the
covenants and agreements of the Issuer contained in this Indenture or of the Company
contained in any document, other covenants or agreements thereafter to be
observed, or to assign or pledge additional security for any of the Bonds, or
to surrender any right or power reserved or conferred upon the Issuer or the
Company, which in the judgment of the Trustee is not materially adverse to the
Owners of the Bonds (in making such determination, the Trustee may, but is not
required to, rely conclusively upon an opinion of counsel);

 

(c)                                  to confirm, as
further assurance, any pledge of or lien on the Trust Estate or any other
moneys, securities or funds subject or to be subjected to the lien of this
Indenture;

 

(d)                                 to comply with
the requirements of the Trust Indenture Act, if applicable to this Indenture;

 

(e)                                  to modify,
alter, amend or supplement this Indenture or any Supplemental Indenture in any
other respect which in the judgment of the Trustee is not materially adverse to
the Owners of the Bonds (in making such determination, the Trustee may, but is
not required to, rely conclusively upon an opinion of counsel);

 

(f)                                    to modify,
alter, amend or supplement or restate this Indenture or any Supplemental
Indenture in any and all respects necessary, desirable or appropriate in
connection with the delivery to the Trustee of bond insurance or other security
arrangements obtained or provided by the Company;

 

(g)                                 to provide for
a depository to accept Bonds in lieu of DTC;

 

(h)                                 to modify or
eliminate the book-entry registration system for any of the Bonds;

 

(i)                                     to provide for
uncertificated Bonds or for the issuance of coupons and bearer Bonds or Bonds
registered only as to principal but only to the extent that such would not
adversely affect the Tax-Exempt status of the Bonds;

 

80

 

(j)                                     to secure or
maintain ratings on the Bonds from Moody’s, S&P and/or Fitch, Inc. ;

 

(k)                                  to provide
demand purchase obligations to cause the Bonds to be authorized purchases for
investment companies;

 

(l)                                     to provide for
the appointment of a successor Trustee and Registrar;

 

(m)                               to provide the
procedures required to permit any Owner to separate the right to receive
interest on the Bonds from the right to receive principal thereof and to sell
or dispose of such right as contemplated by Section 1286 of the Code (or
similar successor provision);

 

(n)                                 to make any
change necessary (i) to establish or maintain the Tax-Exempt status of the
Bonds as a result of any modifications or amendments to Section 148 of the
Code (or any successor provision of law) or interpretations thereof by the
Internal Revenue Service, or (ii) to comply with the provisions of Section 148(f) of
the Code (or any successor provision of law), including provisions for the
payment of all or a portion of the investment earnings of any of the funds
established hereunder to the United States of America; and

 

(o)                                 to conform to
amendments made to the Loan Agreement or the Subsidiary Bond Guarantees
effected in compliance with this Indenture.

 

Before
the Issuer and the Trustee shall enter into any Supplemental Indenture pursuant
to this Section 11.01, in all cases, there shall have been delivered to
the Trustee and the Company, a Favorable Opinion of Bond Counsel and an Opinion
of Counsel with respect to such modification, alteration, amendment or
supplement, and further stating that such Supplemental Indenture is authorized
or permitted by this Indenture and will, upon the execution and delivery
thereof, be valid and binding upon the Issuer in accordance with its
terms.  Neither the Issuer nor the
Trustee will be obligated to enter into any such Supplemental Indenture that
would materially alter their respective rights, duties or immunities under this
Indenture, the Loan Agreement or otherwise.

 

The
Trustee shall provide written notice of any Supplemental Indenture described in
this Section 11.01 to Moody’s, S&P and Fitch, Inc. (but only if
such corporations are then providing a rating for the Bonds) and to the Owners
of all Bonds then Outstanding at least 15 days prior to the effective date of
such Supplemental Indenture.  Such notice
shall state the effective date of such Supplemental Indenture and shall briefly
describe the nature of such Supplemental Indenture and shall state that a copy
thereof is on file at the Principal Office of the Trustee for inspection by the
parties mentioned in the preceding sentence.

 

Section 11.02.                     Supplemental
Indentures Requiring Owner Consent.  (a) Except
for any Supplemental Indenture entered into pursuant to Section 11.01
hereof, subject to the terms and provisions contained in this Section 11.02
and not otherwise, the Owners of not less than a majority in aggregate
principal amount of the Bonds then Outstanding shall have the right from

 

81

 

time
to time to consent to and approve the execution and delivery by the Issuer and
the Trustee of any Supplemental Indenture deemed necessary or desirable by the
Issuer for the purposes of modifying, altering, amending, supplementing or
rescinding, any of the terms or provisions contained in this Indenture; provided, however, that, unless approved in writing by the
Owners of all the Bonds then Outstanding, nothing herein contained shall
permit, or be construed as permitting (i) an extension of the maturity of
the principal of, or the time for payment of any redemption premium or interest
on, any Bond or a reduction in the principal amount of any Bond, or the rate of
interest or redemption premium thereon, or a reduction in the amount of, or
extension of the time of any payment required by, any Bond; (ii) a privilege
or priority of any Bond over any other Bond (except as herein provided);
(iii) a reduction in the aggregate principal amount of the Bonds required
for consent to such a Supplemental Indenture; (iv) the deprivation of the
owner of any Bond then Outstanding of the lien created by this Indenture; or
(v) the amendment of this Section 11.02.

 

 

(b)                                 If at any time
the Issuer shall request the Trustee to enter into any Supplemental Indenture
for any of the purposes of this Section 11.02, the Trustee, upon being
satisfactorily indemnified for its expenses, shall cause notice of the proposed
Supplemental Indenture to be given by Mail to Moody’s, S&P and Fitch, Inc.
(but only if such corporations are then providing a rating for the Bonds) and
to all Owners of Outstanding Bonds.  Such
notice shall briefly set forth the nature of the proposed Supplemental
Indenture and shall state that a copy thereof is on file at the Principal
Office of the Trustee for inspection by the Owners, Moody’s, S&P and Fitch, Inc.

 

(c)                                  Within two
years after the date of the mailing of such notice, the Issuer and the Trustee
may enter into such Supplemental Indenture in substantially the form described
in such notice, but only if there shall have first been delivered to the
Trustee (i) the required consents, in writing, of the Owners and
(ii) a Favorable Opinion of Bond Counsel and Opinion of Counsel with
respect to such modification, alteration, amendment or supplement, and further
stating that such Supplemental Indenture is authorized or permitted by this
Indenture and will, upon the execution and delivery thereof, be valid and
binding upon the Issuer in accordance with its terms.  Neither the Issuer nor the Trustee will be
obligated to enter into any such Supplemental Indenture that would materially
alter their respective rights, duties or immunities under this Indenture, under
the Loan Agreement or otherwise.

 

(d)                                      If Owners of
not less than the percentage of Bonds required by this Section 11.02 shall
have consented to and approved the execution and delivery of a Supplemental
Indenture as herein provided, no Owner shall have any right to object to the
execution and delivery of such Supplemental Indenture, or to object to any of
the terms and provisions contained therein or the operation thereof, or in any
manner to question the propriety of the execution and delivery thereof, or to
enjoin or restrain the Issuer or the Trustee from executing and delivering the
same or from taking any action pursuant to the provisions thereof.

 

Section 11.03.                     Effect
of Supplemental Indenture.  Upon the
execution and delivery of any Supplemental Indenture pursuant to the provisions
of this Article XI, this Indenture shall be, and be deemed to be, modified
and amended in accordance therewith, and the respective rights,

 

82

 

duties
and obligations under this Indenture shall thereafter be determined, exercised
and enforced under this Indenture subject in all respects to such modifications
and amendments.

 

Section 11.04.                     Consent
of the Company and Other Parties.  No Supplemental
Indenture under this Article XI and no amendment of the Loan Agreement
shall become effective unless the Company shall have consented thereto in
writing.

 

Any
provision of this Indenture expressly recognizing or granting rights in or to
the Registrar may not be amended in any manner which affects the rights of such
party hereunder without the prior written consent of such party.

 

Section 11.05.                     Amendment
of Loan Agreement Without Owner Consent; Waivers.   Without the consent of or
notice to the Owners, the Issuer and the Company may modify, amend or
supplement the Loan Agreement, or any provision thereof, or may consent to the
amendment or modification thereof, in any manner not inconsistent with the
terms and provisions of this Indenture, for any one or more of the following
purposes:  (a) to cure any ambiguity
or formal defect in the Loan Agreement; (b) to grant to or confer upon the
Issuer or Trustee, for the benefit of the Bond Owners, any additional rights,
remedies, powers or authorities that lawfully may be granted to or conferred
upon the Issuer or the Trustee; (c) to amend or modify the Loan Agreement,
or any part thereof, in any manner specifically required or permitted by the
terms thereof, including, without limitation, as may be necessary to maintain
the exclusion from gross income for purposes of federal income taxation of the
interest on the Bonds; (d) to provide that the Bonds may be secured by a
credit facility or other additional security not otherwise provided for in this
Indenture or the Loan Agreement; (e) to modify, amend or supplement the
Loan Agreement, or any part thereof, or any supplement thereto, in such manner
as the Trustee and the Company deem necessary in order to comply with any
statute, regulation, judicial decision or other law relating to secondary
market disclosure requirements with respect to tax-exempt obligations of the
type that includes the Bonds; (f) to provide for the appointment of a
successor securities depository; (g) to provide for the availability of
certificated Bonds; and (h) to make any other change which does not, in
the opinion of the Trustee, have a material adverse effect upon the interests
of the Bondholders.  In addition, the
Trustee, may grant such waivers of compliance by the Company with the
provisions of the Loan Agreement as to which the Trustee may deem necessary or
desirable to effectuate the purposes of the intent of the Loan Agreement and
which, in the opinion of the Trustee, do not have a material adverse effect
upon the interests of the Bondholders, provided that
the Trustee shall file with the Issuer any and all such waivers granted by the
Trustee within three Business Days thereof.

 

A
revision of Exhibit A to the Loan Agreement in accordance with
Section 3.03 of the Loan Agreement shall not be deemed a modification,
alteration, amendment or supplement to the Loan Agreement, or to this
Indenture, for any purpose of this Indenture.

 

Before
the Issuer shall enter into, and the Trustee shall consent to, any
modification, alteration, amendment or supplement to the Loan Agreement
pursuant to this Section 11.05, there shall have been delivered to the
Issuer and the Trustee a Favorable Opinion of Bond Counsel with respect to such
modification, alteration, amendment or supplement and further stating that such
modification, alteration, amendment or supplement is authorized or permitted 

 

83

 

by
the Loan Agreement or this Indenture and will, upon the execution and delivery
thereof, be valid and binding upon the Issuer in accordance with its terms and
an opinion of counsel to the Company to the effect that such modification,
alteration, amendment or supplement will, upon execution and delivery thereof, be
valid and binding upon the Company in accordance with its terms.  Neither the Issuer nor the Trustee will be
obligated to enter into or consent to any such modifications, alterations,
amendments or supplements to the Loan Agreement that would materially alter
their respective rights, duties or immunities under this Indenture, under the
Loan Agreement or otherwise.

 

Section 11.06.                     Amendment
of Loan Agreement Requiring Owner Consent. 
Except in the case of modifications, alterations, amendments or
supplements referred to in Section 11.05 hereof, the Issuer shall not
enter into, and the Trustee shall not consent to, any amendment, alteration,
supplement or modification of the Loan Agreement without the written approval
or consent of the Owners of at least a majority in aggregate principal amount
of the Bonds then Outstanding given and procured as provided in
Section 11.02 hereof; provided, however, that,
unless approved in writing by the Owners of all Bonds affected thereby, nothing
herein contained shall permit, or be construed as permitting, a change in the
obligations of the Company under Section 6.01 or Section 6.02 of the
Loan Agreement.  If at any time the
Issuer or the Company shall request the consent of the Trustee to any such
proposed modification, alteration, amendment or supplement permitted under this
Section 11.06, the Trustee shall cause notice thereof to be given in the
same manner as provided by Section 11.02 hereof with respect to
Supplemental Indentures.  Such notice
shall briefly set forth the nature of such proposed modification, alteration,
amendment or supplement and shall state that copies of the instrument embodying
the same are on file at the Principal Office of the Trustee for inspection by
all Owners.  The Issuer may enter into,
and the Trustee may consent to, any such proposed modification, alteration,
amendment or supplement subject to the same conditions and with the same effect
as provided in Section 11.02 hereof with respect to Supplemental
Indentures.

 

Before
the Issuer shall enter into, and the Trustee shall consent to, any
modification, alteration, amendment or supplement to the Loan Agreement
pursuant to this Section 11.06, there shall have been delivered to the
Issuer and the Trustee a Favorable Opinion of Bond Counsel and/or an Opinion of
Counsel with respect to such modification, alteration, amendment or supplement
and further stating that such modification, alteration, amendment or supplement
is authorized or permitted by the Loan Agreement or this Indenture and will,
upon the execution and delivery thereof, be valid and binding upon the Issuer
in accordance with its terms and an opinion of counsel to the Company to the
effect that such modification, alteration, amendment or supplement will, upon
execution and delivery thereof, be valid and binding upon the Company in
accordance with its terms.  Neither the
Issuer nor the Trustee will be obligated to enter into any such modification,
alteration, amendment or supplement to the Loan Agreement that would materially
alter their respective rights, duties or immunities under this Indenture, under
the Loan Agreement or otherwise.

 

Section 11.07.                     Amendment
of Bond Guarantee.  (a) The
Trustee, without the consent of or notice to any of the Bondholders, may enter
into any amendment, change or modification of the Bond Guarantee as may be
required (i) by the provisions of the Loan Agreement or the Bond
Guarantee, as the case may be, or this Indenture, (ii) for the purpose of
curing any ambiguity,

 

84

 

formal
defect or formal omission, (iii) in connection with any other change
therein, or (iv) so as to add additional rights acquired in accordance
with the provisions of the Loan Agreement or the Bond Guarantee, as the case
may be; provided that no such action pursuant to
clause (ii) or clause (iii) above is to the material
prejudice of the owners of the Bonds.

 

(b)                                      Except in the
case of modifications, alterations, amendments or supplements referred to in
Section 11.07(a) hereof, the Trustee shall not consent to, any
amendment, alteration, supplement or modification of the Bond Guarantee without
the written approval or consent of the Owners of at least a majority in
aggregate principal amount of the Bonds then Outstanding given and procured as
provided in Section 11.02 hereof; provided, however, that,
unless approved in writing by the Owners of all Bonds affected thereby, nothing
herein contained shall permit, or be construed as permitting, a change in the
obligations of the Guarantor under Section 2.1 of the Bond Guarantee.  If at any time the Guarantor shall request
the consent of the Trustee to any such proposed modification, alteration,
amendment or supplement permitted under this Section 11.07(b), the Trustee
shall cause notice thereof to be given in the same manner as provided by
Section 11.02 hereof with respect to Supplemental Indentures.  Such notice shall briefly set forth the
nature of such proposed modification, alteration, amendment or supplement and
shall state that copies of the instrument embodying the same are on file at the
Principal Office of the Trustee for inspection by all Owners.  The Trustee may consent to, any such proposed
modification, alteration, amendment or supplement subject to the same
conditions and with the same effect as provided in Section 11.02 hereof
with respect to Supplemental Indentures.

 

Before
the Trustee shall consent to, any modification, alteration, amendment or
supplement to the Bond Guarantee pursuant to this Section 11.07, there
shall have been delivered to the Issuer and the Trustee (i) a Favorable
Opinion of Bond Counsel and/or Opinion of Counsel with respect to such
modification, alteration, amendment or supplement and further stating that such
modification, alteration, amendment or supplement is authorized or permitted by
the Bond Guarantee or this Indenture and (ii) an opinion of counsel to the
Guarantor to the effect that such modification, alteration, amendment or
supplement will, upon execution and delivery thereof, be valid and binding upon
the Guarantor in accordance with its terms. 
The Trustee will not be obligated to enter into any such modification,
alteration, amendment or supplement to the Bond Guarantee that would materially
alter its rights, duties or immunities under this Indenture, under the Bond
Guarantee or otherwise.

 

ARTICLE XII

 

MISCELLANEOUS

 

Section 12.01.                     [Reserved].

 

Section 12.02.                     Parties
in Interest.  Except as
herein otherwise specifically provided, nothing in this Indenture expressed or
implied is intended or shall be construed to confer upon any person, firm,
corporation or entity other than the Issuer, the Registrar, the Company, the
Guarantor, the Trustee and the Owners of Bonds any right, remedy or claim under
or by reason

 

85

 

of
this Indenture, this Indenture being intended to be for the sole and exclusive
benefit of the Issuer, the Registrar, the Company, the Trustee and the Owners
of Bonds.  The Trustee shall have no
fiduciary duty to any entity other than the Owner of any Bond as such and only
in accordance with, into the extent of, the terms and provisions hereunder.

 

Section 12.03.                     Severability.  In case any one or more of
the provisions of this Indenture or of the Loan Agreement or of the Bonds shall
for any reason be held to be illegal or invalid, such illegality or invalidity
shall not affect any other provisions of this Indenture, the Loan Agreement or
the Bonds, and this Indenture, the Loan Agreement and the Bonds shall be
construed and enforced as if such illegal or invalid provisions had not been
contained herein or therein.

 

Section 12.04.                     No
Personal Liability of Issuer Officials.  No
representation, warranty, covenant or agreement contained in the Bonds or in
this Indenture or in any of the documents or certificates related thereto shall
be deemed to be the representation, warranty, covenant or agreement of any
official, officer, agent, counsel or employee of the Issuer in his or her
individual capacity, and neither the members of the Board of Commissioners of
the Issuer nor any official executing the Bonds shall be liable personally on
the Bonds or be subject to any personal liability or accountability by reason
of the issuance thereof.

 

Section 12.05.                     Bonds
Owned by the Issuer or the Company.  In determining
whether the Owners of the requisite aggregate principal amount of the Bonds
have concurred in any direction, consent or waiver under this Indenture, Bonds
which are owned by the Issuer or the Company or by any person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company (unless the Issuer, the Company or such person owns
all Bonds which are then Outstanding, determined without regard to this
Section 12.05) shall be disregarded and deemed not to be Outstanding for
the purpose of any such determination, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Bonds with respect to which the Trustee has
received written notice of such ownership shall be so disregarded.  Bonds so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee’s right so to act with respect to such
Bonds and that the pledgee is not the Issuer or the Company or any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company.  In case
of a dispute as to such right, any decision by the Trustee taken upon the advice
of Counsel shall be full protection to the Trustee.

 

Section 12.06.                     Counterparts.  This Indenture may be
executed in any number of counterparts, each of which, when so executed and
delivered, shall be an original; but such counterparts shall together
constitute but one and the same Indenture.

 

Section 12.07.                     Governing
Law; Waiver of Jury Trial.  This Indenture
shall be governed by and construed in accordance with the laws of the State
without application of the conflicts of law provisions of any other state.  EACH OF THE COMPANY, THE ISSUER AND THE
TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION
CONTEMPLATED HEREBY.

 

86

 

Section 12.08.                     Notices.  Except as otherwise provided
in this Indenture, all notices, demands, certificates, requests, requisitions,
directions or other communications by the Issuer, the Company or the Trustee or
by the Bondholders pursuant to this Indenture shall be in writing and shall be
deemed to have been sufficiently given or made for all purposes if given or
served by being deposited postage prepaid by registered or certified mail in a
post office letter box, addressed (until a different or additional address is
filed with the Trustee) as follows:

 

	
  if
  to the Issuer, to:

  	
  The
  County of Cook, Illinois

  
	
   

  	
  118
  North Clark Street, Room 500

  
	
   

  	
  Chicago, Illinois
  60602

  
	
   

  	
  Attention:

  	
  Chief
  Financial Officer

  
	
   

  	
  Telephone:

  	
  (312)
  603-5287

  
	
   

  	
  Facsimile:

  	
  (312)
  603-3681

  
	
   

  	
   

  	
   

  
	
  if
  to the Trustee or the

  	
  Citibank
  N.A., Agency & Trust

  
	
  Registrar,
  to:

  	
  388
  Greenwich Street, 14th Floor

  
	
   

  	
  New
  York, New York 10013

  
	
   

  	
  Attention:

  	
  Miriam
  Molina

  
	
   

  	
  Telephone:

  	
  (212)
  816-5576

  
	
   

  	
  Facsimile:

  	
  (212)
  657-2762

  
	
   

  	
  Email:

  	
  miriam.molina@citi.com

  
	
   

  	
   

  	
   

  
	
  if
  to the Company, to:

  	
  Navistar
  International Corporation

  
	
   

  	
  4201
  Winfield Road

  
	
   

  	
  Warrenville, Illinois
  60555

  
	
   

  	
  Attention:

  	
  Vice
  President and Treasurer

  
	
   

  	
  Telephone:

  	
  (630)
  753-2059

  
	
   

  	
  Facsimile:

  	
  (630)
  753-2305

  
	
   

  	
   

  	
   

  
	
  if
  to the Guarantor, to:

  	
  Navistar, Inc.

  
	
   

  	
  4201
  Winfield Road

  
	
   

  	
  Warrenville, Illinois
  60555

  
	
   

  	
  Attention:

  	
  Vice
  President and Treasurer

  
	
   

  	
  Telephone:

  	
  (630)
  753-2059

  
	
   

  	
  Facsimile:

  	
  (630)
  753-2305

  

 

In
addition, the Trustee, the Issuer and the Company agree to accept and act upon
instructions or directions pursuant to this Indenture sent by unsecured e-mail,
facsimile transmission or other similar unsecured electronic methods; provided, however, that (a) the party providing such
written instructions, subsequent to such transmission of written instructions,
shall provide the originally executed instructions or directions to such party
in a timely manner, and (b) such originally executed instructions or
directions shall be signed by an authorized representative of the party
providing such instructions or directions. 
If the party elects to give e-mail or facsimile instructions (or
instructions by a similar electronic method), the other party’s understanding
of such instructions shall be deemed controlling.  The Trustee, the Issuer or the Company shall
not be liable for any losses, costs or expenses arising directly or indirectly
from 

 

87

 

such
party’s reliance upon and compliance with such instructions notwithstanding
such instructions conflict or are inconsistent with a subsequent written
instruction.  The party providing
electronic instructions agrees to assume all risks arising out of the use of
such electronic methods to submit instructions and directions, including without
limitation the risk of the notified party acting on unauthorized instructions,
and the risk or interception  and misuse
by third parties.

 

Any
notice or communication mailed to a Bondholder shall be mailed to it by Mail at
its address as it appears on the Register and shall be sufficiently given to it
if so mailed within the time prescribed.

 

Failure
to mail a notice or communication to a Bondholder or any defect in it shall not
affect its sufficiency with respect to other Bondholders.  If a notice or communication is mailed in the
manner provided above, it is duly given, whether or not the addressee receives
it.

 

In
case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice to Holders by Mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

 

Notwithstanding
any other provision of this Indenture or any Bond, whenever notice is required
to be given to a Beneficial Owner, such notice shall be sufficiently given if
given to the Securities Depository for such Bond (or its designee), pursuant to
customary procedures of such Securities Depository.

 

Any
of the foregoing may, by notice given hereunder to each of the others, designate
any further or different addresses to which subsequent notices, certificates,
requests or other communications shall be sent hereunder.  Any communications required to be given
hereunder by the Company shall be given by an Authorized Company Representative.  A copy of any notice given to Bondholders
shall be sent to the Company.

 

Section 12.09.                     Holidays.  If the date for making any
payment or the last date for performance of any act or the exercising of any
right, as provided in this Indenture, shall not be a Business Day, such payment
may, unless otherwise provided in this Indenture or the Loan Agreement, be made
or act performed or right exercised on the next succeeding Business Day with
the same force and effect as if done on the nominal date provided in this
Indenture, and no interest shall accrue for the period after such nominal date.

 

Section 12.10.                     Date
for Identification Purposes Only; Effective Date.  The date on this Indenture shall be for
identification purposes only and shall not be construed to imply that this
Indenture was executed on such date. 
This Indenture shall become effective upon the Closing Date.

 

Section 12.11.                     Force
Majeure.  In no event
shall the Trustee be responsible or liable for any failure or delay in the
performance of its obligations hereunder arising out of or caused by, directly
or indirectly, forces beyond its control, including, without limitation,
strikes, work

 

88

 

stoppages,
accidents, acts of war or terrorism, civil or military disturbances, nuclear or
natural catastrophes or acts of God, and interruptions, loss or malfunctions of
utilities, communications or computer (software and hardware) services; it
being understood that the Trustee shall use reasonable efforts which are
consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.

 

Section 12.12.                     U.S.A.
Patriot Act.  The parties
hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot
Act, the Trustee, like all financial institutions and in order to help fight
the funding of terrorism and money laundering, is required to obtain, verify,
and record information that identifies each person or legal entity that
establishes a relationship or opens an account with the Trustee.  The parties to this Indenture agree that they
will provide the Trustee with such information as it may request in order for
the Trustee to satisfy the requirements of the U.S.A. Patriot Act.

 

89

 

IN
WITNESS WHEREOF, The COUNTY OF COOK, ILLINOIS has caused these presents to
be signed in its name and on its behalf by its Chief Financial Officer and its
seal to be hereunto affixed and attested by its County Clerk and to evidence
its acceptance of the trusts hereby created CITIBANK N.A., in its capacity as
Trustee, has caused these presents to be signed and attested in its name and on
its behalf by its duly authorized officers all as of the day and year first
above written. 

 

	
   

  	
   

  	
  THE
  COUNTY OF COOK, ILLINOIS

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/
  Jaye Morgan Williams

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/
  David D. Orr

  	
   

  	
   

  	
   

  
	
   

  	
  County Clerk

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CITIBANK
  N.A., Agency & Trust, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/
  Miriam Molinda

  
	
   

  	
   

  	
   

  	
  Its

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/
  Patricia Gallagher

  	
   

  	
   

  	
   

  
	
   

  	
  Its

  	
  Vice
  President

  	
   

  	
   

  	
   

  
								

 

90

 

EXHIBIT A

 

[FORM OF BOND]

 

	
  REGISTERED

  	
   

  	
  REGISTERED

  
	
  NO.
  R-

  	
   

  	
  $90,000,000

  

 

UNITED STATES OF AMERICA

 

STATE OF ILLINOIS

 

THE COUNTY OF COOK, ILLINOIS

RECOVERY ZONE FACILITY REVENUE BOND

(NAVISTAR INTERNATIONAL CORPORATION PROJECT) SERIES 2010

 

	
  INTEREST RATE

  	
   

  	
  MATURITY DATE

  	
   

  	
  DATED DATE

  	
   

  	
  CUSIP NO.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.50%

  	
   

  	
  October 15, 2040

  	
   

  	
  October 26, 2010

  	
   

  	
  213247 CA5

  

 

Registered Owner:                                              CEDE &
CO.

 

Principal Amount:                                                NINETY MILLION
DOLLARS

 

THIS
BOND AND THE OBLIGATION TO PAY PRINCIPAL, PREMIUM, IF ANY, AND INTEREST
HEREON, IS A SPECIAL, LIMITED OBLIGATION OF THE ISSUER, SECURED AS
PROVIDED HEREIN AND IN THE HEREINAFTER DEFINED INDENTURE AND PAYABLE SOLELY OUT
OF THE PAYMENTS MADE PURSUANT TO THE LOAN AGREEMENT AND THE SECURITY THEREFOR
(AS SUCH TERMS ARE HEREINAFTER DEFINED) AND AS OTHERWISE PROVIDED IN THE
INDENTURE AND THE LOAN AGREEMENT.  THIS
BOND, AND THE OBLIGATION TO PAY PRINCIPAL, PREMIUM, IF ANY, AND INTEREST
HEREON, SHALL NOT CONSTITUTE A GENERAL OBLIGATION OF THE ISSUER, OR A CHARGE
AGAINST THE GENERAL CREDIT OR TAXING POWER OF THE ISSUER OR THE STATE OF
ILLINOIS.  NO OWNER OF THIS BOND SHALL
HAVE THE RIGHT TO DEMAND PAYMENT OUT OF ANY FUNDS TO BE RAISED BY TAXATION OR
FROM ANY SOURCE OTHER THAN THOSE SPECIFIED ABOVE.

 

THE
COUNTY OF COOK, ILLINOIS (the “Issuer”), a
home rule unit under Section 6(a) of Article VII of the
1970 Constitution of the State of Illinois, for value received, hereby promises
to pay (but only out of the source hereinafter provided) to the registered
owner identified above, or registered assigns, on the Maturity Date set forth
above (or if this Bond is called for earlier redemption as described herein on
the redemption date),  the Principal
Amount set forth above (the “Principal Amount”)
and to pay (but only out of the sources hereinafter provided) interest on the
balance of said Principal Amount from time to time remaining unpaid from the
Interest Payment Date next preceding the date of registration and
authentication hereof unless this Bond is registered and authenticated on or
prior to the first Interest Payment Date, in which event this Bond shall bear
interest from the Dated Date set forth above; provided,
however, that if, as shown by the records of the Trustee, interest
on the Bonds shall be in default, Bonds issued in exchange for Bonds
surrendered for registration of transfer or exchange shall bear interest from 

 

A-1

 

the
last date to which interest has been paid in full or duly provided for on the
Bonds, or, if no interest has been paid or duly provided for on the Bonds, from
the Dated Date, until payment of said Principal Amount has been made or duly
provided for, at the interest rate specified above, computed on the basis of a
360-day year consisting of twelve 30-day months, payable on April 15, 2011
and semi-annually thereafter on each April 15 and October 15, and to
pay (but only out of the sources hereinafter provided) interest on overdue
principal and, to the extent permitted by law, on overdue interest at the rate
then borne by this Bond, except as the provisions hereinafter set forth with
respect to redemption or acceleration prior to maturity may become applicable
hereto.  The principal of and premium, if
any, on this Bond are payable upon surrender thereof in lawful money of the
United States of America at the payment office in New York, New York, of Citibank
N.A., or its successors and assigns, as Trustee.  Interest payments on this Bond shall be made
by the Trustee to the registered owner hereof as of the close of business on
the Record Date (as hereinafter defined) with respect to each Interest Payment
Date (except that, if and to the extent that there shall be a default in the
payment of the interest due on an Interest Payment Date, such defaulted
interest shall be paid to the Owners in whose name any such Bonds are
registered as of a special record date to be fixed by the Trustee, notice of
which shall be given to such Owners not less than ten days prior thereto) and
shall be paid:

 

(a)                                  in respect of
any Bond that is registered in the book-entry system pursuant to the Indenture,
in immediately available funds by no later than 12:00 noon, New York City time,
and

 

(b)                                 in respect of
any Bond that is not registered in the book-entry system, (i) by bank
check mailed by first-class mail on the Interest Payment Date to the registered
owner hereof at its address as it appears on the registration books of Citibank
N.A., New York, New York, as Registrar  or at such
other address as is furnished in writing by such registered owner to the
Registrar, or (ii) by wire transfer on the Interest Payment Date to any
owner of at least $1,000,000 in aggregate principal amount of Bonds (or such
lesser amount if such Bonds constitute all of the Bonds then outstanding).

 

This
Bond is one of the duly authorized Recovery Zone Facility Revenue Bonds
(Navistar International Corporation Project) Series 2010 of the Issuer,
originally issued in the aggregate principal amount of $90,000,000 (the “Bonds”), pursuant to
proper action duly adopted by the Board of Commissioners of the Issuer on
October 5, 2010, and executed under an Indenture of Trust, dated as of
October 1, 2010 (the “Indenture”), between the Issuer and Citibank N.A., as trustee (the “Trustee,” which term shall include any successor trustee),
for the purpose of loaning the proceeds thereof to Navistar International
Corporation (the “Company”) in order to provide
funds (i) to finance a portion of the costs of the Project, (ii) to
pay a portion of the interest accruing on the Bonds during construction of the
Project and (iii) to pay certain costs of issuance relating  to the Bonds. 
Pursuant to the Loan Agreement, dated as of October 1, 2010 (the “Loan Agreement”), between the
Issuer and the Company,  the proceeds
of the Bonds have been loaned to the Company. 
Any term used herein as a defined term but not defined herein shall be defined
as in the Indenture.  Payment of the
principal of and interest on the Bonds has been guaranteed by Navistar, Inc.
(the “Guarantor”) directly to the Trustee for
the benefit of the Owners of the Bonds pursuant to a Bond Guarantee, dated as
of October 1, 2010 (the “Bond Guarantee”)
from the Guarantor to the Trustee.

 

A-2

 

The
Bonds are payable solely from the amounts received by the Issuer derived
pursuant to the Loan Agreement or the Bond Guarantee and any other Subsidiary
Bond Guarantees that may be delivered from time to time.

 

This
Bond and all other Bonds of the issue of which it forms a part are issued
pursuant to and in full compliance with the Constitution and laws of the State
of Illinois, and pursuant to a bond ordinance adopted by the Board of
Commissioners of the Issuer on October 5, 2010, which ordinance authorizes
the execution and delivery of the Indenture.

 

The
Bonds shall be deliverable in the form of registered Bonds without coupons in
the denominations of $100,000 or any integral multiple of $5,000 in excess
thereof (the “Authorized Denomination”).

 

“Record Date” means the first day of the month in which
each Interest Payment Date occurs.

 

The
Bonds are subject to optional and mandatory redemption prior to maturity as
provided in the Indenture.

 

Notice
of any optional or mandatory redemption shall be given by first-class mail not
less than 30 days (except as provided in the Indenture) nor more than 60 days
prior to the date fixed for redemption to the Owners of Bonds at the address
shown on the registration books of the Registrar on the date such notice is
mailed.  Except as described in the
Indenture for partial redemptions upon a Determination of Taxability, if less
than all of the Bonds are called for redemption, the Trustee shall select the
Bonds or any given portion thereof from the outstanding Bonds or such given
portion thereof not previously called for redemption, by such method as the
Trustee may deem fair and appropriate. 
For the purpose of any such selection the Trustee shall assign a
separate number for each minimum Authorized Denomination of each Bond of a
denomination of more than such minimum; provided that,
following any such selection, both the portion of such Bond to be redeemed and
the portion remaining shall be in Authorized Denominations.

 

Any
notice of optional redemption of Bonds may state that such redemption is
conditioned upon the receipt by the Trustee, on or prior to the date fixed for
such redemption, of moneys sufficient to pay the principal of, and premium, if
any, and interest on, such Bonds to be redeemed.  In the event such moneys are not so received,
the redemption shall not be made and the Trustee shall within a reasonable time
thereafter give notice, in the manner in which the notice of redemption was
given, that such redemption will not take place.

 

Subject
to the limitations and upon payment of the charges, if any, provided in the
Indenture, Bonds may be exchanged at the Principal Office of the Registrar for
a like aggregate principal amount of Bonds of the same tenor and of Authorized
Denominations.

 

This
Bond is transferable by the person in whose name it is registered, in person,
or by its attorney duly authorized in writing, at the Principal Office of the
Registrar, but only in the manner, subject to the limitations and upon payment
of the charges, if any, provided in the 

 

A-3

 

Indenture,
and upon surrender and cancellation of this Bond accompanied by a written
instrument of transfer in a form approved by the Registrar, duly executed.  Upon such transfer a new fully registered
Bond or Bonds in Authorized Denominations, for the same aggregate principal
amount, will be issued to the transferee in exchange therefor.

 

The
Issuer, the Registrar, the Trustee and any agent of the Issuer, the Registrar
or the Trustee may treat the person in whose name this Bond is registered as
the owner hereof for the purpose of receiving payment as herein provided and
for all other purposes, whether or not this Bond be overdue, and neither the
Issuer, the Registrar, the Trustee nor any such agent shall be affected by
notice to the contrary.

 

The
Bonds are equally and ratably secured, to the extent provided in the Indenture,
by the pledge thereunder of the Trust Estate. 
The Issuer has also pledged and assigned to the Trustee as security for
the Bonds all other rights and interests of the Issuer under the Loan Agreement
(other than its rights to indemnification, exemption from personal liability
and certain administration expenses and certain other rights).

 

The
Owner of this Bond shall have no right to enforce the provisions of the
Indenture, or to institute action to enforce the covenants therein, or to take
any action with respect to any Event of Default under the Indenture, or to
institute, appear in or defend any suit or other proceeding with respect
thereto, except as provided in the Indenture.

 

With
certain exceptions as provided therein, the Indenture, the Loan Agreement and
the Bond Guarantee may be modified or amended by the Owners of not less than a
majority in aggregate principal amount of all Bonds then Outstanding under the
Indenture.

 

Reference
is hereby made to the Indenture, the Loan Agreement, the Bond Guarantee and the
Tax Agreement, copies of which are on file with the Trustee, for the
provisions, among others, with respect to the nature and extent of the rights,
duties and obligations of the Issuer, the Company, the Trustee, the Guarantor,
the Registrar and the Owners of the Bonds. 
The Owner of this Bond, by the acceptance hereof, is deemed to have
agreed and consented to and to be bound by the terms and provisions of the
Indenture, the Loan Agreement, the Bond Guarantee and the Tax Agreement.

 

The
Indenture prescribes the manner in which it may be discharged, including (a) a
provision that the Bonds shall be deemed to be paid if moneys sufficient to pay
the principal of, premium, if any, and interest on the Bonds and all necessary
and proper fees, compensation and expenses of the Trustee and the Registrar,
shall have been deposited with the Trustee, after which the Bonds shall no
longer be secured by or entitled to the benefits of the Indenture, except for
the purposes of registration and exchange of Bonds and of delivery of the Bonds
to the Trustee for purchase, and (b) a provision that, if the Bonds mature
or are called for redemption pursuant to the Indenture, the Bonds shall be
deemed to be paid if Government Obligations, as defined in the Indenture,
maturing as to principal and interest in such amounts and at such times as to
insure the availability of sufficient moneys to pay the principal of, premium,
if any, and interest on the Bonds on and prior to the redemption date or
maturity date thereof, and all necessary and proper fees, compensation and
expenses of the Issuer, the Trustee and the 

 

A-4

 

Registrar,
shall have been deposited with the Trustee, after which the Bonds shall no
longer be secured by or entitled to the benefits of the Indenture, except for
the purposes of registration and exchange of Bonds and of such payment.

 

No
recourse shall be had for the payment of the principal of, premium, if any, or
interest on any of the Bonds or for any claim based thereon or upon any
obligation, covenant or agreement in the Indenture, the Bonds, the Loan
Agreement or any other related document contained, against any past, present or
future member of the Board of Commissioners, officer, elected official agent or
employee of the Issuer, or any officer, director or member of any successor
entity, as such, either directly or through the Issuer or any successor entity,
under any rule of law or equity, statute or constitution or by the
enforcement of any assessment or penalty or otherwise, and all such liability
of any such officer, director or member is hereby expressly waived and released
as a condition of and in consideration for the execution of the Indenture and
the issuance of any of the Bonds.

 

IT
IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things
required to exist, happen and be performed precedent to and in the execution
and delivery of the Indenture and the issuance of this Bond do exist, have
happened and have been performed in due time, form and manner as required by
law, and that the issuance of this Bond and the issue of which it forms a part,
together with all other obligations of the Issuer, does not exceed or violate
any constitutional or statutory limitation of indebtedness.

 

This
Bond shall not be entitled to any security or benefit under the Indenture, or
be valid or become obligatory for any purpose, until this Bond shall have been
authenticated by the execution by the Registrar of the certificate of
authentication inscribed hereon.

 

A-5

 

IN
WITNESS WHEREOF, The COUNTY OF COOK, ILLINOIS has caused this Bond to be
executed in its name and on its behalf by the manual or duly authorized
facsimile signature of its President and its corporate seal to be hereunto
affixed manually or by facsimile and attested to by the manual or duly
authorized facsimile signature of the County Clerk.

 

	
   

  	
   

  	
  THE
  COUNTY OF COOK, ILLINOIS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  County
  Clerk

  	
   

  	
   

  

 

                

 

[FORM OF REGISTRAR’S CERTIFICATE]

 

CERTIFICATE OF AUTHENTICATION

 

This
is to certify that this Bond is one of the Bonds of the series described in the
within-mentioned Indenture.

 

	
   

  	
  CITIBANK N.A., as Registrar

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

 

	
  Date
  of registration and authentication:

  	
   

  	
   

  

 

 

[FORM OF ASSIGNMENT]

 

The
following abbreviations, when used in the inscription on the face of the within
Bond shall be construed as though they were written out in full according to
applicable laws or regulations:

 

	
  TEN
  COM 

  	
  —

  	
  as
  tenants in common

  	
   

  	
  UNIF GIFT MIN ACT—

  
	
  TEN
  ENT

  	
  —

  	
  as
  tenants by the entirety

  	
   

  	
   

  	
  Custodian

  	
   

  
	
  JT
  TEN 

  	
  —

  	
  as
  joint tenants with right of survivorship and not as tenants in common

  	
   

  	
  (Cust)

  	
   

  	
  (Minor)

  
	
   

  	
  under Uniform Gifts to Minors Act of

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (State)

  

 

Additional abbreviations may also be used though not in the list above.

 

For
value received
                                                                                          
hereby sells, assigns and transfers unto

 

	
  INSERT SOCIAL SECURITY OR

  	
   

  
	
  OTHER IDENTIFYING NUMBER
  OF ASSIGNEE

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

(Please Print or Typewrite Name and Address of Assignee)

 

the
within Bond of THE COUNTY OF COOK, ILLINOIS, and hereby irrevocably
constitutes and appoints
                                                      
attorney to register the transfer of said Bond on the books kept for
registration thereof with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNATURE GUARANTEED:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

NOTICE:  Signature(s) must be guaranteed by an “eligible
guarantor institution” that is a member of or a participant in a “signature
guarantee program” (e.g., the
Securities Transfer Agents Medallion Program, the Stock Exchange Medallion
Program or the New York Stock Exchange, Inc. Medallion Signature Program).

 

NOTICE:  The
signature to this assignment must correspond with the name as it appears upon
the face of the within Bond in every particular, without alteration or
enlargement or any change whatever.

 

 

SCHEDULE I

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If
you want to elect to have this Bond purchased by the Company pursuant to
Section 4.09 or Section 4.14 of the Loan Agreement, please check the
appropriate box:

 

o    Section 4.09                                                        o    Section 4.14

 

If
you want to have only part of the Bond purchased by the Company pursuant to
Section 4.09 or Section 4.14 of the Loan Agreement, state the amount
you elect to have purchased:

 

$             

 

	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Your
  Signature:

  	
   

  	
   

  
				

 

(Sign exactly as your name appears on the face of this Note)

 

	
  Tax
  Identification No.:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature
  Guarantee*:

  	
   

  	
   

  

 

*          Participant in a recognized
Signature Guarantee Medallion Program (or other signature guarantor acceptable
to the Trustee).

 

 

EXHIBIT B

 

[Form of Requisition]

 

Citibank
N.A., Agency & Trust

388
Greenwich Street, 14th Floor

New
York, New York  10013

Attention:  Miriam Molina

 

This
Requisition is submitted pursuant to the provisions of Section 5.02 of the
Indenture of Trust dated as of October 1, 2010 (the “Indenture”)
between The County of Cook, Illinois (the “Issuer”)
and Citibank N.A., as trustee (the “Trustee”),
relating to The County of Cook, Illinois Recovery Zone Facility Revenue
Bonds (Navistar International Corporation Project) Series 2010.  Capitalized terms used herein have the same
meanings herein as when used in the Indenture (except where the context
otherwise requires).

 

The
undersigned is an Authorized Company Representative and hereby certifies as
follows:

 

(1)                                  that the name
and address of the person, firm or corporation to whom payment is due or has
been made (which may include the Company) is set forth on Schedule I attached
hereto;

 

(2)                                  that the amount
to be or which has been paid is set forth on Schedule I attached       hereto;

 

(3)                                  that the costs
of an aggregate amount set forth in this Requisition have been or will be made
or incurred or financed and were or will be necessary for the Project and were
made or incurred in accordance with the construction contracts, plans and
specifications and building permits therefor then in effect;

 

(4)                                  that the amount
paid or to be paid, as set forth on Schedule I attached hereto, represents
either a part of the amount that is or will be due and payable for Project
Costs and was or will be made in accordance with the terms of any contracts
applicable thereto and in accordance with usual and customary practice under
existing conditions;

 

(5)                                  that no part of
the Project Costs was included within the costs referred to in any requisition
previously filed with the Trustee under the provisions of the Indenture;

 

(6)                                  that
(i) the withdrawal of moneys from the Project Fund and the use of the
property financed or reimbursed therefrom has not and will not result in a
violation of any representation, term or covenant in the Tax Agreement or the
Project Certificate and (ii) any Favorable Opinion of Bond Counsel
required to be delivered as a result of changes in the use of Project Fund
moneys pursuant to Section 3.04 of the Loan Agreement has been delivered
to the Trustee and the Issuer;

 

B-1

 

(7)                                  that the amount
remaining in the Project Fund, together with (i) moneys then on hand at
the Company or committed to the Company which are or will be available, and are
anticipated by the Company to be applied, to pay the Project Costs and
(ii) expected investment earnings to be deposited into the Project Fund
pursuant to the Indenture, will, after payment of the amount requested on
Schedule I attached hereto, be sufficient to pay the costs of completing the
Project substantially in accordance with the construction contracts, plans and
specifications and building permits therefor, if any, then in effect; and

 

(8)                                  that the
amounts paid or to be paid as set forth in this Requisition are properly
payable under the terms of the Indenture and that all conditions precedent to
payment as prescribed in the Indenture have been satisfied.

 

You
are authorized and directed to make the disbursements pursuant to this
Requisition from the Project Fund as provided in Section 5.02 of the
Indenture.  In making such disbursements,
you are entitled to rely on this Requisition as provided in Section 5.02
of the Indenture.

 

B-2

 

IN
WITNESS WHEREOF, the undersigned Authorized Company Representative has caused this
Requisition to be executed as of the day first above written.

 

	
   

  	
  NAVISTAR
  INTERNATIONAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Company
  Representative

  

 

 

Date:                            ,
20

 

B-3

 

SCHEDULE I

 

	
  PAYEE

  	
   

  	
  PAYEE ADDRESS AND/OR

  WIRE INSTRUCTIONS

  	
   

  	
  AMOUNT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

I-1

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