SECOND AMENDMENT AND FOURTH WAIVER
Dated
as
of October 23, 2007
EXHIBIT
A
SECOND
AMENDMENT AND FOURTH WAIVER
SECOND
AMENDMENT AND FOURTH WAIVER, dated as of October 23, 2007 (this
“Amendment”), to the Amended and Restated Credit Agreement, dated as of
July 1, 2005 (as heretofore amended, supplemented or otherwise modified, the
“Credit Agreement”), among NAVISTAR FINANCIAL CORPORATION, a Delaware
corporation, ARRENDADORA FINANCIERA NAVISTAR, S.A. DE C.V., ORGANIZACIÓN
AUXILIAR DEL CRÉDITO, a Mexican corporation, SERVICIOS FINANCIEROS NAVISTAR,
S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO LIMITADO, a Mexican corporation,
and
NAVISTAR COMERCIAL, S.A. DE C.V., a Mexican corporation (each, a
“Borrower” and collectively, the “Borrowers”), the several lenders
from time to time parties thereto (the “Lenders”), JPMORGAN CHASE BANK,
N.A., as administrative agent for the Lenders (in such capacity, the
“Administrative Agent”), BANK OF AMERICA, N.A., as syndication agent (in
such capacity, the “Syndication Agent”), and THE BANK OF NOVA SCOTIA, as
documentation agent (in such capacity, the “Documentation
Agent”).
WITNESSETH
:
WHEREAS,
the Borrowers, the Administrative Agent, the Syndication Agent, the
Documentation Agent and the Lenders are parties to the Credit
Agreement;
WHEREAS,
the Borrowers have requested that the Administrative Agent and the Required
Lenders agree to amend and waive compliance with certain provisions of the
Credit Agreement; and
WHEREAS,
the Administrative Agent has obtained the consent of the Required Lenders to
execute this Amendment, but only upon the terms and conditions set forth
herein;
NOW,
THEREFORE, for valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, and in consideration of the premises contained herein,
the
parties hereto agree as follows:
1. Defined
Terms. (a) Unless otherwise defined herein, capitalized terms
which are defined in the Credit Agreement are used herein as defined
therein.
(b) For
purposes of this Amendment, “Financial Officer” shall mean the chief
financial officer or the treasurer of the Parent or the treasurer or controller
of the US Borrower, as applicable.
(c) For
purposes of this Amendment, the “2007 NIC Credit Agreement” shall mean
the Credit Agreement, dated as of January 19, 2007, among Navistar International
Corporation, the subsidiary guarantors party thereto, the lenders party thereto,
JPMorgan Chase Bank N.A., Credit Suisse, Banc of America Securities LLC and
Citigroup Capital Markets Inc.
2. Amendment. Effective
on and as of the Effective Date (as defined in Section 6 below), the Credit
Agreement is hereby amended as follows:
(a) Amendment
to Section 1.01 of the Credit Agreement. The definition of
“Applicable Rate” shall be amended by deleting the pricing grid appearing in the
seventh line of such section and inserting in its place the pricing grid
set
forth below:
|
Level
|
Rating
S&P/Xxxxx’x
|
Revolving
Credit Loans
|
Tranche
A Term Loans
|
Facility
Fee Rate
|
||
|
Applicable
Rate for
ABR
Loans
|
Applicable
Rate for
Eurodollar
Loans
|
Applicable
Rate for
ABR
Loans
|
Applicable
Rate for
Eurodollar
Loans
|
|||
|
1
|
BBB-/Baa3
or higher
|
0.00%
|
0.50%
|
0.00%
|
0.75%
|
0.25%
|
|
2
|
BB+/Ba1
|
0.00%
|
0.70%
|
0.00%
|
1.00%
|
0.30%
|
|
3
|
BB/Ba2
|
0.00%
|
0.90%
|
0.25%
|
1.25%
|
0.35%
|
|
4
|
BB-/Ba3
|
0.625%
|
1.625%
|
1.00%
|
2.00%
|
0.375%
|
|
5
|
Less
than BB-/Ba3
|
0.75%
|
1.75%
|
1.25%
|
2.25%
|
0.50%
|
3. Waivers.
The Lenders hereby waive, until December 31, 2007, any Default or Event of
Default under:
(a) Clause
(e) of Article IX of the Credit Agreement that would result solely from the
Parent’s or the Borrowers’ failure to deliver by such date as may be required
under the Credit Agreement, the report on Form 10-K and financial statements
for
each of the fiscal years ended October 31, 2005, October 31, 2006 and October
31, 2007 and other information and documents required under Sections 7.01(a),
(c), (d) and (f) of the Credit Agreement that were to be delivered in connection
with such report or such financial statements;
(b) Clause
(e) of Article IX of the Credit Agreement that would result solely from the
Parent’s or the Borrowers’ failure to deliver by such date as may be required
under the Credit Agreement, the report on Form 10-Q and financial statements
(other than as required by Section 5 hereof) for each of the fiscal quarters
ended January 31, 2006, April 30, 2006, July 31, 2006, January 31, 2007, April
30, 2007 and July 31, 2007 and other information and documents required under
Sections 7.01(b), (d) and (f) of the Credit Agreement to be delivered in
connection with such report or such financial statements; and
(c) (i)
Any
condition or required representation or warranty that could not be satisfied
or
made or deemed made, and (ii) any Default or Event of Default arising, in each
case as a result of the breach of any representation or warranty in Section
5.04
or 5.14(b) of the Credit Agreement as a result of or arising out of any revision
or restatement in connection with the audit conducted for the fiscal year ended
October 31, 2005, October 31, 2006 or October 31, 2007 of any financial
statements of the US Borrower or any of its affiliates for any period ending
on
or before the end of the Waiver Period (as defined below), or in any reports,
financial statements, certificates, or other information containing similar
information with respect to such periods.
4. Additional
Waiver. The Lenders hereby waive each covenant, requirement or
agreement under the Loan Documents for the Parent or the US Borrower to provide,
in the event of any change in generally accepted accounting principles used
in
the preparation of its financial statements for any period ending on or prior
to
December 31, 2007 from those previously used, a reconciliation of such financial
statements to GAAP; provided that, in the event a reconciliation from
past practices to generally accepted accounting principles in the preparation
of
such financial statements is available, the Parent or the US Borrower, as
appropriate, shall also provide such reconciliation.
5. Agreements
by the US Borrower. Notwithstanding anything to the contrary in
the Credit Agreement, to induce the Required Lenders to consent to the execution
by the Administrative Agent of this Amendment, until the expiration of the
waiver provided in Section 3 (the “Waiver Period”):
(
i
) The US Borrower agrees to deliver to the Administrative
Agent, for prompt distribution to each Lender:
(a) As
soon
as available, after the end of each of the fiscal years of the Parent ended
October 31, 2005, October 31, 2006 and October 31, 2007, a copy of the annual
report for such fiscal year for the Parent and its Subsidiaries, including
therein (i) a consolidated balance sheet of the Parent and its Subsidiaries
as
of the end of such fiscal year and (ii) a consolidated statement of income
and a
consolidated statement of cash flows of the Parent and its Subsidiaries for
such
fiscal year, in each case prepared in accordance with Rule 3-10 of Regulation
S-X, consistent with the Parent’s past practice (unless otherwise required to
conform with the results of the audit or changes in GAAP), on the basis of
management’s good faith calculations and fairly presenting in all material
respects the consolidated financial condition of the Parent and its Subsidiaries
as at such date and the consolidated results of operations of the Parent and
its
Subsidiaries for the period ended on such date; provided that, in the
event a reconciliation from past practices to generally accepted accounting
principles in the preparation of such financial statements is available, the
Parent shall also provide such reconciliation.
(b) As
soon
as available, after the end of each of the fiscal quarters of the Parent ended
January 31, 2006, April 30, 2006, July 31, 2006, January 31, 2007, April 30,
2007 and July 31, 2007 (i) a consolidated balance sheet of the Parent and its
Subsidiaries as of the end of such quarter, (ii) a consolidated statement of
income and a consolidated statement of cash flows of the Parent and its
Subsidiaries for the period commencing at the end of the previous fiscal quarter
and ending with the end of such fiscal quarter, and (iii) a consolidated
statement of income and a consolidated statement of cash flows of the Parent
and
its Subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, all prepared in accordance with
Rule 3-10 of Regulation S-X, consistent with the Parent’s past practice (unless
otherwise required to conform with the results of the audit or changes in GAAP),
on the basis of management’s good faith calculations and fairly presenting in
all material respects, subject to year end audit adjustments and the absence
of
footnotes, the consolidated financial condition of the Parent and its
Subsidiaries as at such dates and the consolidated results of operations of
the
Parent and its Subsidiaries for the periods ended on such dates, setting forth
in each case in comparative form the corresponding figures for the corresponding
date or period of the preceding fiscal year, all in reasonable detail and duly
certified (subject to normal year-end audit adjustments and the absence of
footnotes) by a Financial Officer of the Parent, consistent with the Parent’s
past practice; provided that, in the event a reconciliation from past
practices to generally accepted accounting principles in the preparation of
such
financial statements is available, the Parent shall also provide such
reconciliation.
(c) As
soon
as available, and in any event within 60 days after the end of each fiscal
quarter (other than the last fiscal quarter of a fiscal year) or 90 days after
the end of the last fiscal quarter of a fiscal year of the US Borrower, ended
on
or after October 31, 2007, management financial reports of the US Borrower
setting forth (i) a preliminary consolidated statement of financial condition
and consolidated statement of income in a management format, (ii) serviced
portfolio information, (iii) funding availability under its contractual
arrangements with Truck Retail Instalment Paper Corp. and under the Credit
Agreement and (iv) calculations demonstrating compliance with Section 8.01
of
the Credit Agreement, in each case prepared in a manner materially consistent
with the US Borrower’s past practices (unless otherwise required to conform with
the results of the audit or changes in GAAP) and, to the extent relevant, on
the
basis of management’s good faith efforts, in such form and detail reasonably
satisfactory to the Administrative Agent; provided, however, that such
reporting shall not be required so long as the US Borrower has filed all reports
with the Securities and Exchange Commission required pursuant to Section 13
of
the Exchange Act.
(d) As
soon
as available, and in any event within 30 days after the end of each month,
commencing with the month of October 2007, monthly management financial reports
of the Parent in respect of the sales and income by segment and cash balances,
Indebtedness, capital expenditures and depreciation and amortization of the
Parent and its consolidated Subsidiaries prepared in a manner consistent with
the Parent’s past practices (unless otherwise required to conform with the
results of the audit or changes in GAAP) and on the basis of management’s good
faith calculations, in such form and detail reasonably satisfactory to the
Administrative Agent (including, without limitation, any financial information
prepared in accordance with generally accepted accounting principles to
determine compliance with the covenants under the 2007 NIC Credit Agreement);
provided, however, that such reporting shall not be required so long as
the US Borrower has filed all reports with the Securities and Exchange
Commission required pursuant to Section 13 of the Exchange Act.
(e) As
soon
as available, and in any event within 60 days after the end of each fiscal
quarter (other than the last fiscal quarter of a fiscal year) or 90 days after
the end of the last fiscal quarter of a fiscal year of the Parent, commencing
with the fiscal quarter ended October 31, 2007, quarterly condensed
manufacturing balance sheet and income statement of the Parent and its
consolidated subsidiaries, with its finance subsidiaries included on an equity
basis, prepared in a manner consistent with the Parent’s past practices (unless
otherwise required to conform with the results of the audit or changes in GAAP)
and on the basis of management’s good faith calculations.
The
Lenders acknowledge that the financial information delivered pursuant to
subsections (c), (d) and (e) above will be preliminary and unaudited and will
be
prepared by management based on current data in a manner consistent with past
practices (unless otherwise required to conform with the results of the audit
or
changes in the GAAP), will not have been reviewed by the Parent’s or the US
Borrower’s independent accountants, and when the accounting review in connection
with the audit of the fiscal 2005, 2006 and 2007 financial statements is
complete, the information provided may differ from the audited financial
statements.
6. Conditions
to Effectiveness of this Amendment. The amendment and waivers set
forth herein shall become effective on the date upon receipt by the
Administrative Agent of (the “Effective Date”):
(a) counterparts
of this Amendment duly executed by each of the Borrowers and the Administrative
Agent; and
(b) for
the account of each Lender that executes and delivers a Lender Consent Letter
with respect to this Amendment on or before 12 p.m. (noon), Eastern time, on
October [23], 2007, an amendment fee equal to 0.20% of the sum of the
outstanding principal amount of such Lender’s Tranche A Term Loans and its US
Revolving Commitment.
7. Representations
and Warranties. On and as of the date hereof and after giving
effect to this Amendment, each Borrower hereby confirms, reaffirms and restates
the representations and warranties set forth in Article V of the Credit
Agreement mutatismutandis, except to the extent that such
representations and warranties expressly relate to a specific earlier date,
in
which case each Borrower hereby confirms, reaffirms and restates such
representations and warranties as of such earlier date, and represents and
warrants that, except to the extent waived hereby, no Default or Event of
Default has occurred and is continuing.
8. Continuing
Effect; No Other Waiver. Except as expressly amended, waived or
provided for above, and subject to any existing amendment and waiver, all of
the
terms and provisions of the Credit Agreement are and shall remain in full force
and effect and each Borrower shall continue to be bound by all of such terms
and
provisions. The amendment and waivers provided for herein are limited
to the specific sections of the Credit Agreement specified herein and shall
not
constitute an amendment or waiver of, or an indication of the Administrative
Agent’s or the Lenders’ willingness to amend or waive, any other provisions of
the Credit Agreement or the same section for any other date or
purpose. For the avoidance of doubt, the amendments set forth in the
First Amendment, dated as of March 28, 2007, to the Credit Agreement remain
in
effect in accordance with the terms thereof. Further, for the
avoidance of doubt, the change to the definition of Applicable Rate effected
by
the Third Waiver and Consent, dated as of November 10, 2006, is hereby
rescinded.
9. Expenses. The
Borrowers agree to pay and reimburse the Administrative Agent for all its
reasonable out-of-pocket costs and expenses incurred in connection with the
preparation and delivery of this Amendment, including, without limitation,
the
reasonable fees and disbursements of counsel to the Administrative
Agent.
10. Counterparts. This
Amendment may be executed by one or more of the parties to this Amendment on
any
number of separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Amendment signed by the
parties hereto shall be delivered to the Borrowers and the Administrative
Agent. The execution and delivery of this Amendment by the
Administrative Agent with the consent of any Lender shall be binding upon such
Lender’s successors and assigns (including transferees of its commitments and
Loans in whole or in part prior to effectiveness hereof) and binding in respect
of all of its commitments and Loans, including any acquired subsequent to its
execution and delivery hereof and prior to the effectiveness
hereof.
11. GOVERNING
LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
* * * * *
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
and delivered by their respective duly authorized officers as of the date first
above written.
NAVISTAR
FINANCIAL CORPORATION
By:
/s/ Xxxx X. Xxxxxxxx Xx.
Name:
Xxxx X. Xxxxxxxx Xx.
Title: V.P., CFO and Treasurer
ARRENDADORA
FINANCIERA NAVISTAR, S.A.
DE
C.V., ORGANIZACIÓN AUXILIAR DEL CRÉDITO
By:
/s/
Xxxx
X.
Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Attorney in Fact
SERVICIOS
FINANCIEROS
NAVISTAR, S.A.
DE
C.V., SOCIEDAD
FINANCIERA DE OBJETO LIMITADO
By:
/s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Attorney in Fact
NAVISTAR
COMERCIAL,
S.A. DE C.V.
By: /s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Attorney in
Fact
JPMORGAN
CHASE BANK, N.A. as Administrative Agent
By: /s/
Xxxxxxx X. Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Managing Director
[Signature
Page to
Waiver]
