Form 8-K NAVISTAR INTERNATIONAL For: May 27
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 27, 2016
NAVISTAR INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 1-9618 | 36-3359573 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File No.) |
(I.R.S. Employer Identification No.) | ||
| 2701 Navistar Drive Lisle, Illinois |
60532 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (331) 332-5000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On May 27, 2016, Navistar Financial Securities Corporation, as the seller (“NFSC”), Navistar Financial Corporation, as the servicer (“NFC”), and Credit Suisse AG, New York Branch, as a managing agent, Credit Suisse AG, Cayman Islands Branch, as a committed purchaser, Alpine Securitization Corp., as a conduit purchaser, Bank of America, National Association, as administrative agent, as a managing agent and as a committed purchaser, New York Life Insurance Company, as a managing agent and a committed purchaser, and New York Life Insurance and Annuity Corporation, as a managing agent and a committed purchaser (collectively, the “Purchaser Parties”), entered into Amendment No. 7 to Note Purchase Agreement (the “NPA Amendment”), which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein. The NPA Amendment amends the Note Purchase Agreement, dated as of August 29, 2012, among NFSC, NFC and the Purchaser Parties (filed as Exhibit 10.2 to the registrant’s Form 8-K dated and filed on August 30, 2012. Commission File No. 001-09618), to extend the Scheduled Purchase Expiration Date to May 27, 2017.
On May 27, 2016, NFC entered into the Third Amended and Restated Credit Agreement (the “Third Amended and Restated Credit Agreement”), which is attached as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated by reference herein, by and among NFC and Navistar Financial, S.A. de C.V., Sociedad Financiera De Objeto Multiple, Entidad Regulada, a Mexican corporation, as borrowers, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), and Bank of America, N.A., as syndication agent. The Third Amended and Restated Credit Agreement has two primary components: a term loan of $229.5 million, which includes an extended term loan tranche of $92.0 million, and a revolving bank loan of $400.0 million, which includes an extended revolving bank loan tranche of $274.7 million. Utilization of the facility under the Third Amended and Restated Credit Agreement was $557 million at April 30, 2016. The revolving bank loan has a Mexican sub-revolver providing for up to $100.0 million (which includes an extended Mexican sub-revolver tranche providing for up to $80.5 million) which may be used by a Mexican finance subsidiary of Navistar International Corporation, a Delaware corporation (“NIC”). The obligations under the Third Amended and Restated Credit Agreement are secured by substantially all assets of NFC. The maturity date of the non-extended loans is the original maturity date of December 2, 2016, and the maturity date of the extended loans is June 1, 2018. In addition, the Third Amended and Restated Credit Agreement provides for the following, among other amendments: (i) following the original maturity date of the non-extended loans, the increase of the interest rate margins on the extended loans by an amount ranging from 0.50% to 1.75%, depending upon the ratings of NIC and NFC, (ii) the modification of the provisions allowing NFC to increase the size of the facility, subject to obtaining commitments from existing or new lenders to provide additional or increased revolving commitments and/or additional term loans, to permit a maximum facility size of $700 million after giving effect to any such increase, and without taking into account the non-extended loans and commitments, (iii) the modification of certain of the provisions regarding investments and restricted payments, (iv) the reduction of the maximum permitted leverage ratio to 3.75:1, and (v) the insertion of a collateral coverage ratio covenant. In connection with the Third Amended and Restated Credit Agreement, NFC paid certain fees, the total of which NFC does not believe are material to its financial position or results of operations. The Third Amended and Restated Credit Agreement amends and restates and supersedes and replaces in its entirety that certain Second Amended and Restated Credit Agreement (“2011 Credit Agreement”), dated as December 2, 2011, by and among NFC and Navistar Financial, S.A. de C.V., Sociedad Financiera De Objeto Multiple, Entidad Regulada, a Mexican corporation (formerly known as Navistar Financial, S.A. de C.V., Sociedad Financiera De Objeto Multiple, Entidad No Regulada), as borrowers, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A., as syndication agent, and Citibank, N.A., as documentation agent.
On May 27, 2016, NIC entered into the Fourth Amended and Restated Parent Guarantee (the “Parent Guarantee”), which is attached as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated by reference herein, in favor of the Administrative Agent for the lenders party to the Third Amended and Restated Credit Agreement. Pursuant to the Parent Guarantee, NIC guarantees the obligations of its Mexican finance subsidiary under the Third Amended and Restated Credit Agreement.
The Parent Guarantee supersedes and replaces in its entirety that certain Third Amended and Restated Parent Guarantee, dated as of December 2, 2011, by NIC in favor of the administrative agent for the lenders party to the 2011 Credit Agreement.
On May 27, 2016, NIC entered into the Fourth Amended and Restated Parents’ Side Agreement (“Parents’ Side Agreement”), which is attached as Exhibit 10.4 to this Current Report on Form 8-K and is incorporated by reference herein, by and between NIC and Navistar, Inc., a Delaware corporation, for the benefit of the lenders from time to time party to the Third Amended and Restated Credit Agreement. The Parents’ Side Agreement requires that NIC and Navistar, Inc. collectively continue to own 100% of the voting stock of NFC and that Navistar, Inc. not permit NFC to have a fixed charge coverage ratio of less than 1.25:1. The Parents’ Side Agreement supersedes and replaces in its entirety that certain Third Amended and Restated Parents’ Side Agreement, dated as of December 2, 2011, by NIC and Navistar, Inc. for the benefit of the lenders party to the 2011 Credit Agreement.
On May 27, 2016, NFC entered into the Second Amended and Restated Security, Pledge and Trust Agreement (the “Security Agreement”), which is attached as Exhibit 10.5 to this Current Report on Form 8-K and is incorporated by reference herein, by and between NFC and Deutsche Bank Trust Company Americas, a corporation duly organized and existing under the laws of the State of New York, acting individually and as trustee for the holders of the secured obligations under the Third Amended and Restated Credit Agreement (the “Trustee”). The Security Agreement supersedes and replaces in its entirety that certain Amended and Restated Security, Pledge and Trust Agreement, dated as of July 1, 2005, by and between NFC and the Trustee, as amended.
ITEM 8.01. OTHER EVENTS
On April 29, 2016, NFC and Truck Retail Accounts Corp., our consolidated Special Purpose Entity, entered into a normal course extension of a revolving retail accounts facility (the “TRAC Facility”) to April 27, 2017. There were no material changes in either operational terms or pricing. The TRAC Facility funds up to $100 million of retail accounts receivable from large direct-sale fleet customers.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
The following documents are filed herewith:
| Exhibit No. |
Description | |
| 10.1 | Amendment No. 7 to the Note Purchase Agreement, dated as of May 27, 2016, among Navistar Financial Securities Corporation, as the seller, Navistar Financial Corporation, as the servicer, Credit Suisse AG, New York Branch, as a managing agent, Credit Suisse AG, Cayman Islands Branch, as a committed purchaser, Alpine Securitization Corp., as a conduit purchaser, New York Life Insurance Company, as a managing agent and a committed purchaser, New York Life Insurance and Annuity Corporation, as a managing agent and a committed purchaser, and Bank of America, National Association, as administrative agent, as a managing agent and as a committed purchaser. | |
| 10.2 | Third Amended and Restated Credit Agreement, dated as of May 27, 2016, by and among Navistar Financial Corporation and Navistar Financial, S.A. de C.V., Sociedad Financiera De Objeto Multiple, Entidad Regulada, a Mexican corporation, as borrowers, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), and Bank of America, N.A., as syndication agent. | |
| Exhibit No. |
Description | |
| 10.3 | Fourth Amended and Restated Parent Guarantee, dated as of May 27, 2016, by Navistar International Corporation in favor of the Administrative Agent for the lenders party to the Third Amended and Restated Credit Agreement. | |
| 10.4 | Fourth Amended and Restated Parents’ Side Agreement, dated as of May 27, 2016, by Navistar International Corporation and Navistar, Inc. for the benefit of the lenders from time to time party to the Third Amended and Restated Credit Agreement. | |
| 10.5 | Second Amended and Restated Security, Pledge and Trust Agreement, dated as of May 27, 2016, by and between Navistar Financial Corporation and Deutsche Bank Trust Company Americas, individually and as trustee for the holders of the secured obligations under the Third Amended and Restated Credit Agreement. | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| NAVISTAR INTERNATIONAL CORPORATION | ||||
| (Registrant) | ||||
| By: | /s/ Walter G. Borst | |||
| Name: | Walter G. Borst | |||
| Title: | Executive Vice President and Chief Financial Officer | |||
Dated: June 1, 2016
EXHIBIT INDEX
| Exhibit No. |
Description | |
| 10.1 | Amendment No. 7 to the Note Purchase Agreement, dated as of May 27, 2016, among Navistar Financial Securities Corporation, as the seller, Navistar Financial Corporation, as the servicer, Credit Suisse AG, New York Branch, as a managing agent, Credit Suisse AG, Cayman Islands Branch, as a committed purchaser, Alpine Securitization Corp., as a conduit purchaser, New York Life Insurance Company, as a managing agent and a committed purchaser, New York Life Insurance and Annuity Corporation, as a managing agent and a committed purchaser, and Bank of America, National Association, as administrative agent, as a managing agent and as a committed purchaser. | |
| 10.2 | Third Amended and Restated Credit Agreement, dated as of May 27, 2016, by and among Navistar Financial Corporation and Navistar Financial, S.A. de C.V., Sociedad Financiera De Objeto Multiple, Entidad Regulada, a Mexican corporation, as borrowers, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), and Bank of America, N.A., as syndication agent. | |
| 10.3 | Fourth Amended and Restated Parent Guarantee, dated as of May 27, 2016, by Navistar International Corporation in favor of the Administrative Agent for the lenders party to the Third Amended and Restated Credit Agreement. | |
| 10.4 | Fourth Amended and Restated Parents’ Side Agreement, dated as of May 27, 2016, by Navistar International Corporation and Navistar, Inc. for the benefit of the lenders from time to time party to the Third Amended and Restated Credit Agreement. | |
| 10.5 | Second Amended and Restated Security, Pledge and Trust Agreement, dated as of May 27, 2016, by and between Navistar Financial Corporation and Deutsche Bank Trust Company Americas, individually and as trustee for the holders of the secured obligations under the Third Amended and Restated Credit Agreement. | |
Exhibit 10.1
EXECUTION COPY
AMENDMENT NO. 7
TO
NOTE PURCHASE AGREEMENT
THIS AMENDMENT NO. 7 TO NOTE PURCHASE AGREEMENT (this “Amendment”) dated as of May 27, 2016, is entered into among Navistar Financial Securities Corporation, as the Seller (the “Seller”), Navistar Financial Corporation (“NFC”), as the Servicer (in such capacity, the “Servicer”), New York Life Insurance Company (“NY Life”), as a Managing Agent and as a Committed Purchaser, New York Life Insurance and Annuity Corporation (“NYLIAC”), as a Managing Agent and as a Committed Purchaser, Credit Suisse AG, New York Branch (“CS NYB”), as a Managing Agent, Credit Suisse AG, Cayman Islands Branch (“CS CIB”), as a Committed Purchaser, Alpine Securitization Corp. (“Alpine”), as a Conduit Purchaser, and Bank of America, National Association (“Bank of America”; together with NY Life, NYLIAC, CS NYB, CS CIB and Alpine, the “Purchaser Parties”), as Administrative Agent (in such capacity, the “Administrative Agent”), as a Managing Agent and as a Committed Purchaser. Capitalized terms used herein without definition shall have the meanings set forth or incorporated by reference in the Agreement, the Indenture or the Indenture Supplement, as applicable.
R E C I T A L S
A. The parties hereto are parties to that certain Note Purchase Agreement dated as of August 29, 2012 (as amended by Amendment No. 1 to Note Purchase Agreement dated as of March 18, 2013, Amendment No. 2 to Note Purchase Agreement dated as of September 13, 2013, Amendment No. 3 to Note Purchase Agreement dated as of March 12, 2014, Amendment No. 4 to Note Purchase Agreement dated as of January 26, 2015, Amendment No. 5 to Note Purchase Agreement dated as of October 30, 2015 and Amendment No. 6 to Note Purchase Agreement dated as of February 24, 2016, the “Agreement”).
B. Pursuant to Section 11.01 of the Agreement, the parties to the Agreement desire to extend the Scheduled Purchase Expiration Date by amending the Agreement as hereafter set forth.
C. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Amendment to Agreement. The definition of “Scheduled Purchase Expiration Date” in Section 1.01 of the Agreement is hereby amended to replace the date “October 28, 2016” set forth therein with the date “May 27, 2017”.
2. Representations and Warranties. The Seller hereby represents and warrants to each of the Purchaser Parties that, after giving effect to this Amendment, no potential Early Redemption Event or Early Redemption Event has occurred and is now continuing, and NFC hereby represents and warrants to each of the Purchaser Parties that, after giving effect to this Amendment, no potential Early Redemption Event, Early Redemption Event or Servicer Termination Event has occurred and is now continuing.
3. Effect of Amendment. All provisions of the Agreement, as amended by this Amendment, remain in full force and effect. After this Amendment becomes effective, all references in the Agreement to “this Agreement”, “hereof”, “herein” or words of similar effect referring to the Agreement in the Agreement or in any other document relating to the Seller’s securitization program shall be deemed to be references to the Agreement as amended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as set forth herein.
4. Conditions Precedent. The effectiveness of this Amendment is subject to (i) receipt (whether by e-mail, facsimile or otherwise) by the Administrative Agent of counterparts of this Amendment executed by each of the other parties hereto and (ii) receipt by each Bank of America, NY Life, NYLIAC and CS CIB of the applicable amendment fee pursuant to and in accordance with the Fee Letter, dated as of the date hereof.
5. Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, and each counterpart shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
6. Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to any otherwise applicable principles of conflicts of law.
7. Section Headings. The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Agreement or any provision hereof or thereof.
[signatures commence on the following page]
2
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.
| NAVISTAR FINANCIAL SECURITIES CORPORATION, | ||
| as the Seller | ||
| By: | /s/ Anthony Aiello | |
| Name: | Anthony Aiello | |
| Title: | Vice President and Treasurer | |
| NAVISTAR FINANCIAL CORPORATION, as the Servicer | ||
| By: | /s/ Anthony Aiello | |
| Name: | Anthony Aiello | |
| Title: | Vice President and Treasurer | |
[signatures continue on the following page]
S-1
NAVMOT II Series 2012-VFN
Amendment No. 7 to Note Purchase Agreement
| BANK OF AMERICA, NATIONAL ASSOCIATION, | ||
| as the Administrative Agent | ||
| By: | /s/ Adarsh Dhand | |
| Name: | Adarsh Dhand | |
| Title: | Vice President | |
| BANK OF AMERICA, NATIONAL ASSOCIATION, as the Managing Agent for the Bank of America Purchaser Group | ||
| By: | /s/ Adarsh Dhand | |
| Name: | Adarsh Dhand | |
| Title: | Vice President | |
| BANK OF AMERICA, NATIONAL ASSOCIATION, as the Committed Purchaser for the Bank of America Purchaser Group | ||
| By: | /s/ Adarsh Dhand | |
| Name: | Adarsh Dhand | |
| Title: | Vice President | |
[signatures continue on the following page]
S-2
NAVMOT II Series 2012-VFN
Amendment No. 7 to Note Purchase Agreement
| NEW YORK LIFE INSURANCE COMPANY, | ||||
| as the Managing Agent for the NY Life Purchaser Group | ||||
| By: | /s/ Scott R. Seewald | |||
| Name: | Scott R. Seewald | |||
| Title: | Vice President | |||
| NEW YORK LIFE INSURANCE COMPANY, as the Committed Purchaser for the NY Life Purchaser Group | ||||
| By: | /s/ Scott R. Seewald | |||
| Name: | Scott R. Seewald | |||
| Title: | Vice President | |||
[signatures continue on the following page]
S-3
NAVMOT II Series 2012-VFN
Amendment No. 7 to Note Purchase Agreement
| NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION, | ||
| as the Managing Agent for the NYLIAC Purchaser Group | ||
| By: | NYL INVESTORS LLC, its Investment Manager | |
| By: | /s/ Scott R. Seewald | |
| Name: | Scott R. Seewald | |
| Title: | Managing Director | |
| NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION, | ||
| as the Committed Purchaser for the NYLIAC Purchaser Group | ||
| By: | NYL INVESTORS LLC, its Investment Manager | |
| By: | /s/ Scott R. Seewald | |
| Name: | Scott R. Seewald | |
| Title: | Managing Director | |
[signatures continue on the following page]
S-4
NAVMOT II Series 2012-VFN
Amendment No. 7 to Note Purchase Agreement
| CREDIT SUISSE AG, | CREDIT SUISSE AG, | |||||||
| NEW YORK BRANCH, | CAYMAN ISLANDS BRANCH, | |||||||
| as the Managing Agent | as the Committed Purchaser | |||||||
| for the CS Purchaser Group | for the CS Purchaser Group | |||||||
| By: | /s/ Jason Muncy |
By: | /s/ Jason Muncy | |||||
| Name: | Jason Muncy | Name: | Jason Muncy | |||||
| Title: | Vice President | Title: | Authorized Signatory | |||||
| By: | /s/ Erin McCutcheon |
By: | /s/ Erin McCutcheon | |||||
| Name: | Erin McCutcheon | Name: | Erin McCutcheon | |||||
| Title: | President | Title: | Authorized Signatory | |||||
| ALPINE SECURITIZATION CORP., as a Conduit Purchaser for the CS Purchaser Group |
||||||||
| By: | Credit Suisse AG, New York Branch, | |||||||
| as its administrative agent | ||||||||
| By: | /s/ Jason Muncy |
|||||||
| Name: | Jason Muncy | |||||||
| Title: | Vice President | |||||||
| By: | /s/ Erin McCutcheon |
|||||||
| Name: | Erin McCutcheon | |||||||
| Title: | Vice President | |||||||
S-5
NAVMOT II Series 2012-VFN
Amendment No. 7 to Note Purchase Agreement
Exhibit 10.2
EXECUTION VERSION
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of
May 27, 2016
among
NAVISTAR FINANCIAL CORPORATION,
and
NAVISTAR FINANCIAL, S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO
MULTIPLE, ENTIDAD REGULADA
as Borrowers
The Lenders Party Hereto,
JPMORGAN CHASE BANK, N.A.
as Administrative Agent
and
BANK OF AMERICA, N.A.,
as Syndication Agent
JPMORGAN CHASE BANK, N.A, and MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
as Joint Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
| Page | ||||||
| ARTICLE I DEFINITIONS |
1 | |||||
| SECTION 1.01. |
Defined Terms |
1 | ||||
| SECTION 1.02. |
Classification of Loans and Borrowings |
32 | ||||
| SECTION 1.03. |
Terms Generally |
32 | ||||
| SECTION 1.04. |
Accounting Terms; GAAP |
33 | ||||
| SECTION 1.05. |
Interpretation |
33 | ||||
| ARTICLE II THE US CREDIT FACILITIES |
33 | |||||
| SECTION 2.01. |
[Reserved] |
33 | ||||
| SECTION 2.02. |
[Reserved] |
33 | ||||
| SECTION 2.03. |
Repayment of Term Loans |
33 | ||||
| SECTION 2.04. |
US Revolving Commitments |
34 | ||||
| SECTION 2.05. |
US Revolving Loans and Borrowings |
34 | ||||
| SECTION 2.06. |
Procedure for US Revolving Borrowings |
35 | ||||
| SECTION 2.07. |
Certain Borrowings of US Revolving Loans and Refunding of Loans |
36 | ||||
| SECTION 2.08. |
Swingline Loans |
36 | ||||
| SECTION 2.09. |
Letters of Credit |
38 | ||||
| ARTICLE III THE MEXICAN CREDIT FACILITY |
43 | |||||
| SECTION 3.01. |
Commitments |
43 | ||||
| SECTION 3.02. |
Loans and Borrowings |
43 | ||||
| SECTION 3.03. |
Requests for Mexican Revolving Borrowings |
44 | ||||
| ARTICLE IV TERMS APPLICABLE TO US CREDIT FACILITIES AND MEXICAN CREDIT FACILITY |
45 | |||||
| SECTION 4.01. |
Funding of Borrowings |
45 | ||||
| SECTION 4.02. |
Interest Elections |
45 | ||||
| SECTION 4.03. |
Termination and Reduction of Revolving Commitments |
47 | ||||
| SECTION 4.04. |
Repayment of Loans; Evidence of Debt |
47 | ||||
| SECTION 4.05. |
Optional Prepayments of Loans |
48 | ||||
| SECTION 4.06. |
Mandatory Prepayments and Commitment Reductions |
49 | ||||
| SECTION 4.07. |
Fees |
50 | ||||
| SECTION 4.08. |
Interest |
51 | ||||
| SECTION 4.09. |
Alternate Rate of Interest |
51 | ||||
| SECTION 4.10. |
Increased Costs |
52 | ||||
| SECTION 4.11. |
Break Funding Payments |
53 | ||||
| SECTION 4.12. |
Taxes |
53 | ||||
| SECTION 4.13. |
Payments Generally; Pro Rata Treatment; Sharing of Set-offs |
57 | ||||
| SECTION 4.14. |
Mitigation Obligations; Replacement of Lenders |
59 | ||||
i
| SECTION 4.15. |
Defaulting Lenders |
60 | ||||
| SECTION 4.16. |
Incremental Loans and Commitments |
62 | ||||
| SECTION 4.17. |
Extension of Loans and Commitments |
64 | ||||
| SECTION 4.18. |
Sanctions Illegality |
66 | ||||
| ARTICLE V REPRESENTATIONS AND WARRANTIES |
67 | |||||
| SECTION 5.01. |
Organization; Powers |
67 | ||||
| SECTION 5.02. |
Authorization; Enforceability |
67 | ||||
| SECTION 5.03. |
Governmental Approvals; No Conflicts |
67 | ||||
| SECTION 5.04. |
Financial Condition; No Material Adverse Change |
68 | ||||
| SECTION 5.05. |
Litigation |
68 | ||||
| SECTION 5.06. |
Compliance with Laws and Agreements |
69 | ||||
| SECTION 5.07. |
Investment Company Status |
69 | ||||
| SECTION 5.08. |
Taxes |
69 | ||||
| SECTION 5.09. |
ERISA |
69 | ||||
| SECTION 5.10. |
Subsidiaries |
69 | ||||
| SECTION 5.11. |
Ownership of Property; Liens |
69 | ||||
| SECTION 5.12. |
Use of Proceeds |
69 | ||||
| SECTION 5.13. |
Foreign Exchange Regulations; Immunity; Enforcement |
69 | ||||
| SECTION 5.14. |
Disclosure |
70 | ||||
| SECTION 5.15. |
Title; No Other Liens |
70 | ||||
| SECTION 5.16. |
Perfected First Priority Lien |
70 | ||||
| SECTION 5.17. |
Regulation U |
70 | ||||
| SECTION 5.18. |
Solvency |
70 | ||||
| SECTION 5.19. |
EEA Financial Institutions |
71 | ||||
| SECTION 5.20. |
Anti-Corruption Laws and Sanctions |
71 | ||||
| ARTICLE VI CONDITIONS |
71 | |||||
| SECTION 6.01. |
Effective Date |
71 | ||||
| SECTION 6.02. |
Each Borrowing Event |
74 | ||||
| ARTICLE VII AFFIRMATIVE COVENANTS |
75 | |||||
| SECTION 7.01. |
Financial Statements and Other Information |
75 | ||||
| SECTION 7.02. |
Notices of Material Events |
77 | ||||
| SECTION 7.03. |
Existence; Conduct of Business |
78 | ||||
| SECTION 7.04. |
Payment of Obligations |
78 | ||||
| SECTION 7.05. |
Maintenance of Properties; Insurance |
78 | ||||
| SECTION 7.06. |
Books and Records; Inspection Rights |
78 | ||||
| SECTION 7.07. |
Compliance with Laws and Material Contractual Obligations |
78 | ||||
| SECTION 7.08. |
Intercompany Agreements |
79 | ||||
| SECTION 7.09. |
Federal Regulations |
80 | ||||
| SECTION 7.10. |
Quarterly Conference Calls |
80 | ||||
| SECTION 7.11. |
Additional Collateral, etc |
81 | ||||
ii
| ARTICLE VIII NEGATIVE COVENANTS |
81 | |||||
| SECTION 8.01. |
Financial Covenants |
81 | ||||
| SECTION 8.02. |
Indebtedness |
81 | ||||
| SECTION 8.03. |
Liens |
83 | ||||
| SECTION 8.04. |
Fundamental Changes |
83 | ||||
| SECTION 8.05. |
Investments, Loans, Advances, Guarantees and Acquisitions; Hedging Agreements |
84 | ||||
| SECTION 8.06. |
Restricted Payments |
85 | ||||
| SECTION 8.07. |
Transactions with Affiliates |
86 | ||||
| SECTION 8.08. |
Negative Pledge |
86 | ||||
| SECTION 8.09. |
Prepayments of Subordinated Debt |
86 | ||||
| SECTION 8.10. |
Serviced Wholesale Portfolio Quality |
86 | ||||
| SECTION 8.11. |
Sales and Leasebacks |
87 | ||||
| SECTION 8.12. |
Changes in Fiscal Periods |
87 | ||||
| SECTION 8.13. |
Use of Proceeds |
87 | ||||
| SECTION 8.14. |
Sanctions |
87 | ||||
| ARTICLE IX EVENTS OF DEFAULT |
88 | |||||
| ARTICLE X THE ADMINISTRATIVE AGENT |
91 | |||||
| ARTICLE XI GUARANTEE |
95 | |||||
| SECTION 11.01. |
Guarantee |
95 | ||||
| SECTION 11.02. |
Waiver of Subrogation |
95 | ||||
| SECTION 11.03. |
Modification of Mexican Obligations |
95 | ||||
| SECTION 11.04. |
Waiver by the US Borrower |
96 | ||||
| SECTION 11.05. |
Reinstatement |
97 | ||||
| SECTION 11.06. |
Keepwell |
97 | ||||
| ARTICLE XII MISCELLANEOUS |
97 | |||||
| SECTION 12.01. |
Notices |
97 | ||||
| SECTION 12.02. |
Waivers; Amendments |
98 | ||||
| SECTION 12.03. |
Expenses; Indemnity; Damage Waiver |
99 | ||||
| SECTION 12.04. |
Successors and Assigns |
101 | ||||
| SECTION 12.05. |
Survival |
104 | ||||
| SECTION 12.06. |
Counterparts; Integration; Amendment and Restatement |
105 | ||||
| SECTION 12.07. |
Severability |
105 | ||||
| SECTION 12.08. |
Right of Setoff |
105 | ||||
| SECTION 12.09. |
GOVERNING LAW |
106 | ||||
| SECTION 12.10. |
Submission To Jurisdiction; Waivers |
106 | ||||
| SECTION 12.11. |
Acknowledgments |
107 | ||||
| SECTION 12.12. |
WAIVERS OF JURY TRIAL |
107 | ||||
| SECTION 12.13. |
Headings |
107 | ||||
| SECTION 12.14. |
Confidentiality |
107 | ||||
iii
| SECTION 12.15. |
Interest Rate Limitation |
108 | ||||
| SECTION 12.16. |
Waiver of Immunities |
108 | ||||
| SECTION 12.17. |
Judgment Currency |
108 | ||||
| SECTION 12.18. |
Loan Equalization; Loan Conversion |
108 | ||||
| SECTION 12.19. |
Release of Liens |
109 | ||||
| SECTION 12.20. |
Intercompany Security Agreements |
110 | ||||
| SECTION 12.21. |
Blocked Account |
110 | ||||
| SECTION 12.22. |
USA PATRIOT Act |
110 | ||||
| SECTION 12.23. |
Consents under the Security Agreement |
110 | ||||
| SECTION 12.24. |
Acknowledgement and Consent to Bail-In of EEA Financial Institutions. |
110 |
iv
| SCHEDULES: |
||||
| Schedule 2.01 |
– | Commitments | ||
| Schedule 5.05 |
– | Disclosed Matters | ||
| Schedule 5.10 |
– | Subsidiaries | ||
| Schedule 8.02 |
– | Existing Indebtedness | ||
| Schedule 8.03 |
– | Existing Liens | ||
| EXHIBITS: |
||||
| Exhibit A |
– | Form of Assignment and Acceptance | ||
| Exhibit B-1 |
– | Form of Opinion of Borrower’s New York Counsel | ||
| Exhibit B-2 |
– | Form of Opinion of Borrower’s Internal Counsel | ||
| Exhibit B-3 |
– | Form of Opinion of Borrowers’ Mexican Counsel | ||
| Exhibit C |
– | Form of Parents’ Side Agreement | ||
| Exhibit D |
– | Form of Report of Statistical Information | ||
| Exhibit E |
– | Form of Borrowing Request | ||
| Exhibit F |
– | Form of Compliance Certificate | ||
| Exhibit G |
– | Form of Parent Guarantee | ||
| Exhibit H |
– | Form of Second Amended and Restated Security Agreement | ||
| Exhibit I |
– | [Reserved] | ||
| Exhibit J |
– | Form of Blocked Account Agreement | ||
| Exhibit K |
– | Form of Blocked Account Certificate | ||
| Exhibit L |
– | Form of Collateral Coverage Ratio Certificate | ||
| Exhibit M |
– | Form of U.S. Tax Compliance Certificate | ||
v
THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”), dated as of May 27, 2016, among NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (the “US Borrower”) and NAVISTAR FINANCIAL, S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, a Mexican corporation (the “Mexican Borrower”; together with the US Borrower, the “Borrowers”), the LENDERS party hereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and BANK OF AMERICA, N.A., as Syndication Agent.
W I T N E S S E T H:
WHEREAS, the Borrowers are parties to the Existing Credit Agreement (as defined below);
WHEREAS, the Borrowers have requested that the Existing Credit Agreement be amended and restated as set forth below; and
WHEREAS, subject to the conditions set forth herein, the Required Lenders under the Existing Credit Agreement, the Administrative Agent, the Issuing Bank and the Swingline Lender have agreed to amend and restate in its entirety the Existing Credit Agreement as set forth below;
NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, the parties hereto hereby agree that, on the Effective Date, the Existing Credit Agreement will be amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:
“2011 Extended Maturity Date Term Loan” means a Term Loan made to the US Borrower on the Original Closing Date and, after giving effect to the Effective Date, maturing on the Extended Maturity Date, held by any US Lender in a principal amount not to exceed the amount set forth under the heading “2011 Extended Maturity Date Term Loans” opposite such Lender’s name on Schedule 2.01. The aggregate principal amount of 2011 Extended Maturity Date Term Loans outstanding on the Effective Date is $92,038,139.63.
“2011 Original Maturity Date Term Loan” means a Term Loan made to the US Borrower on the Original Closing Date and maturing on the Original Maturity Date, held by any US Lender in a principal amount not to exceed the amount set forth under the heading “2011 Original Maturity Date Term Loans” opposite such Lender’s name on Schedule 2.01. The aggregate principal amount of 2011 Original Maturity Date Term Loans outstanding on the Effective Date is $137,461,860.37.
“2011 Term Loans” means collectively, the 2011 Original Maturity Date Term Loans and the 2011 Extended Maturity Date Term Loans.
“2015 Annual Report” means the US Borrower’s 2015 annual report for the fiscal year ended October 31, 2015, in the form delivered to the Lenders prior to the date hereof.
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.
“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders under this Agreement and the other Loan Documents, or any successor agent appointed in accordance with Article X hereof.
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affiliate” means, with respect to a specified Person, another Person (other than, in the case of any Borrower, such Borrower’s respective Subsidiaries) that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“Agreement” has the meaning set forth in the preamble to this Agreement.
“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1% and (c) the Adjusted LIBO Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that, for the avoidance of doubt, for the purpose of this definition, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen Rate (or if the LIBO Screen Rate is not available for such one month Interest Period, the Interpolated Rate) at approximately 11:00 a.m. London time on such day; provided that if the Alternate Base Rate shall be less than zero, such rate shall be deemed to zero for the purposes of this Agreement. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to any Borrower or any of its Subsidiaries from time to time concerning or relating to bribery or corruption.
“Applicable Rate” means, with respect to Revolving Loans, Swingline Loans and Term Loans, for any day, with respect to any ABR Loan or Eurodollar Loan, or with respect to the commitment fees payable with respect to the Revolving Facility, as the case may be, the applicable
2
rate per annum set forth in the Pricing Grid under the caption “ABR Spread”, “Eurodollar Spread” or “Commitment Fee Rate”, as the case may be, based upon the ratings by Moody’s and S&P, respectively, applicable on such date to the Index Debt of the Parent or the US Borrower (whichever has the higher ratings).
“Approved Fund” has the meaning set forth in Section 12.04(b).
“Asset Sale” means any Disposition of property or series of related Dispositions of property (excluding the Disposition of obsolete or worn-out property in the ordinary course of business and any Disposition permitted by Section 8.04) that yields gross proceeds to the US Borrower or its Subsidiaries (valued at the initial principal amount thereof in the case of non-cash proceeds consisting of notes or other debt securities and valued at fair market value in the case of other non-cash proceeds) in excess of $10,000,000.
“Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 12.04), and accepted by the Administrative Agent, in substantially the form of Exhibit A or any other form approved by the Administrative Agent.
“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Revolving Commitment Termination Date and the date of termination of the Revolving Commitments.
“Available Mexican Commitment” means, as at any date of determination (after giving effect to the making, and the application of the proceeds, of any US Revolving Loans required to be made on such date pursuant to Section 2.07), with respect to any Mexican Lender, an amount equal to (a) the lesser of (i) the excess, if any, of (x) the amount of such Mexican Lender’s Mexican Commitment in effect on such date over (y) such Mexican Lender’s Mexican Commitment Percentage of the aggregate principal amount of Mexican Revolving Loans outstanding on such date and (ii) the excess, if any, of (x) the amount of such Mexican Lender’s US Revolving Commitment in effect on such date over (y) the amount of the Revolving Credit Exposure of such Mexican Lender on such date minus (b) an amount equal to the product of (i) such Mexican Lender’s Mexican Commitment Percentage and (ii) the aggregate principal amount of any loans or advances by the US Borrower and its Subsidiaries to the Mexican Borrower outstanding on such date in reliance on Section 8.05(a)(iii).
“Available US Revolving Commitment” means as at any date of determination with respect to any US Lender (after giving effect to the making, and the application of the proceeds, of any US Revolving Loans required to be made on such date pursuant to Section 2.07 or for the prepayment of any outstanding Mexican Revolving Loans), an amount equal to the excess, if any, of (a) the amount of such Lender’s US Revolving Commitment in effect on such date over (b) the Revolving Credit Exposure of such Lender on such date.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
3
“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“Bankruptcy Code” means title 11 of the United States Code, as amended from time to time, or any successor statute.
“Blocked Account” means the bank account subject to the Blocked Account Agreement.
“Blocked Account Agreement” means the Second Amended and Restated Blocked Account Control Agreement, dated as of the date hereof, substantially in the form of Exhibit J, among the US Borrower, JPMorgan Chase Bank, N.A., as depositary bank and the Administrative Agent, as the same may be amended, supplemented, waived or otherwise modified from time to time.
“Board” means the Board of Governors of the Federal Reserve System of the United States of America (or any successor).
“Borrowers” has the meaning set forth in the preamble to this Agreement.
“Borrowing” means, with respect to each Borrower as applicable, (a) Term Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect, (b) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect or (c) a Swingline Loan.
“Borrowing Date” has the meaning set forth in Section 2.07(a).
“Borrowing Request” means a request, substantially in the form of Exhibit E, by the US Borrower for a US Revolving Borrowing in accordance with Section 2.06 or a request by the Mexican Borrower for a Mexican Revolving Borrowing in accordance with Section 3.03.
“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.
“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“Capital Market Transaction” means the issuance or sale in a registered public offering, Rule 144A/Regulation S transaction or private placement of Capital Stock (including
4
equity-linked securities) or notes, debentures, instruments or other debt securities with a maturity in excess of one year from the Extended Maturity Date (provided that Capital Market Transaction shall exclude any Qualified Securitization Transaction).
“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.
“Cash Balance” means Unrestricted Cash of the US Borrower and its Subsidiaries minus (i) any amounts utilized for normal operating expenses of the US Borrower and its Subsidiaries consistent with the US Borrower’s and its Subsidiaries’ past business practices, (ii) amounts utilized to purchase receivables in the normal course of business, (iii) amounts utilized to make payments of permitted dividends consistent with the US Borrower’s past business practices and permitted hereunder and (iv) amounts on deposit in the Blocked Account.
“Cayman Affiliate” means International Truck and Engine Corporation Cayman Islands Holding Company.
“Cayman Loan Agreements” means (i) the Intercompany Revolving Loan Agreement, dated as of November 1, 2011 (as amended, supplemented or otherwise modified from time to time), between the US Borrower and Cayman Affiliate, and (ii) the Intercompany Revolving Loan Agreement, dated as of October 4, 2013 (as amended, supplemented or otherwise modified from time to time) between the US Borrower and Cayman Affiliate. The aggregate principal amount outstanding under the Cayman Loan Agreements as of the Effective Date is $190,000,000.
“Change in Control” means the occurrence of one or more of the following events: (i) any Person or group (within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), other than employee or retiree benefit plans or trusts sponsored or established by the Parent, the US Borrower or International, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Parent representing 35% or more of the combined voting power of the Parent’s then outstanding voting stock; (ii) the following individuals cease for any reason to constitute more than three-fourths of the number of directors then serving on the Board of Directors of the Parent: individuals who, on the date hereof, constitute the Board of Directors and any new director whose appointment or election by the Board of Directors or nomination for election by the Parent’s stockholders was approved by the vote of a majority of the directors then still in office or whose appointment, election or nomination was previously so approved or recommended; and (iii) the stockholders of the Parent shall approve any Plan of Liquidation.
“Change in Law” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 4.10(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any)
5
with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided, however, that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall each be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.
“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Term Loans, Revolving Loans, or Swingline Loans.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute.
“Collateral” means all property of the US Borrower, now owned or hereafter acquired, upon which a Lien is created and/or purported to be created by any Security Document.
“Collateral Coverage Ratio” means, at any date of determination, the ratio of (i) Eligible Collateral to (ii) the sum of (a) the aggregate principal amount of Term Loans plus (b) the Total Revolving Credit Exposure plus (c) the aggregate principal amount (or its equivalent (including the net mark to market obligations under Secured Interest Rate Agreements, as defined in the Security Agreement)) in respect of the other obligations secured under the Security Agreement.
“Commitments” means, collectively, the US Commitments and the Mexican Commitments.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
“Consolidated Leverage Ratio” means, on any date, the ratio of (a) Consolidated Total Debt on such date to (b) Consolidated Tangible Net Worth on such date.
“Consolidated Tangible Net Worth” means, on any date, the consolidated stockholders’ equity of the US Borrower and its consolidated Subsidiaries less, without duplication, (a) their consolidated Intangible Assets and (b) all Redeemable Preferred Stock (if any), all determined as of such date. For purposes of this definition, “Intangible Assets” means the amount (to the extent reflected in determining such consolidated stockholders’ equity) of (i) all investments in Subsidiaries of the US Borrower other than consolidated Subsidiaries and (ii) all unamortized debt discount and expense, unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, organization or developmental expenses and other intangible items.
“Consolidated Total Debt” means, on any date, the outstanding Indebtedness of the US Borrower and its consolidated Subsidiaries determined on a consolidated basis as of such date;
6
provided that the amount of such Indebtedness shall be (a) increased by all Debt Discount Adjustments (if any) applicable thereto (to the extent not included in determining the amount of such Indebtedness) and (b) decreased by (i) the aggregate principal amount of all Warehousing Debt outstanding on such date and (ii) the aggregate principal amount of Indebtedness incurred in connection with Qualified Securitization Transactions outstanding on such date.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Customary Securitization Undertaking” means, with respect to any Person, any obligation of such Person under a Permitted Receivables Document that is of a type customarily arising on the part of a seller or servicer of Receivables in securitization transactions of the same general type as the transaction contemplated by such Permitted Receivables Document, including without limitation, any obligation to (A) purchase or repurchase Receivables or related assets upon the occurrence of certain events, (B) service Receivables or related assets, (C) fund a spread or reserve account at the time of the sale of Receivables, rights to receive income from Receivables or undivided interests in Receivables or (D) indemnify other Persons; provided that the term “Customary Securitization Undertaking” shall not include any obligation to the extent that it (i) results from credit losses on receivables or (ii) constitutes a direct obligation of such Person to repay any Indebtedness issued or incurred by any other Person or to indemnify any Person for losses resulting from the nonpayment of any such Indebtedness or to provide additional capital to, or maintain the financial condition or otherwise support the credit of, the obligor in respect of such Indebtedness (except any obligation to provide additional funds to Subsidiaries of the US Borrower as part of any Qualified Securitization Transaction).
“Debt Discount Adjustment” means at any time, with respect to any interest-bearing Indebtedness for Borrowed Money of the US Borrower or any of its consolidated Subsidiaries, the amount (if any) by which (a) the full outstanding principal amount of such Indebtedness for Borrowed Money exceeds (b) the amount of the liability reflected on the books of the US Borrower or such consolidated Subsidiary with respect to such Indebtedness for Borrowed Money. Without limiting the generality of the foregoing, it is understood that the concept of a “Debt Discount Adjustment” would not apply to non-interest bearing commercial paper issued at a discount or “zero coupon” bonds.
“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“Defaulting Lender” means any Lender, as reasonably determined by the Administrative Agent after notice to the US Borrower and such Lender, that has (a) failed to fund any portion of its Revolving Loans or participations in Letters of Credit or Swingline Loans within three Business Days of the date required to be funded by it hereunder, unless such Lender’s failure to fund such Loan is based on such Lender’s good faith determination that the conditions precedent to funding such loan under this Agreement have not been satisfied and such Lender has notified the Administrative Agent in writing of such determination, (b) notified the US Borrower, the
7
Administrative Agent, the Issuing Bank, the Swingline Lender or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement that it does not intend to comply with its funding obligations under this Agreement (unless such notice or public statement indicates that such position is based on such Lender’s good faith determination that the conditions precedent to such funding obligations under this Agreement have not been satisfied), (c) failed, within five Business Days after a written request by the Administrative Agent (based on the reasonable belief that it may not fulfill its funding obligations and a copy of which was sent to the US Borrower), to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans, unless the subject of a good faith dispute, provided that any such Lender shall cease to be a Defaulting Lender under this clause (c) upon receipt of such confirmation by the Administrative Agent, (d) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount (other than a de minimis amount) required to be paid by it hereunder within five Business Days of the date when due, unless the subject of a good faith dispute, (e) in the case of a Revolving Lender, (i) has been adjudicated as, or determined by any Governmental Authority having regulatory authority over such Person or its assets to be, insolvent or has a parent company that has been adjudicated as, or determined by any Governmental Authority having regulatory authority over such Person or its assets to be, insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action authorizing, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action authorizing, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment (unless in the case of any Lender referred to in this clause (e) the US Borrower, the Administrative Agent, the Issuing Bank and the Swingline Lender shall be satisfied that such Lender intends, and has all approvals required to enable it, to continue to perform its obligations as a Lender hereunder); provided that a Lender shall not qualify as a Defaulting Lender solely as a result of the acquisition or maintenance of an ownership interest in such Lender or its parent company, or of the exercise of control over such Lender or any Person controlling such Lender, by a Governmental Authority or instrumentality thereof, or (f) become, or has a parent company that has become, the subject of a Bail-In Action.
“Disclosed Matters” means the actions, suits and proceedings disclosed in Schedule 5.05.
“Disposition” means, with respect to any property, any sale, lease, sale and leaseback, transfer or other disposition thereof. The term “Dispose” shall have a correlative meaning.
“Dollars”, “dollars” or “$” refers to lawful money of the United States of America.
“EEA Financial Institution” means (a) any institution established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
8
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Effective Date” means the date on which the conditions specified in Section 6.01 are satisfied (or waived in accordance with Section 12.02).
“Eligible Collateral” shall mean, as at any date of determination (a) the sum of “Finance receivables, net,” “Net investment in operating leases,” “Cash and cash equivalents”, “Restricted cash and cash equivalents” and “Vehicle inventory” or any similar items resulting from the recharacterization of any of the foregoing items from time to time, each as set forth in the US Borrower’s financial statements as of such date plus (b) fixed assets, as calculated consistent with the US Borrower’s past practices as of such date less (c) the sum of “Retail secured borrowing/Revolving retail accounts,” “Lease secured borrowing/Borrowing secured by operating and finance leases,” and “Wholesale secured borrowing/Revolving wholesale note trust” or any similar items from time to time, each as set forth in the US Borrower’s financial statements as of such date; provided that the amount of Used Truck Loans included in Eligible Collateral shall not exceed the lesser of (i) $168,000,000 prior to the Original Maturity Date and $125,000,000 on or after the Original Maturity Date and (ii) the maximum amount of Used Truck Loans that would not cause the Loan to Value Ratio to exceed 65%.
“Equalization Date” means any date on which either (a) an Event of Default described in clause (i) or (j) of Article IX has occurred or (b) all Commitments shall have been terminated prior to the Extended Maturity Date and/or the Loans shall have been declared immediately due and payable, in either case pursuant to Article IX.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, or any successor statute.
“ERISA Affiliate” means any entity (whether or not incorporated) that, together with the US Borrower, is treated as a single employer under Section 4001 of ERISA or Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day notice period referred to in 4043(c) of ERISA is waived); (b) the failure of the US Borrower or any ERISA Affiliate to make by its due date a required installment under Section 430(j) of the Code with respect to any Plan or any failure by any Plan to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, whether or not waived in accordance with Section 412(c) of the Code or Section 302(c) of ERISA; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of
9
ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the US Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the US Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the US Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the US Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the US Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, within the meaning of Title IV of ERISA.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
“Event of Default” has the meaning assigned to such term in Article IX.
“Excluded Swap Obligation” means with respect to any guarantor, any Swap Obligation if, and to the extent that, and only for so long as, all or a portion of the guarantee of such guarantor of, or the grant by such guarantor of a security interest to secure, as applicable, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such guarantor’s failure to constitute an “eligible contract participant,” as defined in the Commodity Exchange Act and the regulations thereunder, at the time the guarantee of (or grant of such security interest by, as applicable) such guarantor becomes or would become effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one Swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swaps for which such guarantee or security interest is or becomes illegal.
“Excluded Taxes” means (i) net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the Administrative Agent or any Lender as a result of a present or former connection between the Administrative Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent or such Lender (x) having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document or (y) having a representative office or a subsidiary in Mexico, provided that any such representative office or subsidiary is not the lending office), (ii) in the case of a Lender, U.S. federal withholding taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (x) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by any Borrower under Section
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4.14) or (y) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 4.12, amounts with respect to such taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan or Commitment or to such Lender immediately before it changed its lending office, (iii) any taxes imposed by reason of the Administrative Agent or such Lender’s failure to comply with Section 4.12(c) through (e), in excess of the additional amounts that would have been payable had the Administrative Agent or any Lender complied with such Section, or (iv) any withholding taxes imposed under FATCA.
“Existing Credit Agreement” means the Second Amended and Restated Credit Agreement (as amended, supplemented or otherwise modified prior to the date hereof), dated as of December 2, 2011, among the Borrowers, the banks listed therein and JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A., as syndication agent, and Citibank, N.A., as documentation agent.
“Extended Maturity Date” means June 1, 2018.
“Extended Revolving Commitments” has the meaning assigned to such term in Section 4.17(b).
“Extended Revolving Loans” has the meaning assigned to such term in Section 4.17(b).
“Extended Term Loans” has the meaning assigned to such term in Section 4.17(b).
“Extending Term Loan Lender” has the meaning assigned to such term in Section 4.17(b).
“Extension” has the meaning assigned to such term in Section 4.17(b).
“Extension Offer” has the meaning assigned to such term in Section 4.17(b).
“Facility” means each of (a) the 2011 Term Loans and the New Term Loan Commitments and the Term Loans made thereunder and (b) the Revolving Commitments and the extensions of credit made thereunder (the “Revolving Facility”).
“FATCA” means, Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations promulgated thereunder or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any intergovernmental agreements entered into pursuant to any of the foregoing.
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the
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Administrative Agent from three Federal funds brokers of recognized standing selected by it; provided that, if the Federal Funds Effective Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“First Lender” has the meaning set forth in Section 12.18(b).
“Fixed Charge Coverage Ratio” means, for any period, the ratio of (a) the sum of (i) consolidated interest expense of the US Borrower and its consolidated Subsidiaries, (ii) consolidated income of the US Borrower and its consolidated Subsidiaries before income taxes, (iii) dividends on any preferred stock of the US Borrower or other scheduled payments of a similar nature and (iv) any International Contributions with respect to any fiscal quarter during such period to (b) the sum of (i) consolidated interest expense of the US Borrower and its consolidated Subsidiaries and (ii) dividends on any preferred stock of the US Borrower or other scheduled payments of a similar nature.
“Foreign Lender” means, in respect of any Borrower, any Lender that is organized under the laws of a jurisdiction other than that in which such Borrower is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
“GAAP” means generally accepted accounting principles in the United States of America.
“Governmental Authority” means the government of the United States of America, Mexico, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Granting Lender” has the meaning set forth in Section 12.04(h).
“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including an aval and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include (i) endorsements for collection or deposit or (ii) standard contractual indemnities, each in the ordinary course of business or (iii) any Customary Securitization Undertaking. The amount of any Guarantee of any guaranteeing Person shall be deemed to be the lower of (A) an amount equal to the stated or determinable amount of the primary
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obligation in respect of which such Guarantee is made and (B) the maximum amount for which such guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Guarantee, unless such primary obligation and the maximum amount for which such guaranteeing Person may be liable are not stated or determinable, in which case the amount of such Guarantee shall be such guaranteeing Person’s maximum reasonably anticipated liability (assuming such Person is required to perform) in respect thereof as determined by such Person in good faith.
“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange agreement, currency swap agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.
“Impacted Interest Period” has the meaning assigned to it in the definition of “LIBO Rate”.
“IMSS” means the Instituto Mexicano del Seguro Social or Mexican Social Security Institute.
“Increased Amount Date” has the meaning set forth in Section 4.16(a).
“Indebtedness” of any Person means on any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all Guarantees by such Person of Indebtedness of others, (d) all Capital Lease Obligations of such Person and (e) all obligations, contingent or otherwise, of such Person to reimburse issuers of letters of credit, surety bonds or similar obligations for payments made to repay, purchase or otherwise retire any Indebtedness referred to in the foregoing clauses (a) through (d), excluding trade payables and accrued expenses.
“Indebtedness for Borrowed Money” means the types of Indebtedness referred to in clauses (a) and (b) of the definition of “Indebtedness”.
“Index Debt” means senior, unsecured, long-term Indebtedness for Borrowed Money that is not guaranteed by any other Person or subject to any other credit enhancement.
“INFONAVIT” means the Mexican Instituto del Fondo Nacional de la Vivienda para los Trabajadores or Workers’ Housing Fund Institute.
“Intercompany Loan Agreements” means each agreement from time to time creating or evidencing any Indebtedness owing from time to time to the US Borrower from one of its Subsidiaries.
“Interest Election Request” means a request by any Borrower to convert or continue a Borrowing in accordance with Section 4.02.
“Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline Loan), the last day of each March, June, September and December, (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’
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duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid.
“Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three, or six months (or, if available from the relevant Lenders, one, two or three weeks or twelve months or other period requested by the relevant Borrower) thereafter, as the relevant Borrower may elect; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.
“International” means Navistar, Inc. (formerly known as International Truck and Engine Corporation), a Delaware corporation.
“International Contribution” means a contribution from International pursuant to the Parents’ Side Agreement with respect to any fiscal quarter so long as such contribution from International is made on or after the first day of such fiscal quarter and on or prior to the day that is three Business Days following the date of delivery of the financial statements for the relevant fiscal quarter (or, if earlier, the date a quarterly or annual report containing such financial statements is required to be filed with the SEC) (it being understood that each such contribution shall be credited with respect to only one fiscal quarter; provided that such credit shall be effective as to such fiscal quarter for all periods in which such fiscal quarter is included).
“Interpolated Rate” means, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the LIBO Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest period for which the LIBO Screen Rate is available for dollars) that is shorter than the Impacted Interest Period; and (b) the LIBO Screen Rate for the shortest period (for which that LIBO Screen Rate is available for dollars) that exceeds the Impacted Interest Period, in each case, at such time.
“Investments” has the meaning set forth in Section 8.05(a).
“Issuing Bank” means JPMorgan Chase Bank, N.A., in its capacity as the issuer of Letters of Credit hereunder (or any affiliate thereof in its capacity as issuer of Letters of Credit hereunder), and its successors in such capacity as provided in Section 2.09(i).
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“Joinder Agreement” has the meaning set forth in Section 4.16(a).
“Joint Lead Arrangers” means JPMorgan Chase Bank, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any other registered broker-dealer wholly-owned by Bank of America Corporation to which all or substantially all of Bank of America Corporation’s or any of its subsidiaries’ investment banking, commercial lending services or related businesses may be transferred following the date of this Agreement).
“KPMG” means KPMG LLP.
“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of Credit.
“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements in respect of Letters of Credit that have not yet been reimbursed by or on behalf of the US Borrower at such time. The LC Exposure of any US Lender in respect of any Letter of Credit shall be its US Funding Revolving Commitment Percentage (determined on the date of issuance thereof, as reduced or increased by any assignment effected in accordance with Section 12.04) of the LC Exposure in respect of such Letter of Credit, as reduced by any reduction of such Letter of Credit or any reimbursed drawings thereunder.
“Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Acceptance, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Acceptance. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender and the Issuing Bank.
“Letter of Credit” means any letter of credit issued pursuant to Section 2.09.
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the LIBO Screen Rate at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollars with a maturity comparable to such Interest Period; provided that if the LIBO Screen Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement; provided further that if the LIBO Screen Rate shall not be available at such time to such Interest Period (an “Impacted Interest Period”), then the LIBO Rate shall be the Interpolated Rate.
“LIBO Screen Rate” means, for any day and time, with respect to any Eurodollar Borrowing for any Interest Period, the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate for dollars for a period equal in length to such Interest Period as displayed on such day and time on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion)); provided that if the LIBO Screen Rate shall be less than zero, such rate shall be deemed to zero for the purposes of this Agreement.
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“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, assignment, hypothecation, encumbrance, charge or security interest in, on or of such asset and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.
“Loans” means the loans made by the Lenders to any Borrower pursuant to this Agreement.
“Loan Documents” means this Agreement, the Security Documents, the Notes, the Parent Guarantee, the Parents’ Side Agreement and any amendment, waiver, supplement or any other modification to any of the foregoing.
“Loan to Value Ratio” means the ratio (expressed as a percentage) of (a) Used Truck Loans to (b) the Net Realizable Value of the eligible used truck inventory, as set forth in the Parent’s financial statements and pledged to the US Borrower on a first priority basis under the Used Truck Loan Agreement.
“Majority Facility Lenders” means with respect to any Facility, the holders of more than 50% of the aggregate unpaid principal amount of the Term Loans or the Total Revolving Credit Exposure, as the case may be, outstanding under such Facility (or, in the case of the Revolving Facility, prior to any termination of the Revolving Commitments, the holders of more than 50% of the Total Revolving Commitments).
“Master Intercompany Agreement” means the Amended and Restated Master Intercompany Agreement, dated as of April 1, 2007, between the US Borrower and International, as amended by the Treasurer’s Agreement Number 1, dated as of January 30, 2009, the Treasurers’ Agreement Number 2, dated as of July 31, 2009, the Treasurers’ Agreement Number 3, dated as of December 16, 2009, the Treasurers’ Agreement Number 4, dated as of June 1, 2011, the Treasurers’ Agreement Number 5, dated as of October 31, 2011, the Treasurers’ Agreement Number 6, dated as of January 21, 2012, the Treasurers’ Agreement Number 7, dated as of September 28, 2012, the Treasurers’ Agreement Number 8, dated as of April 21, 2014, and the Treasurers’ Agreement Number 9, dated as of July 18, 2014, and as further amended, supplemented or otherwise modified from time to time.
“Material Adverse Effect” means a material adverse effect on (a) the business, assets, property or financial condition of the US Borrower and its Subsidiaries taken as a whole or (b) the validity or enforceability of any Loan Document or the rights and remedies of or benefits available to the Lenders under any Loan Document.
“Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Hedging Agreements in an aggregate principal amount exceeding (a) $25,000,000, in the case of the US Borrower, and (b) $15,000,000, in the case of the Mexican Borrower. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of any Borrower in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that such Borrower would be required to pay if such Hedging Agreement were terminated at such time.
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“Mexican”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are being made to the Mexican Borrower.
“Mexican Borrower” has the meaning set forth in the Preamble to this Agreement.
“Mexican Change in Control” shall occur in the event that the Parent ceases to own, directly or indirectly, more than 50% of the voting Capital Stock of the Mexican Borrower.
“Mexican Commitment” means, with respect to each Mexican Lender, the commitment of such Lender to make Mexican Revolving Loans hereunder, in an aggregate amount not to exceed at any time outstanding the lesser of (i) the amount initially set forth opposite such Lender’s name on Schedule 2.01 under the heading “Mexican Commitment”, “Mexican Extended Commitment” or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Mexican Commitment, as applicable, and (ii) the US Commitment of such Mexican Lender, as either such commitment may be (a) reduced from time to time pursuant to Section 4.03 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 12.04. The aggregate principal amount of the Mexican Commitments as of the Effective Date is $100,000,000 of which $80,500,000 constitute Mexican Extended Commitments. For the avoidance of doubt, any Mexican Extended Commitments shall be a Mexican Commitment for all purposes of this Agreement.
“Mexican Extended Commitments” means each Mexican Commitment listed on Schedule 2.01 as a “Mexican Extended Commitment”.
“Mexican Commitment Percentage” means, as to any Mexican Lender at any time, the percentage which such Lender’s Mexican Commitment then constitutes of the aggregate Mexican Commitments of all Mexican Lenders (or, if all Mexican Commitments have terminated or expired, the percentage shall be determined based upon the Mexican Commitments most recently in effect, giving effect to any assignments).
“Mexican Income Tax Law” means the Ley del Impuesto sobre la Renta of Mexico, as amended from time to time, or any successor statute.
“Mexican Lender” means each Lender having an amount greater than zero set forth opposite such Lender’s name in Schedule 2.01 under the heading “Mexican Commitment” or “Mexican Extended Commitments”, as applicable, and any other Person that shall have become a party hereto pursuant to an Assignment and Acceptance with respect to a Mexican Commitment. Any US Lender may cause a branch or Affiliate of such US Lender to make available its Mexican Commitment and to make the Mexican Loans thereunder, and the term “Mexican Lender” shall include such branch or affiliate in such capacity where the context permits; provided that any such US Lender causing a branch or Affiliate of such US Lender to make available its Mexican Commitment and to make the Mexican Loans thereunder will not require the Mexican Borrower pay additional amounts under Section 4.12 higher than those it would have paid if such US Lender did not take such action (except to the extent such additional amounts result from a Change in Law occurring after such action).
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“Mexican Obligations” means the unpaid principal of and interest on (including, without limitation, interest accruing after the maturity of the Mexican Revolving Loans and interest accruing after the filing of any petition in bankruptcy (“concurso mercantil” or “quiebra”), or the commencement of any insolvency, reorganization or like proceeding, relating to the Mexican Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Mexican Revolving Loans and all other obligations and liabilities of the Mexican Borrower to the Administrative Agent and the Lenders, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document and any other document made, delivered or given in connection therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including, without limitation, all reasonable fees and disbursements of counsel to the Administrative Agent and the Lenders that are required to be paid by the Mexican Borrower pursuant to the terms of this Agreement) or otherwise.
“Mexico” means the United Mexican States.
“Moody’s” means Moody’s Investors Service, Inc.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“Net Cash Proceeds” means (a) in connection with any Asset Sale or any Recovery Event, the proceeds thereof in the form of cash and Permitted Investments (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received), net of attorneys’ fees, accountants’ fees, investment banking fees, amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset that is the subject of such Asset Sale or Recovery Event and other customary fees and expenses actually incurred in connection therewith and net of taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements) or (b) in connection with any Capital Market Transaction, the proceeds thereof in the form of cash, net of attorneys’ fees, accountants’ fees, investment banking fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith.
“Net Realizable Value” means the estimated selling price of the eligible used truck inventory in the ordinary course of business less reasonably predictable costs of completion and disposal, as disclosed in the Parent’s annual and quarterly public filings.
“New Lender” has the meaning set forth in Section 4.16(b).
“New Term Loans” has the meaning set forth in Section 4.16(a).
“New Term Loan Commitments” has the meaning set forth in Section 4.16(a).
“New TLB Commitments” has the meaning set forth in Section 4.16(a).
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“New TLB Loans” has the meaning set forth in Section 4.16(a).
“NFSC” means Navistar Financial Securities Corporation, a Delaware corporation, and its successors.
“Non-Excluded Taxes” has the meaning set forth in Section 4.12(a).
“Non-Mexican Lender” means each US Lender which is not a Mexican Lender.
“Note” has the meaning set forth in Section 4.04(e).
“Original Closing Date” means December 2, 2011.
“Original Maturity Date” means December 2, 2016.
“Other Lender” has the meaning set forth in Section 12.18(b).
“Other Taxes” means any and all present or future stamp or documentary taxes or any other similar excise or property taxes, charges or levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.
“Parent” means Navistar International Corporation, a Delaware corporation.
“Parent Guarantee” means the Fourth Amended and Restated Parent Guarantee, dated as of the date hereof, substantially in the form of Exhibit G, as amended, supplemented, or otherwise modified from time to time.
“Parents’ Side Agreement” means the Fourth Amended and Restated Parents’ Side Agreement, substantially in the form of Exhibit C, dated as of the date hereof, by the Parent and International for the benefit of the Lenders, as amended, supplemented or otherwise modified from time to time.
“Participant” has the meaning set forth in Section 12.04(e).
“Past Due Serviced Wholesale Notes” at the end of any month means the aggregate Unpaid Balances at the end of such month of all Serviced Wholesale Notes (or installments thereof) which are more than one month past due at the end of such month.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
“Permitted Encumbrances” means:
(a) Liens imposed by law for taxes, assessments or governmental charges that are not yet due or are being contested in compliance with Section 7.04;
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(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that (i) are not overdue by more than 30 days or (ii) are being contested in compliance with Section 7.04;
(c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance, health insurance and other social security laws or regulations and withholding taxes;
(d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;
(e) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the relevant Borrower or any of its Subsidiaries;
(f) Liens arising from judgments, decrees or attachments that do not constitute an Event of Default hereunder;
(g) Liens arising from precautionary Uniform Commercial Code financing statements filed in connection with operating leases of the US Borrower or its Subsidiaries;
(h) any interest or title of a licensor, lessor or sublessor under any license, lease or sublease entered into by any Borrower in the ordinary course of business and covering only the assets so licensed, leased or subleased; and
(i) Liens arising in connection with any Qualified Securitization Transaction;
provided that, with respect to clauses (a) through (h) above, the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.
“Permitted Investments” means:
(a) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (provided that the full faith and credit of the United States is pledged in support of those securities) having maturities of not more than twenty-four months from the date of acquisition;
(b) 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 of America, any state thereof or the District of Columbia having capital and surplus in excess of $500,000,000 and a Thomson Bank Watch Rating of “B” or better;
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(c) repurchase obligations or securities lending arrangements for underlying securities of the types described in clauses (a) and (b) above entered into with any financial institution meeting the qualifications specified in clause (b) above;
(d) 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;
(e) 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, provided that such commercial bank has, at the time of the Investment therein, (1) capital, surplus and undivided profits (as of the date of such institution’s most recently published financial statements) in excess of $100,000,000 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 Investment therein, are rated at least “A” from S&P or “A2” from Moody’s;
(f) 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, provided that (A) such instrument has a final maturity not more than one year from the date of purchase thereof and (B) such depository institution or trust company has at the time of the 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 $100,000,000 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 Investment therein or contractual commitment providing for such Investment, are rated at least “A” from S&P or “A2” from Moody’s; and
(g) money market funds at least 95% of the assets of which constitute Permitted Investments of the kinds described in clauses (a) through (e) of this definition.
Notwithstanding the foregoing, Investments which would otherwise constitute Permitted Investments of the kinds described in clauses (a), (b), (c) and (d) that are permitted to have maturities in excess of twelve months shall only be deemed to be Permitted Investments under this definition if and only if the total weighted average maturity of all Permitted Investments of the kinds described in clauses (a), (b), (c) and (d) does not exceed twelve months on an aggregate basis.
“Permitted Receivables Document” means any document to which the US Borrower or any Subsidiary of the US Borrower is a party that relates to a sale or transfer by the US Borrower or such Subsidiary of Receivables, undivided interests therein or rights to receive income therefrom.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
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“Plan” means any employee pension benefit plan, as defined in Section 3(2) of ERISA (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the US Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Plan of Liquidation” means, with respect to the Parent, 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) (i) the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Parent and (ii) 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 Parent to holders of capital stock of the Parent.
“Pricing Grid” means the table set forth below:
On or prior to the Original Maturity Date:
| Index Debt Ratings: |
ABR Spread |
Eurodollar Spread |
Commitment Fee Rate |
|||||||||||
| Level 1: |
BBB- or higher and Baa3 or higher |
1.00 | % | 2.00 | % | 0.375 | % | |||||||
| Level 2: |
BB+ or higher and Ba1 or higher and Level 1 does not apply |
1.25 | % | 2.25 | % | 0.50 | % | |||||||
| Level 3: |
BB or higher and Ba2 or higher and Levels 1 and 2 do not apply |
1.50 | % | 2.50 | % | 0.50 | % | |||||||
| Level 4: |
B+ or higher and B1 or higher and Levels 1, 2 and 3 do not apply |
1.75 | % | 2.75 | % | 0.50 | % | |||||||
| Level 5: |
Levels 1, 2, 3 and 4 do not apply |
2.00 | % | 3.00 | % | 0.625 | % | |||||||
After the Original Maturity Date:
| Index Debt Ratings: |
ABR Spread |
Eurodollar Spread |
Commitment Fee Rate |
|||||||||||
| Level 1: |
BB or higher and Ba2 or higher |
2.00 | % | 3.00 | % | 0.625 | % | |||||||
| Level 2: |
B+ or higher and B1 or higher and Level 1 does not apply |
2.75 | % | 3.75 | % | 0.625 | % | |||||||
| Level 3: |
CCC+ or higher and Caa1 or higher and Levels 1 and 2 do not apply |
3.25 | % | 4.25 | % | 0.875 | % | |||||||
| Level 4: |
Levels 1, 2 and 3 do not apply |
3.75 | % | 4.75 | % | 1.00 | % | |||||||
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For purposes of the foregoing, (i) if either (or both) of S&P or Moody’s (or a similar nationally recognized rating agency satisfactory to both the US Borrower and the Administrative Agent) shall not have in effect a rating for the Index Debt of the Parent and shall not have in effect a rating for the Index Debt of the US Borrower, then Level 5 (on or prior to the Original Maturity Date) or Level 4 (after the Original Maturity Date) shall be used to determine the Applicable Rate; and (ii) if the ratings established or deemed to have been established by S&P and Moody’s (or a similar nationally recognized rating agency satisfactory to both the US Borrower and the Administrative Agent) for the Index Debt of the Parent or the US Borrower, as applicable shall be changed (other than as a result of a change in the rating system of S&P or Moody’s (or a similar nationally recognized rating agency satisfactory to both the US Borrower and the Administrative Agent)), such change shall be effective as of the date on which it is first announced by the applicable rating agency. Each change in the Applicable Rate shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of S&P or Moody’s (or a similar nationally recognized rating agency satisfactory to both the US Borrower and the Administrative Agent) shall change, or if any such rating agency shall cease to be in the business of rating corporate debt obligations, the US Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating system or the unavailability of ratings from such rating agency and, pending the effectiveness of any such amendment, the Applicable Rate shall be determined by reference to the rating most recently in effect prior to such change or cessation.
“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.
“Qualified Keepwell Provider” means, in respect of any Swap Obligation, the Parent and its Subsidiaries, that, at the time the relevant guarantee (or grant of the relevant security interest, as applicable) becomes effective with respect to such Swap Obligation, has total assets exceeding $10,000,000 or otherwise constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” with respect to such Swap Obligation at such time by entering into a keepwell pursuant to section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
“Qualified Securitization Transaction” means any transaction or series of transactions that have been or may be entered into by the US Borrower or any of its Subsidiaries in connection with or reasonably related to (a) a transaction or series of transactions in which the US Borrower or any of its Subsidiaries may sell, convey or otherwise transfer to (i) a Securitization Subsidiary or (ii) any other Person, or may grant a security interest in, any Receivables or interests
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therein secured by the goods or services financed thereby (whether such Receivables are then existing or arising in the future) of the US Borrower or any of its Subsidiaries, and any assets related thereto including, without limitation, all security interests in goods 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 or (b) financing transactions based upon receivables that are in the ordinary course of business for a finance company at the time of the consummation thereof so long as the recourse to the US Borrower (excluding residual guarantees) is no greater than 25%; provided that any recourse to the US Borrower between 15% and 25% shall be included as Indebtedness for purposes of calculating the Consolidated Leverage Ratio, notwithstanding clause (b)(ii) of the definition of “Consolidated Total Debt” in this Section 1.01.
“Receivables” means, as the context may require, either (a) all assets of the types classified under the heading “Finance Receivables” on the statement of consolidated financial condition of the US Borrower and its consolidated Subsidiaries as of October 31, 2015 and the related statements of consolidated income and retained earnings and consolidated cash flow for the fiscal year then ended, together with the notes thereto, included in the 2015 Annual Report and reported on by KPMG or (b) the aggregate Unpaid Balances thereof or (c) equipment on operating leases.
“Recovery Event” means any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of the US Borrower or its Subsidiaries that yields gross proceeds to the US Borrower or its Subsidiaries in excess of $10,000,000.
“Redeemable Preferred Stock” means preferred stock of the US Borrower which is required, or at the option of the holder may be required, to be redeemed or repurchased at any time.
“Register” has the meaning set forth in Section 12.04(c).
“Reimbursement Obligation” means the obligation of the US Borrower to reimburse the Issuing Bank for amounts drawn under Letters of Credit.
“Reinvestment Deferred Amount” means with respect to any Reinvestment Event, the aggregate Net Cash Proceeds received by the US Borrower or any of its Subsidiaries in connection therewith that are not applied to prepay the Term Loans pursuant to Section 4.06(a) as a result of the delivery of a Reinvestment Notice.
“Reinvestment Event” means any Asset Sale or Recovery Event in respect of which the US Borrower has delivered a Reinvestment Notice.
“Reinvestment Notice” means a written notice executed by a Responsible Officer stating that no Event of Default has occurred and is continuing and that the US Borrower (directly or indirectly through a Subsidiary) intends and expects to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire or repair assets useful in the business of the US Borrower and its Subsidiaries.
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“Reinvestment Prepayment Amount” means with respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any amount expended prior to the relevant Reinvestment Prepayment Date to acquire or repair assets useful in the business of the US Borrower and its Subsidiaries.
“Reinvestment Prepayment Date” means, with respect to any Reinvestment Event, the earlier of (a) the date occurring six months after such Reinvestment Event and (b) the date on which the US Borrower shall have determined not to, or shall have otherwise ceased to, acquire or repair assets useful in business of the US Borrower and its Subsidiaries with all or any portion of the relevant Reinvestment Deferred Amount.
“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, partners, employees, agents and advisors of such Person and such Person’s Affiliates.
“Requested Mexican Loans” has the meaning set forth in Section 2.07(a).
“Required Lenders” means, at any time, the holders of more than 50% of the sum of (a) the aggregate unpaid principal amount of the Term Loans then outstanding and (b) the aggregate US Revolving Commitments then in effect; provided that, for purposes of declaring the Loans to be due and payable pursuant to Article IX, and for all purposes after the Loans become due and payable pursuant to Article IX or the Commitments expire or terminate, “Required Lenders” means Lenders having Term Loans and Revolving Credit Exposures representing more than 50% of the aggregate amount of the Term Loans and the aggregate Revolving Credit Exposures of all Lenders.
“Responsible Officer” means, (a) with respect to the US Borrower, the chief executive officer, president, chief financial officer, vice president and treasurer, vice president and controller, assistant treasurer and general counsel of such Borrower, but in any event, with respect to financial matters, the vice president and treasurer or the vice president and controller of such Borrower and (b) with respect to the Mexican Borrower, the treasurer, financial director and managing director of such Borrower, but in any event, with respect to financial matters, the treasurer or the financial director of such Borrower.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any shares of any class of capital stock of any Borrower or any Subsidiary (except dividends payable solely in shares of its capital stock), or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such shares of capital stock of such Borrower or any option, warrant or other right to acquire any such shares of capital stock of such Borrower.
“Revolving Commitments” means, collectively, the US Revolving Commitments and the Mexican Commitments.
“Revolving Commitment Termination Date” means, (a) with respect to the US Revolving Commitments (other than the US Extended Revolving Commitments) and the Mexican Commitments (other than the Mexican Extended Commitments), the Original Maturity Date and (b) with respect to the US Extended Revolving Commitments and the Mexican Extended Commitments, the Extended Maturity Date.
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“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure and Swingline Exposure at such time.
“Revolving Credit Exposure Percentage” means, on any date with respect to any Lender, the percentage which the Revolving Credit Exposure of such Lender constitutes of the Revolving Credit Exposure of all Lenders.
“Revolving Lender” means each Lender that has a Revolving Commitment or that holds Revolving Credit Exposure.
“Revolving Loan” means a Loan made pursuant to Section 2.06 or Section 3.03.
“S&P” means Standard & Poor’s Ratings Services.
“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Belarus, Cuba, Iran, North Korea, Sudan, Syria and Crimea).
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the United Nations Security Council, Mexico, Canada, the European Union, any European Union member state, Her Majesty’s Treasury of the United Kingdom, the Financial Intelligence Unit (Unidad de Inteligencia Financiera) of the Ministry of Finance and Public Credit of Mexico (Secretaria de Hacienda y Crédito Público) or other relevant sanctions authority (each, a “Sanctions Authority”), (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by, acting for or on behalf of, providing assistance, support or services of any kind to, or otherwise associated with, any such Person or Persons described in the foregoing clauses (a) or (b).
“Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, (b) the United Nations Security Council, Mexico, Canada, the European Union, any European Union member state, Her Majesty’s Treasury of the United Kingdom, the Financial Intelligence Unit (Unidad de Inteligencia Financiera) of the Ministry of Finance and Public Credit of Mexico (Secretaria de Hacienda y Crédito Público) or other relevant sanctions authority, including but not limited to the Mexican Office of the General Attorney (Procuraduría General de la República) or any competent authority as appointed by the laws of Mexico and (c) the respective governmental institutions, agencies and subdivisions of any of (a) or (b).
“Sanctions Authority” has the meaning assigned to it in the definition of “Sanctioned Person”.
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“SAR” means the Mexican Sistema de Ahorro para el Retiro or Savings for Retirement System.
“Securitization Subsidiary” means a wholly owned Subsidiary of the US Borrower which engages in no activities other than those reasonably related to or in connection with the entering into of securitization transactions and which is designated by the Board of Directors of the US Borrower (as provided below) as a Securitization Subsidiary (a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by the US Borrower or any other Subsidiary of the US Borrower other than pursuant to Standard Securitization Undertakings, (ii) is recourse to or obligates the US Borrower or any other Subsidiary of the US Borrower in any way other than pursuant to Standard Securitization Undertakings or (iii) subjects any property or asset of the US Borrower or any other Subsidiary of the US Borrower, directly or indirectly, contingently or otherwise, to any Lien or to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings, (b) with which neither the US Borrower nor any other Subsidiary of the US Borrower (i) provides any credit support (for the avoidance of doubt, no Intercompany Loan Agreement shall be deemed to constitute “credit support”) or (ii) has any contract, agreement, arrangement or understanding other than on terms that are fair and reasonable and that are no less favorable to the US Borrower or such Subsidiary than could be obtained from an unrelated Person (other than Standard Securitization Undertakings and intercompany notes relating to the sale of Receivables to such Securitization Subsidiary) and (c) with which neither the US Borrower nor any Subsidiary of the US Borrower has any obligation to maintain or preserve such Subsidiary’s financial condition or to cause such Subsidiary to achieve certain levels of operating results. Any such designation by the Board of Directors of the US Borrower shall be evidenced to the Administrative Agent by filing with the Administrative Agent a certified copy of the resolutions of the Board of Directors of the US Borrower giving effect to such designation.
“Security Agreement” means the Second Amended and Restated Security, Pledge & Trust Agreement dated as of the date hereof between the US Borrower and the Trustee, a copy of which is attached as Exhibit H.
“Security Documents” means the collective reference to the Security Agreement, the Blocked Account Agreement and all other security documents hereafter delivered to the Administrative Agent or Trustee, as applicable, granting a Lien on any property of any Person to secure the obligations and liabilities of the Borrowers under any Loan Document.
“Serviced Wholesale Notes” means, at any time, as the context may require, (a) all outstanding Wholesale Notes which the US Borrower, NFSC or any other Subsidiary of the US Borrower owns at such time or which the US Borrower, NFSC or any other Subsidiary of the US Borrower has theretofore sold and continues to have an economic interest in (through ownership of a seller certificate, a right to receive payment of deferred purchase price, an undivided interest in a trust or otherwise) at such time or (b) the Unpaid Balances thereof.
“SPC” has the meaning set forth in Section 12.04(h).
“Standard Securitization Undertakings” means representations, warranties and covenants (including those relating to servicing) entered into in the ordinary course of business in connection with a Qualified Securitization Transaction.
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“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for Eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute Eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
“Subordinated Debt” means Indebtedness that (i) is unsecured and is subordinated to the US Obligations, (ii) is not Guaranteed by the Parent, International or any subsidiary of the Parent or International, (iii) does not mature or require any scheduled payment of principal or any mandatory repayment or prepayment (contingent or otherwise) prior to the date that is six months after the Extended Maturity Date, and (iv) contains other terms and conditions reasonably acceptable to the Administrative Agent (it being understood that the terms of such Indebtedness shall not include any financial covenants or a default based solely on the occurrence of a Default or Event of Default).
“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the Parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
“Subsidiary” means any subsidiary of any Borrower.
“Swap” means any agreement, contract, or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“Swap Obligation” means, with respect to any person, any obligation to pay or perform under any Swap.
“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Lender in respect of any Swingline Loan shall be its US Funding Revolving Commitment Percentage (determined on the date such Swingline Loan is made, as reduced or increased by any assignment effected in accordance with Section 12.04) of the principal amount of such Swingline Loan (to the extent such Lender did not make such Swingline Loan in the capacity as a Swingline Lender).
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“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of Swingline Loans hereunder.
“Swingline Loan” means a Loan made pursuant to Section 2.08.
“Tax Allocation Agreement” means the Tax Allocation Agreement, dated as of April 14, 2008, by and among Parent and each of its subsidiary corporations, as amended by the First Amendment, dated as of January 22, 2009, the Joinder, dated as of December 16, 2009, the Joinders, dated as of March 18, 2010, and the Joinders, dated as of April 22, 2016, and as further amended, supplemented or otherwise modified from time to time.
“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority, including any interest, inflationary adjustments, additions to tax or penalties applicable thereto.
“Term Lender” means each US Lender that holds a Term Loan or that has a New Term Loan Commitment.
“Term Loan” means any 2011 Term Loan and, following the making thereof, any New Term Loan.
“Term Percentage” means, as to any Term Lender, at any time, the percentage which the aggregate principal amount of such Lender’s Term Loans (or 2011 Term Loans or New Term Loans, as the context so requires) then outstanding constitutes of the aggregate principal amount of the applicable Term Loans then outstanding.
“(Three-Month Total)” means, when used with respect to any type of Receivables (or portions thereof) at the end of any month, the sum of the aggregate Unpaid Balances of such type of Receivables (or portions thereof) at the end of such month and at the end of each of the immediately preceding two months.
“Total Revolving Commitments” means at any time, the aggregate amount of the Revolving Commitments then in effect.
“Total Revolving Credit Exposure” means at any time, the aggregate amount of the Revolving Credit Exposure of the Lenders outstanding at such time.
“Transactions” means the execution, delivery and performance by the Borrowers of this Agreement, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of Credit hereunder and the execution, delivery and performance by the Parent of the Parent Guarantee and by the Parent and International of the Parents’ Side Agreement.
“Trustee” means Deutsche Bank Trust Company Americas.
“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
29
“Unpaid Balance” means at any time with respect to any Serviced Wholesale Note (or installment thereof), the unpaid principal amount thereof at such time.
“Unrestricted Cash” means all cash and Marketable Securities (as defined in the Security Agreement) of the US Borrower and its Subsidiaries not classified as “Restricted Cash” in accordance with GAAP.
“US”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are being made to the US Borrower.
“U.S.” and “United States” means the United States of America.
“US Borrower” has the meaning set forth in the preamble to this Agreement.
“US Commitments” means, collectively, the New Term Loan Commitments and the US Revolving Commitments.
“US Funding Revolving Commitment Percentage” means, as at any date of determination (after giving effect to the making, and application of proceeds, of any Loans made on such date pursuant to Section 2.07), with respect to any US Lender, that percentage which the Available US Revolving Commitment of such Lender then constitutes of the aggregate Available US Revolving Commitments; provided that each US Lender’s US Funding Revolving Commitment Percentage of any US Revolving Loan or Swingline Loan the proceeds of which are applied to refund any Swingline Loan or to pay reimbursement obligations in respect of any Letter of Credit shall be equal to such US Lender’s US Funding Revolving Commitment Percentage of such Swingline Loan or reimbursement obligations (determined on the date on which such Swingline Loans were made or such Letter of Credit was issued, as the case may be, but giving effect to any assignments).
“US Lenders” means each Lender having an amount greater than zero set forth under the heading “US Extended Revolving Commitment”, “US Revolving Commitment”, “2011 Original Maturity Date Term Loans” or “2011 Extended Maturity Date Term Loans” opposite its name on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Acceptance or a Joinder Agreement with respect to a 2011 Term Loan or a US Commitment.
“US Obligations” means the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and Reimbursement Obligations and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the US Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans and all other obligations and liabilities of the US Borrower to the Administrative Agent or to any Lender (or, in the case of Hedging Agreements, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, the Letters of Credit, any Hedging Agreement or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all fees, charges and disbursements of counsel to the Administrative Agent or to any Lender that are required to be paid by the US Borrower pursuant hereto) or otherwise.
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“US Extended Revolving Commitment” means each US Revolving Commitment listed on Schedule 2.01 as a “US Extended Revolving Commitment”.
“US Revolving Commitment” means, with respect to each US Lender, the commitment of such Lender to make US Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, in an aggregate amount not to exceed at any time outstanding the amount initially set forth opposite such Lender’s name on Schedule 2.01 under the heading “US Revolving Commitment” or in the Joinder Agreement or Assignment and Acceptance pursuant to which such Lender shall have assumed its US Revolving Commitment, as applicable, as such commitment may be (a) reduced from time to time pursuant to Section 4.03 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 12.04. The original aggregate principal amount of the US Revolving Commitments as of the Effective Date is $400,000,000 of which $274,675,378.56 constitute US Extended Revolving Commitments. For the avoidance of doubt, any US Extended Revolving Commitment shall be a US Revolving Commitment for all purposes of this Agreement.
“US Revolving Commitment Percentage” means, as to any US Lender at any time, the percentage which such Lender’s US Revolving Commitment then constitutes of the aggregate US Revolving Commitments of all US Lenders (or, if all US Revolving Commitments have terminated or expired, the percentage shall be determined based upon the US Revolving Commitments most recently in effect, giving effect to any assignments).
“Used Truck Loan Agreement” means the Used Truck Financing Secured Note, dated as of July 23, 2014 (as amended, supplemented or otherwise modified from time to time), between the US Borrower and International.
“Used Truck Loans” shall mean the aggregate outstanding amounts owed by International to the US Borrower under the certain Used Truck Loan Agreement, which shall equal the amount of “Finance Receivables from Affiliates” as set forth in the US Borrower’s financial statements, less any amounts included therein that are not related to that Used Truck Loan Agreement as described in the footnotes to such financial statements.
“Warehousing Collateral” means the collateral securing Warehousing Debt, including, without limitation, any spread account or reserve required to be established under the relevant securitization documents.
“Warehousing Debt” means as of any date Indebtedness of the US Borrower or any of its Subsidiaries with respect to which (i) neither the US Borrower nor any of its Subsidiaries (other than the US Borrower or such Subsidiary) has any liability, absolute or contingent, direct or indirect, provided that, for purposes of the foregoing, neither the US Borrower nor any of its Subsidiaries shall be deemed to have any liability with respect to any such Indebtedness solely as a result of any Customary Securitization Undertaking of the US Borrower or such Subsidiary, as the case may be, and (ii) recourse for payment thereof is expressly limited to the Warehousing Collateral.
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“Wholesale Notes” means, as the context may require, (a) all assets of the types classified under the heading “Wholesale notes” in the statement of consolidated financial condition of the US Borrower and its consolidated Subsidiaries as of October 31, 2015 and the related statements of consolidated income and retained earnings and consolidated cash flow for the fiscal year then ended, together with the notes thereto, included in the 2015 Annual Report and reported on by KPMG or (b) the aggregate Unpaid Balances thereof.
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement and any other Loan Document, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”), by Type (e.g., a “Eurodollar Loan”), by Borrower (e.g., a “Mexican Loan”), by Class and Type (e.g., a “Eurodollar Revolving Loan”), by Class and Borrower (e.g., a “Mexican Revolving Loan”), by Borrower and Type (e.g., a “Mexican Eurodollar Loan”) or by Class, Type and Borrower (e.g., a “Mexican Eurodollar Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) by Type (e.g., a “Eurodollar Borrowing”), by Borrower (e.g., a “Mexican Borrowing”), by Class and Type (e.g., a “Eurodollar Revolving Borrowing”), by Class and Borrower (e.g., a “Mexican Revolving Loan”), by Borrower and Type (e.g., a “Mexican Eurodollar Loan”) or by Class, Type and Borrower (e.g., a “Mexican Eurodollar Revolving Loan”).
SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
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SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that (a) if the US Borrower notifies the Administrative Agent that such Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the US Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP, or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith and (b) if at any time after the Effective Date, any obligations of the US Borrower or any of its Subsidiaries that would not have constituted Indebtedness as of the Effective Date are recharacterized as Indebtedness in accordance with any relevant changes in GAAP, such recharacterized obligations shall not be considered Indebtedness for all purposes hereunder. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard having a similar effect) to value any Indebtedness or other liabilities of the Parent, the US Borrower or any Subsidiary at “fair value”, as defined therein.
SECTION 1.05. Interpretation. References in this Agreement to the term “sale” with respect to any transfer of Receivables, rights to receive income therefrom or undivided interests therein are deemed to include any transfer which purports to be a sale on the face of the agreement governing such transfer, without regard to whether such transfer would constitute a “true sale” under applicable legal principles. The terms “sell” and “sold”, as used as described in the foregoing sentence, shall have correlative meanings.
ARTICLE II
THE US CREDIT FACILITIES
SECTION 2.01. [Reserved].
SECTION 2.02. [Reserved].
SECTION 2.03. Repayment of Term Loans. (a) Before the Original Maturity Date, the 2011 Term Loan of each Term Lender shall be repaid on May 31, 2016, August 31, 2016 and November 31, 2016 in installments, each of which shall be in an amount equal to such Lender’s Term Percentage with respect to the 2011 Term Loans multiplied by $8,500,000.
(b) On the Original Maturity Date, the remaining principal balance of the 2011 Original Maturity Date Term Loans shall be repaid in full by the US Borrower to each Term Lender holding the 2011 Original Maturity Date Term Loans in accordance with such Lender’s Term Percentage with respect to the 2011 Original Maturity Date Term Loans.
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(c) After the Original Maturity Date, the 2011 Extended Maturity Date Term Loan of each Term Lender shall be repaid in consecutive quarterly installments, commencing on February 28, 2017, each of which shall be in an amount equal to such Lender’s Term Percentage with respect to the 2011 Extended Maturity Date Term Loans multiplied by 2.5% of the 2011 Extended Maturity Date Term Loans outstanding on the Original Maturity Date.
(d) The New Term Loans of each Term Lender shall be repaid in consecutive quarterly installments, each of which shall be in an amount equal to such Lender’s Term Percentage with respect to such New Term Loan multiplied by 2.5% of the New Term Loans made on the applicable Increased Amount Date pursuant to Section 4.16.
(e) Subject to Section 4.17, on the Extended Maturity Date, the remaining principal balance of the 2011 Extended Maturity Date Term Loans and the New Term Loans shall be repaid in full by the US Borrower to each Term Lender holding such Loans in accordance with such Lender’s Term Percentage with respect to such Loans.
SECTION 2.04. US Revolving Commitments. Subject to the terms and conditions set forth herein, each US Lender agrees to make US Revolving Loans to the US Borrower from time to time during the Availability Period so long as after giving effect thereto (a) the Available US Revolving Commitment of each US Lender is greater than or equal to zero and (b) the aggregate Revolving Credit Exposures of all the Lenders does not exceed the aggregate US Revolving Commitments. Within the foregoing limits and subject to the terms and conditions set forth herein, the US Borrower may borrow, prepay and reborrow US Revolving Loans.
SECTION 2.05. US Revolving Loans and Borrowings. (a) Each US Revolving Loan shall be made as part of a US Borrowing consisting of US Revolving Loans made by the US Lenders ratably in accordance with their US Funding Revolving Commitment Percentages. The failure of any US Lender to make any US Revolving Loan required to be made by it shall not relieve any other US Lender of its obligations hereunder; provided that the US Revolving Commitments of the US Lenders are several and no US Lender shall be responsible for any other US Lender’s failure to make US Revolving Loans as required.
(b) Subject to Section 4.09, each US Revolving Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the US Borrower may request in accordance herewith. Unless otherwise agreed between the US Borrower and the Swingline Lender as provided in Section 2.08(a), each Swingline Loan shall be an ABR Loan. Each US Lender at its option may make any US Revolving Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the US Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any US Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000. At the time that each US ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000
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and not less than $5,000,000; provided that a US ABR Revolving Borrowing may be in an aggregate amount that is equal to (i) the entire unused balance of the total US Revolving Commitments or (ii) that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.09(e) or (iii) that is required to repay any US Revolving Loans as contemplated by Section 2.07(a). Each Swingline Loan shall be in an amount that is an integral multiple of $500,000 and not less than $1,000,000. US Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of ten US Eurodollar Revolving Borrowings outstanding.
Notwithstanding any other provision of this Agreement, the US Borrower shall not be entitled to request, or to elect to convert or continue, any US Borrowing if the Interest Period requested with respect thereto would end after the Extended Maturity Date.
SECTION 2.06. Procedure for US Revolving Borrowings. To request a US Revolving Borrowing, the US Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a US Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of the proposed Borrowing or (b) in the case of a US ABR Borrowing, not later than 12:00 Noon, New York City time, on the date of the proposed Borrowing; provided that any such notice of a US ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.09(e) may be given not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable (except in the circumstance where increased costs will result or where it is illegal to make a US Eurodollar Borrowing) and shall be confirmed promptly by delivery to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the US Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.05:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and
(v) the location and number of the US Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 4.01.
If no election as to the Type of US Revolving Borrowing is specified, then the requested US Revolving Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Revolving Borrowing, then the US Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section 2.06, the Administrative Agent shall advise each US Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested US Borrowing.
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SECTION 2.07. Certain Borrowings of US Revolving Loans and Refunding of Loans. (a) If on any date (a “Borrowing Date”) on which the Mexican Borrower has requested the Mexican Lenders to make Mexican Revolving Loans (the “Requested Mexican Loans”), (i) any Mexican Lender’s Mexican Commitment Percentage of the Requested Mexican Loans exceeds the Available Mexican Commitment of such Mexican Lender on such date (before giving effect to the making, and application of proceeds, of any Loans required to be made pursuant to this Section 2.07 on such date) and (ii) the amount of such excess is less than or equal to the aggregate Available US Revolving Commitments of all Non-Mexican Lenders (before giving effect to the making, and application of proceeds, of any Loans pursuant to this Section 2.07 on such date), each Non-Mexican Lender shall make a US Revolving Loan to the US Borrower on such date, and the proceeds of such US Revolving Loans shall be simultaneously applied to repay outstanding US Revolving Loans of the Mexican Lenders, in amounts such that, after giving effect to (A) such borrowings and repayments and (B) the making of the Requested Mexican Loans, the Revolving Credit Exposure Percentage of each US Lender will equal (as nearly as possible) its US Revolving Commitment Percentage. To effect such borrowings and repayments, (1) not later than 12:00 Noon, New York City time, on such requested Borrowing Date, the proceeds of such US Revolving Loans shall be made available by each Non-Mexican Lender to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders, in immediately available funds, and the Administrative Agent shall apply the proceeds of such US Revolving Loans toward repayment of outstanding US Revolving Loans of the Mexican Lenders and (2) concurrently with the repayment of such Loans on such date, (x) the Mexican Lenders shall, in accordance with the applicable provisions hereof, make the Requested Mexican Loans in an aggregate amount equal to the amount so requested by the Mexican Borrower (but not in any event greater than the aggregate Available Mexican Commitments after giving effect to the making of such repayment of US Revolving Loans on such date) and (y) the US Borrower shall pay to the Administrative Agent for the account of the Lenders whose US Revolving Loans are repaid on such date pursuant to this Section 2.07 all interest accrued on the amounts repaid to the date of repayment, together with any amounts payable pursuant to Section 4.11 in connection with such repayment.
(b) If any borrowing of US Revolving Loans is required pursuant to this Section 2.07, the US Borrower shall notify the Administrative Agent in the manner provided for US Revolving Loans in Section 2.06, except that the minimum borrowing amounts and threshold multiples in excess thereof applicable to ABR Loans set forth in Section 2.05(c) shall not be applicable to the extent that such minimum borrowing amounts exceed the amounts of US Revolving Loans required to be made pursuant to this Section 2.07.
SECTION 2.08. Swingline Loans. (a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the US Borrower from time to time during the Availability Period, in an aggregate principal amount at any time outstanding not to exceed $25,000,000, so long as after giving effect thereto (i) the Available US Revolving Commitment of each US Lender is greater than or equal to zero, (ii) without duplication, the sum of the Revolving Credit Exposure of the Swingline Lender and the outstanding principal amount of Swingline Loans (to the extent that the other Lenders shall not have funded their participation)
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does not exceed the US Revolving Commitment of the Swingline Lender and (iii) the aggregate Revolving Credit Exposures of all the Lenders does not exceed the aggregate US Revolving Commitments; provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the US Borrower may borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, the US Borrower shall notify the Administrative Agent and the Swingline Lender of such request by telephone (confirmed in writing), not later than 1:00 p.m., New York City time, on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. Each Swingline Loan shall be an ABR Loan. The Swingline Lender shall make each Swingline Loan available to the US Borrower by means of a credit to the general deposit account of the US Borrower with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.09(e), by remittance to the Issuing Bank) by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may, by written notice given to the Administrative Agent not later than 10:00 a.m., New York City time on any Business Day, require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender, specifying in such notice such Lender’s US Funding Revolving Commitment Percentage of such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s US Funding Revolving Commitment Percentage of such Swingline Loan or Loans. Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the US Revolving Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 4.01 with respect to Loans made by such Lender (and Section 4.01 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the US Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the US Borrower (or other party on behalf of the US Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the US Borrower of any default in the payment thereof.
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(d) The Swingline Lender may be replaced at any time by written agreement among the US Borrower, the Administrative Agent, the replaced Swingline Lender and the successor Swingline Lender. The Administrative Agent shall notify the Lenders of any such replacement of the Swingline Lender. At the time any such replacement shall become effective, the US Borrower shall pay all unpaid interest accrued for the account of the replaced Swingline Lender pursuant to Section 4.08. From and after the effective date of any such replacement, (i) the successor Swingline Lender shall have all the rights and obligations of the replaced Swingline Lender under this Agreement with respect to Swingline Loans made thereafter and (ii) references herein to the term “Swingline Lender” shall be deemed to refer to such successor or to any previous Swingline Lender, or to such successor and all previous Swingline Lenders, as the context shall require. After the replacement of the Swingline Lender hereunder, the replaced Swingline Lender shall remain a party hereto and shall continue to have all the rights and obligations of the Swingline Lender under this Agreement with respect to Swingline Loans made by it prior to its replacement, but shall not be required to make additional Swingline Loans.
(e) Subject to the appointment and acceptance of a successor Swingline Lender, the Swingline Lender may resign as the Swingline Lender at any time upon thirty days’ prior written notice to the Administrative Agent, the US Borrower and the Lenders, in which case, the Swingline Lender shall be replaced in accordance with Section 2.08(d) above.
SECTION 2.09. Letters of Credit. (a) General. Subject to the terms and conditions set forth herein, the US Borrower may request the issuance of Letters of Credit for its own account, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the US Borrower to, or entered into by the US Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the US Borrower shall deliver to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a written notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, the date of issuance, amendment, renewal or extension, the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the US Borrower also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the US Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $25,000,000, (ii) the Available US Revolving Commitment of each US Lender is greater than or equal to zero and (iii) the aggregate Revolving Credit Exposures of all the Lenders shall not exceed the aggregate US Revolving Commitments. Notwithstanding anything herein to the contrary, the Issuing Bank shall have no obligation
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hereunder to issue, and shall not issue, any Letter of Credit the proceeds of which would be made available to any Person (i) to fund any activity or business of or with any Sanctioned Person, or in any country or territory that, at the time of such funding, is the subject of any Sanctions, in each case, in any manner that would result in a violation of any Sanctions or (ii) in any manner that would result in a violation of any Sanctions by any party to this Agreement.
(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date that is one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension; provided that such renewal or extension shall in no event extend beyond the date referred to in the following clause (ii)) and (ii) the date that is five Business Days prior to the Extended Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each US Lender, and each US Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such US Lender’s US Funding Revolving Commitment Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each US Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s US Funding Revolving Commitment Percentage of each LC Disbursement made in respect of a Letter of Credit by the Issuing Bank and not reimbursed by the US Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the US Borrower for any reason. Each US Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the US Revolving Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the US Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, New York City time, on the date that such LC Disbursement is made, if the US Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been received by the US Borrower prior to such time on such date, then not later than 12:00 noon, New York City time, on (i) the Business Day that the US Borrower receives such notice, if such notice is received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day immediately following the day that the US Borrower receives such notice, if such notice is not received prior to such time on the day of receipt; provided that the US Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.06 or Section 2.08 that such payment be financed with a US ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the US Borrower’s obligation to make such payment shall be discharged and replaced by the resulting US ABR Revolving Borrowing or Swingline Loan. If the US Borrower fails to make such payment when due, the Administrative Agent shall notify each US Lender of the applicable LC
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Disbursement, the payment then due from the US Borrower in respect thereof and such US Lender’s US Funding Revolving Commitment Percentage thereof. Promptly following receipt of such notice, each US Lender shall pay to the Administrative Agent its US Funding Revolving Commitment Percentage of the payment then due from the US Borrower, in the same manner as provided in Section 4.01 with respect to Loans made by such Lender (and Section 4.01 shall apply, mutatis mutandis, to the payment obligations of the US Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the US Lenders. Promptly following receipt by the Administrative Agent of any payment from the US Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that US Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such US Lenders and the Issuing Bank as their interests may appear. Any payment made by a US Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of US ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the US Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The US Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein;
(ii) any amendment or waiver of or any consent to or departure from all or any of the provisions of any Letter of Credit or this Agreement;
(iii) the existence of any claim, setoff, defense or other right that the US Borrower, any other party guaranteeing, or otherwise obligated with, the US Borrower, any Subsidiary or other Affiliate thereof or any other Person may at any time have against the beneficiary under any Letter of Credit, the Issuing Bank, the Administrative Agent or any Lender or any other Person, whether in connection with this Agreement or any other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, so long as such draft or other document appears on its face to comply with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the Issuing Bank, the Lenders or the Administrative Agent or any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of the US Borrower’s obligations hereunder.
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Neither the Administrative Agent, the US Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder, including any of the circumstances specified in clauses (i) through (vi) above, as well as any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the US Borrower to the extent of any direct damages (as opposed to special, indirect consequential or punitive damages, claims in respect of which are hereby waived by the US Borrower to the extent permitted by applicable law) suffered by the US Borrower that are caused by the Issuing Bank’s failure to exercise the agreed standard of care (as set forth below) in determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that the Issuing Bank shall have exercised the agreed standard of care in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction). Without limiting the generality of the foregoing, it is understood that the Issuing Bank may accept documents that appear on their face to be in substantial compliance with the terms of a Letter of Credit, without responsibility for further investigation, regardless of any notice or information to the contrary, and may make payment upon presentation of documents that appear on their face to be in substantial compliance with the terms of such Letter of Credit; provided that the Issuing Bank shall have the right, in its sole discretion, to decline to accept such documents and to make such payment if such documents are not in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the US Borrower by telephone (confirmed in writing) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the US Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to any such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, then, unless the US Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the US Borrower reimburses such LC Disbursement, at the rate per annum then applicable to US ABR Revolving Loans; provided that, if the US Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 4.08(d) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any US Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.
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(i) Replacement or Resignation of the Issuing Bank. (i) The Issuing Bank may be replaced at any time by written agreement among the US Borrower, the Administrative Agent and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of the Issuing Bank. At the time any such replacement shall become effective, the US Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 4.07(b). From and after the effective date of any such replacement, (x) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement and any other Loan Document with respect to Letters of Credit to be issued thereafter and (y) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement and any other Loan Document with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.
(ii) Subject to the appointment and acceptance of a successor Issuing Bank, the Issuing Bank may resign as the Issuing Bank at any time upon thirty days’ prior written notice to the Administrative Agent, the Borrower and the Lenders, in which case, the Issuing Bank shall be replaced in accordance with Section 2.09(i)(i) above.
(i) Cash Collateralization. If any Event of Default shall occur and be continuing, on the Business Day that the US Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, US Lenders with LC Exposure representing greater than 50% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the US Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the US Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Parent, International, the US Borrower or its Subsidiaries (other than the Securitization Subsidiaries) described in clause (i) or (j) of Article IX. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the US Borrower under this Agreement and any other Loan Document. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account, and the US Borrower hereby grants to the Administrative Agent, for the ratable benefit of the Lenders, a security interest in such cash collateral account and all cash and other investment property from time to time credited thereto, and all proceeds thereof. Other than any interest earned on the investment of such deposit, which investments shall be made at the option and sole discretion of the Administrative Agent and at the US Borrower’s risk and expense, such deposit shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements in respect of Letters of Credit for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the US Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of US Lenders with LC Exposure representing greater than 50% of the
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total LC Exposure), be applied to satisfy other obligations of the US Borrower under this Agreement and any other Loan Document. If the US Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the US Borrower within two Business Days after all Events of Default have been cured or waived.
(j) Letters of Credit under Existing Credit Agreement. On the Effective Date, the letters of credit outstanding under the Existing Credit Agreement as of the Effective Date shall be deemed to be Letters of Credit pursuant to and in compliance with this Section 2.09 on the Effective Date.
(k) Letters of Credit under Extended Revolving Commitments. If the Original Maturity Date occurs prior to the expiration of any Letter of Credit, then as of the Original Maturity Date, such Letter of Credit shall automatically be deemed to have been issued (including for purposes of the obligations of the US Lenders to purchase participations therein and to make Loans in respect thereof pursuant paragraphs (d) and (e) of this Section) under (and ratably participated in by Lenders pursuant to) the US Extended Revolving Commitments up to an aggregate amount not to exceed the amount permitted under paragraph (b) of this Section. To the extent reallocations cannot occur pursuant to the immediate preceding sentence, the US Borrower shall cash collateralize any such Letter of Credit in a manner reasonably satisfactory to the Administrative Agent and the Issuing Bank but only up to the amount of such Letter of Credit not so allocated. Except to the extent of reallocations of participations set forth in this paragraph, the occurrence of the Original Maturity Date shall have no effect upon (and shall not diminish) any Letter of Credit issued prior to the Original Maturity Date.
ARTICLE III
THE MEXICAN CREDIT FACILITY
SECTION 3.01. Commitments. Subject to the terms and conditions set forth herein, each Mexican Lender agrees to make Mexican Revolving Loans to the Mexican Borrower from time to time during the Availability Period so long as after giving effect thereto (a) the aggregate principal amount of outstanding Mexican Revolving Loans does not exceed $100,000,000, (b) the Available Mexican Commitment of each Mexican Lender is greater than or equal to zero and (c) the aggregate Revolving Credit Exposures of all the Lenders does not exceed the aggregate US Revolving Commitments. Within the foregoing limits and subject to the terms and conditions set forth herein, the Mexican Borrower may borrow, prepay and reborrow Mexican Revolving Loans.
SECTION 3.02. Loans and Borrowings. (a) Each Mexican Revolving Loan shall be made as part of a Mexican Borrowing consisting of Mexican Revolving Loans made by the Mexican Lenders ratably in accordance with their respective Mexican Commitments. The failure of any Mexican Lender to make any Mexican Revolving Loan required to be made by it shall not relieve any other Mexican Lender of its obligations hereunder; provided that the Mexican Commitments of the Mexican Lenders are several and no Mexican Lender shall be responsible for any other Mexican Lender’s failure to make Mexican Revolving Loans as required.
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(b) Subject to Section 4.09, each Mexican Revolving Borrowing shall be comprised entirely of Eurodollar Loans. Each Mexican Lender at its option may make any Mexican Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Mexican Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Mexican Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000. There shall not at any time be more than a total of ten Mexican Eurodollar Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the Mexican Borrower shall not be entitled to request, or to elect to continue, any Mexican Borrowing having an Interest Period ending after the Extended Maturity Date.
SECTION 3.03. Requests for Mexican Revolving Borrowings. To request a Mexican Revolving Borrowing, the Mexican Borrower shall notify the Administrative Agent of such request by telephone, not later than 11:00 a.m., New York City time, three Business Days before the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable (except in the circumstance where increased costs will result or where it is illegal to make a Mexican Revolving Borrowing) and shall be confirmed promptly by delivery to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Mexican Borrower and consented to by the US Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 3.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and
(iv) the location and number of the Mexican Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 4.01.
If no Interest Period is specified, then the Mexican Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Mexican Lender of the details thereof and of the amount of such Mexican Lender’s Loan to be made as part of the requested Borrowing.
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ARTICLE IV
TERMS APPLICABLE TO US CREDIT FACILITIES AND MEXICAN CREDIT FACILITY
SECTION 4.01. Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 2:00 P.M., New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders; provided that Swingline Loans shall be made as provided in Section 2.08. The Administrative Agent will make such Loans available to the relevant Borrower by promptly crediting the amounts so received, in like funds, to an account of such Borrower maintained with the Administrative Agent in New York City and designated by such Borrower in the applicable Borrowing Request; provided that (x) ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.09(e) shall be remitted by the Administrative Agent to the Issuing Bank and (y) Revolving Loans made to refinance the Swingline Loans as provided in Section 4.04(a) shall be remitted by the Administrative Agent to the Swingline Lender.
(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed time of any Borrowing or other funding that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing or such other funding, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the relevant Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and such Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to such Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the Federal Funds Effective Rate or (ii) in the case of such Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.
SECTION 4.02. Interest Elections. (a) Each US Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the US Borrower may elect to convert any of its Borrowings to a different Type or to continue any of such Borrowings and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section. Except as provided in Section 4.09, all Mexican Revolving Loans shall be Eurodollar Loans, and the Mexican Borrower may elect Interest Periods in respect thereof as provided in this Section. Each Borrower may elect different options with respect to different portions of its respective affected Borrowings, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Borrowings, which may not be converted or continued.
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(b) To make an election pursuant to this Section, the relevant Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.06 if the US Borrower (applicable to both Revolving Loans and Term Loans), or Section 3.03 if the Mexican Borrower, as the case may be, were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable (except in the circumstance where increased costs will result or where it is illegal to make the proposed conversion or continuance) and shall be confirmed promptly by delivery to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the relevant Borrower.
(c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.06 and Section 3.03:
(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii) in the case of US Borrowings, whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.
If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the relevant Borrower shall be deemed to have selected an Interest Period of one month’s duration.
(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.
(e) If the US Borrower fails to deliver a timely Interest Election Request with respect to a US Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. If the Mexican Borrower fails to deliver a timely Interest Election Request with respect to a Mexican Eurodollar Revolving Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be continued as a Eurodollar Revolving Borrowing with an Interest Period of one month’s duration. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the
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Borrowers, then, so long as an Event of Default is continuing (i) no outstanding US Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each US Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.
SECTION 4.03. Termination and Reduction of Revolving Commitments. (a) (i) As of the Effective Date, the US Revolving Commitments (as defined in the Existing Credit Agreement) shall be reduced to $400,000,000 and the Mexican Commitments (as defined in the Existing Credit Agreement) shall be reduced to $100,000,000.
(ii) Unless previously terminated, the Revolving Commitments (other than the US Extended Revolving Commitments and the Mexican Extended Commitments) shall terminate on the Original Maturity Date.
(iii) Unless previously terminated, the US Extended Revolving Commitments and the Mexican Extended Commitments shall terminate on the Extended Maturity Date.
(b) (i) The US Borrower may at any time terminate, or from time to time reduce, the US Revolving Commitments; provided that (i) each reduction of the US Revolving Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the US Borrower shall not terminate or reduce the US Revolving Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 4.05, the Available US Revolving Commitment or Available Mexican Commitment of any Lender would be less than zero.
(ii) The US Borrower may at any time terminate, or from time to time reduce, the Mexican Commitments; provided that (i) each reduction of the Mexican Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the US Borrower shall not terminate or reduce the Mexican Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 4.05, the Available Mexican Commitment of any Mexican Lender would be less than zero.
(c) The US Borrower shall notify the Administrative Agent of any election to terminate or reduce the US Revolving Commitments or the Mexican Commitments, as the case may be, under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the US Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Revolving Commitments delivered by the US Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the US Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the US Revolving Commitments or the Mexican Commitments, as the case may be, shall be permanent.
SECTION 4.04. Repayment of Loans; Evidence of Debt. (a) The US Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each US
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Lender, the Term Loans in accordance with Section 2.03, (ii) to the Administrative Agent for the account of each US Lender, the then unpaid principal amount of each US Revolving Loan on each of the Original Maturity Date and the Extended Maturity Date, (iii) to the Swingline Lender, the then unpaid principal amount of each Swingline Loan on the earlier of (x) the five Business Days after such Swingline Loan is made and (y) in the case of any Swingline Loan made prior to the Original Maturity Date, the Original Maturity Date or in the case of any Swingline Loan made on or after the Original Maturity Date, the Extended Maturity Date, as applicable; provided that on each date that a US Revolving Loan is borrowed, the US Borrower shall repay all Swingline Loans then outstanding and the proceeds of any such Revolving Loan shall be applied by the Administrative Agent to repay any Swingline Loans outstanding. The Mexican Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Mexican Lender the then unpaid principal amount of each of its respective Mexican Revolving Loans on each of the Original Maturity Date and the Extended Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of each Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Borrower, Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from each Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrowers to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a promissory note (a “Note”). In such event, the relevant Borrower shall prepare, execute and deliver to such Lender a Note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such Note and interest thereon shall at all times (including after assignment pursuant to Section 12.04) be represented by one or more Notes in such form.
SECTION 4.05. Optional Prepayments of Loans. (a) Each Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with paragraph (b) of this Section. Optional prepayments of the Term Loans may not be reborrowed.
(b) The US Borrower or the Mexican Borrower, as the case may be, shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed in writing) of any prepayment hereunder (i) in the case of
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prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 12:00 noon, New York City time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the US Revolving Commitments or Mexican Commitments as contemplated by Section 4.03, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 4.03. Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Partial prepayments of Term Loans and Revolving Loans shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000. Partial prepayments of Swingline Loans shall be in an amount that is an integral multiple of $500,000 and not less than $1,000,000. Prepayments shall be accompanied by accrued interest to the extent required by Section 4.08 and any amounts payable under Section 4.11 in connection with such prepayment.
SECTION 4.06. Mandatory Prepayments and Commitment Reductions. (a) If on any date the US Borrower or any of its Subsidiaries shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered in respect thereof, such Net Cash Proceeds shall be applied within three Business Days toward the prepayment of the Term Loans as set forth in Section 4.06(d); provided, that, notwithstanding the foregoing, on each Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be applied toward the prepayment of the Term Loans as set forth in Section 4.06(d).
(b) If on any date the US Borrower or any of its Subsidiaries shall receive Net Cash Proceeds from any Capital Market Transactions, then an amount equal to 75% of the Net Cash Proceeds from such Capital Market Transaction (to the extent such Net Cash Proceeds, together with the Net Cash Proceeds from prior Capital Market Transactions after the Original Closing Date are in excess of $200,000,000) shall be applied within five Business Days of such issuance or incurrence to the prepayment of the Term Loans as set forth in Section 4.06(d); provided, that, notwithstanding the foregoing, any Net Cash Proceeds from any Capital Market Transactions of less than $200,000,000 shall be applied to prepay any amounts outstanding under the Revolving Credit Facility.
(c) On the Effective Date, if after giving effect to the reduction provided in Section 4.03(a)(i), (x) the aggregate Revolving Credit Exposures of all the Lenders exceeds the aggregate US Revolving Commitments or (y) the aggregate principal amount of outstanding Mexican Revolving Loans exceeds $100,000,000, then the US Borrower or the Mexican Borrower, as applicable, shall repay the applicable Revolving Loans in amounts necessary to be in compliance with this Agreement.
(d) Amounts to be applied in connection with prepayments made pursuant to Section 4.06(a) or (b) shall be applied to the prepayment of the Term Loans in accordance with Section 4.13(a)(iii). The application of any prepayment pursuant to Section 4.06 shall be made, first, to ABR Loans and, second, to Eurodollar Loans in a manner that minimizes amounts due under Section 4.11. Each prepayment of the Loans under Section 4.06 shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.
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SECTION 4.07. Fees. (a) The US Borrower agrees to pay to the Administrative Agent a commitment fee for the account of each US Lender, which shall accrue at the Applicable Rate on the average daily amount of the unused portion of the US Revolving Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which such Commitment terminates. Accrued commitment fees shall be payable in arrears on the last day of March, June, September and December of each year and on the date on which the US Revolving Commitments terminate, commencing on the first such date to occur after the date hereof. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). For purposes of calculating commitment fees, Swingline Loans shall not be treated as usage of the US Revolving Commitments.
(b) The US Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender, a participation fee with respect to its participations in Letters of Credit issued for the US Borrower’s account, which shall accrue at a rate per annum equal to the Applicable Rate applicable to interest on Eurodollar Revolving Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily amount of the LC Exposure in respect of Letters of Credit issued for the US Borrower’s account (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any such Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third Business Day following such last day, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within ten Business Days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(c) Each Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrowers and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders. Fees paid shall not be refundable under any circumstances.
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SECTION 4.08. Interest. (a) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at a rate per annum equal to the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest at a rate per annum equal to in the case of a Eurodollar Revolving Loan or a Eurodollar Term Loan, the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.
(c) [Reserved.]
(d) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by any Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided above or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided above.
(e) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to paragraph (d) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment, (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion and (iv) all accrued interest shall be payable upon termination of the Revolving Commitments.
(f) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.
SECTION 4.09. Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means (including, without limitation, by means of an Interpolated Rate) do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the Majority Facility Lenders in respect of the relevant Facility that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;
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then the Administrative Agent shall give notice thereof to the relevant Borrower and the Lenders by telephone or electronic mail as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrowers and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be revoked, (ii) if any Borrowing Request requests a US Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing and (iii) any request for a Mexican Eurodollar Borrowing shall be revoked; provided that if the circumstances giving rise to such notice affect only one Type of Borrowings, then the other Type of Borrowings shall be permitted.
SECTION 4.10. Increased Costs. (a) If any Change in Law shall:
(i) subject the Administrative Agent or any Lender to any tax of any kind whatsoever with respect to this Agreement or Loans made by such Lender or any Letter of Credit or participation therein, or change the basis of taxation of payments to such Lender in respect thereto (except for Non-Excluded Taxes and changes in the rate of tax on the overall net income of such Lender);
(ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate); or
(iii) impose on any Lender or the London interbank market any other condition;
and the result of any of the foregoing shall be to increase the cost to such Lender or the Administrative Agent of making or maintaining any Loan (or any Loans in the case of (i)) (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender the Administrative Agent of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or the Administrative Agent hereunder (whether of principal, interest or otherwise), then the US Borrower will pay to such Lender or the Administrative Agent such additional amount or amounts as will compensate such Lender or the Administrative Agent for such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital adequacy or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy or liquidity), then from time to time the US Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the US Borrower and shall be conclusive absent manifest error. The US Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.
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(d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the US Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than nine months prior to the date that such Lender notifies such Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof.
SECTION 4.11. Break Funding Payments. In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including, in each case, as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Revolving Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice is permitted to be revocable under Section 2.06, Section 3.03 or Section 4.02(b) and is revoked in accordance with Section 4.09(b) or is permitted to be revocable under Section 4.05(b) and is revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by a Borrower pursuant to Section 4.14, then, in any such event, such Borrower in respect of such Loan shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, the loss to any Lender attributable to any such event shall be deemed to include an amount determined by such Lender to be equal to the excess, if any, of (i) the amount of interest that such Lender would pay for a deposit equal to the principal amount of such Loan for the period from the date of such payment, conversion, failure or assignment to the last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow, convert or continue, the duration of the Interest Period that would have resulted from such borrowing, conversion or continuation) if the interest rate payable on such deposit were equal to the Adjusted LIBO Rate for such Interest Period, over (ii) the amount of interest that such Lender would earn on such principal amount for such period if such Lender were to invest such principal amount for such period at the interest rate that would be bid by such Lender (or an affiliate of such Lender) for dollar deposits from other banks in the eurodollar market at the commencement of such period. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the relevant Borrower and shall be conclusive absent manifest error. The relevant Borrower shall pay such Lender the amount shown as due on any such certificate within ten Business Days after receipt thereof.
SECTION 4.12. Taxes. (a) Any and all payments made by or on behalf of each Borrower under this Agreement or any other Loan Document shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding Excluded Taxes (all such taxes, levies, imposts, duties, charges, fees, deductions or withholdings
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other than Excluded Taxes, “Non-Excluded Taxes”). If any Non-Excluded Taxes or Other Taxes are required to be withheld or deducted from any amounts payable to the Administrative Agent or any Lender under any Loan Document, as determined in good faith by the applicable withholding agent, the amounts so payable by the applicable Borrower to the Administrative Agent or such Lender shall be increased to the extent necessary (after payment of all such Non-Excluded Taxes and Other Taxes) so that the Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made. Whenever any such Non-Excluded Taxes or Other Taxes are payable by any Borrower pursuant to applicable law, thereafter such Borrower shall send to the Administrative Agent for its own account or for the account of such Lender but in any event no later than thirty days following the date on which such Borrower pays any Non-Excluded Taxes or Other Taxes to the Mexican tax authority, as the case may be, the original official report or return, the electronic document obtained after the payment of the withholding tax or the withholding certificate, received by such Borrower showing payment thereof and all other additional information and documents that the Administrative Agent or such Lender shall reasonably request related to such payment. If any Borrower fails to pay any such Non-Excluded Taxes or Other Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, such Borrower shall indemnify the Administrative Agent and each Lender within ten days after written demand thereof for any incremental taxes, interest or penalties that may become payable by the Administrative Agent or such Lender as a result of any such failure. Each Borrower shall jointly and severally indemnify the Administrative Agent and each Lender for any Non-Excluded Taxes or Other Taxes that are payable or paid by the Administrative Agent or such Lender and any incremental taxes, interest or penalties with respect thereto; provided, however, that in no event shall the Mexican Borrower be required to indemnify the Administrative Agent or any Lender for withholding Taxes payable on payments made by the US Borrower under any Loan Document.
(b) In addition, the US Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) The Mexican Borrower shall not be obligated to pay the Administrative Agent or any Lender any amounts described in Section 4.12(a) in respect of Non-Excluded Taxes or Other Taxes that would not have been imposed but for the failure of the Administrative Agent or such Lender: (I) to use its reasonable commercial efforts (consistent with legal and regulatory restrictions) to (i) comply, if applicable, with rule 3.18.19 of the administrative regulations (resolución miscelánea fiscal) or with any successor or substitute administrative regulations or any provisions provided by the applicable law, (ii) maintain its status as a resident (or its principal office to remain as a resident, if acting through an office or a branch thereof) for tax purposes in a country with which Mexico has entered into a tax treaty for the avoidance of double taxation and (iii) comply with the requirements provided in such tax treaty to apply a reduced withholding tax rate on interest or (II) following a reasonable request of the Mexican Borrower upon thirty days’ written notice (unless a lesser period is reasonable under the circumstances), to (x) provide a letter specifying that such Lender is the effective beneficiary of interest hereunder and under any Note held by such Lender as set forth in, and for so long as it is requested under, the Mexican Income Tax Law or in the applicable double taxation treaty to which Mexico is a party and which is in effect or any equivalent administrative regulations (resolución miscelánea fiscal) in effect thereafter while this Agreement shall remain in full force and effect and (y) complete and file with the appropriate Governmental Authority, such forms, certificates or documents (collectively,
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“Forms”) prescribed by law, rule or regulation enacted or issued by Mexico, or required under the applicable double taxation treaty to which Mexico is a party and which is in effect, that are necessary to avoid or reduce such Non-Excluded Taxes or Other Taxes pursuant to provisions of any law, rule or regulation enacted or issued by Mexico, or a double taxation treaty to which Mexico is a party and which is in effect (provided, that (A) such Lender or the Administrative Agent shall be under no obligation to provide any information of any nature (including the information specified above) to the Mexican Borrower which such Lender or the Administrative Agent deems, in such Lender’s or the Administrative Agent’s judgment, to be confidential or the disclosure of which is not permitted by law, (B) such Lender or the Administrative Agent is legally entitled to complete, execute and deliver such Forms and (C) the completion, execution and delivery of such Forms will not result, in the good faith, reasonable determination of such Lender or the Administrative Agent, in the imposition on such Lender or the Administrative Agent of (1) any additional material legal or regulatory burden or (2) any additional material out-of-pocket costs or (3) any other material adverse consequences). If any Lender or beneficial owner of a Note fails to provide the Forms or the letter mentioned in subparagraph (c)(II)(x) above (other than as excepted in the prior proviso), or any Lender (but not an office or branch thereof through which such Lender may be acting) is no longer a resident for tax purposes in a country with which Mexico has entered into a tax treaty for the avoidance of double taxation or due to its own action no longer complies with the requirements set forth in such tax treaty to apply a reduced Mexican withholding tax on interest, the Mexican Borrower may terminate the Mexican Commitment of such Lender and prepay the then outstanding Loans of the affected Lender, together with accrued interest thereon, additional amounts payable in respect thereto and any other amounts payable hereunder.
(d) Any Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which any Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the relevant Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by such Borrower, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate. Unless prejudicial to such Mexican Lender, each Mexican Lender agrees that it shall comply with rule 3.18.19 of the administrative regulations (resolución miscelánea fiscal) and/or any successor or substitute administrative regulation thereof. In addition, any Lender, if requested by the US Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the US Borrower or the Administrative Agent as will enable the US Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Without limiting the generality of the foregoing, any Lender with respect to the US Borrower shall, to the extent it is legally entitled to do so, deliver to the US Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(i) duly completed copies of Internal Revenue Service Form W-9,
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(ii) duly completed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E claiming eligibility for benefits of an income tax treaty to which the United States of America is a party,
(iii) duly completed copies of Internal Revenue Service Form W-8ECI,
(iv) in the case of a Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate substantially in the Form of Exhibit M to the effect that (A) such Lender is not (i) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (ii) a “10 percent shareholder” of the US Borrower within the meaning of section 881(c)(3)(B) of the Code, or (iii) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (B) the interest payments in question are not effectively connected with the United States trade or business conducted by such Lender (a “U.S. Tax Compliance Certificate”) and (y) duly completed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E,
(v) to the extent a Lender is not the beneficial owner (for example, where the Lender is a partnership or participating Lender granting a typical participation), an Internal Revenue Service Form W-8IMY, accompanied by a Form W-8ECI, W-8BEN, W-8BEN-E, U.S. Tax Compliance Certificate, Form W-9, and/or other certification documents from each beneficial owner, as applicable, or
(vi) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the US Borrower or Administrative Agent to determine the withholding or deduction required to be made.
Each Lender agrees that if any form or certification previously delivered by it expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the US Borrower and the Administrative Agent in writing of its legal inability to do so.
(e) If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the US Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the US Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the US Borrower or the Administrative Agent as may be necessary for the Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement. For purposes of determining withholding Taxes imposed under FATCA, from and after the Effective Date of the Agreement, the US Borrower and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) this Agreement as not qualifying as a “grandfathered obligation” within the meaning of United States Treasury Regulations Section 1.1471-2(b)(2)(i).
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(f) If any Lender receives a refund in respect of any Non-Excluded Taxes or Other Taxes paid by any Borrower, (a “Tax Refund”), which in the sole judgment of such Lender is allocable to such payment, it shall promptly pay such Tax Refund to such Borrower net of all out-of-pocket expenses of such Lender incurred in obtaining such Tax Refund; provided, however, that such Borrower agrees to promptly return such Tax Refund to the applicable Lender if it receives notice from the applicable Lender that such Lender is required to repay such Tax Refund. This paragraph shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrowers or any other Person.
(g) Each Lender shall indemnify the Administrative Agent within 10 days after demand therefor, for the full amount of any taxes, levies, imposts, duties, charges, fees, deductions or withholdings attributable to such Lender that are payable or paid by the Administrative Agent, and reasonable expenses arising therefrom or with respect thereto, whether or not such taxes, levies, imposts, duties, charges, fees, deductions or withholdings were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.
SECTION 4.13. Payments Generally; Pro Rata Treatment; Sharing of Set-offs. (a) (i) Except as provided in Section 2.07, each Borrowing by the US Borrower from the US Lenders hereunder shall be made pro rata according to the respective US Funding Revolving Commitment Percentages or Term Percentages, as the case may be, of the US Lenders in effect on the date of such Borrowing. Any reduction of the US Revolving Commitments of the US Lenders shall be allocated by the Administrative Agent among the US Lenders pro rata according to the US Revolving Commitment Percentages of the US Lenders.
(ii) Except as provided in Section 2.07, each payment (other than any optional prepayment) by the US Borrower on account of principal of or interest on the US Revolving Loans shall be allocated by the Administrative Agent pro rata according to the respective principal amounts thereof then due and owing to each US Lender. Each optional prepayment by the US Borrower on account of principal of or interest on the US Revolving Loans shall be allocated by the Administrative Agent pro rata according to the respective outstanding principal amounts thereof.
(iii) Each payment (including each prepayment) by the US Borrower on account of principal of and interest on the Term Loans shall be made pro rata according to the respective outstanding principal amounts of the Term Loans then held by the Term Lenders. The amount of each principal prepayment of the Term Loans shall be applied to reduce the then remaining installments of the Term Loans in direct order of maturity. Amounts prepaid on account of the Term Loans may not be reborrowed.
(iv) Each Borrowing of Mexican Revolving Loans by the Mexican Borrower from the Mexican Lenders hereunder shall be made, and any reduction of the Mexican Commitments shall be allocated by the Administrative Agent, pro rata according to the Mexican Commitment Percentages of the Mexican Lenders.
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(v) Each payment (including each prepayment) by the Mexican Borrower on account of principal of and interest on Mexican Revolving Loans shall be allocated by the Administrative Agent pro rata according to the respective principal amounts of the Mexican Loans then due and owing by such Borrower to each Mexican Lender.
(b) Each Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or under Section 4.10, Section 4.11 or Section 4.12, or otherwise) prior to 12:00 noon, New York City time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 270 Park Avenue, New York, New York, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Section 4.10, Section 4.11, Section 4.12 and Section 12.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in Dollars.
(c) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, to pay interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, to pay principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.
(d) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by any Borrower pursuant to and in
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accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements or Swingline Loans to any assignee or participant, other than to a Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.
(e) Unless the Administrative Agent shall have received notice from the relevant Borrower prior to the date on which any payment is due from such Borrower to the Administrative Agent for the account of the Lenders hereunder that such Borrower will not make such payment, the Administrative Agent may assume that such Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the relevant Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Federal Funds Effective Rate.
(f) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.08(c), Section 2.09(d) or Section 2.09(e) or Section 4.01(b), then the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to ABR Loans under the relevant Facility, on demand, from the relevant Borrower.
SECTION 4.14. Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests compensation under Section 4.10, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.12, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the sole judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 4.10 or Section 4.12, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. Each Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 4.10, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.12, or if any Lender becomes a Defaulting Lender, then the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 12.04), all its interests, rights and obligations under this Agreement or any other Loan Document to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such
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assignment); provided that (i) the Borrowers shall have received the prior written consent of the Administrative Agent (and, if a Revolving Commitment is being assigned, the Issuing Bank and Swingline Lender), which consent or consents shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 4.10 or payments required to be made pursuant to Section 4.12, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.
SECTION 4.15. Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(a) fees shall cease to accrue on the unfunded portion of the Revolving Commitment of such Defaulting Lender pursuant to Section 4.07(a);
(b) the Revolving Commitment and Revolving Credit Exposure of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 12.02); provided that this clause (b) shall not apply to any waiver, amendment or modification set forth in clauses (i) through (iii) of Section 12.02(b) or to any other waiver amendment or modification requiring the consent of all Lenders which affects such Defaulting Lender differently than other affected Lenders;
(c) if any Swingline Exposure or LC Exposure exists at the time a Revolving Lender becomes a Defaulting Lender then:
(i) all or any part of such Swingline Exposure and LC Exposure shall be reallocated among the non-Defaulting Lenders in accordance with their respective US Funding Revolving Commitment Percentages but only to the extent (x) the sum of all non-Defaulting Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total of all non-Defaulting Lenders’ Revolving Commitments and (y) the conditions set forth in Section 6.02 are satisfied at such time;
(ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, the US Borrower shall within three Business Days following notice by the Administrative Agent (x) first, prepay such Defaulting Lender’s remaining Swingline Exposure and (y) second, cash collateralize such Defaulting Lender’s remaining LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.09(i) for so long as such LC Exposure is outstanding;
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(iii) if the US Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to Section 4.15(c)(ii), the US Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 4.07(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;
(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to Section 4.15(c)(i), then the fees payable to the Lenders pursuant to Section 4.07(a) and Section 4.07(b) shall be adjusted in accordance with such non-Defaulting Lenders’ US Funding Revolving Commitment Percentages; and
(v) if any Defaulting Lender’s LC Exposure is neither cash collateralized nor reallocated pursuant to this Section 4.15(c), then, without prejudice to any rights or remedies of the Issuing Bank or any Lender hereunder, all commitment fees that otherwise would have been payable to such Defaulting Lender (solely with respect to the portion of such Defaulting Lender’s Commitment that was utilized by such LC Exposure) and letter of credit fees payable under Section 4.07(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until such LC Exposure is cash collateralized and/or reallocated;
(d) so long as any Revolving Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure will be 100% covered by the Revolving Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the US Borrower in accordance with Section 4.15(c), and participating interests in any such newly issued or increased Letter of Credit or newly made Swingline Loan shall be allocated among non-Defaulting Lenders in a manner consistent with Section 4.15(c)(i) (and Defaulting Lenders shall not participate therein); and
(e) so long as any Lender is a Defaulting Lender, any amount payable to such Defaulting Lender hereunder (whether on account of principal, interest, fees or otherwise and including any amount that would otherwise be payable to such Defaulting Lender pursuant to Section 4.13(d) but excluding Section 4.14) shall, in lieu of being distributed to such Defaulting Lender, be retained by the Administrative Agent in a segregated account (for the avoidance of doubt, it is noted that any amounts retained pursuant to this Section 4.15(e) shall for all other purposes be treated as having been paid to such Defaulting Lender) and, subject to any applicable requirements of law, be applied at such time or times as may be determined by the Administrative Agent (i) first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder, (ii) second, pro rata, to the payment of any amounts owing by such Defaulting Lender to the Issuing Bank or Swingline Lender hereunder, (iii) third, if such Defaulting Lender is a Revolving Lender and the Administrative Agent so determines or is requested by an Issuing Bank or Swingline Lender, held in such account as cash collateral for future funding obligations of the Defaulting Lender in respect of any existing or future participating interest in any Swingline Loan or Letter of Credit, (iv) fourth, so long as no Default or Event of Default exists, to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent, (v) fifth, if such Defaulting Lender is a Revolving Lender and the
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Administrative Agent or the US Borrower (with the consent of the Administrative Agent, such consent not to be unreasonably withheld or delayed) so determines, held in such account as cash collateral for future funding obligations of the Defaulting Lender in respect of any Loans under this Agreement, (vi) sixth, to the payment of any amounts owing to the Lenders or an Issuing Bank or Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender or such Issuing Bank or Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement, (vii) seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the US Borrower as a result of any judgment of a court of competent jurisdiction obtained by the US Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement, and (viii) eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if such Defaulting Lender is a Revolving Lender and such payment is (x) a prepayment of the principal amount of any Loans or reimbursement obligations in respect of LC Disbursements which such Defaulting Lender has funded its participation obligations and (y) made at a time when the conditions set forth in Section 6.02 are satisfied, such payment shall be applied solely to prepay the Loans of, and reimbursement obligations owed to, all non-Defaulting Lenders pro rata prior to being applied to the prepayment of any Loans, or reimbursement obligations owed to, any Defaulting Lender; provided further that, if such Defaulting Lender is also a Term Loan Lender, then the amounts to be paid in accordance with Section 4.06 with respect to such Lender’s Term Loans shall not be withheld from such Defaulting Lender.
In the event that the Administrative Agent, the US Borrower, the Issuing Bank and the Swingline Lender (as applicable), each agrees that a Defaulting Lender which is a Revolving Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its pro rata share.
SECTION 4.16. Incremental Loans and Commitments. (a) The US Borrower may by written notice to the Administrative Agent elect from time to time to request the establishment of one or more new term loan commitments (“New Term Loan Commitments” and the loans thereunder, the “New Term Loans”), new term loan B commitments (“New TLB Commitments” and the loans thereunder, the “New TLB Loans”) or additional or increased US Revolving Commitments hereunder, in an aggregate amount such that the aggregate outstanding amount of Term Loans (after giving effect to such New Term Loan Commitments but without taking into account the 2011 Original Maturity Date Term Loans), the New TLB Loans (after giving effect to such New TLB Commitments) and Revolving Commitments (after giving effect to such additional or increased US Revolving Commitments but without taking into account any Revolving Commitments that terminate on the Original Maturity Date pursuant to Section 4.03(a)(ii)) are not in excess of $700,000,000; provided that if at any time prior to the Original Maturity Date the aggregate principal amount of Term Loans (after giving effect to such New Term Loan Commitments and taking into account the 2011 Original Maturity Date Term Loans), the New TLB Loans (after giving effect to such New TLB Commitments) and Revolving Commitments (after giving effect to such additional or increased US Revolving Commitments and
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taking into account Revolving Commitments that terminate on the Original Maturity Date pursuant to Section 4.03(a)(ii)) outstanding at such time exceeds $700,000,000, the US Revolving Commitments shall be temporarily reduced by an amount equal to such excess until the repayment of all 2011 Original Maturity Date Term Loans and the termination of any applicable Revolving Commitments pursuant to Section 4.03(a)(ii) on the Original Maturity Date (it being understood and agreed that, notwithstanding the foregoing, during the period of any such temporary reduction, fees shall accrue and be payable pursuant to Section 4.07(a) without taking into account such temporary reduction in the Revolving Commitments); provided, further, that if on the Original Maturity Date, after giving effect to the repayment of all then outstanding 2011 Original Maturity Date Term Loans and the termination of any then outstanding applicable Revolving Commitments pursuant to Section 4.03(a)(ii), the aggregate principal amount of Term Loans, New TLB Loans and Revolving Commitments outstanding exceeds $700,000,000, the US Borrower will make repayments of Term Loans and New TLB Loans and permanent reductions of Revolving Commitments on such date in an aggregate amount equal to such excess. Each such notice shall specify the date (each, an “Increased Amount Date”) on which the US Borrower proposes that the New Term Loan Commitments, New TLB Commitments or additional or increased US Revolving Commitments shall be effective, which shall be a date not less than three Business Days after the date on which such notice is delivered to Administrative Agent; provided that any Lender offered or approached to provide all or a portion of any New Term Loan Commitments, New TLB Commitments or additional or increased US Revolving Commitments may elect or decline, in its sole discretion, to provide or not to provide the same. Such New Term Loan Commitments, New TLB Commitments or additional or increased US Revolving Commitments shall become effective as of such Increased Amount Date; provided that (1) no Default or Event of Default shall exist on such Increased Amount Date before or after giving effect to such New Term Loan Commitments, New TLB Commitments or additional or increased US Revolving Commitments, as the case may be; (2) the proceeds of any New Term Loans or any New TLB Loans shall be used for general corporate purposes of the US Borrower and its Subsidiaries; (3) the terms and provisions of the New Term Loans made under New Term Loan Commitments shall be identical to those of the Term Loans and for purposes of this Agreement, any New Term Loans shall, upon the making thereof, be deemed to be Term Loans; (4) the terms and provisions of the New TLB Loans made under the New TLB Commitments shall be determined by the US Borrower and the lenders providing such New TLB Loans, subject to the approval of the Administrative Agent (such approval not to be unreasonably withheld, delayed or conditioned), and may be different from the terms and provisions of the Term Loans, including but not limited to pricing, interest rate margins, premiums, rate floors, fees, amortization schedule and a mandatory prepayment provision based on excess cash flow; (5) there shall only be one tranche of New TLB Loans made under the New TLB Commitments; (6) any such additional or increased US Revolving Commitments and the extensions of credit thereunder shall be ratable with the existing US Revolving Commitments and extensions of credit thereunder; (7) such New Term Loan Commitments, New TLB Commitments or additional or increased US Revolving Commitments shall be effected pursuant to one or more joinder agreements (each, a “Joinder Agreement”) executed and delivered by the US Borrower, the Administrative Agent and one or more new lenders or existing Lenders as to which consents have been given as provided for in Section 12.04(b) for assignees of existing Term Loans or US Revolving Commitments, as the case may be; and (8) the US Borrower shall deliver or cause to be delivered any customary legal opinions or other documents, in each case as reasonably requested by the Administrative Agent or the New Lenders in connection with any such transaction,
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including any supplements or amendments to the Security Documents providing for such New Term Loans, New TLB Loans or additional or increased US Revolving Commitments and the extensions of credit thereunder to be secured thereby.
(b) On any Increased Amount Date on which any New Term Loan Commitments, New TLB Commitments or additional or increased US Revolving Commitments become effective, subject to the foregoing terms and conditions, each new lender with a New Term Loan Commitment, New TLB Commitment or additional US Revolving Commitment (each, a “New Lender”) shall become a Lender hereunder with respect to such New Term Loan Commitment, New TLB Commitment or additional US Revolving Commitment and each Lender with an increased US Revolving Commitment shall have its US Revolving Commitment adjusted accordingly. The New Term Loans or New TLB Loans to be made under the New Term Loan Commitments or the New TLB Commitments, as applicable, shall be made on or promptly following such effectiveness.
(c) Each Joinder Agreement may, without the consent of any other Lenders, effect such amendments to this Agreement as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 4.16 (including to provide transition provisions to provide for any New Term Loans to be ratable with the Term Loans, any provisions to provide for the New TLB Loans and the terms applicable thereto, any additional or increased US Revolving Commitments to share ratably in the extensions of credit under the US Revolving Commitments).
SECTION 4.17. Extension of Loans and Commitments.
(a) Any US Lender holding a 2011 Original Maturity Date Term Loan, any US Lender holding a US Revolving Commitment (other than a US Extended Revolving Commitment) or any Mexican Lender holding a Mexican Commitment (other than a Mexican Extended Commitment) may, by written notice to the Administrative Agent (such notice being an “2016 Extension Notice”), at any time, from time to time, prior to the Original Maturity Date, elect to extend the maturity of all or any part of its 2011 Original Maturity Date Term Loan, any US Revolving Commitment (other than a US Extended Revolving Commitment) and/or any Mexican Commitment (other than a Mexican Extended Commitment) to the Extended Maturity Date. Upon receipt by the Administrative Agent of a 2016 Extension Notice from such Lender, all or such part (as elected by such Lender) of such Lender’s (i) 2011 Original Maturity Date Term Loan shall become a 2011 Extended Maturity Term Loan, (ii) US Revolving Commitment (other than a US Extended Revolving Commitment) shall become a US Extended Revolving Commitment and (iii) Mexican Commitment (other than a Mexican Extended Commitment) shall become a Mexican Extended Commitment, in each case automatically and permanently. The Administrative Agent shall promptly give notice to the US Borrower of any such extension.
(b) Notwithstanding anything to the contrary in this Agreement, pursuant to one or more offers (each, an “Extension Offer”) made from time to time by the US Borrower to all Lenders of Term Loans or Revolving Commitments, each with the same maturity date and in each case on a pro rata basis (based on the aggregate outstanding principal amount of the respective Term Loans or Revolving Commitments with the same maturity date) and on the same terms to each such Lender, the US Borrower is hereby permitted to consummate from time to time
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transactions with individual Lenders that accept the terms contained in such Extension Offers to extend the maturity date of each such Lender’s Term Loans and/or Revolving Commitments and otherwise modify (to the extent effective after the original maturity date) the terms of such Term Loans and/or Revolving Commitments pursuant to the terms of the relevant Extension Offer (each, an “Extension”); any Extended Term Loans shall constitute a separate tranche of Term Loans from the tranche of Term Loans from which they were converted, and any Extended Revolving Commitments shall constitute a separate tranche of Revolving Commitments from the tranche of Revolving Commitments from which they were converted), so long as the following terms are satisfied: (i) no Default or Event of Default shall have occurred and be continuing at the time the offering document in respect of an Extension Offer is delivered to the applicable Lenders and no Event of Default shall exist immediately after the effectiveness of any Extension; (ii) except as to maturity, and to the extent effective after the latest maturity date of the then outstanding and non-extending Revolving Commitment, any other terms and covenants and provisions (which shall be determined by the US Borrower and the relevant Revolving Lenders and set forth in the relevant Extension Offer), the Revolving Commitment of any Revolving Lender extended pursuant to an Extension (an “Extended Revolving Commitment” and, such obligations with respect to any Extended Revolving Commitments, “Extended Revolving Loans”), and the related outstandings, shall be a Revolving Commitment and a Revolving Loan, as applicable, and shall have the same terms as the original Revolving Commitments and original Revolving Loan; provided that at no time shall there be Revolving Commitments hereunder (including Extended Revolving Commitments, the US Extended Revolving Commitments, the Mexican Extended Commitments and any original Revolving Commitments) which have more than two different maturity dates; (iii) except as to maturity (which shall be subject to immediately succeeding clauses (iv) and (v)), and to the extent effective after the latest maturity date of the then outstanding and non-extending Term Loans, any other terms and covenants and provisions (which shall be determined by the US Borrower and the relevant Term Lenders and set forth in the relevant Extension Offer), the Term Loans of any Term Lender that agrees to an Extension with respect to such Term Loans (an “Extending Term Loan Lender”) extended pursuant to any Extension (“Extended Term Loans”) shall have the same terms as the tranche of Term Loans subject to such Extension Offer; provided that at no time shall there be Term Loans hereunder (including 2011 Term Loans and Extended Term Loans) which have more than two different maturity dates; (iv) the final maturity date of any Extended Term Loans shall be no earlier than the then the latest maturity date applicable to any Term Loan outstanding hereunder at such time; (v) the weighted average life to maturity of any Extended Term Loans shall be no shorter than the remaining weighted average life to maturity of the Term Loans extended thereby; (vi) if the aggregate principal amount of Term Loans (calculated on the face amount thereof) or Revolving Commitments, as the case may be, in respect of which Term Lenders or Revolving Lenders, as the case may be, shall have accepted the relevant Extension Offer shall exceed the maximum aggregate principal amount of Term Loans or Revolving Commitments, as the case may be, offered to be extended by the US Borrower pursuant to such Extension Offer, then the Term Loans or Revolving Commitments, as the case may be, of such Term Lenders or Revolving Lenders, as the case may be, shall be extended ratably up to such maximum amount based on the respective principal amounts (but not to exceed actual holdings of record) with respect to which such Term Lenders or Revolving Lenders, as the case may be, have accepted such Extension Offer; and (vii) all documentation in respect of such Extension shall be consistent with the foregoing.
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(c) With respect to all Extensions consummated by the US Borrower pursuant to this Section 4.17, (i) such Extensions shall not constitute voluntary or mandatory payments or prepayments for purposes of Sections 4.05 or 4.06 and (ii) such Extensions shall not be less than $5,000,000 per Extension. The Administrative Agent and the Lenders hereby consent to the Extensions and the other transactions contemplated by this Section 4.17 and hereby waive the requirements of any provision of this Agreement or any other Loan Document that may otherwise prohibit any such Extension or any other transaction contemplated by this Section 4.17 (in each case to the extent that the requirements of such provision could be waived with the consent of the Required Lenders pursuant to Section 12.02).
(d) No consent of any Lender or the Administrative Agent shall be required to effectuate any Extensions, other than (A) the consent of each Lender agreeing to such Extension with respect to one or more of its Term Loans and/or Revolving Commitments (or a portion thereof) and (B) with respect to any Extension of the Revolving Commitments (i) the consent of the Issuing Bank to the extent capacity to issue Letters of Credit is to be extended and (ii) the consent of the Swingline Lender, in each case, which consent shall not be unreasonably withheld or delayed. All Extended Term Loans, Extended Revolving Commitments and all obligations in respect thereof shall be US Obligations and Mexican Obligations, as applicable, under this Agreement and the other Loan Documents that are secured by the Collateral on an equal and ratable basis with all US Obligations and Mexican Obligations, as applicable, under this Agreement and the other Loan Documents. The Lenders hereby irrevocably authorize the Administrative Agent to enter into amendments to this Agreement and the other Loan Documents with the US Borrower as may be necessary or appropriate in order to establish new tranches or sub-tranches in respect of Revolving Commitments or Term Loans so extended and such technical amendments as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the US Borrower in connection with the establishment of such new tranches or sub-tranches, in each case on terms consistent with this Section 4.17. All such amendments entered into with the US Borrower by the Administrative Agent hereunder shall be binding and conclusive on the Lenders. In addition, if so provided in such amendment and with the consent of the Issuing Bank, participations in Letters of Credit expiring on or after the original maturity date in respect of the Revolving Loans shall be re-allocated from Lenders holding Revolving Commitments to Lenders holding Extended Revolving Commitments as set forth in Section 2.09(k).
(e) In connection with any Extension, the US Borrower shall provide the Administrative Agent at least three Business Days’ (or such shorter period as may be agreed by the Administrative Agent) prior written notice thereof, and shall agree to such procedures (including, without limitation, regarding timing, rounding and other adjustments and to ensure reasonable administrative management of the credit facilities hereunder after such Extension), if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably to accomplish the purposes of this Section 4.17.
SECTION 4.18. Sanctions Illegality. If, at any time, it is or becomes illegal (in the reasonable opinion of any Lender) under the laws of any jurisdiction for any Lender to perform, fund or maintain its position, including without limitation, any illegality due to any economic or financial sanctions administered or enforced by any Sanctions Authority or any Lender is advised in writing by a Sanctions Authority that penalties will be imposed by a Sanctions Authority as a result of such Lender’s participation in this Agreement or any other business or
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financial relationship with any Borrower, to the extent required to comply with such laws or to avoid such penalties (in the reasonable opinion of such Lender), (i) the Commitments of such Lender will be immediately cancelled and such Lender shall not thereafter be obliged to participate in the making of any Loans, and (ii) the outstanding Loans (together with accrued interest thereon, additional amounts payable in respect thereto and any other amounts payable hereunder) of such Lender shall become immediately due and payable.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The US Borrower represents and warrants, and the Mexican Borrower represents and warrants with respect to itself and its Subsidiaries, to the Administrative Agent and the Lenders that:
SECTION 5.01. Organization; Powers. Each Borrower and each of its respective Subsidiaries is duly organized, validly existing and in good standing (to the extent such requirement shall be applicable) under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.
SECTION 5.02. Authorization; Enforceability. (a) The Transactions to be consummated by each Borrower are within such Borrower’s corporate powers and have been duly authorized by all necessary corporate and, if required, stockholder action. Each Loan Document has been duly executed and delivered by each Borrower and constitutes a legal, valid and binding obligation of each Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
(b) Each of the Master Intercompany Agreement, the Tax Allocation Agreement, the Cayman Loan Agreements and the Used Truck Loan Agreement constitutes a legal, valid and binding obligation of the US Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 5.03. Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect, (ii) routine renewals of existing licenses and permits of the US Borrower and its Subsidiaries in the ordinary course of business and (iii) such filings as may be required under federal and state securities laws for purposes of disclosure, (b) will not violate any applicable law or regulation (including, without limitation, all laws, rules and regulations promulgated by or
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relating to IMSS, INFONAVIT and SAR) or the charter, by-laws or other organizational documents of any Borrower or any of its Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Borrower or any of its Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by any Borrower or any of its Subsidiaries and (d) will not result in the creation or imposition of any Lien on any asset of any Borrower or any of its Subsidiaries other than the Liens created by the Security Documents.
SECTION 5.04. Financial Condition; No Material Adverse Change. (a) The consolidated statements of financial condition of the US Borrower and its Subsidiaries as at October 31, 2015 and the related consolidated statements of operations, shareowner’s equity and cash flows for such fiscal year ended on such date, reported on by KPMG, copies of which have heretofore been furnished to the Lenders, present fairly, in all material respects, the consolidated financial condition of the US Borrower and its Subsidiaries as at such date, and the consolidated results of its operations and cash flows for such fiscal year then ended.
(b) The unaudited consolidated statements of financial condition of the US Borrower and its Subsidiaries as at January 31, 2016 and the related unaudited consolidated statements of operations, shareowner’s equity and cash flows for the three-month period ended on such date, certified by a Responsible Officer, copies of which have heretofore been furnished to the Lenders, present fairly, in all material respects, the consolidated financial condition of the US Borrower and its Subsidiaries as at such date, and the consolidated results of its operations and cash flows for the three-month period then ended (subject to normal year-end audit adjustments).
(c) All the financial statements referred to in clauses (a) and (b) of this Section 5.04, including the related schedules and notes thereto, have been prepared in accordance with GAAP, applied consistently throughout the periods involved (except as approved by such accountants or Responsible Officer, as the case may be, and as disclosed therein).
(d) The US Borrower and its Subsidiaries do not have, at the date hereof, any material Guarantee obligations, contingent liabilities and liabilities for taxes, or any long-term leases or unusual forward or long-term commitments, including any interest rate or foreign currency swap or exchange transaction or other obligation in respect of derivatives that are not reflected in the financial statements referred to in this Section 5.04.
(e) Since October 31, 2015, there has been no material adverse change in the business, assets, property or financial condition of the US Borrower and its Subsidiaries, taken as a whole.
SECTION 5.05. Litigation. There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of any Borrower, threatened against or affecting any Borrower or any of its Subsidiaries (a) which could reasonably be expected to result in an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (b) that involve this Agreement, the Loan Documents or the Transactions.
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SECTION 5.06. Compliance with Laws and Agreements. Each Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing.
SECTION 5.07. Investment Company Status. None of the Borrowers is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.
SECTION 5.08. Taxes. Each Borrower and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the relevant Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves with respect thereto in accordance with GAAP or with the applicable accounting principles or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.09. ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.
SECTION 5.10. Subsidiaries. As of the Effective Date, Schedule 5.10 sets forth the name, jurisdiction of incorporation and capital stock ownership of each Subsidiary owned by any Borrower.
SECTION 5.11. Ownership of Property; Liens. The US Borrower has title in fee simple to, or a valid leasehold interest in, all of its real property, and good title to, a valid leasehold interest in or other rights to use, all of its other property (other than immaterial assets), and none of such property is subject to any Lien except as permitted by Section 8.03.
SECTION 5.12. Use of Proceeds. The proceeds of the Loans and the Letters of Credit shall be used for general corporate purposes.
SECTION 5.13. Foreign Exchange Regulations; Immunity; Enforcement. (a) Under the laws of Mexico, with respect to the execution, delivery and performance of this Agreement or any Note issued hereunder, each of the Mexican Borrower and its Subsidiaries is subject to private commercial law and to suit, and neither it nor its properties have any immunity from the jurisdiction of any court or any legal process that may be brought in the courts of Mexico (whether through service of notice, attachment prior to notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise).
(b) It is not necessary, in order to ensure the legality, validity, enforceability or admissibility into evidence in Mexico of this Agreement or any Note issued hereunder, that any such document be filed, recorded or enrolled with any Governmental Authority, or that this Agreement or any Note issued hereunder be stamped with any stamp, registration or similar transaction tax, except that in order for this Agreement or any Note issued hereunder to be
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admissible in evidence in legal proceedings in a court in Mexico, such documents would have to be translated into the Spanish language by a court-approved translator and would have to be approved by such court after the defendant had been given an opportunity to be heard with respect to the accuracy of the translation, and proceedings would thereafter be based upon the translated documents.
SECTION 5.14. Disclosure. (a) Each Borrower has disclosed to the Lenders all matters known to it that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.
(b) None of the reports, financial statements, certificates or other information furnished by or on behalf of the Borrowers to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrowers represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.
SECTION 5.15. Title; No Other Liens. Except for the security interest granted to the Administrative Agent for the ratable benefit of the Lenders pursuant to Section 12.21 of this Agreement and the other Liens permitted to exist on the Blocked Account by the terms of this Agreement, the US Borrower owns the Blocked Account free and clear of any and all Liens or claims of others.
SECTION 5.16. Perfected First Priority Lien. The security interest granted pursuant to Section 12.21 of this Agreement (a) upon execution of the Blocked Account Agreement will constitute a valid perfected security interest in the Blocked Account in favor of the Administrative Agent, for the ratable benefit of the Lenders, as collateral security for the US Obligations, enforceable against all creditors of the US Borrower and (b) is prior to all other Liens on the Blocked Account except for unrecorded Liens permitted by this Agreement which have priority over the Liens on the Blocked Account by operation of law.
SECTION 5.17. Regulation U. Following the application of the proceeds of each Borrowing by any Borrower, no more than 25% of the value of the assets of such Borrower and its subsidiaries, subject to any restriction on sale or pledge, will consist of, or be represented by, “margin stock” within the meaning of the quoted term under Regulation U of the Board as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulations of the Board.
SECTION 5.18. Solvency. Immediately after the consummation of the Transactions to occur on the Effective Date and immediately following the making of each Loan and after giving effect to the application of the proceeds of each Loan, (i) the fair value of the assets of the Borrowers, on a consolidated basis, at a fair valuation and on a going concern basis, will exceed the debts and liabilities, direct, subordinated, contingent or otherwise, of the Borrowers on a consolidated basis; (ii) the present fair saleable value of the property of the Borrowers on a consolidated basis (on a going concern basis) will be greater than the amount that
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will be required to pay the probable liability of the Borrowers on a consolidated basis, on their debts and other liabilities, direct, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Borrowers on a consolidated basis will be able to pay their debts and liabilities, direct, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) the Borrowers on a consolidated basis will not have unreasonably small capital with which to conduct the businesses in which they are engaged as such businesses are now conducted and are proposed to be conducted following the Effective Date. The amount of contingent liabilities at any time shall be computed as the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
SECTION 5.19. EEA Financial Institutions. Neither Borrower is an EEA Financial Institution.
SECTION 5.20. Anti-Corruption Laws and Sanctions. Each Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by such Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and such Borrower, its Subsidiaries and their respective officers and directors and to the knowledge of such Borrower its employees and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects and are not knowingly engaged in any activity that violates any Anti-Corruption Laws or would reasonably be expected to result in such Borrower being designated as a Sanctioned Person. None of (a) the Borrowers, any Subsidiary or any of their respective directors, officers or employees, or (b) to the knowledge of any Borrower, any agent of such Borrower or any Subsidiary of such Borrower that will act in any capacity in connection with or benefit from the Facilities, is a Sanctioned Person, has any dealing in or otherwise engages in any transaction relating to any property or interest in property subject to prohibitions under Sanctions or participates in any transaction that evades, avoids or attempts to violate any of the prohibitions set forth in Sanctions or has such a purpose. No Borrowing or Letter of Credit, use of proceeds or other transaction contemplated by this Agreement will violate any Anti-Corruption Law or applicable Sanctions.
ARTICLE VI
CONDITIONS
SECTION 6.01. Effective Date. This Agreement shall become effective upon the execution and delivery hereof by all parties hereto. The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 12.02):
(a) The Administrative Agent (or its counsel) shall have received a counterpart or written evidence satisfactory to the Administrative Agent (which may include electronic delivery of a signed signature page) that such party has signed a counterpart (i) of this Agreement from each Borrower, the Issuing Bank, the Swingline Lender and the Required Lenders (as defined under the Existing Credit Agreement), (ii) of the Security Agreement from the US Borrower and the Trustee, and (iii) of the Blocked Account Agreement from the US Borrower and the depositary.
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(b) The Administrative Agent shall have received an executed copy of the Parents’ Side Agreement and the Parent Guarantee, duly executed and delivered by the parties thereto, which shall be in full force and effect on the Effective Date.
(c) The Administrative Agent shall have received a copy of the Master Intercompany Agreement, the Cayman Loan Agreements, the Used Truck Loan Agreement, and the Tax Allocation Agreement as in effect on the Effective Date.
(d) The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of (i) Paul Hastings LLP, New York counsel for the Borrowers, substantially in the form of Exhibit B-1, (ii) internal counsel of the US Borrower, substantially in the form of Exhibit B-2 and (iii) Gonzalez-Calvillo, S.C., Mexican counsel for the Borrowers, substantially in the form of Exhibit B-3, and, in each case, covering such matters relating to the Borrowers, this Agreement or the Transactions as the Administrative Agent shall reasonably request.
(e) The Administrative Agent shall have received a certificate of each Borrower, dated the Effective Date, as to (i) the adoption of resolutions (or equivalent corporate actions including, in the case of the Mexican Borrower, notarized powers of attorney, certified by a Mexican notary public, evidencing authority to, among other things, execute negotiable instruments), of the Board of Directors (or other similar governing body) of each Borrower authorizing (A) the execution, delivery and performance of this Agreement and (B) the borrowings contemplated hereunder, (ii) the incumbency and true signature of the officers of each Borrower executing this Agreement and any Notes issued hereunder and (iii) the certificate of incorporation and by-laws, in the case of the US Borrower, and the incorporation deed (acta constitutiva) with recording information and the current by-laws (estatutos sociales vigentes) (certified by a Mexican notary public), in the case of the Mexican Borrower, which certificate shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel and executed by the secretary or any assistant secretary or a legal representative of such Borrower.
(f) The Administrative Agent shall have received a certificate, dated the Effective Date and signed by a Responsible Officer of the US Borrower, confirming compliance with the conditions set forth in paragraphs (a), (b) and (c) of Section 6.02.
(g) The Lenders shall have received (i) audited consolidated financial statements of each of the US Borrower and the Parent for the fiscal year ended October 31, 2015 and (ii) unaudited consolidated financial statements of each of the US Borrower and the Parent for the quarterly period ended January 31, 2016, and such financial statements shall not, in the reasonable judgment of the Required Lenders, reflect any material adverse change in the consolidated financial condition of the US Borrower, as reflected in the financial statements or projections contained in the Lender Presentation supplied to the Lenders, in April 2016.
(h) The Administrative Agent, the Lenders and the Joint Lead Arrangers shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, and to the extent invoiced, reimbursement or payment of all reasonable out-of-pocket expenses required to be reimbursed or paid by the Borrowers hereunder.
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(i) The Administrative Agent shall have received evidence that the US Borrower has agreed to act as agent for service of process in New York, New York on behalf of the Mexican Borrower under this Agreement (together with a notarized power of attorney to that effect).
(j) The Administrative Agent shall have received a perfection certificate, dated the Effective Date and signed by a Responsible Officer of the US Borrower, and the results of a recent lien search in each of the US jurisdictions where assets of the US Borrower are located, and such search shall reveal no liens on any of the assets of the US Borrower except for liens permitted by Section 8.03 or discharged on or prior to the Effective Date pursuant to documentation reasonably satisfactory to the Administrative Agent.
(k) To the extent not previously delivered, the Administrative Agent shall have received evidence that the Trustee has received (i) the certificates representing the shares of Capital Stock pledged pursuant to the Security Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged pursuant to the Security Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof.
(l) Each document (including any Uniform Commercial Code financing statement) required by the Security Agreement or under law or reasonably requested by the Trustee, the Administrative Agent or any Lender to be filed, registered or recorded in order to create in favor of the Trustee a perfected Lien on the Collateral described therein to secure the Secured Obligations (as defined in the Security Agreement) (including without limitation, the designation of certain Additional Secured Obligation (as defined in the Security Agreement) as agreed by any Lender and the US Borrower), prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 8.03 which have priority), shall be in proper form for filing, registration or recordation.
(m) The Administrative Agent shall have received a customary certificate from the chief financial officer or treasurer of the US Borrower certifying that the US Borrower, the Mexican Borrower, and their Subsidiaries, on a consolidated basis after giving effect to the Transactions contemplated to occur on the Effective Date, are solvent (within the meaning of Section 5.18).
(n) The Administrative Agent shall have received a certificate from the US Borrower evidencing that the Collateral Coverage Ratio as of and after giving effect on a pro forma basis to the Transactions to occur on the Effective Date is, in the reasonable judgment of the US Borrower based on then available financial information, at least 1.35 to 1.00.
The Administrative Agent shall notify the Borrowers and the Lenders of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding anything herein to the contrary, simultaneously with the effectiveness of this Agreement, each Lender listed as an “Exiting Lender” on its signature page hereto (each, an
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“Exiting Lender”) shall relinquish its rights and be released from its obligations under this Agreement and cease to be a Lender hereunder (but shall continue to be entitled to the benefits of Section 4.10, Section 4.11, Section 4.12 and Section 12.03 of this Agreement). On the Effective Date, upon the execution by each person that is a signatory hereto as a Lender but that was not a party to the Existing Credit Agreement prior to giving effect to this Agreement (each a “New Lender”), such New Lender shall become a “Lender” under, and for all purposes of, this Agreement and the other Loan Documents, and shall be subject to and bound by the terms hereof and thereof, and shall perform all the obligations of and shall have all rights of a Lender hereunder and thereunder. Each New Lender: (i) represents and warrants that it has received a copy of this Agreement, together with copies of the financial statements delivered pursuant to Section 6.01(g), and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement and to become a Lender on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, (ii) represents and warrants that if it is a Non-U.S. Lender, has delivered any documentation required to be delivered by it pursuant to the terms of this Agreement, (iii) agrees that it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents and (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender including its obligations pursuant to Section 4.12 of this Agreement. For purposes of this Agreement, the initial notice address of each New Lender shall be as set forth on its signature page hereto.
SECTION 6.02. Each Borrowing Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction (or waiver) of the following conditions:
(a) The representations and warranties of the Borrowers, the Parent and International set forth in this Agreement (except for, other than in the case of the Loans made on the Effective Date, the representations and warranties set forth in Section 5.04(e) and Section 5.14(a)) and any other Loan Document shall be true and correct in all material respects (without duplication of any materiality standard set forth in such representation or warranty) on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable (except to the extent that any such representation and warranty specifically refers to an earlier date, in which case such representation and warranty shall have been true and correct in all material respects (without duplication of any materiality standard set forth in such representation or warranty) on and as of such earlier date).
(b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.
(c) The Cash Balance of the US Borrower and its Subsidiaries as of such date (after giving effect to such extension of credit, the application of proceeds of such Borrowing and the use of cash on hand) shall not exceed $75,000,000. If the Cash Balance as of such date exceeds $75,000,000, the US Borrower shall have caused all excess amounts to be deposited into the Blocked Account to be held as security for the US Obligations in accordance with the terms hereof and of the Blocked Account Agreement.
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(d) In the case of any Borrowing by the Mexican Borrower, (i) the Parent Guarantee and the Guarantee contained in Article XI shall be in full force and effect and neither the Parent, nor the US Borrower nor any Affiliate thereof shall have asserted that either such Guarantee is not in full force and effect and (ii) the Administrative Agent shall have received the written Borrowing Request required under Section 3.03, signed by the Mexican Borrower and US Borrower.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the relevant Borrower on the date thereof as to the matters specified in this Section 6.02.
ARTICLE VII
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated, the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, each Borrower, as applicable, covenants and agrees with the Administrative Agent and the Lenders that:
SECTION 7.01. Financial Statements and Other Information. Each of the Borrowers and the Parent, as applicable, will furnish to the Administrative Agent, for prompt distribution to each Lender:
(a) (i) within 90 days after the end of each fiscal year of each of the Parent and the US Borrower, its audited consolidated statement of financial condition and related statements of consolidated income and retained earnings and consolidated cash flow as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by KPMG or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations and cash flow of the Parent and its consolidated Subsidiaries or the US Borrower and its consolidated Subsidiaries, as the case may be, on a consolidated basis in accordance with GAAP, and, in the case of the Parent and, to the extent that the US Borrower files reports under Sections 13 and 15(d) of the Securities Exchange Act of 1934, the US Borrower, its Form 10-K for such fiscal year in which such financial statements are included (and if the US Borrower does not file such reports, a Management’s Discussion and Analysis of Financial Condition and Results of Operations and, upon the Administrative Agent’s or any Lender’s reasonable request, any additional information and analysis required by the Administrative Agent to conduct its credit review of the US Borrower, in each case consistent in all material respects with what would have been included, based on the US Borrower’s past practices, in a Form 10-K for such fiscal year);
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(ii) within 90 days after the end of each fiscal year of the Mexican Borrower, its consolidated statement of financial condition and related statements of consolidated income and retained earnings and consolidated cash flow as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all certified by one of its Responsible Officers as presenting fairly in all material respects the financial condition and results of operations and cash flow of the such Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP, consistently applied, subject to normal year-end adjustments and the absence of footnotes;
(iii) within 45 days after the end of each of the first three fiscal quarters of each fiscal year of each of the Parent and the US Borrower, its consolidated statement of financial condition and related statements of consolidated income and retained earnings and consolidated cash flow as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the statement of financial condition, as of the end of) the previous fiscal year, all certified by one of its Responsible Officers as presenting fairly in all material respects the financial condition and results of operations and cash flow of the Parent and its consolidated Subsidiaries or the US Borrower and its consolidated Subsidiaries, as the case may be, on a consolidated basis in accordance with GAAP, consistently applied, subject to normal year-end audit adjustments and the absence of footnotes, and, in the case of the Parent and, to the extent that the US Borrower files reports under Sections 13 and 15(d) of the Securities Exchange Act of 1934, the US Borrower, its Form 10-Q for such fiscal quarter in which such financial statements are included (and, if the US Borrower does not file such reports, a Management’s Discussion and Analysis of Financial Condition and Results of Operations, any footnotes to the financial statements and, upon the Administrative Agent’s or any Lender’s reasonable request, any additional information and analysis required by the Administrative Agent to conduct its credit review of the US Borrower, in each case consistent in all material respects with what would have been included, based on the US Borrower’s past practices, in a Form 10-Q for such fiscal year);
(iv) within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Mexican Borrower, its consolidated statement of financial condition and related statements of consolidated income and retained earnings and consolidated cash flow as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the statement of financial condition, as of the end of) the previous fiscal year, all certified by one of its Responsible Officers as presenting fairly in all material respects the financial condition and results of operations and cash flow of such Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP, consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;
(v) concurrently with the delivery of the financial statements under clause (a)(i) above, a report from of KPMG or other independent public accountants of recognized national standing stating that in making the examination necessary therefor no knowledge was obtained of any Default or Event of Default pursuant to Section 8.01, except as specified in such report;
(b) concurrently with any delivery of financial statements under clause (a)(i) or (a)(iii) above, a certificate of a Responsible Officer of the US Borrower, substantially in the form
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of Exhibit F (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 8.01(a), (b) and (c) and (iii) stating whether any change in GAAP, or in the application thereof has occurred since the date of the audited financial statements referred to in Section 5.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;
(c) within 30 days after the end of each fiscal month of the US Borrower (other than the last fiscal month of any fiscal quarter of the US Borrower) and within 45 days after the end of each fiscal month of the US Borrower that is the last fiscal month of any fiscal quarter of the US Borrower, a certificate of a Responsible Officer of the US Borrower, substantially in the form of Exhibit L setting forth reasonably detailed calculations demonstrating compliance with Section 8.01(c);
(d) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of any Borrower or any Subsidiaries, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request;
(e) concurrently with the delivery of the financial statements under clause (a)(i) or (a)(iii) above, a report containing statistical and other information in respect of all Serviced Wholesale Notes for the fiscal quarter then ended and comparative information relating to the corresponding portion of the previous fiscal year, all substantially in the same form and scope (except for the period covered) as set forth on Exhibit D hereto; and
(f) concurrently with the delivery of the financial statements under clause (a)(i) or (a)(iii) above, any amendment or modification to the Master Intercompany Agreement, the Cayman Loan Agreements or the Used Truck Loan Agreement.
SECTION 7.02. Notices of Material Events. The US Borrower (or the Mexican Borrower, in the case of paragraph (b) below) will furnish to the Administrative Agent, for prompt distribution to each Lender, prompt written notice of the following:
(a) the occurrence of any Default;
(b) any changes in taxes, duties or other charges of Mexico or any political subdivision or taxing authority thereof or any change in any laws of Mexico that affects the amount or timing of receipt of any payment due under this Agreement or any Notes issued hereunder;
(c) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting any Borrower, any Subsidiary or any Affiliate thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;
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(d) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; and
(e) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of a Responsible Officer of the relevant Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
SECTION 7.03. Existence; Conduct of Business. Each Borrower will, and will cause each of its respective Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material and necessary to the conduct of its business; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 8.04.
SECTION 7.04. Payment of Obligations. Each Borrower will, and will cause each of its respective Subsidiaries to, pay its obligations, including Tax liabilities, that, if not paid, could result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the relevant Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP, and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect; provided, however, that nothing in this Section 7.04 shall impose an obligation on any Borrower to cause a Securitization Subsidiary to repay any Indebtedness or to repay any Indebtedness of any Securitization Subsidiary.
SECTION 7.05. Maintenance of Properties; Insurance. Each Borrower will, and will cause each of its respective Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear and damage by casualty excepted, and (b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations.
SECTION 7.06. Books and Records; Inspection Rights. Each Borrower will, and will cause each of its respective Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. Each Borrower will, and will cause each of its respective Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.
SECTION 7.07. Compliance with Laws and Material Contractual Obligations. Each Borrower will, and will cause each of its respective Subsidiaries to, comply with (a) all laws,
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rules, regulations and orders of any Governmental Authority applicable to it or its property (including, without limitation, all laws, rules and regulations relating to INFONAVIT and SAR) and (b) all material obligations under any indenture, agreement or other instrument binding upon such Borrower or any of its Subsidiaries, in each case except where (i) the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect or (ii) the necessity of compliance therewith is contested in good faith by appropriate proceedings. Each Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by such Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.
SECTION 7.08. Intercompany Agreements. (a) The US Borrower will (i) perform all of its obligations under the Master Intercompany Agreement and the Used Truck Loan Agreement unless International shall have failed to make any payment payable by it to the US Borrower under the Master Intercompany Agreement the Used Truck Loan Agreement or the Tax Allocation Agreement; (ii) enforce each of the Master Intercompany Agreement and the Used Truck Loan Agreement against International in accordance with its terms; (iii) not cancel or terminate, or permit the cancellation or termination of, the Master Intercompany Agreement, or Article II, III or IV thereof, or the Used Truck Loan Agreement, if in each case, such cancellation or termination is materially adverse to the US Borrower, and (iv) not agree to any amendment, waiver or modification of the Master Intercompany Agreement or the Used Truck Loan Agreement which is materially adverse to the US Borrower; provided that (x) the Master Intercompany agreement may be modified to modify, amend or eliminate Section II.A of the Master Intercompany Agreement insofar as such Section requires International to offer to sell to the US Borrower, or requires the US Borrower to purchase, “Wholesale Contracts” (as such term is defined in the Master Intercompany Agreement) and (y) the Used Truck Loan Agreement may not be amended, waived or modified if there is a reasonable possibility that such amendment, waiver or modification would have the effect of (1) forgiving any amount owed by International to the US Borrower thereunder, (2) postponing the date that any payment would otherwise be payable to the US Borrower thereunder by more than one year, (3) further subordinating the US Borrower’s right to payment thereunder to the rights of any other creditors or (4) changing the transactions contemplated thereunder in a manner that makes them, taken as a whole, materially less favorable to the US Borrower.
(b) The US Borrower will (i) enforce the Tax Allocation Agreement against International in accordance with its terms, (ii) not agree to any amendment, waiver or modification of the Tax Allocation Agreement which is in any manner adverse to the US Borrower or to the US Borrower and its Subsidiaries taken as a whole.
(c) The US Borrower will (i) enforce each Intercompany Loan Agreement against the Subsidiary of the US Borrower that is a party thereto in accordance with its terms; (ii) cause each of its Subsidiaries to pay promptly all accounts payable from time to time owing by such Subsidiary to the US Borrower (including without limitation amounts payable from time to time by such Subsidiary to the US Borrower under the Tax Allocation Agreement); (iii) not cancel or terminate, or permit the cancellation or termination of, any Intercompany Loan Agreement without the consent of the Required Lenders (other than the cancellation or termination of any Intercompany Loan Agreement resulting from the termination of the Qualified Securitization Transaction to which such Intercompany Loan Agreement relates and the repayment of all
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amounts outstanding under such Intercompany Loan Agreement); (iv) not agree to any amendment, waiver or modification of any provision of any Intercompany Loan Agreement if there is a reasonable possibility that such amendment, waiver or modification would have the effect of (1) forgiving any amount owed by any Subsidiary of the US Borrower to the US Borrower under any Intercompany Loan Agreement, (2) postponing the date that any payment would otherwise be payable to the US Borrower thereunder, (3) further subordinating the US Borrower’s right to payment thereunder to the rights of any other creditors, (4) further restricting the Subsidiary party thereto from applying, or releasing to any extent such Subsidiary from its obligation to apply, cash received by it to pay its allocated share of payments from time to time owing by the US Borrower to International under the Tax Allocation Agreement or (5) changing the transactions contemplated thereunder in a manner that makes them, taken as a whole, less favorable to the US Borrower; and (v) deliver to the Administrative Agent, promptly upon receipt thereof, a copy of each certificate, notice, instruction or other document received or delivered by it in connection with each Intercompany Loan Agreement.
(d) The US Borrower will (i) perform all of its obligations under the Cayman Loan Agreements, (ii) enforce each Cayman Loan Agreement against the Cayman Affiliate and (iii) not cancel or terminate, or permit the cancellation or termination of, any Cayman Loan Agreement if such cancellation or termination is materially adverse to the US Borrower, and (iv) not agree to any amendment, waiver or modification of any provision of any Cayman Loan Agreement if there is a reasonable possibility that such amendment, waiver or modification would have the effect of (1) forgiving any amount owed by the Cayman Affiliates to the US Borrower thereunder, (2) postponing the date that any payment would otherwise be payable to the US Borrower thereunder by more than one year, (3) further subordinating the US Borrower’s right to payment thereunder to the rights of any other creditors or (4) changing the transactions contemplated thereunder in a manner that makes them, taken as a whole, materially less favorable to the US Borrower.
(e) The US Borrower will (i) maintain in effect and enforce the Parents’ Side Agreement with the Parent and International in accordance with its terms and (ii) not agree to any amendment, waiver or modification of the Parents’ Side Agreement which is materially adverse to the US Borrower or which is materially adverse to the interest of the Lenders.
SECTION 7.09. Federal Regulations. No part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used for “buying” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U of the Board as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulations of the Board. If requested by any Lender or the Administrative Agent, the relevant Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in Regulation U.
SECTION 7.10. Quarterly Conference Calls. The US Borrower shall host a telephone conference call (at times agreed with the Administrative Agent and reasonably requested by the Administrative Agent but no more frequently than once per quarter) with the Lenders on which telephone conference call the financial results of the previous fiscal quarter and the financial condition shall be reviewed.
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SECTION 7.11. Additional Collateral, etc. The US Borrower will comply with all provisions in the Security Documents with respect to property acquired after the Effective Date.
ARTICLE VIII
NEGATIVE COVENANTS
Until the Commitments have expired or terminated, the principal of and interest on each Loan and all fees payable hereunder have been paid in full, all Letters of Credit have expired or terminated and all LC Disbursements shall have been reimbursed, the US Borrower covenants and agrees, and the Mexican Borrower covenants and agrees as set forth in Sections 8.13 and 8.14 with respect to itself, with the Administrative Agent and the Lenders that:
SECTION 8.01. Financial Covenants. (a) The US Borrower will not permit the Consolidated Leverage Ratio to exceed 3.75 to 1.00 as of the last Business Day of each calendar month.
(b) The US Borrower will not permit the Fixed Charge Coverage Ratio as at the last day of any fiscal quarter for the period of four consecutive fiscal quarters then ended to be less than 1.25 to 1.00.
(c) The US Borrower will not permit the Collateral Coverage Ratio as at the last day of any fiscal month to be less than 1.35 to 1.00, commencing with the month ended following the Effective Date; provided that any Default or Event of Default arising from any non-compliance with this Section 8.01(c) shall be deemed cured and no longer in effect if within five Business Days following the timely delivery of a compliance certificate pursuant to Section 7.01(b) with respect to such last day, the US Borrower shall deliver a certificate substantially in the form of Exhibit L setting forth reasonably detailed calculations demonstrating that the Collateral Coverage Ratio as of the most recent Business Day prior to the date of such delivery for which sufficient information is available to the US Borrower to prepare such certificate is not less than the required Collateral Coverage Ratio for such last day.
SECTION 8.02. Indebtedness. The US Borrower will not, and will not permit any of its Subsidiaries to create, issue, incur, assume, become liable in respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of the US Borrower pursuant to any Loan Document;
(b) (i) Indebtedness of the US Borrower to any of its Subsidiaries, (ii) Indebtedness for Borrowed Money of the US Borrower to the Mexican Borrower (iii) Indebtedness of any Subsidiary of the US Borrower to the US Borrower or any other Subsidiary of the US Borrower or (iv) Indebtedness for Borrowed Money of any Subsidiary of the US Borrower to the Mexican Borrower;
(c) Guarantees and Indebtedness permitted by Section 8.05(a);
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(d) Indebtedness outstanding on the date hereof (or available to be borrowed under facilities existing on the date hereof) and listed on Schedule 8.02 and any refinancings, refundings, renewals or extensions thereof (without increasing, or shortening the maturity of, the principal amount thereof (or amount available for borrowing thereunder));
(e) Indebtedness (including, without limitation, Capital Lease Obligations) secured by Liens permitted by Section 8.03(d) in an aggregate principal amount not to exceed $10,000,000 at any one time outstanding;
(f) Subordinated Debt and other unsecured Indebtedness of the US Borrower issued or incurred in Capital Market Transactions; provided that (i) the US Borrower uses the Net Cash Proceeds of any such Indebtedness to make a mandatory prepayment to the extent required in Section 4.06(b), (ii) after giving effect to the issuance or incurrence of any such Indebtedness, the US Borrower is in pro forma compliance with Section 8.01(a) as of the end of the most recent fiscal quarter and (iii) any such Indebtedness is issued or incurred on market terms and matures after the Extended Maturity Date;
(g) unsecured Indebtedness of the US Borrower in an aggregate principal amount not to exceed $200,000,000 at any time outstanding;
(h) Indebtedness with respect to Hedging Agreements permitted by Section 8.05(b);
(i) Indebtedness incurred pursuant to Qualified Securitization Transactions;
(j) Indebtedness of any Person that becomes a Subsidiary after the date hereof that is outstanding on the date such Person becomes a Subsidiary; provided that (i) such Indebtedness is not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii) the amount of such Indebtedness shall not be increased;
(k) Indebtedness assumed in connection with the acquisition of any asset or property; provided that (i) immediately after giving effect thereto, no Default or Event of Default shall exist or result therefrom, (ii) the US Borrower will be in pro forma compliance with the covenants set forth in Section 8.01 after giving effect to such acquisition and the incurrence of such Indebtedness, (iii) such Indebtedness is not created in contemplation of or in connection with such acquisition and (iv) the amount of such Indebtedness shall not be increased;
(l) Indebtedness incurred in the ordinary course of business to finance insurance premiums; and
(m) additional unsecured Indebtedness of the US Borrower in an aggregate principal amount not to exceed $50,000,000.
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SECTION 8.03. Liens. The US Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the US Borrower or any of its Subsidiaries existing on the date hereof and set forth in Schedule 8.03; provided that (i) such Lien shall not apply to any other property or asset of the US Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;
(c) any Lien existing on any property or asset prior to the acquisition thereof by the US Borrower or any of its Subsidiaries or existing on any property or asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the US Borrower or such Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;
(d) Liens on fixed or capital assets acquired, constructed or improved by the US Borrower or any of its Subsidiaries; provided that (i) such security interests and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, (ii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets and (iii) such security interests shall not apply to any other property or assets of the US Borrower or such Subsidiary;
(e) any rights of set-off of financial institutions holding accounts of the US Borrower and its Subsidiaries;
(f) any Lien created pursuant to the Security Documents;
(g) any Lien on unearned insurance premiums securing Indebtedness permitted under Section 8.02(l); and
(h) Liens not otherwise permitted by this Section so long as the aggregate outstanding principal amount of the obligations secured thereby does not at any time exceed $10,000,000.
SECTION 8.04. Fundamental Changes. (a) The US Borrower will not, and will not permit any of its Subsidiaries to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all of its assets (other than sales of Receivables, operating leases through its leasing Subsidiaries or interests therein in the ordinary course of business for finance companies by the US Borrower or a Securitization Subsidiary in connection with a Qualified Securitization Transaction), or all or substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing, (i) any Person may merge into the US Borrower in a transaction in which the US Borrower is the surviving corporation, (ii) any Person (other than the
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US Borrower) may merge into any Subsidiary in a transaction in which the surviving entity is a direct or indirect Subsidiary, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose of its assets to the US Borrower or to another Subsidiary, (iv) any Subsidiary may liquidate or dissolve if the US Borrower determines in good faith that such liquidation or dissolution is in the best interests of the US Borrower and is not materially disadvantageous to the Lenders; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 8.06 and (v) the US Borrower may sell, transfer, lease or otherwise dispose of stock of any Subsidiary and any Subsidiary may sell, transfer, lease or otherwise dispose of all or substantially all of its assets, so long as the aggregate consideration received in any such transaction does not exceed $25,000,000 and shall be applied to the extent required by Section 4.06.
(b) The US Borrower will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the US Borrower and its Subsidiaries on the date of execution of this Agreement and businesses reasonably related, similar, supportive or ancillary thereto.
SECTION 8.05. Investments, Loans, Advances, Guarantees and Acquisitions; Hedging Agreements. (a) Other than in the ordinary course of business for a finance company, the US Borrower will not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any capital stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, make or permit to exist any investment or any other interest in, or Guarantee any obligations of , any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (all of the foregoing, “Investments”), except:
(i) Permitted Investments;
(ii) Investments by the US Borrower in the capital stock of its Subsidiaries;
(iii) loans or advances made by the US Borrower to any Subsidiary or the Mexican Borrower and made by any Subsidiary to the US Borrower, the Mexican Borrower or any other Subsidiary; provided that the aggregate principal amount of loans and advances outstanding at any time made by the US Borrower and its Subsidiaries to the Mexican Borrower, shall not exceed the lesser of (x) $20,000,000 and (y) the amount that would cause the aggregate Available Mexican Commitments at such time to be equal to zero;
(iv) loans and advances to employees of any Borrower or its Subsidiaries in the ordinary course of business (including for travel and relocation expenses);
(v) [reserved];
(vi) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;
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(vii) [reserved];
(viii) Investments made in connection with Qualified Securitization Transactions;
(ix) Investments by the US Borrower existing on the Effective Date under the Used Truck Loan Agreement and the Cayman Loan Agreements; provided that (x)(1) Used Truck Loans shall not exceed $168,000,000 prior to the Original Maturity Date and $125,000,000 on or after the Original Maturity Date and (2) the Loan to Value Ratio shall not exceed 65% and (y) any repayments under the Cayman Loan Agreements shall not be reused;
(x) (A) the Guarantee by the US Borrower contained in Article XI and (B) other Guarantee obligations of the US Borrower incurred in accordance with Section 8.02;
(xi) Guarantees by any Subsidiary, so long as such guarantor simultaneously delivers to the Administrative Agent a Guarantee, in form and substance reasonably satisfactory to the Administrative Agent and on terms no less favorable than the terms in such original Guarantee entered into by such Subsidiary, for the benefit of the Administrative Agent, on behalf of the Lenders;
(xii) [reserved];
(xiii) [reserved];
(xiv) Investments (including debt obligations and equity) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; and
(xv) additional unsecured Guarantees of obligations in an aggregate amount not to exceed $25,000,000 at any one time outstanding.
(b) The US Borrower will not, and will not permit any of its Subsidiaries to, enter into any Hedging Agreement, other than Hedging Agreements entered into in the ordinary course of business to hedge or mitigate risks to which the US Borrower or such Subsidiary is exposed in the conduct of its business or the management of its liabilities or as otherwise required by any Qualified Securitization Transaction.
SECTION 8.06. Restricted Payments. The US Borrower will not, and will not permit any of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except (a) any Subsidiary may make Restricted Payments to the US Borrower, (b) the US Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the US Borrower and its Subsidiaries, (c) so long as no Default or Event of Default has occurred and is continuing or would result after giving effect thereto, the US Borrower may make Restricted Payments to International, so long as, after giving effect to such Restricted Payment and any borrowing used therefor, the
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Consolidated Leverage Ratio on a pro forma basis as at the end of the most recent fiscal quarter is not greater than 2.75 to 1.00, in an amount not to exceed (i) the sum of (A) 50% of cumulative annual net income (minus 100% of cumulative annual net losses) since November 1, 2016 and (d) Restricted Payments in an aggregate amount equal to any repayments made under the Cayman Loan Agreements after the Effective Date.
SECTION 8.07. Transactions with Affiliates. The US Borrower will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices and on terms not less favorable to the US Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among the US Borrower and its wholly owned Subsidiaries not involving any other Affiliate, (c) any Restricted Payment permitted by Section 8.06, (d) in connection with any Qualified Securitization Transaction (e) any Indebtedness or Guarantees permitted by Section 8.02, (f) any Investment permitted by Section 8.05 and (g) in connection with the Master Intercompany Agreement, the Tax Allocation Agreement and any Intercompany Loan Agreement.
SECTION 8.08. Negative Pledge. The US Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the US Borrower or any of its Subsidiaries to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary of the US Borrower to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to the US Borrower or any other Subsidiary of the US Borrower or to Guarantee Indebtedness of the US Borrower or any other Subsidiary of the US Borrower; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by this Agreement, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof, (iii) the foregoing shall not apply to Qualified Securitization Transactions, (iv) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (v) [reserved], (vi) clause (a) above shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (vii) clause (a) above shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.
SECTION 8.09. Prepayments of Subordinated Debt. The US Borrower will not, and will not permit any of its Subsidiaries to, prepay, purchase or otherwise retire any of the Subordinated Debt prior to the stated maturity thereof.
SECTION 8.10. Serviced Wholesale Portfolio Quality. The US Borrower will not permit:
(a) Past Due Serviced Wholesale Notes (Three-Month Total) at the end of any month (determined substantially in accordance with practices, including policies as to extensions and rewrites, in effect as of the Effective Date), expressed as a percentage of Serviced Wholesale Notes (Three-Month Total) at the end of such month, to exceed 4%; or
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(b) net losses of the US Borrower (determined on the basis of the US Borrower’s normal practice) on Serviced Wholesale Notes recognized during any period of four consecutive fiscal quarters to exceed 0.325% of Serviced Wholesale Notes liquidated during the same period.
For purposes of clause (b) of this Section 8.10, Serviced Wholesale Notes liquidated during any period shall be determined on the same basis as was used in determining the liquidations of Serviced Wholesale Notes for the fiscal year ended October 31, 2015 as set forth on page 4 of Exhibit D.
SECTION 8.11. Sales and Leasebacks. The US Borrower will not, and will not permit any of its Subsidiaries to, enter into any arrangement with any Person providing for the leasing by the US Borrower or any of its Subsidiaries of real or personal property that has been or is to be sold or transferred by, the US Borrower or any of its Subsidiaries, as applicable, to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of, the US Borrower or any of its Subsidiaries, as applicable, except in connection with Qualified Securitization Transactions.
SECTION 8.12. Changes in Fiscal Periods. The US Borrower will not permit its fiscal year to end on a day other than October 31 or change its method of determining fiscal quarters.
SECTION 8.13. Use of Proceeds. No Borrower will request any Loan or Letter of Credit, and no Borrower shall use, or shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall use, the proceeds of any Loan or Letter of Credit (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, to the extent such activities, business or transaction would be prohibited by Sanctions if conducted by a corporation incorporated in the United States, or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto.
SECTION 8.14. Sanctions. Unless any such activity is conducted in compliance with a permit, certificate or other approval issued under, or otherwise in compliance with, Sanctions (and/or the regulations promulgated thereunder), none of (a) the Borrowers, any Subsidiary or any of their respective directors, officers or employees, or (b) to the knowledge of any Borrower, any agent of such Borrower or any Subsidiary of such Borrower that will act in any capacity in connection with or benefit from the Facilities will, directly or indirectly, have any dealings involving or benefitting a Sanctioned Person or Sanctioned Country or will deal in or otherwise engage in any transaction relating to any property or interest in property subject to prohibitions under Sanctions or participate in any transaction that evades, avoids or attempts to violate any of the prohibitions set forth in Sanctions or has such a purpose.
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ARTICLE IX
EVENTS OF DEFAULT
If any of the following events (each, an “Event of Default”) shall occur:
(a) any Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;
(b) any Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five Business Days;
(c) any representation or warranty made or deemed made by or on behalf of the Parent, the US Borrower, the Mexican Borrower or any of their respective Subsidiaries in or in connection with this Agreement or any other Loan Document or any amendment or modification thereof, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any such other Loan Document or any amendment or modification thereof, shall prove to have been incorrect in any material respect when made or deemed made (for the avoidance of doubt, the representations and warranties set forth in Section 5.04(d) and Section 5.14(a) are made or deemed made solely on and as of the Effective Date) and, if the consequences of such representation or warranty being incorrect shall be susceptible of remedy in all material respects, such consequences shall not be remedied in all material respects within ten Business Days after the Parent, the US Borrower, the Mexican Borrower or the respective Subsidiary becomes aware or is advised that such representation or warranty was incorrect in any material respect;
(d) the US Borrower or the Mexican Borrower, as applicable, shall fail to observe or perform any covenant, condition or agreement contained in Section 7.02, 7.03, or 7.09, or in Article VIII (other than Section 8.05(a)(ix)(x)(2)); provided that any failure of the Mexican Borrower to observe or perform any covenant, condition or agreement contained in Section 7.02, 7.03 or 7.09 shall constitute an Event of Default solely when any Mexican Obligations or any Investments to the Mexican Borrower pursuant to Section 8.05(a)(iii) are outstanding and such failure shall continue unremedied for a period of five Business Days after notice thereof from the Administrative Agent (given at the request of any Lender) to the US Borrower;
(e) the US Borrower or, at any time when any Mexican Obligations or any Investments to the Mexican Borrower pursuant to Section 8.05(a)(iii) are outstanding, the Mexican Borrower, shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b), or (d) of this Article) or any other Loan Document, and such failure shall continue unremedied for a period of (i) five Business Days in the case of Section 8.05(a)(ix)(x)(2) and (ii) thirty days after notice thereof from the Administrative Agent (given at the request of any Lender) to the US Borrower in all other instances;
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(f) at any time when any Mexican Obligations or any Investments to the Mexican Borrower pursuant to Section 8.05(a)(iii) are outstanding, the Parent Guarantee or the Guarantee contained in Article XI hereunder shall cease, for any reason, to be in full force and effect or the Parent, the US Borrower or any Affiliate of the Parent or the US Borrower shall so assert and such matter shall continue unremedied for a period of ten days after notice thereof from the Administrative Agent (given at the request of any Lender) to the Parent or the US Borrower, as applicable;
(g) any Borrower shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable and such failure shall continue beyond the period of grace, if any, provided in the instrument or agreement under which such Material Indebtedness was created;
(h) any event or condition occurs that (i) results in any Material Indebtedness becoming due prior to its scheduled maturity or (ii) solely in the case of the US Borrower, enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this paragraph (h) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(i) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization, concurso mercantil, quiebra or other relief in respect of the Parent, International, any Borrower or any of its Subsidiaries or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conciliador, síndico, conservator or similar official for the Parent, International, any Borrower or any of its Subsidiaries or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;
(j) the Parent, International, any Borrower or any of its Subsidiaries shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization, concurso mercantil, quiebra or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (j) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conciliador, síndico, conservator or similar official for the Parent, International, any Borrower or any of its Subsidiaries or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
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(k) the Parent, International, any Borrower or any of its Subsidiaries shall become unable, admit in writing or fail generally to pay its debts as they become due;
(l) one or more judgments for the payment of money in an aggregate amount in excess of $10,000,000 shall be rendered against the US Borrower, any of its Subsidiaries or any combination thereof or, at any time when any Mexican Obligations or any Investments to the Mexican Borrower pursuant to Section 8.05(a)(iii) are outstanding, the Mexican Borrower, any of its Subsidiaries or any combination thereof, and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the US Borrower or any of its Subsidiaries or, at any time when any Mexican Obligations or any Investments to the Mexican Borrower pursuant to Section 8.05(a)(iii) are outstanding, the Mexican Borrower, any of its Subsidiaries or any combination thereof, to enforce any such judgment;
(m) an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; or
(n) a Change in Control shall occur;
(o) International or the Parent shall fail to observe or perform any of its obligations contained in the Parents’ Side Agreement for a period of 30 days after notice of such failure shall have been given to the US Borrower, International and the Parent by the Administrative Agent at the request of any Lender, or the Parents’ Side Agreement shall fail, at any time and for any reason, to be in full force and effect or International or the Parent shall so assert in writing;
(p) International or the Cayman Affiliate, as applicable, shall (i) cancel or terminate the Master Intercompany Agreement, or Article II, III or IV, (ii) fail to make any payment payable by it to the US Borrower under the Master Intercompany Agreement, the Tax Allocation Agreement, the Used Truck Loan Agreement or any Cayman Loan Agreement, within ten Business Days after such payment is due or (iii) fail to observe or perform any of its other covenants or obligations under the Master Intercompany Agreement, Used Truck Loan Agreement or any Cayman Loan Agreement for a period of 30 days after notice of such failure shall have been given to the US Borrower by the Administrative Agent at the request of any Lender;
(q) either the Parent or International shall fail to pay when due, or within any applicable grace period, any principal of or interest on its Indebtedness for Borrowed Money which exceeds $50,000,000 in aggregate principal or face amount;
(r) any Indebtedness for Borrowed Money of either the Parent or International which exceeds $50,000,000 in aggregate principal or face amount shall become due prior to its stated maturity, or any event or circumstance shall occur which permits one or more Persons other than the Parent or International, as the case may be, to cause such Indebtedness for Borrowed Money to become due prior to its stated maturity; or
(s) any of the Security Documents shall cease, for any reason, to be in full force and effect (other than in accordance with its terms), or the US Borrower or any Affiliate of the US
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Borrower shall so assert, or any Lien created by any of the Security Documents shall cease to be enforceable and of the same effect and priority purported to be created thereby on Collateral with an aggregate fair market value which exceeds $10,000,000, except as a result of (i) a sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents or (ii) the Trustee’s failure to maintain possession of any stock certificate, promissory note or other instrument delivered to it under the Security Documents;
then, and in every such event relating to the US Borrower or its Subsidiaries, the Parent or International (other than an event described in clause (i) or (j) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the US Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Borrower; in the case of any event with respect to the US Borrower or its Subsidiaries (other than the Securitization Subsidiaries), the Parent or International described in clause (i) or (j) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Borrower; and in the case of any such event relating to the Mexican Borrower, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the US Borrower, terminate the Commitments with respect to the Mexican Borrower and declare the Loans of the Mexican Borrower then outstanding to be due and payable in whole or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable.
ARTICLE X
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with any Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.
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The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and the other Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise, and (c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the relevant Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article VI or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
The Administrative Agent may resign as Administrative Agent upon 30 days’ notice to the Lenders and the US Borrower. If the Administrative Agent shall resign as Administrative Agent under this Agreement and the other Loan Documents, then the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall (unless a payment or bankruptcy Event of Default shall have occurred and be
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continuing) be subject to approval by the US Borrower (which approval shall not be unreasonably withheld or delayed), whereupon such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term “Administrative Agent” shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agent’s rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the Loans. If no successor agent has accepted appointment as Administrative Agent by the date that is 30 days following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective, and the Lenders shall assume and perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. After any retiring Administrative Agent’s resignation as Administrative Agent, the provisions of this Article X and of Section 12.03 shall continue to inure to its benefit.
If the Person serving as the Administrative Agent becomes a Defaulting Lender pursuant to clause (e) of the definition thereof, the Required Lenders may, to the extent permitted by applicable law, by notice in writing to the US Borrower and such Person, remove such Person as the Administrative Agent and, unless a payment or bankruptcy Event of Default shall have occurred and be continuing, with the consent of the US Borrower, appoint a successor. If no such successor shall have been so appointed by the Required Lenders or shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date, and the Lenders shall assume and perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. After the removed Administrative Agent’s removal as Administrative Agent, the provisions of this Article X and of Section 12.03 shall continue to inure to its benefit.
Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder.
The Lenders hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid (or direct the Trustee to credit bid) all or any portion of the Secured Obligations (as defined in the Security Agreement) (including by accepting some or all of the Collateral in satisfaction of some or all of the Secured Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of the Bankruptcy Code, or any similar laws in any other jurisdictions to which a Lender is subject, or (b) at any other sale, foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or
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otherwise) in accordance with any applicable law. In connection with any such credit bid and purchase, the obligations owed to the Lenders shall be entitled to be, and shall be, credit bid by the Administrative Agent (or the Trustee) at the direction of the Required Lenders on a ratable basis (with Secured Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that shall vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) for the asset or assets so purchased (or for the equity interests or debt instruments of the acquisition vehicle or vehicles that are issued in connection with such purchase). In connection with any such bid, (i) the Administrative Agent (or the Trustee) shall be authorized to form one or more acquisition vehicles and to assign any successful credit bid to such acquisition vehicle or vehicles, (ii) each of the Secured Parties’ (as defined in the Security Agreement) ratable interests in the Secured Obligations which were credit bid shall be deemed without any further action under this Agreement to be assigned to such vehicle or vehicles for the purpose of closing such sale, (iii) the Administrative Agent (or the Trustee) shall be authorized to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or equity interests thereof, shall be governed, directly or indirectly, by, and the governing documents shall provide for, control by the vote of the Required Lenders or their permitted assignees under the terms of this Agreement or the governing documents of the applicable acquisition vehicle or vehicles, as the case may be, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in Section 12.02 of this Agreement), (iv) the Administrative Agent on behalf of such acquisition vehicle or vehicles shall be authorized to issue to each of the Lenders, ratably on account of the relevant Secured Obligations which were credit bid, interests, whether as equity, partnership, limited partnership interests or membership interests, in any such acquisition vehicle and/or debt instruments issued by such acquisition vehicle, all without the need for any Lender or acquisition vehicle to take any further action, and (v) to the extent that the Secured Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Secured Obligations assigned to the acquisition vehicle exceeds the amount of the Secured Obligations credit bid by the acquisition vehicle or otherwise), such Secured Obligations shall automatically be reassigned to the Secured Parties pro rata and the equity interests and/or debt instruments issued by any acquisition vehicle on account of such Secured Obligations shall automatically be cancelled, without the need for any Lender or any acquisition vehicle to take any further action. Notwithstanding that the ratable portion of the Secured Obligations of each Lender are deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each Lender shall execute such documents and provide such information regarding the Lender (and/or any designee of the Lender which will receive interests in or debt instruments issued by such acquisition vehicle) as the Administrative Agent may reasonably request in connection with the formation of any acquisition vehicle, the formulation or submission of any credit bid or the consummation of the transactions contemplated by such credit bid.
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ARTICLE XI
GUARANTEE
SECTION 11.01. Guarantee. To induce the Lenders to execute and deliver this Agreement and to make Mexican Loans, and in consideration thereof, the US Borrower hereby unconditionally and irrevocably guarantees, as primary obligor and joint and several co-debtor and not merely as surety, to the Administrative Agent, the Lenders and their successors, indorsees, transferees and assigns, the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Mexican Obligations, and the US Borrower further agrees to pay the expenses which may be paid or incurred by the Administrative Agent or the Lenders in collecting any or all of the Mexican Obligations and/or enforcing any rights under this Article XI or under the Mexican Obligations in accordance with this Article XI; provided, that for purposes of determining the obligations of any guarantor under this Agreement, the definition of “Mexican Obligations” shall not create any guarantee by the US Borrower of any Excluded Swap Obligations of the US Borrower. The guarantee contained in this Article XI shall remain in full force and effect until the Mexican Obligations are paid in full and the Commitments are terminated. Anything herein to the contrary notwithstanding, the maximum liability of the US Borrower under this Article XI shall in no event exceed the amount which can be guaranteed by the US Borrower under applicable federal and state laws relating to the insolvency of debtors.
SECTION 11.02. Waiver of Subrogation. Notwithstanding any payment or payments made by the US Borrower in respect of the Mexican Obligations or any setoff or application of funds of the US Borrower by the Administrative Agent or any Lender, until payment in full of the Mexican Obligations, and the Commitments are terminated the US Borrower shall not be entitled to be subrogated to any of the rights of the Administrative Agent or the Lenders against the Borrowers or any collateral security or guarantee or right of offset held by the Administrative Agent or any Lender for the payment of the Mexican Obligations, nor shall the US Borrower seek any reimbursement from the Mexican Borrower in respect of payments made by the US Borrower hereunder.
SECTION 11.03. Modification of Mexican Obligations. The US Borrower hereby consents that, without the necessity of any reservation of rights against the US Borrower and without notice to or further assent by the US Borrower (a) any demand for payment of the Mexican Obligations made by the Administrative Agent or any Lender may be rescinded by the Administrative Agent or such Lender, and the Mexican Obligations continued, (b) except as otherwise provided in this Agreement, the Mexican Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent or any Lender, (c) except as otherwise provided in this Agreement, this Agreement may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent or the Lenders may deem advisable from time to time, and (d) to the extent permitted by applicable law, any collateral security or guarantee or right of offset at any time held by the Administrative Agent or any Lender, for the payment of the Mexican Obligations may be sold, exchanged, waived, surrendered or released, all without the necessity of any reservation of rights against the
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US Borrower and without notice to or further assent by the US Borrower, which will remain bound hereunder notwithstanding any such renewal, extension, modification, acceleration, compromise, amendment, supplement, termination, sale, exchange, waiver, surrender or release. The Administrative Agent and the Lenders shall not have any obligation to protect, secure, perfect or insure any collateral security document or property subject thereto at any time held as security for the Mexican Obligations. When making any demand hereunder against the US Borrower, the Administrative Agent or the Lenders may, but shall be under no obligation to, make a similar demand on any other party or any other guarantor, and any failure by the Administrative Agent or any Lender to make any such demand or to collect any payments from any Borrower or any such other guarantor shall not relieve the US Borrower of its obligations or liabilities hereunder and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of the Administrative Agent or the Lenders against the US Borrower. For the purposes of this Section 11.03 “demand” shall include the commencement and continuance of any legal proceedings.
SECTION 11.04. Waiver by the US Borrower. The US Borrower waives the benefits of any and all notice of the creation, renewal, extension or accrual of the Mexican Obligations and notice of or proof of reliance by the Administrative Agent or the Lenders upon the guarantee contained in this Article XI or acceptance of the guarantee contained in this Article XI, and the Mexican Obligations, and any of them, shall conclusively be deemed to have been created, contracted, continued or incurred in reliance upon the guarantee contained in this Article XI, and all dealings between the US Borrower and the Administrative Agent or the Lenders shall likewise be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Article XI. The US Borrower waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Mexican Borrower or the US Borrower with respect to any relevant Mexican Obligations. This guarantee shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to the validity, regularity or enforceability of this Agreement or the Mexican Obligations, including, without limitation, any collateral security or guarantee therefor or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any Lender and without regard to any defense, setoff or counterclaim which may at any time be available to or be asserted by any Borrower against the Administrative Agent or any Lender, or any other Person, or by any other circumstance whatsoever (with or without notice to or knowledge of the Mexican Borrower or the US Borrower) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Mexican Borrower for any of the Mexican Obligations, or of the US Borrower under the guarantee contained in this Article XI in bankruptcy or in any other instance, and the obligations and liabilities of the US Borrower hereunder shall not be conditioned or contingent upon the pursuit by the Administrative Agent or any Lender or any other Person at any time of any right or remedy against the Mexican Borrower or against any other Person which may be or become liable in respect of any Mexican Obligations or against any collateral security or guarantee therefor or right of offset with respect thereto. The guarantee contained in this Article XI shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the US Borrower and the successors and assigns thereof, and shall inure to the benefit of the Lenders and their successors, indorsees, transferees and assigns, until the Mexican Obligations shall have been satisfied in full and the Mexican Commitments have expired or been terminated, notwithstanding that from time to time during the term of this Agreement the Mexican Borrower may be free from any Mexican Obligations.
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SECTION 11.05. Reinstatement. This guarantee shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Mexican Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the US Borrower or the Mexican Borrower or upon or as a result of the appointment of a receiver, intervenor, síndico or conservator of, or trustee or similar officer for, the US Borrower, the Mexican Borrower or any substantial part of their respective property, or otherwise, all as though such payments had not been made.
SECTION 11.06. Keepwell. Each Qualified Keepwell Provider hereby jointly and severally absolutely, unconditionally, and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other guarantor to honor all of its obligations under its guarantee or security agreement in respect of any Swap Obligation (provided, however, that each Qualified Keepwell Provider shall only be liable under this Section 11.06 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 11.06, or otherwise under this guarantee, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified Keepwell Provider under this Section 11.06 shall remain in full force and effect until a discharge of guarantor obligations. Each Qualified Keepwell Provider intends that this Section 11.06 constitute, and this Section 11.06 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other guarantor for all purposes of section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Notices. (a) Except in the case of notices and other communications expressly permitted to be given by telephone, all notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by pdf, e-mail or other electronic delivery), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of electronic delivery, when received, addressed as follows in the case of the Borrowers, the Administrative Agent, the Issuing Bank and the Swingline Lender, and as set forth in its Administrative Questionnaire delivered to the Administrative Agent in the case of the Lenders, or to such other address as may be hereafter notified by the respective parties hereto:
| (i) if to the Borrowers: | Navistar Financial Corporation 2701 Navistar Drive Lisle, IL 60532 Attention: President Email: [email protected] |
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| Navistar Financial Corporation 2701 Navistar Drive Lisle, IL 60532 Attention: General Counsel Email: [email protected] | ||
| (ii) if to the Administrative Agent: | JPMorgan Chase Bank, N.A. 500 Stanton Christiana Road Ops Building 2, 3rd Floor Newark, DE 19713-2107 Attention: Dan Lougheed Email: [email protected] Telecopy: 302-634-4250 | |
| (iii) if to the Issuing Bank: | JPMorgan Chase Bank, N.A. 10420 Highland Manor Drive, 4th Floor Tampa, Florida 33610-9120 Attention: Global Trade Services Email: [email protected] Telecopy: 813-432-5161
with a copy to: JPMorgan Chase Bank, N.A. 500 Stanton Christiana Road Ops Building 2, 3rd Floor Newark, DE 19713-2107 Attention: Dan Lougheed Email: [email protected] Telecopy: 302-634-4250 | |
| (iv) if to the Swingline Lender: | JPMorgan Chase Bank, N.A. 500 Stanton Christiana Road Ops Building 2, 3rd Floor Newark, DE 19713-2107 Attention: Dan Lougheed Email: [email protected] Telecopy: 302-634-4250 | |
(b) The Administrative Agent and the Lenders are authorized to rely on instructions received by telephone from Persons they believe in good faith to be authorized to give such instructions hereunder. Neither the Administrative Agent nor any Lender shall incur any liability to any Borrower or any other Person as a result of any act or omission by it in accordance with such instructions.
SECTION 12.02. Waivers; Amendments. (a) No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of
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the Administrative Agent, the Issuing Bank and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement, any other Loan Document nor any provision thereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrowers and the Required Lenders or by the Borrowers and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender (including a Defaulting Lender) without the written consent of such Lender, (ii) forgive the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender (including a Defaulting Lender) affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender (including a Defaulting Lender) affected thereby, (iv) change Section 4.13(a), (b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change any of the provisions of this Section, Section 4.15(b) or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender, (vi) reduce the percentage specified in the definition of Majority Facility Lenders with respect to any Facility without the written consent of all Lenders under such Facility, (vii) release the US Borrower from its Guarantee obligations set forth in Article XI or the Parent from its obligations under the Parent Guarantee, or modify Section 12.19 in a manner adverse to the Lenders, in each case without the written consent of each Lender, (viii) release all or substantially all of the assets of the US Borrower subject to the Liens granted pursuant to the Security Documents (other than as permitted under Section 12.19), without the written consent of each Lender, (ix) amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be or (x) amend or modify Section 4.15 without the prior written consent of the Administrative Agent, the Issuing Lender and the Swingline Lender.
SECTION 12.03. Expenses; Indemnity; Damage Waiver. (a) Each Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and the Joint Lead Arrangers, including the reasonable fees, charges and disbursements of Simpson Thacher & Bartlett LLP, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of this Agreement or any amendments, modifications or waivers of the provisions hereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in
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connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the reasonable fees, charges and disbursements of one firm of counsel for the Administrative Agent, the Issuing Bank and the Lenders in each relevant jurisdiction, subject to conflicts, in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including in connection with any workout, restructuring or negotiations in respect thereof. For the avoidance of doubt, each Borrower shall pay its own out-of-pocket expenses hereunder.
(b) Each Borrower shall indemnify the Administrative Agent, the Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit) or (iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses have resulted from the gross negligence or willful misconduct of such Indemnitee as determined by a final non-appealable judgment of a court of competent jurisdiction.
(c) To the extent that the Borrowers fail to pay any amount required to be paid by it to the Administrative Agent, the Issuing Bank or the Swingline Lender (or their respective Related Parties) under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender (or their respective Related Parties), as the case may be, such Lender’s Aggregate Exposure Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Aggregate Exposure Percentages immediately prior to such date); provided that such indemnity shall not be available to the extent that such losses, claims, damages, liabilities or related expenses have resulted from the gross negligence or willful misconduct of the Administrative Agent, the Issuing Bank or the Swingline Lender (or their respective Related Parties) as determined by a final non-appealable judgment of a court of competent jurisdiction.
(d) To the extent permitted by applicable law, each Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof or any act
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or omission or event in connection therewith, and Borrower hereby waives, releases and agrees not to sue upon any such claim or any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.
(e) All amounts due under this Section shall be payable promptly after written demand therefor.
(f) No Borrower shall indemnify any Person for any claim whatsoever against any Securitization Subsidiary.
SECTION 12.04. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that each Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by such Borrower without such consent shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its US Commitment and the US Loans at the time owing to it or, if applicable, all or a portion of its Mexican Commitment and the Mexican Loans at the time owing to it, which assignments may be made on a non pro rata basis); provided that (i) each Borrower (except (x) in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund (as defined below); (y) when a payment or bankruptcy Event of Default has occurred and is continuing and (z) in the case of an assignment of a Term Loan, the US Borrower only), the Administrative Agent (except in the case of an assignment of a Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund), and, in the case of an assignment of all or a portion of a US Revolving Commitment or any Lender’s obligations in respect of its LC Exposure or Swingline Exposure, the Issuing Bank and the Swingline Lender must give their prior written consent to such assignment (which consent shall not be unreasonably withheld or delayed); provided further that, the relevant Borrower shall be deemed to have consented to any such assignment unless such Borrower shall object thereto by written notice to the Administrative Agent within five Business Days after having received notice thereof, (ii) except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, if any US Lender assigns a part of its rights and obligations under this Agreement in respect of its US Revolving Loans and/or US Revolving Commitment to an assignee, such US Lender shall assign proportionate interests in (A) its participations in the Letters of Credit and other rights and obligations hereunder in respect of the Letters of Credit, (B) its participations in the Swingline Loans and other rights and obligations hereunder in respect of the Swingline Loans and (C) its Mexican Revolving Loans and Mexican Commitment to such assignee (provided, that with the consent of the US Borrower and the Administrative Agent, a US Lender may assign portions of its US Revolving Commitment without assigning a proportionate share of its Mexican Commitment if either (x) such proportionate share of such Mexican Commitment shall be assumed by another Lender or (y) if the US Borrower so agrees, such proportionate share of such Mexican Commitment shall be
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terminated), (iii) except in the case of an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 (or, in the case of the Term Loans, $1,000,000) unless the applicable Borrower and the Administrative Agent otherwise consent (each such consent not to be unreasonably withheld or delayed), (iv) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement, (v) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500 (except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund), and (vi) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire. Upon acceptance and recording pursuant to paragraph (d) of this Section, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have (in addition to any such rights and obligations theretofore held by it) the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 4.10, Section 4.11, Section 4.12 and Section 12.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (e) of this Section.
For the purposes of this Section 12.04, “Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an affiliate of an entity that administers or manages a Lender.
(c) The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrowers, shall maintain at one of its offices a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent, the Issuing Bank and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. This paragraph shall be construed so that the Loans or other obligations under this Agreement are at all times maintained in “registered form” within the meaning of United States Treasury Regulations Sections 5f.103-1(c) and 1.871-14(c).
(d) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire
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(unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrowers, the Administrative Agent, the Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 12.02(b) that affects such Participant. Subject to paragraph (f) of this Section, each Borrower agrees that each Participant shall be entitled to the benefits of Section 4.10, Section 4.11, and Section 4.12 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in “registered form” under Section 5f.103-1(c) or Section 1.871-14(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. This paragraph shall be construed so that the Loans or other obligations under this Agreement are at all times maintained in “registered form” within the meaning of United States Treasury Regulations Sections 5f.103-1(c) and 1.871-14(c).
(f) A Participant shall not be entitled to receive any greater payment under Section 4.10 or Section 4.12 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrowers’ prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 4.12 unless the Borrowers are notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Sections 4.12(d) and 4.12(e) as though it were a Lender.
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(g) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any such pledge or assignment to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such assignee for such Lender as a party hereto.
(h) Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”), identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrowers, the option to provide to the US Borrower or the Mexican Borrower, as the case may be, all or any part of any Loan that such Granting Lender would otherwise be obligated to make to the US Borrower or the Mexican Borrower, as the case may be, pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to make any Loan and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall utilize the US Commitment or the Mexican Commitment, as the case may be, of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Lender). In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any state thereof. In addition, notwithstanding anything to the contrary in this Section 12.04(h), any SPC may (A) with notice to, but without the prior written consent of, the Borrowers and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans to the Granting Lender, or with the prior written consent of the Borrowers and the Administrative Agent (which consent shall not be unreasonably withheld) to any financial institutions providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Loans, and (B) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPC; provided that non-public information with respect to any Borrower may be disclosed only with such Borrower’s consent which will not be unreasonably withheld. This paragraph (h) may not be amended without the written consent of any SPC with Loans outstanding at the time of such proposed amendment.
SECTION 12.05. Survival. All covenants, agreements, representations and warranties made by the Borrowers herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any
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such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Section 4.10, Section 4.11, Section 4.12 and Section 12.03 and Article X shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.
SECTION 12.06. Counterparts; Integration; Amendment and Restatement. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by electronic delivery shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. On the Effective Date, the Existing Credit Agreement shall be amended, restated, superseded and replaced in its entirety. The parties hereto acknowledge and agree that (i) this Agreement and the other Loan Documents executed and delivered in connection herewith do not constitute a novation, payment and reborrowing, or termination of the “Mexican Obligations” (as defined in the Existing Credit Agreement) or the “US Obligations” (as defined in the Existing Credit Agreement) under the Existing Credit Agreement as in effect prior to the Effective Date; (ii) such “Mexican Obligations” and “US Obligations” are in all respects continuing with only the terms thereof being modified as provided in this Agreement; and (iii) the Liens as granted under the Collateral Documents securing payment of such “Mexican Obligations” and “US Obligations” are in all respects continuing and in full force and effect and secure the payment of the Mexican Obligations (as defined in this Agreement) and the US Obligations (as defined in this Agreement) and are hereby fully ratified and affirmed. Without limitation of the foregoing, the US Borrower hereby fully and unconditionally ratifies and affirms all Security Documents to which it is a party and agrees that all collateral granted thereunder shall from and after the date hereof secure all Mexican Obligations and US Obligations hereunder.
SECTION 12.07. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 12.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final but excluding deposits designated to payroll accounts, any trust accounts or any accounts related to any Qualified Securitization Transaction) at any time held and
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other indebtedness at any time owing by such Lender to or for the credit or the account of any Borrower against any of and all the obligations of such Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have; provided, that to the extent prohibited by applicable law as described in the definition of “Excluded Swap Obligation,” no amounts received from, or set off with respect to, any guarantor shall be applied to any Excluded Swap Obligations of such guarantor.
SECTION 12.09. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 12.10. Submission To Jurisdiction; Waivers. Each party hereto hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding relating to this Agreement, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the courts of the State of New York in the Borough of Manhattan, City of New York, the courts of the United States for the Southern District of New York, and appellate courts from any thereof and to the courts of its own corporate domicile in respect of any actions brought against it as a defendant in any action or proceeding arising out of this Agreement;
(b) consents that any such action or proceeding may be brought in such courts and waives any objection (including any objection based on place of residence or domicile) that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the US Borrower (in the case of the Mexican Borrower, as the Mexican Borrower’s agent for service of process) or to any other party at its address set forth in Section 12.01 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law; and
(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.
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SECTION 12.11. Acknowledgments. Each Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement;
(b) neither the Administrative Agent nor any Lender has any fiduciary relationship, and with respect to the Lenders only, any advisory or agency relationship, with or duty to any Borrower arising out of or in connection with this Agreement,
(c) the relationship between the Administrative Agent and Lenders, on one hand, and each Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor;
(d) the Administrative Agent and each Lender may have interests that conflict with those of the Borrower; and
(e) no joint venture is created hereby or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Borrowers and the Lenders.
SECTION 12.12. WAIVERS OF JURY TRIAL. EACH BORROWER, THE ADMINISTRATIVE AGENT AND EACH OF THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 12.13. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 12.14. Confidentiality. Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors involved with this financing (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the administration of the facilities and the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (f) subject to an agreement containing provisions at least as restrictive as those of this Section, to any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, (g) with the consent of the relevant Borrower, (h) subject to an agreement containing provisions at least as restrictive as those of this Section, to direct or indirect counterparties in connection with swaps or derivatives, (i) to ratings agencies, (j) subject to an agreement containing provisions at least as restrictive as those of this Section, to market data collectors or (k) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source
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other than the relevant Borrower. For the purposes of this Section, “Information” means all information received from such Borrower relating to such Borrower or its business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by such Borrower; provided that, in the case of information received from such Borrower after the date hereof, such information is identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
SECTION 12.15. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.
SECTION 12.16. Waiver of Immunities. To the extent permitted by applicable law, if any Borrower has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set-off or any legal process (whether service or notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) with respect to itself or any of its property, such Borrower hereby irrevocably waives and agrees not to plead or claim such immunity in respect of its obligations under this Agreement. Each Borrower agrees that the waivers set forth above shall have the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America and are intended to be irrevocable and not subject to withdrawal for purposes of such Act.
SECTION 12.17. Judgment Currency. The obligation of the Borrowers hereunder to make payments in Dollars shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than Dollars except to the extent to which such tender or recovery shall result in the effective receipt by the Lenders of the full amount of Dollars expressed to be payable hereunder, and the Borrowers shall indemnify the Lenders (as an alternative or additional cause of action) for the amount (if any) by which such effective receipt shall fall short of the full amount of Dollars expressed to be payable hereunder and such obligation to indemnify shall not be affected by judgment being obtained for any other sums due hereunder.
SECTION 12.18. Loan Equalization; Loan Conversion. (a) On any Equalization Date each US Lender severally, unconditionally and irrevocably agrees that it shall purchase a
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participating interest in the Mexican Revolving Loans of each Mexican Lender that have not been assumed by the US Borrower pursuant to clause (c) below to the extent necessary to cause the Revolving Credit Exposure Percentage of each US Lender, after giving effect to such purchase and sale of participating interests, to equal its US Funding Revolving Commitment Percentage (calculated immediately prior to the termination or expiration of the US Commitments). Each US Lender will immediately transfer to the Administrative Agent, in immediately available funds, the amounts of its participation(s), and the proceeds of such participation(s) shall be distributed by the Administrative Agent to each Lender from which a participating interest is being purchased in the amount(s) provided for in the preceding sentence. Notwithstanding the foregoing, Export Development Canada (“EDC”) shall not be required to purchase a participating interest in any Mexican Revolving Loans, and in lieu of EDC’s purchase of such participating interest, (i) JPMorgan Chase Bank, N.A. (“JPMorgan Chase Bank”) will purchase the participating interest that would, but for this sentence, be required to be purchased by EDC, and (ii) simultaneously therewith, EDC will purchase from JPMorgan Chase Bank a participating interest in the US Revolving Loans of JPMorgan Chase Bank in an amount equal to the amount of the participating interest purchased by JPMorgan Chase Bank in Mexican Revolving Loans pursuant to clause (i) of this sentence.
(b) To the extent any Taxes are required to be withheld from any amounts payable by a Lender (the “First Lender”) to another Lender (the “Other Lender”) in connection with its participating interest in any Mexican Revolving Loan resulting from the application of Section 12.18(a), each Borrower, with respect to the relevant Loans made to it, shall be required to pay increased amounts to the Other Lender receiving such payments from the First Lender to the same extent they would be required under Section 4.12 if such Borrower were making payments with respect to the participating interest directly to the Other Lender. For purposes of receipt by any Other Lender of payments pursuant to this Section 12.18(b), such Other Lender shall not be required to comply with the requirements of Section 4.12(c).
(c) If an Event of Default or a Mexican Change in Control has occurred and is continuing, upon the notice of any Mexican Lender to the Borrowers, the US Borrower (through the guarantee contained in Section 11) shall automatically be deemed to have assumed the Mexican Revolving Loans of such Mexican Lender outstanding on such date.
SECTION 12.19. Release of Liens. (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Administrative Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender except as expressly required by Section 12.02) to take any action requested by the US Borrower having the effect of releasing any assets from the Liens granted pursuant to the Security Documents (i) to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with Section 12.02 or (ii) under the circumstances described in paragraph (b) below.
(b) At such time as the Commitments have expired or been terminated, the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, all LC Disbursements shall have been reimbursed and no Letters of Credit shall be outstanding, the assets subject to the Liens granted pursuant to the Security Documents, and the Security Documents and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and the US Borrower under the Security Documents shall terminate, all without delivery of any instrument or performance of any act by any Person.
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SECTION 12.20. Intercompany Security Agreements. Notwithstanding anything to the contrary contained in the intercompany security agreements between the US Borrower as secured party and certain of its Subsidiaries as pledgors, the parties thereto may amend, waive, modify, restate, discharge or terminate such intercompany security agreements without the consent of the Administrative Agent and the Lenders so long as after giving effect to any such amendment, waiver, modification, restatement, discharge or termination, no Event of Default shall have occurred and be continuing.
SECTION 12.21. Blocked Account. (a) The US Borrower hereby grants to the Administrative Agent, for the ratable benefit of the Lenders, a security interest in the Blocked Account, as collateral security for the prompt and complete payment and performance when due of the US Obligations. The Administrative Agent shall have all rights and remedies of a secured party with respect to such collateral security under the Uniform Commercial Code.
(b) The US Borrower shall have no right to issue instructions or have any other right or ability to access or withdraw or transfer funds from the Blocked Account without the prior written consent of the Administrative Agent, which consent shall be given if the US Borrower has delivered a certificate, substantially in the form of Exhibit K, certifying that the following conditions have been met: (i) no Default or Event of Default shall have occurred and be continuing, (ii) the US Borrower represents and warrants that such funds shall be utilized (A) for normal operating expenses of the US Borrower and its Subsidiaries consistent with the US Borrower’s and its Subsidiaries’ past business practices, (B) to purchase receivables in the normal course of business or (C) to make payments of permitted dividends and permitted hereunder under this Agreement consistent with the US Borrower’s past business practices and (iii) the Cash Balance shall be less than $75,000,000.
(c) The Blocked Account Agreement may not be terminated without the consent of the Administrative Agent and the Required Lenders.
SECTION 12.22. USA PATRIOT Act. Each Lender to which the Patriot Act applies hereby notifies each Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), it may be required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of each Borrower and other information that will allow such Lender to identify each Borrower in accordance with said Act.
SECTION 12.23. Consents under the Security Agreement. The Lenders executing this Agreement (and constituting Required Lenders under the Existing Credit Agreement) hereby consent to the execution and delivery by the US Borrower and the Trustee of the Security Agreement, substantially in the form of Exhibit H, to be dated the date hereof.
SECTION 12.24. Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto
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acknowledges that any liability of any EEA Financial Institution arising under any Loan Document may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b) the effects of any Bail-In Action on any such liability, including, if applicable:
(i) a reduction in full or in part or cancellation of any such liability;
(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers or representatives as of the day and year first above written.
| NAVISTAR FINANCIAL CORPORATION | ||
| By | /s/ Anthony Aiello | |
| Name: | Anthony Aiello | |
| Title: | Vice President and Treasurer | |
| NAVISTAR FINANCIAL, S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA | ||
| By | /s/ José de Jesús Lechuga Corvacho | |
| Name: | José de Jesús Lechuga Corvacho | |
| Title: | Attorney In Fact | |
Signature Page to the Third Amended and Restated Credit Agreement
| JPMORGAN CHASE BANK, N.A., as Administrative Agent, Issuing Bank, Swingline Lender and a Lender | ||
| By | /s/ Gene Riego de Dios | |
| Name: | Gene Riego de Dios | |
| Title: | Vice President | |
Signature Page to the Third Amended and Restated Credit Agreement
| BANK OF AMERICA, N.A., as Syndication Agent and a Lender | ||
| By | /s/ Brian Lukehart | |
| Name: | Brian Lukehart | |
| Title: | Director | |
Signature Page to the Third Amended and Restated Credit Agreement
| Credit Suisse AG, Cayman Islands Branch, | ||
| as a Lender | ||
| By | /s/ Nupur Kumar | |
| Name: | Nupur Kumar | |
| Title: | Authorized Signatory | |
Signature Page to the Third Amended and Restated Credit Agreement
| CITIBANK, N.A., as a Lender | ||||
| By: | /s/ Sarah Terner | |||
| Name: | Sarah Terner | |||
| Title: | Vice President | |||
| DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender | ||||
| By: | /s/ Michael Shannon | |||
| Name: | Michael Shannon | |||
| Title: | Vice President | |||
| By: | /s/ Peter Cucchiara | |||
| Name: | Peter Cucchiara | |||
| Title: | Vice President | |||
Signature Page to the Third Amended and Restated Credit Agreement
| Export Development Canada, as a Lender | ||||
| By: | /s/ Margaret Michalski | |||
| Name: | Margaret Michalski | |||
| Title: | Financing Manager | |||
| By: | /s/ Matthew Devine | |||
| Name: | Matthew Devine | |||
| Title: | Financing Manager | |||
| GOLDMAN SACHS LENDING PARTNERS LLC, as a Lender | ||||
| By: | /s/ Rebecca Kratz | |||
| Name: | Rebecca Kratz | |||
| Title: | Authorized Signatory | |||
| DEUTSCHE BANK TRUST COMPANY AMERICAS, as an Exiting Lender | ||||
| By: | /s/ Michael Shannon | |||
| Name: | Michael Shannon | |||
| Title: | Vice President | |||
| By: | /s/ Peter Cucchiara | |||
| Name: | Peter Cucchiara | |||
| Title: | Vice President | |||
| GOLDMAN SACHS BANK USA, as an Exiting Lender | ||||
| By: | /s/ Rebecca Kratz | |||
| Name: | Rebecca Kratz | |||
| Title: | Authorized Signatory | |||
Schedule 2.01
Commitments/Loans
| Investor |
US Revolving Commitment |
US Extended Revolving Commitment |
Mexican Commitment |
Mexican Extended Commitment |
2011 Original Maturity Date Term Loans |
2011 Extended Maturity Date Term Loans |
Total Commitments/ Loans |
|||||||||||||||||||||
| JPMorgan Chase Bank, N.A. |
59,523,809.54 | 59,523,809.54 | 10,625,000.00 | 10,625,000.00 | 0.00 | 27,401,785.70 | 86,925,595.24 | |||||||||||||||||||||
| Bank of America, N.A. |
49,951,569.02 | 49,951,569.02 | 10,625,000.00 | 10,625,000.00 | 0.00 | 28,659,712.75 | 78,611,281.77 | |||||||||||||||||||||
| Credit Suisse AG, Cayman Islands Branch |
42,857,142.86 | 42,857,142.86 | 10,625,000.00 | 10,625,000.00 | 0.00 | 15,490,655.60 | 58,347,798.46 | |||||||||||||||||||||
| The Bank of Nova Scotia |
35,714,285.71 | 0.00 | 19,500,000.00 | 0.00 | 20,491,071.41 | 0.00 | 56,205,357.12 | |||||||||||||||||||||
| Citibank, N.A. |
54,723,809.52 | 54,723,809.52 | 21,375,000.00 | 21,375,000.00 | 0.00 | 0.00 | 54,723,809.52 | |||||||||||||||||||||
| Royal Bank of Canada |
28,571,428.57 | 0.00 | 0.00 | 0.00 | 16,392,857.11 | 0.00 | 44,964,285.68 | |||||||||||||||||||||
| Deutsche Bank AG New York Branch |
23,809,523.81 | 23,809,523.81 | 0.00 | 0.00 | 0.00 | 13,660,714.30 | 37,470,238.11 | |||||||||||||||||||||
| The Northern Trust Company |
23,809,523.81 | 0.00 | 0.00 | 0.00 | 13,660,714.30 | 0.00 | 37,470,238.11 | |||||||||||||||||||||
| Export Development Canada |
30,952,380.95 | 20,000,000.00 | 16,625,000.00 | 16,625,000.00 | 0.00 | 0.00 | 30,952,380.95 | |||||||||||||||||||||
| Goldman Sachs Lending Partners LLC |
23,809,523.81 | 23,809,523.81 | 10,625,000.00 | 10,625,000.00 | 0.00 | 6,825,271.28 | 30,634,795.09 | |||||||||||||||||||||
| The Huntington National Bank |
14,372,240.50 | 0.00 | 0.00 | 0.00 | 8,226,250.21 | 0.00 | 22,598,490.71 | |||||||||||||||||||||
| Comerica Bank |
11,904,761.90 | 0.00 | 0.00 | 0.00 | 10,205,357.13 | 0.00 | 22,110,119.03 | |||||||||||||||||||||
| Lord Abbett Investment Trust – Lord Abbett Floating Rate Fund |
0.00 | 0.00 | 0.00 | 0.00 | 11,297,809.22 | 0.00 | 11,297,809.22 | |||||||||||||||||||||
| Wells Fargo Principal Lending, LLC |
0.00 | 0.00 | 0.00 | 0.00 | 9,048,648.65 | 0.00 | 9,048,648.65 | |||||||||||||||||||||
| OCP Senior Credit Fund |
0.00 | 0.00 | 0.00 | 0.00 | 8,496,295.48 | 0.00 | 8,496,295.48 | |||||||||||||||||||||
| Onex Debt Opportunity Fund Ltd. |
0.00 | 0.00 | 0.00 | 0.00 | 4,963,428.97 | 0.00 | 4,963,428.97 | |||||||||||||||||||||
| Greywolf CLO III, Ltd. |
0.00 | 0.00 | 0.00 | 0.00 | 4,759,319.33 | 0.00 | 4,759,319.33 | |||||||||||||||||||||
| Onex Senior Credit Fund, L.P. |
0.00 | 0.00 | 0.00 | 0.00 | 4,657,546.90 | 0.00 | 4,657,546.90 | |||||||||||||||||||||
| Redwood Opportunity Master Fund, Ltd. |
0.00 | 0.00 | 0.00 | 0.00 | 4,559,464.27 | 0.00 | 4,559,464.27 | |||||||||||||||||||||
| Greywolf CLO IV, Ltd. |
0.00 | 0.00 | 0.00 | 0.00 | 4,354,838.72 | 0.00 | 4,354,838.72 | |||||||||||||||||||||
| Greywolf CLO V, Ltd. |
0.00 | 0.00 | 0.00 | 0.00 | 4,354,838.72 | 0.00 | 4,354,838.72 | |||||||||||||||||||||
| Pontus Holdings Ltd. |
0.00 | 0.00 | 0.00 | 0.00 | 3,600,000.02 | 0.00 | 3,600,000.02 | |||||||||||||||||||||
| Greywolf CLO II, Ltd. |
0.00 | 0.00 | 0.00 | 0.00 | 3,174,952.01 | 0.00 | 3,174,952.01 | |||||||||||||||||||||
| OCP Credit Strategy Fund |
0.00 | 0.00 | 0.00 | 0.00 | 2,995,057.89 | 0.00 | 2,995,057.89 | |||||||||||||||||||||
| Golden Knight II CLO Ltd. |
0.00 | 0.00 | 0.00 | 0.00 | 1,367,088.59 | 0.00 | 1,367,088.59 | |||||||||||||||||||||
| Onex Senior Credit II, LP |
0.00 | 0.00 | 0.00 | 0.00 | 856,321.44 | 0.00 | 856,321.44 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total |
400,000,000.00 | 274,675,378.56 | 100,000,000.00 | 80,500,000.00 | 137,461,860.37 | 92,038,139.63 | 629,500,000.00 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Schedule 5.05
Disclosed Matters
None.
Schedule 5.10
Subsidiaries
| Subsidiary Name |
Jurisdiction of Incorporation | Capital Stock Ownership | ||
| Navistar Financial Retail Receivables Corporation | Delaware | 100% owned by Navistar Financial Corporation | ||
| Navistar Financial Securities Corporation | Delaware | 100% owned by Navistar Financial Corporation | ||
| Truck Retail Accounts Corporation | Delaware | 100% owned by Navistar Financial Corporation | ||
| International Truck Leasing Corporation | Delaware | 100% owned by Navistar Financial Corporation | ||
| Navistar Leasing Services Corporation | Delaware | 100% owned by Navistar Financial Corporation | ||
| Navistar Financial Fleet Funding Corp. | Delaware | 100% owned by Navistar Financial Corporation | ||
| Servicios Corporativos NFC, S. de R.L. de C.V. | Mexico | 99.97% owned by Navistar Financial, S.A. de C.V., Sociedad Financiera de Objeto Multiple, Entidad Regulada | ||
Schedule 8.02
Existing Indebtedness
None.
Schedule 8.03
Existing Liens
None.
EXHIBIT A
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Third Amended and Restated Credit Agreement, dated as of May 27, 2016 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (the “US Borrower”), NAVISTAR FINANCIAL, S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, a Mexican corporation (the “Mexican Borrower”; together with the US Borrower, the “Borrowers”), the LENDERS party thereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and BANK OF AMERICA, N.A., as Syndication Agent.
This Assignment and Acceptance (the “Assignment and Acceptance”) is dated as of the Effective Date set forth below and is entered into between the Assignor named below (the “Assignor”) and the Assignee named below (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below, receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex I attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Acceptance as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit, guarantees, and swingline loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Acceptance, without representation or warranty by the Assignor.
| 1. | Assignor: |
|
||||
| 2. | Assignee: |
|
||||
| [and is an Affiliate/Approved Fund of [identify Lender]1] | ||||||
| 3. | Borrower(s): |
|
||||
| 4. | Administrative Agent: | JPMorgan Chase Bank, N.A., as administrative agent under the Credit Agreement | ||||
| 5. | Credit Agreement: | The Third Amended and Restated Credit Agreement dated as of May 27, 2016 among Navistar Financial Corporation, a Delaware corporation and Navistar Financial S.A. DE C.V., Sociedad Financiera de Objeto Multiple, Entidad Regulada, a Mexican corporation, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other agents party thereto | ||||
| 6. | Assigned Interest: | |||||
| Facility Assigned2 |
Aggregate Amount of Commitment/Loans for all Lenders |
Amount of Commitment/Loans Assigned |
Percentage Assigned of Commitment/Loans3 |
|||||||||
| $ | $ | % | ||||||||||
| $ | $ | % | ||||||||||
| $ | $ | % | ||||||||||
Effective Date: , 20 [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The Assignee agrees to deliver to the Administrative Agent a completed Administrative Questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower, the Loan Parties and their Affiliates or their respective securities) will be made available and who may receive such information in accordance with the Assignee’s compliance procedures and applicable laws, including Federal and state securities laws.
| 1 | Select as applicable. |
| 2 | Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g. “US Revolving Commitment,” “US Extended Revolving Commitment,” “Mexican Commitment,” “Mexican Extended Commitment”). |
| 3 | Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders. |
The terms set forth in this Assignment and Acceptance are hereby agreed to:
| ASSIGNOR | ||
|
| ||
| NAME OF ASSIGNOR | ||
| By: |
| |
| Title: | ||
| ASSIGNEE | ||
|
| ||
| NAME OF ASSIGNEE | ||
| By: |
| |
| Title: | ||
| [Consented to and]4 Accepted: | ||
| JPMORGAN CHASE BANK, N.A., as | ||
| Administrative Agent | ||
| By |
| |
| Title: | ||
| [Consented to:]5 | ||
| NAVISTAR FINANCIAL CORPORATION, as US Borrower | ||
| By |
| |
| Title: | ||
| NAVISTAR FINANCIAL, S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, as Mexican Borrower | ||
| By |
| |
| Title: | ||
| [JPMORGAN CHASE BANK, N.A., as | ||
| Issuing Bank | ||
| By |
| |
| Name: | ||
| Title: | ] | |
| [JPMORGAN CHASE BANK, NA., as | ||
| Swingline Lender | ||
| By |
| |
| Name: | ||
| Title: | ] | |
| 4 | To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement. |
| 5 | To be added only if the consent of the Borrowers and/or other parties (e .g. Swingline Lender, Issuing Lender) is required by the terms of the Credit Agreement. |
ANNEX I
Third Amended and Restated Credit
Agreement, dated as of May 27, 2016, (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Navistar Financial Corporation, Navistar Financial, S.A. de C.V., Sociedad Financiera de Objeto Multiple, Entidad Regulada, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and Bank of America, N.A., as Syndication Agent.
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ACCEPTANCE
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrowers, any of their Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrowers, any of their Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2 Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 7.01 thereof, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender and (v) if it is a Foreign Lender, attached to the Assignment and Acceptance is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender including, if it is organized under the laws of a jurisdiction outside the United States or Mexico, its obligations pursuant to Section 4.12 of the Credit Agreement.
2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3. General Provisions. This Assignment and Acceptance shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Acceptance may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Acceptance by email or telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance. This Assignment and Acceptance, and the rights and obligations of the parties under this Assignment and Acceptance shall be governed by and construed in accordance with, the law of the State of New York.
EXHIBIT B-1
LEGAL OPINION OF BORROWERS’ NY COUNSEL
[ON FILE WITH ADMINISTRATIVE AGENT]
EXHIBIT B-2
LEGAL OPINION OF BORROWERS’ INTERNAL COUNSEL
[ON FILE WITH ADMINISTRATIVE AGENT]
EXHIBIT B-3
LEGAL OPINION OF BORROWERS’ MEXICAN COUNSEL
[ON FILE WITH ADMINISTRATIVE AGENT]
EXHIBIT C
FORM OF
PARENTS’ SIDE AGREEMENT
[ATTACHED]
EXHIBIT D
FORM OF REPORT OF STATISTICAL INFORMATION
[ATTACHED]
EXHIBIT E
FORM OF
BORROWING REQUEST
Pursuant to Section [2.06][2.08][3.03] of the Third Amended and Restated Credit Agreement, dated as of May 27, 2016 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (the “US Borrower”), NAVISTAR FINANCIAL, S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, a Mexican corporation (the “Mexican Borrower”; together with the US Borrower, the “Borrowers”), the LENDERS party thereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and BANK OF AMERICA, N.A., as Syndication Agent, the undersigned hereby delivers this Borrowing Request. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
The undersigned hereby requests that a [US Eurodollar Borrowing] [US ABR Borrowing]1 [Mexican Revolving Borrowing] [Swingline Loan] be made in the aggregate principal amount of $ on , [with an Interest Period of ].
The undersigned hereby certifies as follows:
(a) The representations and warranties made by the Borrowers in the Credit Agreement (except for the representations and warranties set forth in Sections 5.04(e) and 5.14(a)) are true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof (except to the extent they relate to a particular date, in which case they shall remain true and correct in all material respects on and as of such date); and
(b) No Default has occurred and is continuing on the date hereof or after giving effect to the Borrowing requested to be made hereby.
(c) [The Cash Balance of the US Borrower and its Subsidiaries (after giving effect to the Borrowing to be made hereby, the application of proceeds of such Borrowing and the use of cash on hand) does not exceed $75,000,000.][The Cash Balance of the US Borrower and its Subsidiaries (after giving effect to the Borrowing to be made hereby, the application of proceeds of such Borrowing and the use of cash on hand) exceeds $75,000,000. All excess amounts have been deposited into the Blocked Account.]
The undersigned agrees that if prior to the time of the Borrowing requested hereby any matter certified to herein by it will not be true and correct in all material respects at such time as if then made, it will promptly (and, in any event, prior to such Borrowing) so notify the Administrative Agent. Except to the extent, if any, that prior to the time of the Borrowing requested hereby the Administrative Agent shall receive written notice to the contrary from the undersigned, each matter certified to herein shall be deemed once again to be certified as true and correct in all material respects at the date of such Borrowing as if then made.
| 1 | Available to US Borrower; Swingline Loans may only be ABR Borrowings. |
The undersigned further agrees to compensate each Lender for any loss, cost and expense attributable to such Lender pursuant to Section 4.11 of the Credit Agreement.
Please wire transfer the proceeds of the Borrowing to the account of the undersigned at Routing No.: (Account No. ).
| NAVISTAR FINANCIAL CORPORATION2 | ||
| By: |
| |
| Name: | ||
| Title: | ||
| [NAVISTAR FINANCIAL, S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, as Mexican Borrower | ||
| By: |
| |
| Name: | ||
| Title: | ] | |
| 2 | US Borrower consent required for Mexican Borrowings. |
EXHIBIT F
FORM OF
COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered pursuant to Section 7.01(b) of the Third Amended and Restated Credit Agreement, dated as of May 27, 2016 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (the “US Borrower”), NAVISTAR FINANCIAL, S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, a Mexican corporation (the “Mexican Borrower”; together with the US Borrower, the “Borrowers”), the LENDERS party thereto, JPMORGAN CHASE BANK, NA., as Administrative Agent, and BANK OF AMERICA, N.A., as Syndication Agent. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
The undersigned [Responsible Officer] of the US Borrower, in such official capacity, and not in an individual capacity, on behalf of the US Borrower, on and as of the date hereof, hereby certifies as follows:
1. I am the duly elected, qualified and acting [Responsible Officer] of the US Borrower.
2. I have reviewed and am familiar with the contents of this Certificate.
3. In my official capacity as and not in my individual capacity I have reviewed the terms of the Credit Agreement and have made or caused to be made under my supervision, a review in reasonable detail of the transactions and condition of each of the Borrowers and the Parent during the accounting period covered by the financial statements attached hereto as Attachment 1 (the “Financial Statements”). Such review did not disclose the existence during or at the end of the accounting period covered by the Financial Statements, and I have no knowledge of the existence, as of the date of this Certificate, of any condition or event which constitutes a Default or Event of Default[, except as set forth below].
4. Attached hereto as Attachment 2 are the computations showing compliance with the covenants set forth in Sections 8.01(a), (b) and (c) of the Credit Agreement.
5. In my official capacity as and not in my individual capacity I have reviewed the Financial Statements attached hereto and hereby certify that there has been no change in GAAP, or in the application thereof, since [ ] [, except as set forth below].
IN WITNESS WHEREOF, I have executed this Certificate this day of , 20 .
| NAVISTAR FINANCIAL CORPORATION | ||
|
| ||
| Name: | ||
| Title: | ||
Attachment 1
to Compliance Certificate
[Attach Financial Statements]
Attachment 2
to Compliance Certificate
The information described herein is as of , , and pertains to the period from , to , .
Consolidated Leverage Ratio (Section 8.01(a))
| Items |
Amounts ($ Million) | |
| (a) Outstanding Indebtedness |
||
| (b) Debt Discount Adjustments (if applicable) |
||
| (c) Aggregate principal amount of all Warehousing Debt outstanding |
||
| (d) Aggregate principal amount of Indebtedness incurred in connection with Qualified Securitization Transactions outstanding |
||
| (e) Consolidated Stockholders’ Equity |
||
| (f) Consolidated Intangible Assets |
||
| All investments in Subsidiaries of the US Borrower other than consolidated Subsidiaries |
||
| All unamortized debt discount and expense, unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, organization or developmental expenses and other intangible items |
||
| (g) Redeemable Preferred Stock | ||
| (A) Consolidated Total Debt (a+b-c-d) | ||
| (B) Consolidated Tangible Net Worth (e-f-g) | ||
| Consolidated Leverage Ratio (= A/B) | ||
| If equal to or less than 3.75, then in compliance | ||
Fixed Charge Coverage Ratio (Section 8.01(b))
| Items |
Amounts ($ Million) | |
| (a) Consolidated interest expense | ||
| (b) Consolidated income before income taxes | ||
| (c) Dividends on any preferred stock of the US Borrower or other scheduled payments of a similar nature | ||
| (d) Any International Contributions | ||
| (e) Consolidated interest expense | ||
| (f) Dividends on any preferred stock of the US Borrower or other scheduled payments of a similar nature | ||
| (A) (a+b+c+d) | ||
| (B) (e+f) | ||
| Fixed Charge Coverage Ratio (= A/B) | ||
| If equal to or greater than 1.25, then in compliance |
||
Collateral Coverage Ratio Calculation (Section 8.01(c))
| Items |
Amounts ($ Million) | |
| Retail Notes & Leases |
||
| Wholesale Notes |
||
| Accounts |
||
| Finance Receivables from Affiliates |
||
| Allowance for Losses |
||
| Finance Receivables, Net |
||
| Net Investment in Operating Leases |
||
| Cash & Cash Equivalents |
||
| Restricted Cash & Cash Equivalents |
||
| Vehicle Inventory |
||
| (a) Total from Financial Statements |
||
| (b) Fixed Assets |
||
| Retail Secured Borrowing/Revolving retail accounts |
||
| Lease Secured Borrowing/Borrowing secured by operating and finance leases |
||
| Wholesale Secured Borrowing/Revolving wholesale note trust |
||
| (c) Total Secured Borrowings |
||
| (A) Total Eligible Collateral (a+b-c) |
||
| US Borrower Term Loan |
||
| US Borrower Revolving Credit Exposure |
||
| Mexican Borrower Revolving Credit Exposure |
||
| Any obligations secured under the Security Agreement |
||
| (B) Total Term Loans and Revolving Credit Exposures and other obligations |
||
| Collateral Coverage Ratio (= A/B) |
||
| If equal to or greater than 1.35, then in compliance |
||
EXHIBIT G
FORM OF
PARENT GUARANTEE
[ATTACHED]
EXHIBIT H
FORM OF
SECOND AMENDED AND RESTATED SECURITY AGREEMENT
[ATTACHED]
EXHIBIT I
[RESERVED]
EXHIBIT J
FORM OF
BLOCKED ACCOUNT AGREEMENT
[ATTACHED]
EXHIBIT K
FORM OF
BLOCKED ACCOUNT CERTIFICATE
Pursuant to Section 12.21(b) of the Third Amended and Restated Credit Agreement, dated as of May 27, 2016 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (the “US Borrower”), NAVISTAR FINANCIAL, S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, a Mexican corporation (the “Mexican Borrower”; together with the US Borrower, the “Borrowers”), the LENDERS party thereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and BANK OF AMERICA, N.A., as Syndication Agent, the undersigned hereby delivers this Blocked Account Certificate. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
The undersigned hereby requests consent from the Administrative Agent to access or withdraw or transfer funds from the Blocked Account.
The undersigned hereby certifies as of the date hereof as follows:
(a) no Default or Event of Default has occurred and is continuing;
(b) such funds shall be utilized (A) for normal operating expenses of the US Borrower and its Subsidiaries consistent with the US Borrower’s and its Subsidiaries’ past business practices, (B) to purchase receivables in the normal course of business or (C) to make payments of permitted dividends consistent with the US Borrower’s past business practices and permitted under the Credit Agreement; and
(c) the Cash Balance is less than $75,000,000.
IN WITNESS WHEREOF, I have hereunto set my hand on behalf of the Corporation this day of , 20 .
| NAVISTAR FINANCIAL CORPORATION | ||
| By: |
| |
| Name: | ||
| Title: | ||
EXHIBIT L
FORM OF
COLLATERAL COVERAGE RATIO CERTIFICATE
This Compliance Certificate is delivered pursuant to Section 8.01(c) of the Third Amended and Restated Credit Agreement, dated as of May 27, 2016 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (the “US Borrower”), NAVISTAR FINANCIAL, S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, a Mexican corporation (the “Mexican Borrower”; together with the US Borrower, the “Borrowers”), the LENDERS party thereto, JPMORGAN CHASE BANK, NA., as Administrative Agent, and BANK OF AMERICA, N.A., as Syndication Agent. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
The undersigned [Responsible Officer] of the US Borrower, in such official capacity, and not in an individual capacity, on behalf of the US Borrower, on and as of the date hereof, hereby certifies as follows:
1. I am the duly elected, qualified and acting [Responsible Officer] of the US Borrower.
2. I have reviewed and am familiar with the contents of this Certificate.
3. Attached hereto as Attachment 1 are the computations showing compliance with the covenants set forth in Section 8.01(c) of the Credit Agreement.
IN WITNESS WHEREOF, I have executed this Certificate this day of , 20 .
| NAVISTAR FINANCIAL CORPORATION | ||
|
| ||
| Name: | ||
| Title: | ||
Attachment 1
to Compliance Certificate
The information described herein is as of , , and pertains to the period from , to , .
Collateral Coverage Ratio Calculation
| Items |
Amounts ($ Million) | |
| Retail Notes & Leases |
||
| Wholesale Notes |
||
| Accounts |
||
| Finance Receivables from Affiliates |
||
| Allowance for Losses |
||
| Finance Receivables, Net |
||
| Net Investment in Operating Leases |
||
| Cash & Cash Equivalents |
||
| Restricted Cash & Cash Equivalents |
||
| Vehicle Inventory |
||
| (a) Total from Financial Statements |
||
| (b) Fixed Assets |
||
| Retail Secured Borrowing/Revolving retail accounts |
||
| Lease Secured Borrowing/Borrowing secured by operating and finance leases |
||
| Wholesale Secured Borrowing/Revolving wholesale note trust |
||
| (c) Total Secured Borrowings |
||
| (A) Total Eligible Collateral (a+b-c) |
||
| US Borrower Term Loan |
||
| US Borrower Revolving Credit Exposure |
||
| Mexican Borrower Revolving Credit Exposure |
||
| Any obligations secured under the Security Agreement |
||
| (B) Total Term Loans and Revolving Credit Exposures and other obligations |
||
| Collateral Coverage Ratio (= A/B) |
||
| If equal to or greater than 1.35, then in compliance |
||
EXHIBIT M
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships for U.S. Federal Income Tax Purposes)
Reference is made to the Third Amended and Restated Credit Agreement, dated as of May 27, 2016 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (the “US Borrower”), NAVISTAR FINANCIAL, S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, a Mexican corporation (the “Mexican Borrower”; together with the US Borrower, the “Borrowers”), the LENDERS party thereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and BANK OF AMERICA, N.A., as Syndication Agent. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
(the “Non-U.S. Lender”) is providing this certificate pursuant to Section 4.12(d) of the Credit Agreement.
Pursuant to the provisions of Section 4.12(d) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), (iii) it is not a “10-percent shareholder” of the US Borrower within the meaning of Section 881(c)(3)(B) of the Code, (iv) it is not a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (v) the interest payments in question are not effectively connected with the undersigned’s conduct of a U.S. trade or business.
The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. person status on Internal Revenue Service Form W-8BEN or W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
| [NAME OF LENDER] | ||
| By: |
| |
| Name: | ||
| Title: | ||
| Date: , ,2016 | ||
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships for U.S. Federal Income Tax Purposes)
Reference is made to the Third Amended and Restated Credit Agreement, dated as of May 27, 2016 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (the “US Borrower”), NAVISTAR FINANCIAL, S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, a Mexican corporation (the “Mexican Borrower”; together with the US Borrower, the “Borrowers”), the LENDERS party thereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and BANK OF AMERICA, N.A., as Syndication Agent. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
(the “Non-U.S. Lender”) is providing this certificate pursuant to Section 4.12(d) of the Credit Agreement.
Pursuant to the provisions of Section 4.12(d) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), (iv) none of its direct or indirect partners/members is a “10-percent shareholder” of the US Borrower within the meaning of Section 881(c)(3)(B) of the Code, (v) none of its direct or indirect partners/members is a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigned’s or its direct or indirect partners/members’ conduct of a U.S. trade or business.
The undersigned has furnished the Administrative Agent and the Borrower with Internal Revenue Service Form W-8IMY accompanied by an Internal Revenue Service Form W-8BEN or W-8BEN-E (or other applicable form) from each of its partners/members claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
| [NAME OF LENDER] | ||
| By: |
| |
| Name: | ||
| Title: | ||
| Date: | , , 2016 | |
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships for U.S. Federal Income Tax Purposes)
Reference is made to the Amended and Restated Credit Agreement, dated as of May 27, 2016 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (the “US Borrower”), NAVISTAR FINANCIAL, S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, a Mexican corporation (the “Mexican Borrower”; together with the US Borrower, the “Borrowers”) the LENDERS party thereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and BANK OF AMERICA, N.A., as Syndication Agent. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
(the “Non-U.S. Lender”) is providing this certificate pursuant to Section 4.12(d) of the Credit Agreement.
Pursuant to the provisions of Section 4.12(d) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), (iii) it is not a “10-percent shareholder” of the US Borrower within the meaning of Section 881(c)(3)(B) of the Code, (iv) it is not a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (v) the interest payments in question are not effectively connected with the undersigned’s conduct of a U.S. trade or business.
The undersigned has furnished its participating Foreign Lender with a certificate of its non-U.S. person status on Internal Revenue Service Form W-8BEN or W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Foreign Lender in writing (2) the undersigned shall have at all times furnished such Foreign Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
| [NAME OF PARTICIPANT] | ||
| By: |
| |
| Name: | ||
| Title: | ||
| Date: | , , 2016 | |
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships for U.S. Federal Income Tax Purposes)
Reference is made to the Third Amended and Restated Credit Agreement, dated as of May 27, 2016 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (the “US Borrower”), NAVISTAR FINANCIAL, S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO MULTIPLE, ENTIDAD REGULADA, a Mexican corporation (the “Mexican Borrower”; together with the US Borrower, the “Borrowers”), the LENDERS party thereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and BANK OF AMERICA, N.A., as Syndication Agent. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
(the “Non-U.S. Lender”) is providing this certificate pursuant to Section 4.12(d) of the Credit Agreement.
Pursuant to the provisions of Section 4.12(d) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect to such participation, neither the undersigned nor any of its direct or indirect partners/members is a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), (iv) none of its direct or indirect partners/members is a “10-percent shareholder” of the US Borrower within the meaning of Section 881(c)(3)(B) of the Code, (v) none of its direct or indirect partners/members is a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigned’s or its direct or indirect partners/members’ conduct of a U.S. trade or business.
The undersigned has furnished its participating Foreign Lender with Internal Revenue Service Form W-8IMY accompanied by an Internal Revenue Service Form W-8BEN or W-8BEN-E (or other applicable form) from each of its partners/members claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Foreign Lender and (2) the undersigned shall have at all times furnished such Foreign Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
| [NAME OF PARTICIPANT] | ||
| By: |
| |
| Name: | ||
| Title: | ||
| Date: | , , 2016 | |
Exhibit 10.3
EXECUTION VERSION
FOURTH AMENDED AND RESTATED PARENT GUARANTEE
FOURTH AMENDED AND RESTATED GUARANTEE (the “Guarantee”), dated as of May 27, 2016, made by NAVISTAR INTERNATIONAL CORPORATION, a Delaware corporation (the “Guarantor”), in favor of JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity, the “Administrative Agent”) for the lenders (the “Lenders”) parties to the Third Amended and Restated Credit Agreement, dated as of the date hereof (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Navistar Financial Corporation (the “US Borrower”) and Navistar Financial, S.A. de C.V., Sociedad Financiera de Objeto Multiple, Entidad Regulada (the “Mexican Borrower”; together with the US Borrower, the “Borrowers”), the Lenders, Bank of America, N.A., as syndication agent, and the Administrative Agent.
WHEREAS, pursuant to the Credit Agreement, certain of the Lenders have severally agreed to make Loans to the Mexican Borrower upon the terms and subject to the conditions set forth therein;
WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective Loans to the Mexican Borrower under the Credit Agreement that the Guarantor shall have executed and delivered this Guarantee to the Administrative Agent for the ratable benefit of the Lenders; and WHEREAS, Guarantor owns, directly or indirectly, all of the capital stock of the Mexican Borrower, and it is to the advantage of Guarantor that the Lenders make the Loans to the Mexican Borrower;
NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective loans to the Mexican Borrower under the Credit Agreement, the Guarantor hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders, as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
(b) As used herein, “Mexican Obligations” means the unpaid principal of and interest on (including, without limitation, interest accruing after the maturity of the Mexican Revolving Loans and interest accruing after the filing of any petition in bankruptcy (“concurso mercantil” or “quiebra”), or the commencement of any insolvency, reorganization or like proceeding, relating to the Mexican Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Mexican Revolving Loans and all other obligations and liabilities of the Mexican Borrower to the Administrative Agent and the Lenders, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Credit Agreement and any other document made, delivered or given in connection therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including, without limitation, all reasonable fees and disbursements of counsel to the Administrative Agent and the Lenders that are required to be paid by the Mexican Borrower pursuant to the terms of the Credit Agreement) or otherwise; provided that for the purposes of determining the obligations of the Guarantor under this Agreement, the definition of “Mexican Obligations” shall not create any guarantee by the Guarantor of any Excluded Swap Obligations of the Guarantor.
(c) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Guarantee shall refer to this Guarantee as a whole and not to any particular provision of this Guarantee, and section and paragraph references are to this Guarantee unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.
2. Guarantee. (a) The Guarantor hereby unconditionally and irrevocably guarantees (other than, with respect to the Guarantor, any Excluded Swap Obligations of the Guarantor) to the Administrative Agent, for its own benefit and for the ratable benefit of the Lenders and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the Mexican Borrower when due (whether at the stated maturity, by acceleration or otherwise) of the Mexican Obligations of the Mexican Borrower.
(b) Without duplication of any reimbursement to the extent paid by the Borrowers, the Guarantor further agrees to pay any and all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the reasonable fees, charges and disbursements for one firm of counsel for the Administrative Agent, the Issuing Bank and the Lenders in each relevant jurisdiction in enforcing any or all of the Mexican Obligations and/or enforcing any rights with respect to the Guarantor under this Guarantee. This Guarantee shall remain in full force and effect until the Mexican Obligations are paid in full and the Commitments are terminated, notwithstanding that from time to time prior thereto the Mexican Borrower may be free from any Mexican Obligations.
(c) The Guarantor agrees that whenever, at any time, or from time to time, it shall make any payment to the Administrative Agent or any Lender on account of its liability hereunder, it will notify the Administrative Agent or such Lender in writing that such payment is made under this Guarantee for such purpose.
(d) Any and all payments made by or on behalf of the Guarantor to the Administrative Agent or a Lender under this Guarantee or any other Loan Document shall be made free and clear of, and without deduction or withholding for or on account of, any Non-Excluded Taxes (which, for the avoidance of doubt, shall exclude all Excluded Taxes, applying such term as though any such payment were made to the Administrative Agent or such Lender (as applicable) under the Credit Agreement). If any Non-Excluded Taxes or Other Taxes are required to be withheld or deducted from any amounts payable to the Administrative Agent or any Lender under this Guarantee or any other Loan Documents, as determined in good faith by the applicable withholding agent, the amounts so payable by the Guarantor to the Administrative Agent or such Lender shall be increased to the extent necessary to yield to the Administrative Agent or such Lender (after payment of all such Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable at the rates or in the amounts specified in this Guarantee or any other Loan Document. Whenever any such Non-Excluded Taxes or Other Taxes are payable by the Guarantor, thereafter the Guarantor shall send to the Administrative Agent for its own
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account or for the account of such Lender, as the case may be, the original official report or return, or a certified copy thereof, received by the Guarantor showing payment thereof. If the Guarantor fails to pay any such Non-Excluded Taxes or Other Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, the Guarantor shall indemnify the Administrative Agent and each Lender for any incremental taxes, interest or penalties that may become payable by the Administrative Agent or such Lender as a result of any such failure. The Guarantor shall indemnify the Administrative Agent and each Lender for any Non-Excluded Taxes or Other Taxes that are payable or paid by the Administrative Agent or such Lender and any incremental taxes, interest or penalties with respect thereto. Each Lender and the Administrative Agent shall comply with Sections 4.12(c) and (d) of the Credit Agreement, treating the Guarantor as if it were a Borrower for purposes of those Sections.
(e) The Guarantor absolutely, unconditionally, and irrevocably undertakes to provide (and acknowledges that each Qualified Keepwell Provider jointly and severally absolutely, unconditionally, and irrevocably undertakes to provide) such funds or other support as may be needed from time to time by any Qualified Keepwell Provider to honor all of its obligations under its guarantee or security agreement in respect of any Swap Obligation (provided, however, that the Guarantor shall only be liable under this Section 2 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 2, or otherwise under this guarantee, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of the Guarantor under this Section 2 shall remain in full force and effect until a discharge of the guarantor obligations of each Qualified Keepwell Provider. The Guarantor intends that this Section 2 constitutes, and this Section 2 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of any Qualified Keepwell Provider for all purposes of section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
3. No Subrogation. Notwithstanding any payment or payments made by the Guarantor hereunder, or any set-off or application of funds of the Guarantor by the Administrative Agent or any Lender, the Guarantor shall not be entitled to be subrogated to any of the rights of the Administrative Agent or any Lender against the Mexican Borrower or against any collateral security or guarantee or right of offset held by the Administrative Agent or any Lender for the payment of the Mexican Obligations, nor shall the Guarantor seek or be entitled to seek any contribution or reimbursement from the Mexican Borrower in respect of payments made by the Guarantor hereunder, until all amounts owing to the Administrative Agent and the Lenders by the Mexican Borrower on account of the Mexican Obligations are paid in full and the Commitments are terminated.
4. Amendments, etc. with respect to the Mexican Obligations: Waiver of Rights. The Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against the Guarantor, and without notice to or further assent by the Guarantor, any demand for payment of any of the Mexican Obligations made by the Administrative Agent or any Lender may be rescinded by the Administrative Agent or such Lender, and any of the Mexican Obligations continued, and the Mexican Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor (including, without limitation, the guarantee of the US Borrower contained in Article XI of the Credit Agreement) or
3
right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent or any Lender, and the Credit Agreement, any Notes, any other Loan Document and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the requisite number of Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Administrative Agent or any Lender for the payment of the Mexican Obligations may be sold, exchanged, waived, surrendered or released. Neither the Administrative Agent nor any Lender shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Mexican Obligations or for this Guarantee or any property subject thereto. When making any demand hereunder against the Guarantor, the Administrative Agent or any Lender may, but shall be under no obligation to, make a similar demand on the Mexican Borrower or any other guarantor, and any failure by the Administrative Agent or any Lender to make any such demand or to collect any payments from the Borrower or any such other guarantor or any release of the Borrower or such other guarantor shall not relieve the Guarantor of its obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of the Administrative Agent or any Lender against the Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.
5. Guarantee Absolute and Unconditional. The Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Mexican Obligations and notice of or proof of reliance by the Administrative Agent or any Lender upon this Guarantee or acceptance of this Guarantee; the Mexican Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Guarantee; and all dealings between the Mexican Borrower or the Guarantor, on the one hand, and the Administrative Agent and the Lenders, on the other, shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guarantee. The Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Mexican Borrower or any other guarantor with respect to the Mexican Obligations. This Guarantee shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity, regularity or enforceability of the Credit Agreement or any Note or other Loan Document, any of the Mexican Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any Lender, (b) any defense, setoff or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Mexican Borrower against the Administrative Agent or any Lender, or (c) any other circumstance (other than a defense of payment or performance) whatsoever (with or without notice to or knowledge of the Mexican Borrower or the Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Mexican Borrower for the Mexican Obligations, or of the Guarantor under this Guarantee, in bankruptcy or in any other instance. When pursuing its rights and remedies hereunder against the Guarantor, the Administrative Agent and any Lender may, but shall be under no obligation to, pursue such rights and remedies as it may have against the Mexican Borrower or any other Person or against any collateral security or guarantee for the Mexican Obligations (including, without limitation, the guarantee of the US Borrower contained in Article XI of the Credit
4
Agreement) or any right of offset with respect thereto, and any failure by the Administrative Agent or any Lender to pursue such other rights or remedies or to collect any payments from the Mexican Borrower or any such other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Mexican Borrower or any such other Person or of any such collateral security, guarantee or right of offset, shall not relieve the Guarantor of any liability hereunder and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Administrative Agent or any Lender against the Guarantor. This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Guarantor and its successors and assigns, and shall inure to the benefit of the Administrative Agent and the Lenders, and their respective permitted successors, indorsees, transferees and assigns, until all the Mexican Obligations and the obligations of the Guarantor under this Guarantee shall have been satisfied by payment in full and the Commitments shall have been terminated, notwithstanding that from time to time during the term of the Credit Agreement the Mexican Borrower may be free from any Mexican Obligations.
6. Reinstatement. This Guarantee shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Mexican Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Mexican Borrower or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Mexican Borrower or any substantial part of its property, or otherwise, all as though such payments had not been made.
7. Payments. The Guarantor hereby agrees that the Mexican Obligations will be paid to the Administrative Agent without set-off or counterclaim in U.S. Dollars at the office of the Administrative Agent located at 500 Stanton Christiana Road, Ops Building 2, 3rd Floor, Newark, DE 19713-2107, Attention: Dan Lougheed, E-mail: [email protected].
8. Representations and Warranties. In order to induce the Lenders to make the Loans pursuant to the Credit Agreement, the Guarantor hereby represents and warrants to the Administrative Agent and the Lenders that:
(a) Organization. The Guarantor is duly organized, validly existing and in good standing (to the extent such requirement shall be applicable) under the laws of the jurisdiction of its organization.
(b) Power. The Guarantor has the corporate power and authority to execute and deliver, and to perform its obligations under, this Guarantee and has taken all necessary corporate and, if required, stockholder action to authorize its execution, delivery and performance of this Guarantee.
(c) Due Execution. This Guarantee has been duly executed and delivered by the Guarantor and constitutes a legal, valid and binding obligation of the Guarantor enforceable in accordance with its terms, except as affected by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws affecting creditors’ rights generally and subject to general principles of equity regardless of whether considered in a proceeding in equity or at law.
5
(d) Governmental Approvals; No Conflicts. The execution, delivery, performance, validity or enforceability of this Guarantee, (i) does not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (A) such as have been obtained or made and are in full force and effect and (B) such filings as may be required under federal and state securities laws for purposes of disclosure, (ii) will not violate any applicable law or regulation (including, without limitation, all laws, rules and regulations promulgated by or relating to IMSS, INFONAVIT and SAR) or the charter, by-laws or other organizational documents of the Guarantor or any order of any Governmental Authority, (iii) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Guarantor or any of its Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by the Guarantor or any of its Subsidiaries, and (iv) will not result in the creation or imposition of any Lien on any asset of the Guarantor or any of its Subsidiaries.
The Guarantor agrees that the foregoing representations and warranties shall be deemed to have been made by the Guarantor on the date of each borrowing by any Borrower under the Credit Agreement on and as of such date of borrowing as though made hereunder on and as of such date.
9. Authority of Administrative Agent. The Guarantor acknowledges that the rights and responsibilities of the Administrative Agent under this Guarantee with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Guarantee shall, as between the Administrative Agent and the Lenders, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative Agent and the Guarantor, the Administrative Agent shall be conclusively presumed to be acting as Administrative Agent for the Lenders with full and valid authority so to act or refrain from acting, and the Guarantor shall not be under any obligation, or entitlement, to make any inquiry respecting such authority.
10. Notices. All notices, requests and demands to or upon the Administrative Agent, any Lender or the Guarantor to be effective shall be in writing (or by electronic mail confirmed in writing) and shall be deemed to have been duly given or made when delivered by hand or if given by mail, three Business Days after being deposited in the mails by certified mail, return receipt requested, or if by electronic mail, when sent and receipt has been confirmed, addressed as follows:
(a) if to the Administrative Agent or any Lender, at its address or transmission number for notices provided in or pursuant to Section 12.01 of the Credit Agreement; and
(b) if to the Guarantor, at its address or e-mail address for notices set forth under its signature below.
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The Administrative Agent, each Lender and the Guarantor may change its address and transmission numbers for notices by notice in the manner provided in this Section.
11. Severability. Any provision of this Guarantee which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
12. Integration. This Guarantee represents the agreement of the Guarantor with respect to the subject matter hereof and there are no promises or representations by the Administrative Agent or any Lender relative to the subject matter hereof not reflected herein. This Guarantee amends and restates in its entirety the Third Amended and Restated Parent Guarantee, dated as of December 2, 2011, made by the Guarantor in favor of JPMorgan Chase Bank, N.A., as administrative agent for the lenders under the Existing Credit Agreement and supersedes and replaces the terms thereof in their entirety.
13. Amendments in Writing: No Waiver: Cumulative Remedies. (a) None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except by a written instrument executed by the Guarantor and the Required Lenders; provided that any provision of this Guarantee may be waived by the Required Lenders in a letter or agreement executed by the Required Lenders provided by e-mail transmission from the Administrative Agent.
(b) Neither the Administrative Agent nor any Lender shall by any act (except by a written instrument pursuant to paragraph 13(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of the Administrative Agent or any Lender, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Administrative Agent or any Lender of any right or remedy hereunder on anyone occasion shall not be construed as a bar to any right or remedy which the Administrative Agent or such Lender would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.
14. Section Headings. The section headings used in this Guarantee are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.
15. Successors and Assigns. This Guarantee shall be binding upon the successors and assigns of the Guarantor and shall inure to the benefit of the Administrative Agent and the Lenders and their successors and assigns. The Guarantor may not transfer any of its rights or obligations under this Guarantee without the written consent of each Lender.
7
16. Governing Law. This Guarantee and the rights and obligations of the parties under this Guarantee shall be governed by and construed and interpreted in accordance with the law of the State of New York.
17. Submission To Jurisdiction; Waivers. Each party hereto, except in the case of paragraph (a) below, in which case, the Guarantor, hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding relating to this Guarantee and any other loan documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the courts of the State of New York in the Borough of Manhattan City of New York, the courts of the United States for the Southern District of New York, and appellate courts from any thereof and to the courts of its own corporate domicile in respect of any actions brought against it as a defendant in any action or proceeding arising out of this Guarantee;
(b) consents that any such action or proceeding may be brought in such courts and waives any objection (including any objection based on place of residence or domicile) that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid to such party at its address set forth under its signature below or at such other address of which the other parties hereto shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law; and
(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this subsection any special, exemplary punitive or consequential damages.
18. WAIVERS OF JURY TRIAL. THE GUARANTOR, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.
8
IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed and delivered by its duly authorized officer as of the day and year first above written.
| NAVISTAR INTERNATIONAL CORPORATION | ||
| By: | /s/ William V. McMenamin | |
| Name: | William V. McMenamin | |
| Title: | President, Financial Services and Treasurer | |
| Address for Notices: | ||
| 2701 Navistar Drive | ||
| Lisle, IL 60532 | ||
| Attention: Treasurer | ||
| Email: [email protected] | ||
| Copies of notices should be sent to each of the following: | ||
| Navistar International Corporation | ||
| 2701 Navistar Drive | ||
| Lisle, IL 60532 | ||
| Attention: General Counsel | ||
| Email: [email protected] | ||
| Paul Hastings LLP | ||
| 71 S. Wacker Drive, 45th Floor | ||
| Chicago, IL 60606 | ||
| Attention: Maureen Sweeney | ||
| Email: [email protected] | ||
Signature page to the Fourth Amended and Restated Parent Guarantee
| JPMORGAN CHASE BANK, N.A. as Administrative Agent | ||
| By: | /s/ Gene Riego de Dios | |
| Name: | Gene Riego de Dios | |
| Title: | Vice President | |
Signature page to the Fourth Amended and Restated Parent Guarantee
Exhibit 10.4
EXECUTION VERSION
FOURTH AMENDED AND RESTATED PARENTS’ SIDE AGREEMENT
FOURTH AMENDED AND RESTATED PARENTS’ SIDE AGREEMENT (this “Agreement”), dated as of May 27, 2016 by Navistar International Corporation, a Delaware corporation (the “Parent”), and Navistar, Inc. (formerly known as International Truck and Engine Corporation), a Delaware corporation (“International”), for the benefit of the Lenders from time to time party to the Credit Agreement referred to below.
WHEREAS, Navistar Financial Corporation, a Delaware corporation (the “US Borrower”), has entered into a Third Amended and Restated Credit Agreement, dated as of May 27, 2016 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) (capitalized terms used herein and not otherwise defined herein shall have the meanings attributed to such terms in the Credit Agreement), with NAVISTAR FINANCIAL, S.A. DE C.V., SOCIEDAD FINANCIERA DE OBJETO MULITPLE, ENTIDAD REGULADA, a Mexican corporation (the “Mexican Borrower”; together with the US Borrower, the “Borrowers”), the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and Bank of America, N.A., as Syndication Agent, which amends and restates in its entirety the Existing Credit Agreement;
WHEREAS, it is a condition to the effectiveness of the Credit Agreement that the Parent and International execute and deliver this Agreement; and WHEREAS, unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
NOW, THEREFORE, in order to induce the Lenders to enter into the Credit Agreement and to satisfy a condition to the effectiveness thereof, the Parent and International agree for the benefit of the Lenders that, until the Commitments and all Letters of Credit under the Credit Agreement shall have expired or terminated, the principal of and interest on each Loan and all fees payable thereunder shall have been paid in full and all LC Disbursements shall have been reimbursed:
SECTION 1. Ownership of the US Borrower. Either the Parent or International will at all times own and hold the entire legal and beneficial interest in all of the outstanding stock of the US Borrower having ordinary voting power for the election of directors (other than directors’ qualifying shares). Neither the Parent nor International will, directly or indirectly, sell, exchange, transfer, pledge or in any way encumber or otherwise dispose of any such stock.
SECTION 2. US Borrower’s Fixed Charge Coverage Ratio. International will not permit the ratio of (i) the sum of (A) consolidated interest Credit Agreement expense of the US Borrower and its consolidated Subsidiaries, (B) consolidated income of the US Borrower and its consolidated Subsidiaries before income taxes, (C) dividends on any preferred stock of the US Borrower or other scheduled payments of a similar nature, and (D) any International Contributions with respect to any fiscal quarter during such period to (ii) the sum of (A) consolidated interest expense of the US Borrower and its consolidated Subsidiaries and (B) dividends on any preferred stock of the US Borrower or other scheduled payments of a similar nature, as at the last day of any fiscal quarter for the period of four consecutive fiscal quarters then ended, to be less than 1.25 to 1.00.
SECTION 3. Intercompany Agreements. International will perform all of its obligations under the Master Intercompany Agreement and the Used Truck Loan Agreement and, except as permitted by Section 7.08 of the Credit Agreement, will not cancel, terminate, amend, waive or modify the Master Intercompany Agreement or the Used Truck Loan Agreement.
SECTION 4. Additional Covenants. Neither the Parent nor International shall enter into, execute, or otherwise permit to exist any indenture, agreement, or other instrument with a value or principal amount of $10,000,000 or more that is binding upon the Parent, International or any of their respective Subsidiaries or its assets that would prohibit, restrict, or otherwise limit in any way (including, without limitation, by giving rise to a right thereunder to require any payment to be made by the Parent, International or any of their respective Subsidiaries or by resulting in the creation or imposition of any Lien on any asset of the Parent, International or any of their respective Subsidiaries) the ability of the Parent or International to fulfill its obligations under this Agreement, or, with respect to the Parent, its obligations under the Parent Guarantee.
SECTION 5. Representations and Warranties. The execution, delivery and performance by International and the Parent of this Agreement are within such party’s corporate powers and have been duly authorized by all necessary corporate and, if required, stockholder action. This Agreement has been duly executed and delivered by each of International and the Parent and each of this Agreement, the Master Intercompany Agreement, the Used Truck Loan Agreement and the Tax Allocation Agreement constitutes a legal, valid and binding obligation of each of International and the Parent, as applicable, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. The execution and delivery by the Parent and International of this Agreement will not (a) violate or result in a default under any indenture, agreement or other instrument binding upon the Parent, International or any of their respective subsidiaries or its assets, (b) give rise to a right thereunder to require any payment to be made by the Parent, International or any of their respective subsidiaries or (c) result in the creation or imposition of any Lien on any asset of the Parent, International or any of their respective subsidiaries.
SECTION 6. Amendments and Waivers. Any provision of this Agreement may be amended or waived so long as such amendment or waiver is in writing and is signed by the Parent, International and the Required Lenders.
SECTION 7. Successors and Assigns. This Agreement shall be binding upon the Parent, International and their respective successors and assigns, and shall inure to the benefit of the Lenders and their respective successors and permitted assigns.
SECTION 8. New York Law. This Agreement and the rights and obligations of the parties under this Agreement shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.
SECTION 9. Integration. This Agreement amends and restates in its entirety the terms and provisions of the Third Amended and Restated Parents’ Side Agreement, dated as of December 2, 2011, between the Parent and International for the benefit of the lenders under the Existing Credit Agreement and supersedes and replaces the terms thereof in their entirety.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed by their authorized officers of the day and year first above written.
| NAVISTAR INTERNATIONAL CORPORATION | ||
| By | /s/ William V. McMenamin | |
| Name: | William V. McMenamin | |
| Title: | President, Financial Services and Treasurer | |
| NAVISTAR, INC. (F/KA/ INTERNATIONAL TRUCK AND ENGINE CORPORATION) | ||
| By | /s/ William V. McMenamin | |
| Name: | William V. McMenamin | |
| Title: | Vice President, Chief Financial Officer and Treasurer | |
Signature page to the Fourth Amended and Restated Parents’ Side Agreement
Exhibit 10.5
EXECUTION VERSION
SECOND AMENDED AND RESTATED
SECURITY, PLEDGE AND TRUST AGREEMENT
between
NAVISTAR FINANCIAL CORPORATION
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Trustee
Dated as of May 27, 2016
TABLE OF CONTENTS
| Page | ||||||
| ARTICLE I DEFINITIONS |
2 | |||||
| SECTION 1.01. |
Definitions |
2 | ||||
| ARTICLE II THE SECURITY INTEREST |
13 | |||||
| SECTION 2.01. |
Grant of Security Interest |
13 | ||||
| SECTION 2.02. |
Release of Security Interest in Receivables |
15 | ||||
| SECTION 2.03. |
Continuing Liability of Navistar Financial and its Subsidiaries |
15 | ||||
| SECTION 2.04. |
Rights of Secured Parties Under Secured Instruments |
16 | ||||
| SECTION 2.05. |
Release of Collateral |
16 | ||||
| SECTION 2.06. |
Senior Liens |
17 | ||||
| SECTION 2.07. |
Additional Secured Obligations |
18 | ||||
| ARTICLE III REPRESENTATIONS AND WARRANTIES |
19 | |||||
| SECTION 3.01. |
Title to Collateral; Validity of Security Interest |
19 | ||||
| SECTION 3.02. |
Enforceability of Navistar Financial Receivables |
21 | ||||
| SECTION 3.03. |
Location of Collateral |
21 | ||||
| SECTION 3.04. |
Jurisdiction of Organization; Chief Executive Office |
21 | ||||
| SECTION 3.05. |
Subsidiaries |
21 | ||||
| ARTICLE IV COVENANTS |
22 | |||||
| SECTION 4.01. |
Filings and Further Assurances |
22 | ||||
| SECTION 4.02. |
Marketable Securities |
25 | ||||
| SECTION 4.03. |
Subsidiary Shares and Subsidiary Notes |
28 | ||||
| SECTION 4.04. |
Liens on the Collateral |
30 | ||||
| SECTION 4.05. |
Place of Business and Collateral |
30 | ||||
| SECTION 4.06. |
Insurance |
31 | ||||
| SECTION 4.07. |
Collection Procedures |
31 | ||||
i
| SECTION 4.08. |
Delivery of Secured Instruments |
36 | ||||
| SECTION 4.09. |
Information as to Secured Parties |
36 | ||||
| SECTION 4.10. |
Stamp and Other Similar Taxes |
37 | ||||
| SECTION 4.11. |
Filing Fees; Excise Taxes |
37 | ||||
| SECTION 4.12. |
Collateral Reports |
37 | ||||
| SECTION 4.13. |
Government Receivables |
37 | ||||
| ARTICLE V ACCELERATION OF SECURED OBLIGATIONS; REMEDIES |
38 | |||||
| SECTION 5.01. |
Notice of Acceleration |
38 | ||||
| SECTION 5.02. |
General Authority of the Trustee over the Collateral |
39 | ||||
| SECTION 5.03. |
Remedies; Rights Upon Acceleration of Secured Obligations |
39 | ||||
| SECTION 5.04. |
Right to Initiate Judicial Proceedings |
41 | ||||
| SECTION 5.05. |
Right to Appoint a Receiver |
41 | ||||
| SECTION 5.06. |
Instructions of Required Secured Parties |
42 | ||||
| SECTION 5.07. |
Remedies Not Exclusive |
42 | ||||
| SECTION 5.08. |
Waiver and Estoppel |
43 | ||||
| SECTION 5.09. |
Limitation by Law |
43 | ||||
| ARTICLE VI COLLATERAL ACCOUNT; DISTRIBUTIONS |
43 | |||||
| SECTION 6.01. |
The Collateral Account |
43 | ||||
| SECTION 6.02. |
Control of Collateral Account |
44 | ||||
| SECTION 6.03. |
Investment of Funds Deposited in Collateral Account |
44 | ||||
| SECTION 6.04. |
Application of Moneys |
45 | ||||
| SECTION 6.05. |
Application of Moneys Distributable to Indenture Trustees |
47 | ||||
| SECTION 6.06. |
Trustee’s Calculations |
47 | ||||
| SECTION 6.07. |
Pro Rata Sharing |
48 | ||||
ii
| ARTICLE VII THE TRUSTEE |
48 | |||||
| SECTION 7.01. |
Acceptance of Trust |
48 | ||||
| SECTION 7.02. |
Exculpatory Provisions |
48 | ||||
| SECTION 7.03. |
Delegation of Duties |
49 | ||||
| SECTION 7.04. |
Reliance by Trustee |
49 | ||||
| SECTION 7.05. |
Limitations on Duties of Trustee |
50 | ||||
| SECTION 7.06. |
Moneys to be Held in Trust |
51 | ||||
| SECTION 7.07. |
Resignation and Removal of the Trustee |
51 | ||||
| SECTION 7.08. |
Status of Successor Trustees |
52 | ||||
| SECTION 7.09. |
Merger of the Trustee |
52 | ||||
| SECTION 7.10. |
Co-Trustee; Separate Trustees |
52 | ||||
| SECTION 7.11. |
Treatment of Payee or Indorsee by Trustee; Representatives of Secured Parties |
53 | ||||
| SECTION 7.12. |
Compensation and Expenses |
54 | ||||
| SECTION 7.13. |
Indemnification |
54 | ||||
| ARTICLE VIII RELEASE OF COLLATERAL |
55 | |||||
| SECTION 8.01. |
Permitted Releases |
55 | ||||
| SECTION 8.02. |
Conditions to Termination of Security Interest and Release of All Collateral |
56 | ||||
| SECTION 8.03. |
Procedure for Termination and Release |
56 | ||||
| ARTICLE IX MISCELLANEOUS |
56 | |||||
| SECTION 9.01. |
Notices |
56 | ||||
| SECTION 9.02. |
No Waivers |
57 | ||||
| SECTION 9.03. |
Amendments, Supplements and Waivers |
57 | ||||
| SECTION 9.04. |
Headings |
58 | ||||
| SECTION 9.05. |
Severability |
58 | ||||
| SECTION 9.06. |
Successors and Assigns |
58 | ||||
| SECTION 9.07. |
Currency Conversions |
58 | ||||
| SECTION 9.08. |
Governing Law |
58 | ||||
| SECTION 9.09. |
Submission to Jurisdiction |
58 | ||||
| SECTION 9.10. |
Waiver of Jury Trial |
58 | ||||
| SECTION 9.11. |
Counterparts; Integration |
59 | ||||
| SECTION 9.12. |
Termination |
59 | ||||
iii
| Schedule A |
- | Permitted Receivables Sale Agreements | ||
| Schedule B |
- | List of Collection Banks, Lock-boxes, Suspense Accounts and Collection Accounts | ||
| Schedule C |
- | List of Proceeds Account Banks and Proceeds Deposit Accounts | ||
| Schedule D |
- | Proceeds Allocation Account | ||
| Schedule E |
- | Subsidiaries and Capitalization | ||
| Schedule F |
- | Pledged Instruments | ||
| Exhibit A |
- | Perfection Certificate | ||
| Exhibit B |
- | Confirmation | ||
iv
SECOND AMENDED AND RESTATED SECURITY, PLEDGE AND TRUST AGREEMENT (this “Agreement”) dated as of May 27, 2016, between NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (with its successors, “Navistar Financial”), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a corporation duly organized and existing under the laws of the State of New York, acting individually and as trustee for the holders of the Secured Obligations.
W I T N E S S E T H:
WHEREAS, Navistar Financial and Navistar Financial, S.A. De C.V., Sociedad Financiera De Objeto Multiple, Entidad Regulada (together with Navistar Financial, the “Borrowers”), the Lenders parties thereto, JPMorgan Chase Bank, N.A., as administrative agent are entering into the Third Amended and Restated Credit Agreement (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) on the date hereof;
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make extensions of credit to the Borrowers upon the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the terms of the Credit Agreement, Navistar Financial desires to secure, equally and ratably, the payment of (i) the principal of and interest on the Loans and all other amounts from time to time owing by Navistar Financial under the Credit Agreement and (ii) all amounts from time to time owing by Navistar Financial in respect of Financial Services Obligations;
WHEREAS, from time to time after the date hereof Navistar Financial may desire to secure additional Indebtedness equally and ratably with the Loans and Financial Services Obligations;
WHEREAS, the Required Secured Parties have consented to Navistar Financial and the Trustee entering into this Agreement; and
WHEREAS, in connection with, and as a condition to the initial extensions of credit under the Credit Agreement, Navistar Financial has agreed to enter into this Agreement;
DECLARATION OF TRUST:
NOW, THEREFORE, in order to secure the payment of the Secured Obligations and in consideration of the premises and the mutual agreements set forth herein, Navistar Financial hereby grants the Trust Estate to the Trustee and the Trustee declares that it holds the Trust Estate as trustee in trust under this Agreement.
TO HAVE AND TO HOLD the Trust Estate unto the Trustee in trust under this Agreement and its assigns and their assigns forever.
IN TRUST NEVERTHELESS under and subject to the conditions set forth herein and for the benefit of the Secured Obligations and the holders thereof, and for the enforcement of the payment of the Secured Obligations, and as security for the performance of and compliance with the covenants and conditions of this Agreement.
PROVIDED, HOWEVER, that if Navistar Financial or its assigns shall satisfy the conditions set forth in Section 8.02 and 8.03, then this Agreement, and the estates and rights hereby granted, shall cease, terminate and be void and of no further force and effect.
IT IS HEREBY FURTHER COVENANTED AND DECLARED that the Trust Estate is to be held and applied by the Trustee, subject to the further covenants, conditions and trusts hereinafter set forth.
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have the following meanings:
“Account Debtor” means, with respect to any Receivable, any “account debtor” (as defined in the UCC) on such Receivable.
“Additional Secured Obligation” means any obligation which Navistar Financial designates as an Additional Secured Obligation pursuant to Section 2.07 on or after the date hereof.
“Additional Short-Term Debt” means (i) commercial paper issued by Navistar Financial and (ii) other Indebtedness for Borrowed Money (as defined in the Credit Agreement) of Navistar Financial owing to a bank, in each case (x) having a maturity not greater than 270 days from the date of the issuance or incurrence thereof and (y) not subject to any provision for extension or renewal or automatic “roll-over” at the option of either party.
“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as Administrative Agent under the Credit Agreement, or any successor Administrative Agent appointed in accordance with the respective terms of such agreement.
“Affiliate” has the meaning specified in the Credit Agreement.
“Bankruptcy Code” has the meaning specified in the Credit Agreement.
“Blocked Account” has the meaning specified in the Credit Agreement.
“Books and Records” means all computer programs, tapes, discs, punch cards, data processing software, transaction files, master files and related property and rights (except computer and peripheral equipment) of Navistar Financial pertaining to any of the Collateral, or regularly used by Navistar Financial in enforcing or identifying any of the Collateral or establishing the amount of any Navistar Financial Receivable, or identifying the Account Debtor with respect to any Navistar Financial Receivable, or identifying or establishing the amount of any Proceeds of any of the Collateral.
“Business Day” has the meaning specified in the Credit Agreement.
“Cayman Affiliate” has the meaning specified in the Credit Agreement.
2
“Cayman Loan Agreements” has the meaning specified in the Credit Agreement.
“Chattel Paper” means Navistar Financial Receivables which constitute “chattel paper” (as defined in the UCC).
“Collateral” has the meaning set forth in Section 2.01.
“Collateral Accounts” has the meaning set forth in Section 6.01.
“Collateral Release Notice” has the meaning set forth in Section 8.03.
“Collection Account” has the meaning set forth in Section 4.07(a).
“Collection Bank” means each of the banks listed in Schedule B hereto, as amended from time to time in accordance with Section 4.07(d), at which one or more Lock-boxes and/or Suspense Accounts and/or Collection Accounts are maintained.
“Commitment” has the meaning specified in the Credit Agreement.
“Concentration Bank” means JPMorgan Chase Bank, N.A., in its capacity as the agent of the Trustee (or of a co-trustee or separate trustee), or any successor Concentration Bank appointed pursuant to Section 4.07(h) at which the Proceeds Allocation Account is maintained. If the Concentration Bank is an agent of a co-trustee or separate trustee appointed pursuant to Section 7.10, references to the “Trustee” in connection with the Concentration Bank shall refer to such co-trustee or separate trustee, as the case may be.
“co-trustee” has the meaning set forth in Section 7.10.
“Credit Agreement” has the meaning set forth in the recitals.
“Dealer” means (i) a Person with whom International or an affiliate of International has a valid dealer sales/maintenance agreement to sell Navistar Vehicles (it being understood that any such Person may also have an agreement with an OEM Supplier to sell OEM Vehicles), (ii) a truck equipment manufacturer with whom International has a valid agreement to sell International vehicles, (iii) a Person with whom Navistar Financial has a valid agreement to extend used truck floor plan terms or (iv) a Person for whom Navistar Financial provides financing for OEM Vehicles.
“Debt Indentures” means any indenture entered into after the date hereof pursuant to which Additional Secured Obligations are issued, in each case as such indenture is amended from time to time.
“Deposit Account” means any “deposit account” (as defined in the UCC) now or hereafter maintained by Navistar Financial.
“Documents” means all “documents” (as defined in the UCC) or other receipts covering, evidencing or representing goods, now owned or hereafter acquired by Navistar Financial.
“Dollars” and “$” mean lawful money of the United States of America.
3
“Domestic Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close.
“Effective Date” has the meaning specified in the Credit Agreement.
“Equipment” means all “equipment” (as defined in the UCC) now or hereafter owned by Navistar Financial, including, without limitation, all motor vehicles, trucks, trailers, office equipment and computer hardware; provided that any of the foregoing which constitute Inventory shall be included in the meaning of the term “Inventory” and excluded from the meaning of the term “Equipment”.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, including (unless the context otherwise requires) all rules and regulations promulgated thereunder.
“ERISA Affiliate” has the meaning specified in the Credit Agreement.
“Event of Default” has the meaning specified in the Credit Agreement.
“Excluded Foreign Subsidiary” means any Navistar Financial Subsidiary that is not organized under the laws of any jurisdiction within the United States, in respect of which the pledge of all of the capital stock of such Subsidiary would, in good faith judgment of Navistar Financial, result in adverse tax consequences to Navistar Financial.
“Excluded Swap Obligation” has the meaning specified in the Credit Agreement.
“Financial Assets” means “financial assets” as defined in UCC Article 8-102(a)(9).
“Financial Services Obligations” means all obligations of Navistar Financial to any Lender, or any affiliate of any Lender, under any Secured Interest Rate Agreement.
“Flood Insurance Laws” means, collectively, (i) National Flood Insurance Reform Act of 1994 (which comprehensively revised the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973) as now or hereafter in effect or any successor statute thereto, (ii) the Flood Insurance Reform Act of 2004 as now or hereafter in effect or any successor statute thereto and (iii) the Biggert-Waters Flood Insurance Reform Act of 2012 as now or hereafter in effect or any successor statute thereto.
“General Intangibles” means all “general intangibles” (as defined in the UCC) now owned or hereafter acquired by Navistar Financial (other than any Navistar Financial Receivable or Related Receivables Right), including, without limitation, to the extent the same constitute “general intangibles” (as defined in the UCC), (i) all rights and privileges of Navistar Financial in, to and under the Material Agreements, (ii) all patents, patent licenses, trademarks, trademark licenses, rights in intellectual property, goodwill, trade names, service marks, trade secrets, copyrights, copyright licenses, permits and licenses (“Intellectual Property”), (iii) all rights or claims in respect of refunds for taxes paid and (iv) all rights in respect of any pension plan or similar arrangement maintained for employees of Navistar Financial or any ERISA Affiliate.
4
“Government Account” has the meaning set forth in Section 4.13(c).
“Government Receivables” has the meaning set forth in Section 4.13(a).
“Governmental Authority” has the meaning specified in the Credit Agreement.
“hereunder”, “hereby”, “herein”, “hereof” and like words refer to this Agreement as a whole (including any schedules and supplements hereto) and not merely to the specific section, paragraph or clause in which the respective word appears.
“Indebtedness” has the meaning specified in the Credit Agreement.
“Indenture Obligations” means the securities evidencing Indebtedness of Navistar Financial outstanding from time to time under the Debt Indentures; provided that such securities are Additional Secured Obligations.
“Indenture Trustee” means a trustee under any Debt Indenture.
“Instruments” means all “instruments” as defined in UCC Article 9-102(a)(47).
“Insurance Policies” means all rights of Navistar Financial in, to and under insurance policies of every kind, presently existing or hereafter acquired, under which any collateral securing any Navistar Financial Receivable is insured; provided that any such rights which constitute Proceeds shall be included in the meaning of the term “Proceeds” and excluded from the meaning of the term “Insurance Policies”.
“Intellectual Property” has the meaning set forth in the definition of “General Intangibles”.
“Intercompany Debt” means any Indebtedness owing from time to time by a Navistar Financial Subsidiary to Navistar Financial, whether or not such Indebtedness is evidenced by a promissory note or other Instrument.
“Intercompany Loan Agreement” means each agreement creating or evidencing Intercompany Debt, in each case as such agreement may be amended or supplemented from time to time.
“Interest Rate Agreement” means any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement designed to protect Navistar Financial against fluctuations in interest rates.
“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute.
“International” means Navistar Inc. (formerly known as International Truck and Engine Corporation), a Delaware corporation.
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“Inventory” means all “inventory” (as defined in the UCC), now owned or hereafter acquired by Navistar Financial, wherever located.
“Investment Property” means all “investment property” (as defined in UCC Article 9-102(a)(49), now owned or hereafter acquired by Navistar Financial, wherever located.
“KPMG” means KPMG LLP.
“Lenders” means the lenders that are parties to the Credit Agreement, and their respective successors and assigns; and “Lender” means each of the foregoing.
“Letter of Credit” means “letter of credit” as defined in UCC Article 5-102(a)(10).
“Lien” has the meaning specified in the Credit Agreement.
“Loan Documents” has the meaning specified in the Credit Agreement.
“Loans” means the loans made by the Lenders pursuant to the Credit Agreement.
“Lock-boxes” has the meaning set forth in Section 4.07(a).
“Marketable Securities” has the meaning set forth in Section 6.03, and shall include Financial Assets credited to a Securities Account.
“Master Intercompany Agreement” has the meaning specified in the Credit Agreement.
“Material Agreements” means, collectively, (i) the Intercompany Loan Agreements, (ii) the Master Intercompany Agreement, (iii) the Tax Allocation Agreement, (iv) the Used Truck Loan Agreement, (v) each Cayman Loan Agreement and (vi) each Receivables Sale Agreement, and each other agreement entered into by Navistar Financial in connection with any Receivables Sale Agreement or pursuant thereto, to which Navistar Financial is or becomes a party, in each case as such agreement is amended from time to time.
“Navistar Financial Receivables” means all right, title and interest, whether now owned or existing or hereafter arising or acquired, of Navistar Financial in Receivables, including, without limitation:
(a) all rights of Navistar Financial to receive payments of money or other consideration from International under the Master Intercompany Agreement, the Used Truck Loan Agreement, the Parents’ Side Agreement, the Tax Allocation Agreement, or otherwise, or from any Person (other than any Navistar Financial Subsidiary) under secured or unsecured borrowing or other credit arrangements,
(b) all rights of Navistar Financial to receive payment in respect of the purchase price of any asset (other than any Receivable) sold by it,
(c) all rights of Navistar Financial to receive payments of money or other consideration from a Purchaser or any trust or other similar entity created in connection
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with the sale of Receivables by Navistar Financial under any Receivables Sale Agreement or any other agreement executed in connection with such Receivables Sale Agreement (including, without limitation, all rights of Navistar Financial (i) to receive the purchase price of any Sold Receivables, including any portion thereof which becomes payable at any time following such sale, (ii) to be reimbursed for advances made or expenses incurred on behalf of any such Purchaser, trust or similar entity, and for expenses incurred by Navistar Financial in connection with its servicing of Receivables on behalf of any such Purchaser, trust or similar entity and (iii) to receive servicing fees in connection with the collection and administration of Sold Receivables on behalf of any such Purchaser, trust or similar entity),
(d) all rights of Navistar Financial to receive payments of money or other consideration from Account Debtors in respect of Retail Receivables and Wholesale Receivables (excluding any Sold Receivables) and
(e) all rights of Navistar Financial to receive payments of money or other consideration from (i) any Navistar Financial Subsidiary in respect of any Intercompany Debt, any amounts payable from time to time to Navistar Financial under the Tax Allocation Agreement, or otherwise and (ii) the Cayman Affiliate in respect of any Cayman Loan Agreement;
provided that the term “Navistar Financial Receivables” shall include Navistar Financial’s right, title and interest in Receivables with respect to which the United States of America or an agency or department thereof is the obligor only to the extent provided in Section 4.13; and provided, further, that the term “Navistar Financial Receivables” shall not include any Sold Receivables.
“Navistar Financial Subsidiary” means each Subsidiary of Navistar Financial.
“Navistar Vehicle” means any medium or heavy-duty truck produced by, or for, International or an affiliate of International and sold by International to Dealers.
“NFRRC” means Navistar Financial Retail Receivables Corporation, a Delaware corporation, and its successors.
“NFSC” means Navistar Financial Securities Corporation, a Delaware corporation, and its successors.
“Notice of Acceleration” means a written notice delivered to the Trustee:
(i) by the Administrative Agent with respect to the Loans or other indebtedness outstanding under the Credit Agreement, or
(ii) by the relevant Indenture Trustee with respect to indebtedness constituting Secured Obligations hereunder and outstanding under a Debt Indenture,
in each case, stating that (a) such indebtedness has not been paid in full at the stated final maturity thereof and any applicable grace period has expired or (b) an event of default has occurred under the provisions of the relevant Secured Instrument, and, as a result thereof, such indebtedness has become due and payable prior to the stated maturity thereof.
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“OEM Supplier” means any Person who sells OEM Vehicles to a Dealer and who has entered into an agreement for the benefit of Navistar Financial to repurchase new vehicle inventory from Navistar Financial upon Navistar Financial’s foreclosure upon such inventory owned by such Dealer (subject to such customary conditions and limitations as are acceptable to Navistar Financial).
“OEM Vehicle” means a new medium or heavy-duty truck manufactured by, or for, a manufacturer other than International.
“Opinion of Counsel” means an opinion in writing signed by legal counsel to Navistar Financial (other than an employee of Navistar Financial or any Affiliate of Navistar Financial) reasonably satisfactory to the Trustee.
“Parent” means Navistar International Corporation, a Delaware corporation, and its successors.
“Parents’ Side Agreement” has the meaning specified in the Credit Agreement.
“Perfection Certificate” means a certificate substantially in the form of Exhibit A hereto, completed and supplemented with the schedules and attachments contemplated thereby to the reasonable satisfaction of the Trustee and duly executed by a Responsible Officer of Navistar Financial.
“Permitted Financial Intermediary” means at any time the Trustee, in its individual capacity, or any Affiliate of the Trustee, provided that (i) such Person in the ordinary course of its business maintains securities accounts for its customers and (ii) such Person is at such time acting in the capacity of a Securities Intermediary.
“Permitted Liens” means the Liens on the Collateral permitted to be created, assumed or to exist pursuant to Section 8.03 of the Credit Agreement.
“Permitted Receivables Sale Agreement” means any Receivables Sale Agreement (i) which is listed in Schedule A hereto or (ii) with respect to which the Trustee shall have received a certificate of a Responsible Officer (x) stating that such agreement was entered into after the date hereof and all sales thereunder are either expressly permitted or are not prohibited by any Secured Instrument and (y) setting forth the name and address of each Purchaser under such agreement, as such agreement may be amended from time to time.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Pledged Instruments” means all Instruments or Letters of Credit, whether or not evidencing, representing, arising from or existing in respect of, relating to, securing or otherwise supporting the payment of, any of the Navistar Financial Receivables, including (but not limited to) the Subsidiary Notes and any other promissory notes, drafts, bills of exchange and trade acceptances, in each case now owned by Navistar Financial or hereafter acquired by Navistar Financial or arising, other than any of the foregoing which (i) constitute or are part of a group of writings that constitute Chattel Paper or (ii) are Marketable Securities or Subsidiary Shares.
“Pledged Securities” means the Pledged Instruments and the Subsidiary Shares.
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“Proceeds” means all “proceeds” (as defined in the UCC) of any of the Collateral described in clauses (i) through (xiv) of Section 2.01.
“Proceeds Account Bank” means any of the banks listed in Schedule C hereto, as amended from time to time in accordance with Section 4.07(e), at which a Proceeds Deposit Account is maintained.
“Proceeds Allocation Account” has the meaning set forth in Section 4.07(a).
“Proceeds Deposit Account” has the meaning set forth in Section 4.07(a).
“Purchase Money Lien” means Liens on fixed or capital assets acquired, constructed or improved by Navistar Financial or any of its Subsidiaries; provided that (i) such security interests and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, (ii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets and (iii) such security interests shall not apply to any other property or assets of Navistar Financial or such Subsidiary.
“Purchaser” means, as applicable, NFSC, NFRRC or any other purchaser of Receivables from Navistar Financial under any Receivables Sale Agreement.
“Qualified Securitization Transaction” has the meaning specified in the Credit Agreement.
“Receivable” means, as the context may require, either (a) all assets of the type classified under the heading “Finance Receivables” on the statement of consolidated financial condition of Navistar Financial and its consolidated Subsidiaries as of October 31, 2015. and the related statements of consolidated income and retained earnings and consolidated cash flow for the fiscal year then ended, together with the notes thereto, included in the 2015 Annual Report and reported on by KPMG or (b) the aggregate Unpaid Balances thereof or (c) equipment on operating leases.
“Receivables Sale Agreement” means any agreement providing for the sale by Navistar Financial of any Receivables or interests in Receivables.
“Related Receivables Rights” means the rights with respect to Navistar Financial Receivables which are described in Section 2.01(i) to the extent such rights are “accounts”, “contract rights” or “general intangibles” (as such terms are defined in the UCC) and are not excluded from the coverage of the UCC by reason of Section 9-109 thereof.
“Releasing Secured Parties” means all the Lenders.
“Required Lenders” has the meaning specified in the Credit Agreement.
“Required Secured Parties” means the Required Lenders under the Credit Agreement; provided that, if at any time all principal of and interest on the Loans and all other amounts due under the Credit Agreement shall have been paid in full and the Commitments thereunder shall have terminated in their entirety, “Required Secured Parties” shall mean Indenture Trustees under Debt Indentures under which more than 50% of then aggregate outstanding principal amount of the Indenture Obligations were issued.
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“Requirement of Law” means, as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Responsible Officer” means the chief executive officer, president, vice president and treasurer, vice president and controller, and general counsel of Navistar Financial, but in any event, with respect to financial matters, the vice president and treasurer or the vice president and controller of Navistar Financial.
“Retail Receivables” means all Receivables of the types classified in the statement of consolidated financial condition of Navistar Financial and its consolidated Subsidiaries as of October 31, 2015 and the related statements of consolidated income and retained earnings and consolidated cash flow for the fiscal year then ended, together with the notes thereto, included in the 2015 Annual Report and reported on by KPMG (a) under the heading “Retail notes and lease financing” or (b) under the heading “Accounts”, except Wholesale Receivables; provided, that the term “Retail Receivables” shall not include any Sold Receivables.
“Retained Collections” means all amounts (except Sold Collections) which from time to time are received by Navistar Financial, a Collection Bank, the Concentration Bank, a Proceeds Account Bank or the Trustee as Proceeds of Navistar Financial Receivables which are Wholesale Receivables or Retail Receivables, including, without limitation, to the extent constituting Proceeds, (i) all payments of purchase prices, principal, finance charges, interest, late payment charges and other charges, (ii) all collection fees, extension fees and other fees, (iii) all insurance proceeds, payments by guarantors and other amounts to be applied to the payment of the foregoing, (iv) all net proceeds of the sale or other disposition of repossessed equipment, vehicle repair and replacement parts inventory or other collateral and (v) all proceeds of any repurchase or purchase of any Navistar Financial Receivables by the original seller or a third party.
“Secured Instruments” means at any time (i) the Credit Agreement and any promissory note issued thereunder, (ii) each Secured Interest Rate Agreement, and (iii) each other agreement, Debt Indenture, promissory note or Instrument, evidencing Additional Secured Obligations.
“Secured Interest Rate Agreement” means an Interest Rate Agreement between Navistar Financial and any Lender or any affiliate of any Lender that is in effect on July 1, 2005 or with respect to which Navistar Financial’s obligations are thereafter designated as Additional Secured Obligations pursuant to Section 2.07.
“Secured Obligations” means:
(i) all principal of and interest on the Loans and all other sums payable by Navistar Financial under the Credit Agreement,
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(ii) all sums payable by Navistar Financial under this Agreement including, without limitation, Trustee’s Fees,
(iii) all sums, if any, payable by Navistar Financial to any Lender or any affiliate of any Lender under any Secured Interest Rate Agreement, and
(iv) all Additional Secured Obligations;
provided that the terms “interest”, “sums” and “Additional Secured Obligations” as used above shall each include, without limitation, any interest which accrues on the relevant Secured Obligation after, or would so accrue but for the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of Navistar Financial.
“Secured Parties” means:
(i) so long as any Lender has any Commitment under the Credit Agreement or any Loan is outstanding or any amount due and payable by Navistar Financial under the Credit Agreement remains unpaid, the Lenders and the Administrative Agent,
(ii) the Trustee,
(iii) so long as any Secured Obligation (whether or not due and payable) is unpaid under any Debt Indenture, the Indenture Trustee under such Debt Indenture,
(iv) each Lender or affiliate thereof that is a party to a Secured Interest Rate Agreement, and
(v) each other holder of an Additional Secured Obligation.
“Securities Account” has the meaning set forth in Section 4.02.
“Securities Intermediary” means a “securities intermediary” as defined in UCC Article 8-102(a)(14).
“Security Interest” means a “security interest” as defined in UCC Article 1-201(b)(35).
“Sold Collections” means all amounts which from time to time (i) are received by Navistar Financial, International, a Collection Bank, the Concentration Bank, a Proceeds Account Bank or the Trustee in each case with respect to Sold Receivables and (ii) are owed to a Purchaser or its assignee, or are required to be deposited in a special purpose trust or similar account, in connection with any Permitted Receivables Sale Agreement.
“Sold Receivables” means any Receivables transferred by Navistar Financial pursuant to any Permitted Receivables Sale Agreement and not repurchased by Navistar Financial, except to the extent that Navistar Financial retains an ownership or other interest therein.
“Subsidiary” of any Person means any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person.
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“Subsidiary Notes” means (i) the notes listed in Schedule F hereto evidencing Intercompany Debt and (ii) any other promissory notes or Instruments required to be pledged to the Trustee pursuant to Section 4.03(c).
“Subsidiary Shares” means (i) the shares of capital stock or membership interests of the Navistar Financial Subsidiaries listed in Schedule E hereto and (ii) any other shares of capital stock or membership interests required to be pledged to the Trustee pursuant to Section 4.03(c).
“Supporting Obligations” means all “supporting obligations” as defined in UCC Article 9-102(a)(78).
“Suspense Account” has the meaning set forth in Section 4.07(a).
“Tax Allocation Agreement” has the meaning specified in the Credit Agreement.
“Trust Estate” means all right, title and interest of the Trustee in, to and under the Collateral.
“Trustee” means Deutsche Bank Trust Company Americas, a New York banking corporation, in its capacity as Trustee hereunder, and any successor thereto in such capacity appointed pursuant to Section 7.07, which successor shall be (a) a bank or trust company in good standing and having power to act as Trustee hereunder, incorporated under the laws of the United States of America or any State thereof or the District of Columbia, having its principal corporate trust office within the 48 contiguous States and having capital, surplus and undivided profits of not less than $250,000,000.00, and (b) selected by Navistar Financial, subject to the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed).
“Trustee’s Fees” means all fees, costs, indemnities and expenses of the Trustee of the types described in Sections 4.10, 4.11, 7.12 and 7.13.
“Trustee’s Security Interest” means the security interest granted to the Trustee in Section 2.01.
“2015 Annual Report” means Navistar Financial’s 2015 Annual Report on Form 10-K for the fiscal year ended October 31, 2015, in the form delivered to the Lenders prior to the date hereof.
“UCC” means at any time the Uniform Commercial Code as in effect in the State of New York from time to time; provided that if, by reason of mandatory provisions of law, the validity or perfection of the Trustee’s Security Interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such validity or perfection (and for purposes of definitions related to such provisions).
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“UCC Deposit Account” means a Deposit Account that is subject to the Trustee’s “control” as defined in UCC Article 9-104.
“Unpaid Balances” has the meaning specified in the Credit Agreement.
“Upgrading” has the meaning specified in the Credit Agreement.
“Used Truck Center” means any facility (including, without limitation, any Dealer or any facility of International) which regularly holds for sale any Inventory and/or Equipment.
“Used Truck Loan Agreement” has the meaning specified in the Credit Agreement.
“Wholesale Receivables” means all Receivables of the types classified in the statement of consolidated financial condition of Navistar Financial and its consolidated Subsidiaries as of October 31, 2015 and the related statements of consolidated income and retained earnings and consolidated cash flow for the fiscal year then ended, together with the notes thereto, included in the 2015 Annual Report and reported on by KPMG under the heading “Wholesale notes” or under the heading “Accounts”, but only such “Accounts” with respect to which the obligor is a Dealer; provided, that the term “Wholesale Receivables” shall not include any Sold Receivables.
SECTION 1.02. Interpretation. References in this Agreement to the term “sale” with respect to any transfer of Receivables, rights to receive income therefrom or undivided interests therein are deemed to include any transfer which purports to be a sale on the face of the agreement governing such transfer, without regard to whether such transfer would constitute a “true sale” under applicable legal principles. The terms “sell” and “sold”, as used as described in the foregoing sentence, shall have correlative meanings.
ARTICLE II
THE SECURITY INTEREST
SECTION 2.01. Grant of Security Interest. To secure the due and punctual payment of all Secured Obligations (other than any Excluded Swap Obligations of Navistar Financial), howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing or due or to become due, in accordance with the terms thereof and to secure the due and punctual performance of all of the obligations of Navistar Financial contained herein, Navistar Financial hereby grants to the Trustee a continuing security interest in and to all of the following property of Navistar Financial in each case, whether now owned or existing or hereafter acquired or arising and regardless of where located (all being collectively referred to as the “Collateral”):
(i) all Navistar Financial Receivables and all rights of Navistar Financial (A) with respect to any collateral security for any Navistar Financial Receivable, (B) under any “security agreement” (as defined in the UCC) securing any Navistar Financial Receivable or (C) assertable against any Person other than the related obligor, under a guaranty, warranty or otherwise, in connection with any Navistar Financial Receivable or any collateral securing any Navistar Financial Receivable,
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(ii) all of Navistar Financial’s right, title and interest in Marketable Securities and Investment Property, and all of Navistar Financial’s rights and privileges with respect thereto, and all income and profits thereon, and all interest and other payments with respect thereto,
(iii) all Pledged Securities and all of Navistar Financial’s rights and privileges with respect to the Pledged Securities, and all income and profits thereon, and all interest, dividends and other payments and distributions with respect thereto, and all rights of Navistar Financial (A) with respect to any collateral security for any Instrument or Letter of Credit or (B) under any “security agreement” (as defined in the UCC) securing any Instrument or Letter of Credit,
(iv) all Chattel Paper,
(v) all General Intangibles and all of Navistar Financial’s rights and privileges with respect to the General Intangibles, and all income and profits thereon, and all interest and other payments with respect thereto (excluding any General Intangibles, which by their terms, prohibit any security interest from being taken thereon, but not excluding any Receivables arising out of any such General Intangibles or any money due or to become due under any such General Intangibles),
(vi) all Documents,
(vii) all Inventory,
(viii) all Equipment,
(ix) all right, title and interest of Navistar Financial in the Collateral Account, all funds deposited therein from time to time, the investments made pursuant to Section 6.03 and other monies and property of any kind of Navistar Financial in the possession or under the control of the Trustee,
(x) all right, title and interest of Navistar Financial in Books and Records,
(xi) all Insurance Policies, and
(xii) all Deposit Accounts, all funds deposited therein from time to time, all interest earned thereon and all “proceeds” (as defined in the UCC) thereof,
(xiii) all other property not otherwise described above (except for any property specifically excluded from any clause in this section above, and any property specifically excluded from any defined term used in any clause of this section above), and
(xiv) to the extent not otherwise included, all Proceeds, Supporting Obligations, and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing;
provided that the Trustee’s Security Interest may be released from time to time after the date hereof with respect to certain Collateral as provided in Sections 2.02, 2.05, 4.02(f), 4.07(f) and 8.01; provided further that notwithstanding any of the other provisions set forth in this Section 2,
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this Agreement shall not constitute a grant of a security interest in any property to the extent that such grant of a security interest is (i) prohibited by any Requirements of Law of a Governmental Authority, (ii) requires a consent not obtained of any Governmental Authority pursuant to such Requirement of Law or (iii) is prohibited by, or constitutes a breach or default under or results in the termination of or requires any consent not obtained under, any contract, license, agreement, instrument or other document evidencing or giving rise to such property or, in the case of any Marketable Security or Pledged Security, any applicable shareholder or similar agreement, except to the extent that such Requirement of Law or the term in such contract, license, agreement, instrument or other document or shareholder or similar agreement providing for such prohibition, breach, default or termination or requiring such consent is ineffective under applicable law; and provided further that notwithstanding any of the other provisions set forth in this Section 2, this Agreement shall not constitute a grant of a security interest in the Blocked Account or the Proceeds thereof or in more than 65% of the total outstanding capital stock of any Excluded Foreign Subsidiary; provided, further, that notwithstanding any of the other provisions set forth in this Section 2, this Agreement shall not constitute a grant of a security interest in the equity interests of Servicios Corporativos NFC, S.A. de C.V., a Mexican corporation (“Servicios”), or a pledge of such ownership interests, the certificates representing Navistar Financial’s ownership interests in Servicios, to the extent held by the Trustee, shall be returned to Navistar Financial on or promptly following the date hereof; and provided, further, that for purposes of determining the obligations of Navistar Financial under this Agreement, the definition of “Secured Obligations” shall not create any guarantee by Navistar Financial or the grant by Navistar Financial of a security interest to secure, as applicable, any Excluded Swap Obligations of Navistar Financial.
SECTION 2.02. Release of Security Interest in Receivables. Navistar Financial expects to sell or assign Receivables, or interests in Receivables, from time to time pursuant to Permitted Receivables Sale Agreements. The Trustee’s Security Interest in any Sold Receivables, in all Sold Collections related thereto, in all related rights of the types described in Section 2.01(i) and related Insurance Policies and Books and Records which are expressly sold or assigned by Navistar Financial pursuant to any Permitted Receivables Sale Agreement and in all Proceeds of the foregoing (but not in Proceeds arising from the sale or assignment of such Receivables and related rights by Navistar Financial) shall, immediately upon the sale or assignment of such Receivables pursuant to a Permitted Receivables Sale Agreement and without any further action on the part of the Trustee, be automatically released unless a Notice of Acceleration is in effect at the time of such sale and the Purchaser under such Permitted Receivables Sale Agreement shall have received notice from the Trustee pursuant to Section 5.01, before Navistar Financial shall have become legally obligated to sell such Receivables, stating that a Notice of Acceleration is in effect.
SECTION 2.03. Continuing Liability of Navistar Financial and its Subsidiaries. Anything herein to the contrary notwithstanding, Navistar Financial shall remain liable under each contract, agreement, interest and obligation included in the Collateral, to observe and perform all the conditions and obligations to be observed and performed by it thereunder (including, without limitation, any undertaking to maintain insurance), all in accordance with and pursuant to the terms and provisions thereof, and shall do nothing to impair the Trustee’s Security Interest in any Collateral. Neither the Trustee nor any other Secured Party shall have any obligation or liability under any such contract, agreement, interest or obligation by reason of or arising out of this Agreement or the receipt by the Trustee or any other Secured Party of any payment relating to any such contract, agreement, interest or obligation pursuant hereto, nor shall
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the Trustee or any Secured Party be required or obligated in any manner to perform or fulfill any of the obligations of Navistar Financial thereunder or pursuant thereto, or to make any payment, or to make any inquiry as to the nature or the sufficiency of any payment received by it or the sufficiency of any performance by any party under any such contract, agreement, interest or obligation, or to present or file any claim, or to take any action to collect or enforce any performance or the payment of any amount thereunder to which it may be entitled at any time.
SECTION 2.04. Rights of Secured Parties Under Secured Instruments. Notwithstanding any other provision of this Agreement, the right of each Secured Party to receive payment of each Secured Obligation held by such Secured Party when due (whether at the stated maturity thereof, by acceleration or otherwise) as expressed in the relevant Secured Instrument or, subject to any limitations in such Secured Instrument or in any other agreement to which such Secured Party is a party or by which such Secured Party is bound, to institute suit for the enforcement of such payment on or after such due date, and the obligation of Navistar Financial to pay such Secured Obligation when due, shall not be impaired or affected without the consent of such Secured Party.
SECTION 2.05. Release of Collateral. Unless a Notice of Acceleration is in effect, Navistar Financial may (in addition to its rights under Sections 2.02, 4.02 and 4.07(f)) (x) sell or otherwise dispose of any item of Collateral in the ordinary course of business if such sale or disposition is not prohibited by any Secured Instrument, (y) sell any Collateral subject to any Senior Lien in a sale as to which the Trustee shall have waived its rights in accordance with Section 2.06 and (z) sell or otherwise dispose of any item of Collateral (including Deposit Accounts) pursuant to a Qualified Securitization Transaction. In connection with any such sale or disposition,
(i) the Trustee’s Security Interest in such item (but not in the Proceeds arising from such sale or disposition) shall cease immediately upon such sale or disposition, without any further action on the part of the Trustee;
(ii) if such item is in the possession of the Trustee, any co-trustee or any of their respective agents, the Trustee, such co-trustee or such agent shall deliver such item to Navistar Financial promptly following receipt of a certificate of a Responsible Officer (1) requesting such delivery and certifying that such sale or other disposition is permitted in accordance with this Section 2.05, (2) certifying that such delivery is for a purpose that will cause the Trustee’s Security Interest in such item to remain perfected for a specified period following the date of delivery pursuant to Section 9-312(f) of the UCC and (d) certifying that the relevant sale or disposition shall occur no later than five days prior to the expiration of such specified period; and
(iii) the Trustee, any co-trustee and any of their respective agents are each hereby authorized and instructed to deliver to the purchaser of such item a certificate prepared by Navistar Financial stating that the Trustee no longer has any security interest therein, and such purchaser shall be entitled to rely conclusively on such certificate for any and all purposes; provided that the Trustee, such co-trustee or such agent shall have received a certificate of a Responsible Officer requesting such delivery and certifying that such sale or other disposition is permitted in accordance with this Section 2.05.
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Unless notified to the contrary by any Secured Party, the Trustee may assume that any sale or disposition of an item of Collateral is not prohibited by any Secured Instrument and may so inform any of its agents and any co-trustee.
SECTION 2.06. Senior Liens. (a) If at any time Navistar Financial desires to subordinate the Trustee’s Security Interest in any cash, Marketable Securities or Equipment and any Proceeds thereof to a Purchase Money Lien (a “Senior Lien”) on such Collateral that is not prohibited by any Secured Instrument, then so long as after giving effect to such proposed Senior Lien the aggregate principal amount of all outstanding Indebtedness will not to exceed $10,000,000, Navistar Financial shall deliver to the Trustee (and concurrently deliver to the Administrative Agent for distribution to each of the Lenders) a certificate of a Responsible Officer:
(i) describing the proposed Senior Lien and the cash, Marketable Securities and/or Equipment subject thereto and certifying that (i) the creation and senior status thereof is not prohibited by any Secured Instrument and (ii) after giving effect to the creation and senior status thereof, the aggregate principal amount of all outstanding Indebtedness secured by Senior Liens will not exceed $10,000,000,
(ii) requesting the subordination of the Trustee’s Security Interest in such Collateral to such Senior Lien,
(iii) if any Marketable Securities are to be delivered (or, in the case of Marketable Securities as to which ownership or the existence of a security interest is evidenced by book entries, transferred) by the Trustee to the holder of such Senior Lien or its agent pursuant to subsection (c) below, requesting such delivery (or transfer) thereof,
(iv) attaching a copy of any documents to be prepared by Navistar Financial and executed by the Trustee and delivered by the Trustee to the holder of such Senior Lien or its agent pursuant to subsection (b) of this Section, and
(v) specifying the date on which Navistar Financial desires the Trustee to deliver said documents and deliver or transfer, as the case may be, any Marketable Securities referred to in clause (iii) above to the holder of such Senior Lien or its agent.
(b) If the requirements set forth in subsection (a) above have been met with respect to any Senior Lien, the Trustee will, after having been instructed to do so in writing by the Administrative Agent, at Navistar Financial’s expense, execute and deliver to the holder of such Senior Lien or its agent as set forth in subsection (a) above such documents as Navistar Financial shall reasonably request (copies of which documents shall have been attached to the certificate delivered pursuant to subsection (a) above in accordance with clause (iv) thereof):
(i) evidencing the subordination of the Trustee’s Security Interest in the relevant cash, Marketable Securities and/or Equipment and any Proceeds thereof to such Senior Lien,
(ii) waiving any objection the Trustee may otherwise be entitled to make under this Agreement or under applicable law to the sale or other disposition of the Collateral subject to such Senior Lien or any exercise by the holder of such Senior Lien
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of remedies permitted by applicable law or contract, provided that the Trustee’s Security Interest shall continue in any Proceeds of such Collateral so sold or disposed of, subject in all respects to the rights of the holder of such Senior Lien; and
(iii) waiving any right of the Trustee under this Agreement or under applicable law to sell, or require the holder of such Senior Lien to sell, such Collateral prior to the satisfaction in full of the obligations secured by such Senior Lien.
If the holder of any such Senior Lien shall at any time sell or dispose of any Marketable Securities subject to such Senior Lien for materially less than fair market value, Navistar Financial agrees to use reasonable efforts to recover, as promptly as is practicable, damages from such holder if Navistar Financial determines in its reasonable discretion that such holder failed to act in a commercially reasonable manner in connection with such sale or disposal.
(c) If the requirements set forth in subsection (a) above have been met with respect to any Senior Lien and the certificate delivered pursuant to such subsection requests the delivery and/or transfer of any Marketable Securities, then the Trustee (either directly, through one or more of its agents referred to in Section 4.02 or, in the case of any Marketable Securities as to which ownership or the existence of a security interest is evidenced by book entries, through the relevant Permitted Financial Intermediary) will make appropriate arrangements for such delivery and/or transfer.
SECTION 2.07. Additional Secured Obligations. (a) If at any time Navistar Financial desires to designate any of its proposed or existing Indebtedness or other obligations as an Additional Secured Obligation for purposes hereof (other than any Additional Short-Term Debt), Navistar Financial shall deliver to the Trustee (and concurrently deliver to the Administrative Agent for distribution to each of the Lenders) a certificate signed by a Responsible Officer which shall (x) identify such proposed or existing Indebtedness or other obligation, (y) certify that the designation thereof as an Additional Secured Obligation is not prohibited by any provision of any Secured Instrument and (z) specify the name and address of the proposed or existing holder or holders of each Additional Secured Obligation so designated or of an Indenture Trustee, agent or other duly authorized representative of such holder or holders designated in accordance with Section 7.11(b). Unless the Trustee (at the written direction of the Administrative Agent) or the Administrative Agent, by no later than the ninth Domestic Business Day following the receipt of such certificate by the Trustee or the Administrative Agent, notifies Navistar Financial that the Required Lenders have determined that such designation is prohibited by the Credit Agreement, such Indebtedness or other obligation shall be, from and after the later of (i) the tenth Domestic Business Day after the receipt of such certificate by the Trustee and (ii) the incurrence of such Indebtedness or other obligation, an Additional Secured Obligation for purposes of this Agreement; provided that in the case of any such Indebtedness in a principal amount of $25,000,000 or less, such Indebtedness shall be, from and after the later of (i) the date of the receipt of such certificate by the Trustee and (ii) the incurrence of such Indebtedness, an Additional Secured Obligation for purposes of this Agreement. The proviso to the immediately preceding sentence shall be applicable during each fiscal year of Navistar Financial only to the extent that the aggregate principal amount of Indebtedness designated as Additional Secured Obligations during such fiscal year does not exceed $100,000,000.
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(b) If at any time Navistar Financial desires to designate any Additional Short-Term Debt as an Additional Secured Obligation for purposes hereof, Navistar Financial shall deliver to the Trustee (and concurrently deliver to the Administrative Agent for distribution to each of the Lenders) a certificate signed by a Responsible Officer which shall (w) state that Navistar Financial proposes to issue commercial paper and/or to incur other Additional Short-Term Debt owing to one or more banks, (x) specify the name and address of each Person acting as a dealer with respect to any such commercial paper, (y) certify that the designation of such Additional Short-Term Debt as an Additional Secured Obligation is not prohibited by any provision of any Secured Instrument and that, after giving effect to the issuance or incurrence thereof, the aggregate amount of the unused commitments under (or, if less, the amount actually available to be borrowed or received in connection with a purchase under) the Credit Agreement and all Permitted Receivables Sales Agreements shall be sufficient (taking into account any scheduled terminations of any such commitments) to provide funds to repay in full at maturity the aggregate outstanding principal or face amount of all Additional Secured Obligations constituting Additional Short-Term Debt and (z) specify the name and address of each bank (other than a Lender) to which any such other Additional Short-Term Debt is owing or proposed to be owing. Such commercial paper (if issued through a dealer so specified) and such other Additional Short-Term Debt (if owing to a Lender or another bank so specified) shall be, from and after the later of (i) the date of the receipt of such certificate by the Trustee and (ii) the issuance or incurrence thereof, Additional Secured Obligations for purposes of this Agreement.
(c) Navistar Financial shall not designate any proposed or existing Indebtedness or other obligations in excess of $30,000,000 (other than any Secured Interest Rate Agreement) as an Additional Secured Obligation for purposes hereof on or after December 2, 2011.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Title to Collateral; Validity of Security Interest. In respect of all Collateral, Navistar Financial represents and warrants that:
(a) Navistar Financial owns or has rights in the Collateral free and clear of any Lien of any creditor of Navistar Financial or, to the knowledge of Navistar Financial, of any other Person, except for Permitted Liens.
(b) Navistar Financial has taken all actions necessary under the UCC to perfect, as against its assignors and their creditors, its interest in Receivables purchased or otherwise acquired by it from such assignors and, upon compliance with the applicable provisions of Article IV, the Trustee will have a valid, perfected security interest in each such Receivable under the UCC which is prior, subject only to Permitted Liens, to the extent priority is governed by the UCC, to claims of creditors, or a trustee in bankruptcy, of the assignor of such Receivable.
(c) The Subsidiary Shares include all of the issued and outstanding stock of each Navistar Financial Subsidiary which is directly owned by Navistar Financial.
(d) The Subsidiary Shares have been duly and validly issued.
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(e) The Subsidiary Shares (other than LLC membership interests) are fully paid and nonassessable.
(f) Each Subsidiary Note constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
(g) Navistar Financial is the record and beneficial owner of, and has good and marketable title to, the Pledged Securities pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the Permitted Liens.
(h) To the extent the UCC is applicable thereto, the Trustee’s Security Interest constitutes a valid security interest under the UCC securing the Secured Obligations. When UCC financing statements in the form specified in the Perfection Certificate shall have been filed in the offices specified by Navistar Financial in the Perfection Certificate the Trustee’s Security Interest shall constitute a perfected security interest in the Collateral (except Inventory in transit) to the extent that a security interest therein may be perfected by filing financing statements pursuant to the UCC.
(i) Upon, and assuming the continuation of, compliance with Sections 4.01(a), 4.02 and 4.03, the Trustee will have a valid and perfected security interest in the Pledged Instruments, Marketable Securities, Subsidiary Shares and Subsidiary Notes, to the extent the UCC and, in the case of Marketable Securities issued by the United States, Treasury regulations are applicable thereto.
(j) So long as (i) the relevant Pledged Instrument remains in the possession of the Trustee, a co-trustee or any of their respective agents or (ii) the relevant Marketable Securities, Subsidiary Note or certificate representing any Subsidiary Shares continues to be held as described below, the security interest of the Trustee in, as the case may be, (x) any Pledged Instrument that is delivered to the Trustee, a co-trustee or any of their respective agents in accordance with Section 4.01(a)(ii), (y) any Marketable Securities that is an Instrument and is delivered to the Trustee or any agent thereof and held in any Securities Account, and (z) any Subsidiary Note and any certificate representing any Subsidiary Shares, will be prior to all Liens thereon of any creditor of Navistar Financial arising under the UCC and existing at the time of such delivery and prior to all Liens created or arising under the UCC after such delivery, subject only to Permitted Liens. The Trustee’s Security Interest in all other Collateral will be prior to all other Liens thereon of any creditor of Navistar Financial now existing or arising or created hereafter, subject only to Permitted Liens.
(k) No financing statement or other similar document covering all or any part of the Collateral and naming Navistar Financial as debtor or seller is on file in any recording office in any jurisdiction in which such filing would be effective to perfect a security interest in such Collateral, except for financing statements with respect to Permitted Liens and filings to be terminated on or prior to the Effective Date. No Collateral is in the possession of any Person (other than Navistar Financial) asserting any claim thereto or security interest therein, except (A) such Collateral as may be in the possession of the Trustee, a co-trustee or any of their respective agents and (B) Collateral securing Permitted Liens or Senior Liens.
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(l) Upon compliance by Navistar Financial with Section 4.01(a), a valid and perfected security interest (as to the creation of which any consent required from any third party has been obtained), subject only to Permitted Liens, will have been created under the UCC in favor of the Trustee for the benefit of the Secured Parties in all existing Collateral referred to in Section 2.01.
(m) Other than the filing of financing statements with respect to the Trustee’s Security Interest in the jurisdictions specified in the Perfection Certificate, no registration, recordation or filing with any governmental body, agency or official is required in connection with the execution or delivery of this Agreement or necessary for the validity or enforcement hereof or for the perfection or enforcement of the Trustee’s Security Interest (except as may be required pursuant to Section 4.13). Neither Navistar Financial nor any of the Navistar Financial Subsidiaries has performed or will perform any acts which might prevent the Trustee from enforcing any of the terms and conditions of this Agreement or which would limit the Trustee in any such enforcement.
(n) As of the date hereof, except as specified in Schedule F hereto, (i) none of the Collateral is evidenced by any Pledged Instrument with a value in excess of $500,000 individually or a value in excess of $2,500,000 in the aggregate and (ii) no collateral security for any Collateral is evidenced by any promissory note or other Instrument or any Letter of Credit with a value in excess of $500,000 individually or a value in excess of $2,500,000 in the aggregate.
SECTION 3.02. Enforceability of Navistar Financial Receivables. Navistar Financial represents and warrants that to the best knowledge of Navistar Financial, (1) each Navistar Financial Receivable (i) constitutes a legal, valid and binding obligation of the related Account Debtor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law and (ii) complies in all material respects with all applicable legal requirements, including, without limitation, all state and federal usury laws and (2) the amounts represented by Navistar Financial to the Trustee from time to time as owing to Navistar Financial in respect of the Navistar Financial Receivables will at such times be accurate in all material respects.
SECTION 3.03. Location of Collateral. As of the date hereof, the Perfection Certificate is correct and complete in all material respects and correctly sets forth the location of all of the Collateral (other than (i) Collateral to be delivered to the Trustee under this Agreement and (ii) repossessed and/or seized Inventory and Equipment held by any Dealer that is not a Used Truck Center).
SECTION 3.04. Jurisdiction of Organization; Chief Executive Office. As of the date hereof, the Perfection Certificate correctly sets forth the jurisdiction of organization of Navistar Financial and the location of the chief executive office of Navistar Financial.
SECTION 3.05. Subsidiaries. As of the Effective Date, Schedule E sets forth the exact legal name, jurisdiction of incorporation and capital stock ownership of each
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Subsidiary owned by Navistar Financial. The amount listed directly opposite the name of each Subsidiary of Navistar Financial under the column heading “Subsidiary Shares” in such Schedule correctly states the number of shares of such Subsidiary’s capital stock outstanding as of the date hereof.
ARTICLE IV
COVENANTS
SECTION 4.01. Filings and Further Assurances. (a) In respect of all Collateral, Navistar Financial will, at its expense, take the following steps:
(i) as to all (a) Navistar Financial Receivables (except those covered by clause (ii) below), (b) Related Receivable Rights, (c) Marketable Securities, (d) General Intangibles and related rights and privileges described in Section 2.01(iii) (except any such rights and privileges covered by clause (iv) below), (e) Documents, (f) Inventory, (g) Equipment, (h) Books and Records and (i) other Collateral, Navistar Financial will at all times on and after the date hereof cause UCC financing statements and continuation statements to be filed in all applicable jurisdictions as required to perfect the Trustee’s Security Interest, to the extent that applicable law permits perfection thereof by filing against Navistar Financial under the UCC;
(ii) as to any Pledged Instrument (other than any Subsidiary Note, as to which the provisions of Section 4.03 will apply) (including, without limitation, any Pledged Instrument received by Navistar Financial as a result of Navistar Financial’s realization upon the collateral security for any Collateral) with a value in excess of $500,000 individually or a value in excess of $2,500,000 in the aggregate, other than any check or draft constituting a payment in respect of any Navistar Financial Receivable, as to which the provisions of Section 4.07 shall apply, Navistar Financial will, immediately upon receiving such Pledged Instrument, deliver it or cause it to be delivered to the Trustee, a co-trustee or any of their respective agents;
(iii) as to all Marketable Securities (including, without limitation, any instrument received by Navistar Financial as a result of Navistar Financial’s realization upon the collateral security for any Collateral), Navistar Financial will comply with the provisions of Section 4.02;
(iv) as to all Subsidiary Shares and Subsidiary Notes, Navistar Financial will comply with Section 4.03;
(v) as to Insurance Policies, Navistar Financial will comply with the provisions of Section 4.06 (including, without limitation, by providing evidence of insurance renewals as required under Section 4.06 in form and substance reasonably acceptable to the Trustee); and
(vi) as to all Deposit Accounts (other than the Blocked Account), all funds deposited therein and any interest earned thereon, by the later of the date hereof and the date each such Deposit Account is established, Navistar Financial will notify the organization with which such Deposit Account is maintained of the Trustee’s Security
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Interest therein and obtain from such organization and furnish to the Trustee a written acknowledgment of and consent to such notice and written confirmation that such organization (x) has not received notice of any other Lien or claim on such Deposit Account, (y) does not itself have any Lien or other claim on such Deposit Account other than any Permitted Lien and (z) to the extent obtainable by Navistar Financial using commercially reasonable efforts, irrevocably waives its right of set-off with respect to such Deposit Account except its right to set-off against such Deposit Account the face amount of any check deposited in and credited to such Deposit Account which is subsequently returned for any reason, and will take such other action as may be necessary or appropriate from time to time under the UCC to perfect the Trustee’s Security Interest in any Deposit Account.
(b) Navistar Financial will and will cause each Navistar Financial Subsidiary to, from time to time, at its expense, execute, deliver, file and record any other statement, assignment, instrument, document, agreement or other paper and take any other action that from time to time may be necessary, or that the Trustee may reasonably request, in order to create, preserve, perfect, confirm or validate the Trustee’s Security Interest or any security interest granted as collateral security for any Collateral, or to enable the Trustee to obtain the full benefits of this Agreement or any security agreement securing any Collateral, or to exercise and enforce any of its rights, powers and remedies hereunder or thereunder with respect to any of the Collateral. If Navistar Financial or the servicer of any mortgage or deed of trust securing any Collateral acquires title to any real property with a fair market value in excess of $1,000,000 on foreclosure of any such mortgage or deed of trust then pledged hereunder (or pursuant to any deed in lieu of foreclosure) or repossesses any other real property collateral with a fair market value in excess of $1,000,000 securing any Collateral, Navistar Financial will promptly provide written notice thereof to the Trustee and the other Secured Parties and will, at the reasonable request of the Required Secured Parties and at its own expense,
(i) promptly (and in any event, within five Business Days) provide written notice of such request of the Required Secured Parties to the Trustee and the other Secured Parties; and
(ii) no later than the date that is 90 days after the provision of such written notice described in clause (i) above (or such later date as the Trustee may reasonably agree):
(A) deliver to the Trustee a completed “Life-of-Loan” Federal Emergency Management Agency standard flood hazard determination with respect to such real property (together with a notice about special flood hazard area status and flood disaster assistance duly executed by Navistar Financial);
(B) deliver to the Trustee a copy of, or a certificate as to coverage under, and a declaration page relating to, any insurance policies required by Section 4.06(b) (including, without limitation, flood insurance policies) and the applicable provisions of the Security Documents, each of which (i) shall be endorsed or otherwise amended to include a “standard” or “New York” lender’s loss payable or mortgagee endorsement (as applicable), naming the Trustee as mortgagee and/or loss payee on behalf of the Secured Parties, (ii) shall name the Trustee, on behalf of the Secured Parties, as additional insured,
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(iii) in the case of flood insurance, shall (a) identify the addresses of, and structures on, each property located in a special flood hazard area, (b) indicate the applicable flood zone designation, the flood insurance coverage and the deductible relating thereto and (c) provide that the insurer will give the Trustee 30 days written notice of cancellation or non-renewal and (iv) shall be otherwise in form and substance reasonably satisfactory to the Administrative Agent;
(C) no earlier than the date that is 30 days after the provision of such written notice described in clause (i) above, execute and record, or cause such servicer to execute and record, a mortgage or deed of trust with respect to any such real property in favor of the Trustee for the benefit of the Secured Parties and take all further action as may be necessary, or that the Trustee may reasonably request, so that the Trustee shall have a valid and perfected Lien on such real property prior to all Liens other than Permitted Liens.
(c) Navistar Financial will not, and will not permit any Navistar Financial Subsidiary to, change its name, identity or corporate structure in any manner which would be reasonably likely to make any financing or continuation statement filed hereunder seriously misleading within the meaning of Section 9-507 of the UCC (or any other then applicable provision of the UCC) unless Navistar Financial shall have given the Trustee at least 15 days’ prior written notice thereof and shall have taken all action (or made arrangements to take such action substantially simultaneously with such change if it is impossible to take such action in advance) necessary or reasonably requested by the Trustee to amend such financing statement or continuation statement so that it is not seriously misleading.
(d) To the fullest extent permitted by law, Navistar Financial authorizes the Trustee to file or record financing and continuation statements and amendments thereto with respect to the Collateral; provided, however, that the Trustee shall have no obligation to file or record such financing and continuation statements and amendments thereto. Navistar Financial authorizes the Trustee to use the Collateral description “all personal property” in any such financing statements.
(e) If any Collateral is at any time in the possession or control of any warehouseman or bailee or any of Navistar Financial’s agents or processors (including, without limitation, any Dealer or any Used Truck Center), Navistar Financial shall, at its expense, notify such warehouseman, bailee, agent or processor of Navistar Financial’s ownership interest in such Collateral and the Trustee’s Security Interest therein and to hold all such Collateral for the Trustee’s account; provided that, in the case of any such Person that is a Dealer, such notification may be made by inserting in Navistar Financial’s next regularly scheduled general mailing to Dealers a statement to the effect that (i) Navistar Financial has entered into this Agreement and (ii) any property of Navistar Financial (including, without limitation, any repossessed trucks) that may be held from time to time by such Dealer is owned by Navistar Financial in accordance with the terms of certain agreements between Navistar Financial and International and is subject to the Trustee’s Security Interest therein. If any collateral security for any Collateral is at any time in the possession or control of any warehouseman or bailee or any of Navistar Financial’s or any Navistar Financial Subsidiary’s agents or processors, Navistar Financial shall, at its expense, notify such warehouseman, bailee, agent or processor of the security interest to hold all such collateral security for the account of Navistar Financial. The foregoing shall apply to single
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items of Collateral described herein with a fair market value greater than $100,000; provided that if the aggregate amount of Collateral with a fair market value not exceeding $100,000 exceeds $10,000,000 (the “Maximum Level”), the foregoing shall apply to all Collateral acquired after such Maximum Level has been exceeded.
(f) If any Collateral constituting “goods” (as defined in the UCC) is regularly held for sale by any third party (including, without limitation, any Used Truck Center), Navistar Financial shall, at its expense, promptly following the later of the date hereof and the date on which such third party begins regularly to receive any such goods, (i) file in the applicable filing offices appropriately completed UCC financing statements, and (ii) execute, deliver, file and record any other statement, assignment, instrument, document, agreement or other paper and take any other action that from time to time may be necessary, or that the Trustee may reasonably request, to ensure that such goods shall not be subject to the claims of such third party’s creditors. The foregoing provision shall apply to single items of Collateral described herein with a fair market value greater than $100,000; provided that if the aggregate amount of Collateral with a fair market value not exceeding $100,000 exceeds the Maximum Level, the foregoing provision shall apply to all Collateral acquired after such Maximum Level has been exceeded.
(g) Within 60 days after the date hereof, Navistar Financial shall furnish to the Trustee file search reports from each UCC filing office set forth in Schedule 4 to the Perfection Certificate confirming the filing information set forth in such Schedule; provided that if Navistar Financial’s reasonable efforts to provide such a search report within such 60-day period from any such filing office are unsuccessful, Navistar Financial shall furnish to the Trustee such a file search report from such filing office as promptly as is reasonably practicable.
(h) If a Notice of Acceleration is in effect, Navistar Financial shall, subject to Section 2.06, immediately upon its receipt thereof, deliver or cause to be delivered to the Trustee for deposit in the Collateral Account all Proceeds of Equipment, General Intangibles or Inventory that is sold or otherwise disposed of pursuant to Section 2.05.
(i) Navistar Financial will not, without the prior consent of the Releasing Secured Parties, sell, lease, exchange, assign or otherwise dispose of or grant any option with respect to any Collateral, except as permitted by the Credit Agreement, Section 2.02, Section 2.05, Section 4.02 or Section 4.07(f).
(j) If Navistar Financial acquires an ownership interest in any United States Intellectual Property registrations or applications after the date hereof, Navistar shall prior to the 15th day of the fiscal year immediately succeeding the fiscal year of such acquisition, provide notice to the Trustee of such acquisition and promptly after providing such notice, (i) execute and deliver to the Trustee an appropriate Intellectual Property security agreement to evidence the Trustee’s Security Interest therein and (ii) make any necessary or advisable recordations with the United States Patent and Trademark Office and the United States Copyright Office, as applicable.
SECTION 4.02. Marketable Securities. (a) On or before the date hereof, Navistar Financial shall transfer or cause to be transferred to one or more of the Securities Accounts referred to below (i) all Marketable Securities (other than (x) repurchase agreements and (y) Marketable Securities as to which ownership or the existence of Trustee’s Security Interest is evidenced by entries on the books of a Securities Intermediary, custodian or other
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entity) owned by Navistar Financial on the date hereof, and (ii) all securities subject to, and all confirmations relating to, repurchase agreements constituting Marketable Securities owned by Navistar Financial on the date hereof. The Marketable Securities so transferred (other than repurchase agreements and confirmations) shall be in suitable form for transfer by delivery or shall be accompanied by duly executed and undated instruments of transfer or assignment in blank, in form and substance reasonably satisfactory to the Trustee.
(b) On and after the date hereof, all investments in Marketable Securities by Navistar Financial (except investments in Marketable Securities that are UCC Deposit Accounts or are covered by subsection (c) below) shall be made by and in the name of the Trustee at the written direction of Navistar through one or more accounts (each a “Securities Account” as defined in UCC Article 8-501) (i) established in the name of the Trustee, (ii) maintained with the Trustee or any agent thereof appointed for the purpose as provided in subsections (c) and (d) below and (iii) subject to a customary securities account control agreement among the applicable Securities Intermediary, Navistar Financial and the Trustee, in form and substance reasonably satisfactory to the Trustee and the Administrative Agent, establishing that such Securities Account is subject to the Trustee’s “control” as defined in UCC Article 8-106; provided that no such securities account control agreement shall be required for any Securities Account with a monthly average balance of less than $10,000,000; provided, further, that the requirements set forth in this clause (iii) shall not apply on or prior to the date that is 60 days after the date hereof (or such later date agreed to by the Administrative Agent in its reasonable discretion). Unless a Notice of Acceleration is in effect, the purchase, sale or presentation for payment of any such Marketable Securities and the receipt by Navistar Financial of the proceeds of the sale or collection thereof and any interest paid thereon shall all occur as provided below in this subsection. To initiate the purchase of such Marketable Securities, Navistar Financial will in writing (i) inform the Trustee as to the particulars of such purchase and (ii) cause to be transferred to a bank account designated by, and in the name of, the Trustee (either as Trustee or in its individual capacity) funds, and/or instruct the Trustee to apply funds received by the Trustee in respect of other Marketable Securities, in an amount equal to the sum of (x) the purchase price plus (y) any brokers’ fees and other out-of-pocket expenses reasonably expected to be incurred in connection with such purchase, whereupon the Trustee will make arrangements (either directly or through one or more agents) for the purchase of such Marketable Securities, including the payment of the purchase price thereof. All Marketable Securities (other than repurchase agreements) purchased by the Trustee as aforesaid (and all securities subject to, together with all confirmations relating to, repurchase agreements) will be delivered to and, subject to the following sentence, held in the Securities Accounts. To initiate a sale or presentation for payment of such Marketable Securities, Navistar Financial will inform the Trustee in writing as to the particulars of such sale or presentation, whereupon the Trustee will make arrangements (either directly or through the appropriate agents) for the sale or presentation of such Marketable Securities and the transfer of funds received by the Trustee or such agents on the sale or collection of such Marketable Securities to such bank account of Navistar Financial (other than a Proceeds Deposit Account that is not a UCC Deposit Account) as shall have been designated by Navistar Financial for the purpose, or for the application of such funds to another investment in Marketable Securities, as Navistar Financial shall elect; provided that the Trustee shall revoke any such arrangements previously made for the transfer of such funds to a bank account of Navistar Financial promptly after receiving a Notice of Acceleration. Any interest received by the Trustee or any agent thereof in respect of Marketable Securities Assets held in a Securities Account will be similarly transferred or applied.
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(c) Notwithstanding anything contained in this Agreement to the contrary, on and after the date hereof Navistar Financial may make investments through a Securities Account in Marketable Securities as to which ownership or the existence of a Security Interest is evidenced by entries on the books of a Securities Intermediary, custodian or other entity; provided that,
(i) (A) such investment is made through a Securities Account maintained by the Trustee with a Permitted Financial Intermediary,
(B) concurrently with the making of such investment, such Permitted Financial Intermediary sends to the Trustee confirmation, substantially in the form of Exhibit B hereto, of the purchase of such Marketable Securities, and also by book entry to the relevant Securities Account identifies such Marketable Securities as subject to the Trustee’s Security Interest,
(C) such Permitted Financial Intermediary shall have previously received a copy of this Agreement signed by Navistar Financial, and
(D) Navistar Financial promptly takes any other action that may be necessary under the UCC, or that the Trustee or the Administrative Agent may reasonably request (including entering into a control agreement with such Permitted Financial Intermediary), to perfect the Trustee’s Security Interest in such Marketable Securities ;
or
(ii) (A) before Navistar Financial makes such investment, the Trustee (1) has received an Opinion of Counsel setting forth the procedures to be followed so that, after making such investment, the Trustee will have a valid security interest in the relevant Marketable Securities which is perfected to the same extent as if physical delivery were made to the Trustee of Marketable Securities in bearer definitive form or in other suitable form for such delivery, and (2) has not received notice of any change in the law upon which such Opinion of Counsel is based, and
(B) the procedures set forth in such Opinion of Counsel are followed.
Navistar Financial shall promptly notify the Trustee as to any change in the law upon which any Opinion of Counsel referred to in clause (ii)(A) above is based and shall not make any investment in Marketable Securities of the type covered in such Opinion of Counsel (other than any such investment made in compliance with clause (i) above) until it furnishes the Trustee with a new Opinion of Counsel to the effect set forth in clause (ii)(A)(1) above.
To initiate the purchase of any Marketable Securities in accordance with clause (i) above, Navistar Financial will (x) inform the Trustee in writing as to the particulars of such purchase and (y) cause to be transferred to a bank account designated by, and in the name of, the Trustee (either as Trustee or in its individual capacity) funds, and/or instruct the Trustee to apply funds received by the Trustee in respect of other Marketable Securities , in an amount equal to the sum of (x) the purchase price plus (y) any brokers’ fees and other out-of-pocket expenses reasonably expected to be incurred in connection with such purchase, whereupon the Trustee will make arrangements through a Permitted Financial Intermediary for the purchase of such Marketable Securities , including the payment of the purchase price thereof.
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Unless a Notice of Acceleration is in effect, the Trustee shall, upon the written instructions and for the account of Navistar Financial, sell or otherwise dispose of Marketable Securities in which Navistar Financial has invested pursuant to this subsection (c). To initiate a sale or other disposition of such Marketable Securities , Navistar Financial will inform the Trustee in writing as to the particulars of such sale or presentation, whereupon the Trustee will make arrangements through, and in accordance with the usual procedures of, the relevant Permitted Financial Intermediary for the sale or disposition of such Marketable Securities , and the transfer of funds received by the Trustee on the sale or collection of such Marketable Securities to such bank account of Navistar Financial (other than a Proceeds Deposit Account that is not a UCC Deposit Account) as shall have been designated by Navistar Financial for the purpose, or for the application of such funds to another investment in Marketable Securities , as Navistar Financial shall elect; provided that the Trustee shall revoke any such arrangements previously made for the transfer of such funds to a bank account of Navistar Financial promptly after receiving a Notice of Acceleration. Any interest received by the Trustee or any agent thereof in respect of Marketable Securities held in accordance with this subsection (c) will be similarly transferred or applied.
(d) The Trustee shall from time to time appoint, as its agent or agents, one or more Persons (which in no case shall be Navistar Financial or an Affiliate, employee or agent of Navistar Financial) designated by Navistar Financial and reasonably acceptable to the Trustee, located in New York, with whom a Securities Account shall be established and maintained. Prior to establishing such a Securities Account, the Person so appointed shall deliver to the Trustee a writing acknowledging that (i) in opening such Securities Account and holding securities therein, such Person is acting as agent of the Trustee, and will conduct transactions in securities in such account in the name and upon the instruction of the Trustee (with any confirmations of such transactions sent by such Person to reflect that fact), (ii) such Person has entered into a customary securities account control agreement with Navistar Financial and the Trustee, in form and substance reasonably satisfactory to the Trustee and the Administrative Agent, establishing that the such Securities Account is subject to the Trustee’s “control” as defined in UCC Article 8-106; provided that no such securities account control agreement shall be required for any Securities Account with a monthly average balance of less than $10,000,000 and (iii) such Person shall in no event (except upon the termination of this Agreement as provided in Section 9.12) deliver any securities held in such Securities Account to Navistar Financial or any Affiliate, employee or agent of Navistar Financial. The provisions of clauses (ii) and (iii) of the preceding sentence shall also apply to any Securities Account established and maintained with the Trustee.
(e) Upon receipt of a Notice of Acceleration and thereafter so long as such Notice of Acceleration is in effect, the Trustee shall transfer or cause to be transferred for deposit in the Collateral Account any funds in the Securities Accounts.
(f) Upon the sale or disposition of any Marketable Securities pursuant to this Section, the Trustee’s Security Interest therein (but not in the Proceeds arising from such sale or disposition) shall, without any further action on the part of the Trustee, be automatically released.
SECTION 4.03. Subsidiary Shares and Subsidiary Notes. (a) On or before the date hereof, Navistar Financial shall deliver or cause to be delivered to the Trustee, a co-trustee or any of their respective agents, all Subsidiary Notes and certificates representing Subsidiary
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Shares endorsed or accompanied by duly executed and undated instruments of transfer and assignment in blank so as to be in suitable form for transfer by endorsement and delivery by the Trustee, all in form and substance reasonably satisfactory to the Trustee.
(b) If a Notice of Acceleration is in effect, the Trustee may, in its sole discretion, cause any or all of the Subsidiary Shares to be transferred of record into the name of the Trustee or its nominee. If a Notice of Acceleration is in effect, Navistar Financial will promptly give or cause to be given to the Trustee copies of any notices or other communications received by it with respect to Subsidiary Shares registered in the name of Navistar Financial or any Navistar Financial Subsidiary and required to be delivered to the Trustee hereunder and the Trustee will promptly give to Navistar Financial copies of any notices and communications received by the Trustee with respect to Subsidiary Shares registered in the name of the Trustee or its nominee.
(c) If any Navistar Financial Subsidiary at any time issues any shares of capital stock of any class (including, without limitation, substitute shares of capital stock) to Navistar Financial or owes any Intercompany Debt which is evidenced by a promissory note or Instrument, including any substitute note or instrument, which has not previously been delivered hereunder, Navistar Financial will immediately pledge and deposit with the Trustee, a co-trustee or any of their respective agents certificates representing all such shares and such notes or instruments evidencing such Intercompany Debt as additional security for the Secured Obligations; provided that in no event shall more than 65% of the total outstanding capital stock of any Excluded Foreign Subsidiary be required to be so pledged and deposited. All such shares, notes or instruments shall be endorsed or accompanied by duly executed and undated instruments of transfer and assignment in blank so as to be in suitable form for transfer by endorsement and delivery by the Trustee, all in form and substance reasonably satisfactory to the Trustee. All such shares, notes and instruments constitute Pledged Securities and are subject to all relevant provisions of this Agreement.
(d) If any Navistar Financial Subsidiary at any time holds any certificate or Instrument representing such Navistar Financial Subsidiary’s right to receive any payment from the purchasers of any Receivables sold by such Navistar Financial Subsidiary or from any trust to which any Receivables shall have been transferred (including, without limitation, any substitute certificate or instrument) which has not been previously delivered hereunder, Navistar Financial will immediately cause such Navistar Financial Subsidiary to pledge and deposit such certificate or instrument with Navistar Financial, and Navistar Financial will immediately deliver such certificate or instrument to the Trustee hereunder as additional security (to the extent of Navistar Financial’s interest therein) for the Secured Obligations.
(e) If a Notice of Acceleration is in effect, Navistar Financial shall promptly upon the request of the Required Secured Parties, (i) deliver to the Trustee hereunder as additional security (to the extent of Navistar Financial’s interest therein) for the Secured Obligations any Instruments or Letters of Credit which are pledged to and held by or on behalf of Navistar Financial and (ii) make appropriate arrangements for any Marketable Securities held in a Securities Account to be held by a Permitted Financial Intermediary in the name and for the account of the Trustee as additional security (to the extent of Navistar Financial’s interest therein) for the Secured Obligations. All such instruments and letters of credit shall be endorsed or accompanied by duly executed and undated instruments of transfer and assignment in blank so as to be in suitable form for transfer by endorsement and delivery by the Trustee, all in form and substance reasonably satisfactory to the Trustee.
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(f) The Trustee shall have the right to receive and, while any Notice of Acceleration is in effect, to retain as Collateral hereunder in the Collateral Account all dividends and other payments and distributions made upon or with respect to (A) the Subsidiary Shares and (B) any Pledged Instruments delivered hereunder pursuant to Section 4.01(a)(ii). Navistar Financial shall take all such action as the Trustee may deem necessary or appropriate to give effect to such right. All such dividends and other payments and distributions which are received by Navistar Financial shall be received in trust for the benefit of the Trustee and the other Secured Parties and, if the Trustee so directs so long as a Notice of Acceleration is in effect, shall be segregated from other funds of Navistar Financial and shall forthwith upon demand by the Trustee so long as a Notice of Acceleration is in effect be paid over to the Trustee as Collateral for deposit in the Collateral Account in the same form as received (with any necessary endorsement). After a Notice of Acceleration has been cancelled, the Trustee’s right to retain dividends, interest and other payments and distributions under this Section 4.03(f) shall cease and the Trustee shall pay over to Navistar Financial any such Collateral retained by it while such Notice of Acceleration was in effect.
(g) (i) Unless a Notice of Acceleration shall be in effect, Navistar Financial shall have the right, from time to time, to vote and to give consents, ratifications and waivers with respect to the Subsidiary Shares and the Trustee shall, upon receiving a written request from Navistar Financial, deliver to Navistar Financial or as specified in such request such proxies, powers of attorney, consents, ratifications and waivers in respect of any of the Subsidiary Shares which are registered in the name of the Trustee or its nominee as shall be specified in such request and be in form and substance satisfactory to the Trustee.
(ii) If a Notice of Acceleration has been received by the Trustee and so long as such Notice of Acceleration is in effect, the Trustee shall have the right (to the extent permitted by law), and Navistar Financial shall take all such action as may be necessary, or as the Trustee may reasonably request, to give effect to such right, to vote and to give consents, ratifications and waivers, and take any other action with respect to any or all of the Subsidiary Shares with the same force and effect as if the Trustee were the absolute and sole owner thereof.
SECTION 4.04. Liens on the Collateral. Navistar Financial shall not create or suffer to exist any Lien on any Collateral other than (only with respect to Collateral other than Subsidiary Shares) Permitted Liens. Without limiting the generality of the foregoing, if any Lien on all or any part of the Collateral shall be filed pursuant to Section 4068 or 302(f) of ERISA or Section 6323 of the Internal Revenue Code, Navistar Financial shall cause such Lien to be released within 30 days after such filing.
SECTION 4.05. Place of Business and Collateral. Navistar Financial will not change the location of any of (i) its places of business, (ii) its chief executive office, (iii) its jurisdiction of incorporation or (iv) the offices or other locations where it keeps or holds any Collateral or any records relating thereto from the location listed in the Perfection Certificate (except to the extent temporary location elsewhere is needed in connection with litigation, repossession or other collection activities) unless Navistar Financial, promptly, and in any event within 30 days after making such change, notifies the Trustee of such change, makes all UCC filings required by Section 4.01(a) and takes all other action necessary, or that the Trustee may reasonably request, to preserve, perfect, confirm and protect (to the extent contemplated hereby) the Trustee’s Security Interest. Navistar Financial will not in any event change the location of any Collateral, if such change would cause the Trustee’s Security Interest in such Collateral to
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lapse or cease to be perfected. Navistar Financial will at all times maintain its chief executive office within one of the 48 contiguous states in which Article 9 of the Uniform Commercial Code (Secured Transactions) is in effect. Navistar Financial will permit the Trustee, or any agent designated by it, at any time and from time to time at the Trustee’s reasonable request during normal business hours with reasonable prior notice, to inspect, audit, check and make abstracts from Navistar Financial’s Books and Records.
SECTION 4.06. Insurance. (a) Navistar Financial will cause any group, property or casualty insurance policy maintained by it on the Collateral to name the Trustee, for the benefit of the Secured Parties, as an additional named insured, loss payee, beneficiary or otherwise, as appropriate, to the extent its interest may appear.
(b) If any portion of any real property that is subject to a mortgage or deed of trust in favor of the Trustee for the benefit of the Secured Parties is at any time located in an area identified by the Federal Emergency Management Agency (or any successor agency) as a special flood hazard area with respect to which flood insurance has been made available under the Flood Insurance Laws, then Navistar Financial will (i) maintain, or cause to be maintained, with a financially sound and reputable insurer, flood insurance in an amount and otherwise sufficient to comply with all applicable rules and regulations promulgated pursuant to the Flood Insurance Laws, (ii) cooperate with the Trustee and provide information reasonably required by the Trustee and the other Secured Parties to comply with the Flood Laws and (iii) upon the request of the Administrative Agent, deliver to the Trustee evidence of such compliance reasonably satisfactory to the Trustee and the Required Secured Parties, including, without limitation, evidence of annual renewals of such insurance.
SECTION 4.07. Collection Procedures. (a) On or before the date hereof, Navistar Financial will establish a system of operations, accounts and instructions to the Concentration Bank, Collection Banks, Proceeds Account Banks, International, Dealers and Account Debtors, as provided in this Section.
Navistar Financial shall, subject to the provisions of Section 4.13, (i) instruct any Account Debtor obligated to make payments under any Navistar Financial Receivable (other than any Navistar Financial Receivable referred to in clause (ii) below) to make such payments directly to a separate special purpose account of Navistar Financial maintained at a Proceeds Account Bank and containing only Proceeds (a “Proceeds Deposit Account”) and (ii) instruct any Account Debtor obligated to make payments under any Navistar Financial Receivable referred to in clause (d) of the definition of Navistar Financial Receivables to make such payments (except to the extent that any Permitted Receivables Sale Agreement may require otherwise with respect to Receivables sold thereunder) to lock-boxes (the “Lock-boxes”) (in the case of any payments in the form of cash, checks, drafts and other instruments or items for the payment of money) and accounts (the “Collection Accounts”) (in the case of any payments made by wire transfer or similar electronic means) maintained by Navistar Financial with the Collection Banks. Payments on account of Wholesale Receivables shall be paid to Lock-boxes and Collection Accounts which are separate from those to which payments on account of Retail Receivables are made. Navistar Financial shall, and shall request International and each Dealer to, pay forthwith into Lock-boxes and Collection Accounts, as appropriate, in the form received (or, in the case of any such payment received by wire transfer or similar electronic means, by such means), all payments on account of Wholesale Receivables and Retail Receivables received directly by Navistar Financial, International or any such Dealer; provided that any such payments
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received by International shall be deposited forthwith by International into the applicable retail suspense account of Navistar Financial (each such suspense account and each suspense account referred to in the next succeeding sentence, a “Suspense Account”) maintained by a Collection Bank. Navistar Financial shall instruct each Collection Bank to transfer by wire transfer or similar electronic means, on the same Business Day as received, all amounts deposited by wire transfer or similar electronic means into the wholesale or retail Collection Account maintained by such Collection Bank pursuant to this Section into a special purpose account of Navistar Financial maintained at the Concentration Bank (the “Proceeds Allocation Account”); provided that, if such Collection Bank receives any such amounts on a day that is not a Business Day, or too late on a Business Day to make such a transfer in accordance with such Collection Bank’s normal procedures, then such Collection Bank may make such transfer on the next succeeding Business Day. Navistar Financial shall instruct each Collection Bank (x) to deposit all cash, checks, drafts and other instruments or items for the payment of money paid into the wholesale or retail Lock-box (if any) maintained by such Collection Bank pursuant to this Section forthwith in the wholesale or retail Suspense Account of Navistar Financial, as appropriate, maintained by such Collection Bank (except that such Collection Bank may deal with items which are postdated, improperly endorsed or otherwise irregular in accordance with such Collection Bank’s usual procedures) and (y) to transfer by wire transfer or similar electronic means all cash, checks, drafts and other instruments or items deposited into any Suspense Account maintained by such Collection Bank to the Proceeds Allocation Account on the same Business Day as such items clear in accordance with such Collection Bank’s customary clearing schedule; provided that, if any such items so clear too late on a Business Day to make such a transfer in accordance with such Collection Bank’s normal procedures, then such Collection Bank may make such transfer on the next succeeding Business Day. Navistar Financial shall not deposit or, except as set forth in this subsection (a), cause to be deposited any amount in any Proceeds Deposit Account.
The Trustee is hereby directed to instruct the Concentration Bank to follow the instructions of Navistar Financial given pursuant to this subsection (a). Navistar Financial shall instruct the Concentration Bank to retain all amounts transferred into the Proceeds Allocation Account in such account until they have been identified by Navistar Financial, either by actual identification or, so long as no Notice of Acceleration is in effect, by reasonable estimation in accordance with Navistar Financial’s usual procedures, as (i) Sold Collections, (ii) Retained Collections or (iii) other amounts. Upon such identification, (w) Navistar Financial shall provide prompt notice thereof to the Concentration Bank and the Trustee, (x) Retained Collections shall be transferred forthwith to a Proceeds Deposit Account, (y) Sold Collections shall be transferred in accordance with the terms under which the underlying Receivables were sold and (z) other amounts shall be transferred in accordance with Navistar Financial’s usual procedures. Such identification by Navistar Financial shall be effected as soon as reasonably practicable.
Navistar Financial shall not permit any Proceeds to remain in any Deposit Account (other than any such account that is a UCC Deposit Account) more than 10 days after receipt of such Proceeds by a Collection Bank.
If, notwithstanding the foregoing, the Trustee or any Purchaser shall in good faith challenge Navistar Financial’s identification of any item of payment or shall in good faith challenge any of Navistar Financial’s formulas for allocating items of payment, KPMG (or such other accounting firm as shall be acceptable to Navistar Financial, such Purchaser and the Trustee), at Navistar Financial’s expense, shall determine the proper identification of such item of payment or the propriety of such allocation formula. If any such determination shall result in
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additional amounts being transferable to a Proceeds Deposit Account with respect to any such item of payment, Navistar Financial shall promptly so transfer such additional amounts and, if it has been determined that Navistar Financial’s formula for allocation was in error, the proper allocation formula shall thereafter be applied to allocate items of payment, subject to any subsequent revision as provided herein. No such determination shall prevent Navistar Financial, the Trustee or any Purchaser from litigating a claim to a greater portion of such funds.
Navistar Financial will use all reasonable efforts to cause International and each Account Debtor, Dealer, Proceeds Account Bank and Collection Bank to comply with the foregoing procedures and instructions; provided that the failure of any of them so to comply shall not constitute a breach of this subsection (a).
(b) The name in which such Lock-boxes, Collection Accounts, Suspense Accounts and Proceeds Allocation Account are carried shall clearly indicate that (i) certain of the items and funds deposited therein are the property of Navistar Financial subject to the Trustee’s Security Interest and (ii) certain other items and funds deposited therein are the property of one or more other Persons. The name in which each Proceeds Deposit Account is carried shall reflect the fact that all items and funds deposited therein are the property of Navistar Financial subject to the Trustee’s Security Interest hereunder. The instructions governing such Lock-boxes and accounts shall not be altered in any material manner which is inconsistent with any Secured Instrument or which could reasonably be expected to adversely affect the Trustee, any Secured Party or any other holder of a Secured Obligation without the prior consent of the Required Secured Parties.
(c) On or prior to the date hereof, as to (i) any Lock-box, Suspense Account or Collection Account with a Collection Bank established on or before the date hereof and (ii) any Proceeds Deposit Account with a Proceeds Account Bank established on or before the date hereof, Navistar Financial has caused such bank to deliver a writing to the Trustee confirming that the bank in question has received the instructions and established the relevant accounts and procedures referred to in this Section 4.07.
(d) Not later than 60 days after the date hereof (or such later date agreed to by the Administrative Agent in its reasonable discretion), as to any Lock-box, Suspense Account or Collection Account with a Collection Bank established on or before the date hereof, and prior to establishing any Lock-box, Suspense Account or Collection Account with any bank after the date hereof, Navistar Financial will (A) cause such bank to deliver a writing to the Trustee confirming that the bank in question has (x) received the instructions and established the relevant accounts and procedures referred to in this Section and (y) expressly agreed with Navistar Financial in an agreement governing such Lock-box, Suspense Account or Collection Account, as applicable, that New York will be such bank’s jurisdiction for purposes of Article 9-304 of the Uniform Commercial Code as in effect in the State of New York or (B) execute and deliver to the Trustee an account control agreement, in form and substance reasonably satisfactory to the Trustee and the Administrative Agent, establishing that the such Lock-box, Suspense Account or Collection Account, as applicable, is subject to the Trustee’s “control” as defined in UCC Article 9-104 and whereby the bank maintaining such Lock-box, Suspense Account or Collection Account agrees to comply only with the instructions originated by the Trustee, without the further consent of Navistar Financial, upon the delivery of a notice of sole control by the Trustee. Navistar Financial may, from time to time after the date hereof, designate a bank to act as a Collection Bank and such bank shall become a Collection Bank for purposes of this Agreement, provided
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that (i) either (A) (I) with respect to each Lock-box, Suspense Account and Collection Account maintained with such bank, such bank expressly agrees with Navistar Financial in an agreement governing such Lock-box, Suspense Account or Collection Account, as applicable, that New York will be such bank’s jurisdiction for purposes of Article 9-304 of the Uniform Commercial Code as in effect in the State of New York and (II) such bank has delivered a writing to the Trustee confirming that the bank in question has (x) received the instructions and established the relevant accounts and procedures referred to in this Section and (y) with respect to each Lock-box, Suspense Account and Collection Account maintained with such bank, expressly agreed with Navistar Financial in an agreement governing such Lock-box, Suspense Account or Collection Account, as applicable, that New York will be such bank’s jurisdiction for purposes of Article 9-304 of the Uniform Commercial Code as in effect in the State of New York or (B) Navistar Financial and the bank in question have executed and delivered to the Trustee an account control agreement with respect to each Lock-box, Suspense Account and Collection Account maintained at such bank at such time, in form and substance reasonably satisfactory to the Trustee and the Administrative Agent, establishing that the such Lock-box, Suspense Account or Collection Account, as applicable, is subject to the Trustee’s “control” as defined in UCC Article 9-104 and whereby such bank agrees to comply only with the instructions originated by the Trustee, without the further consent of Navistar Financial, upon the delivery of a notice of sole control by the Trustee and (iii) Navistar Financial has delivered to the Trustee an amended Schedule B, setting forth the then current list of Collection Banks.
(e) Not later than 60 days after the date hereof (or such later date agreed to by the Administrative Agent in its reasonable discretion), as to any Proceeds Deposit Account with a Proceeds Account Bank established on or before the date hereof, and prior to establishing any Proceeds Deposit Account with any bank after the date hereof, Navistar Financial will execute and deliver to the Trustee an account control agreement, in form and substance reasonably satisfactory to the Trustee and the Administrative Agent, establishing that the such Proceeds Deposit Account is subject to the Trustee’s “control” as defined in UCC Article 9-104 and whereby the bank maintaining such Proceeds Deposit Account agrees to comply only with the instructions originated by the Trustee, without the further consent of Navistar Financial, upon the delivery of a notice of sole control by the Trustee. Navistar Financial may, from time to time after the date hereof, designate a bank to act as a Proceeds Account Bank and such bank shall become a Proceeds Account Bank for purposes of this Agreement, provided that (i) Navistar Financial and the bank in question have executed and delivered to the Trustee an account control agreement with respect to each Proceeds Deposit Account maintained at such bank at such time, in form and substance reasonably satisfactory to the Trustee and the Administrative Agent, establishing that each applicable Proceeds Deposit Account is subject to the Trustee’s “control” as defined in UCC Article 9-104 and whereby such bank agrees to comply only with the instructions originated by the Trustee, without the further consent of Navistar Financial, upon the delivery of a notice of sole control by the Trustee and (ii) Navistar Financial has delivered to the Trustee an amended Schedule C, setting forth the then current list of Proceeds Account Banks.
(f) Unless a Notice of Acceleration is in effect, Navistar Financial shall be entitled to instruct any Proceeds Account Bank to transfer amounts held in a Proceeds Deposit Account maintained with such bank to or upon the order of Navistar Financial, whereupon, unless such amounts are deposited in a UCC Deposit Account, the Trustee’s Security Interest in such amounts (but not in any property or rights concurrently or subsequently acquired by Navistar Financial in consideration of Navistar Financial’s payment of any such amounts) shall cease immediately without any further action on the part of the Trustee; provided that Navistar
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Financial shall not instruct any Proceeds Account Bank to transfer funds from a Proceeds Deposit Account to any other bank account maintained by Navistar Financial which is not a Proceeds Deposit Account except to facilitate the prompt application thereof in Navistar Financial’s business. With respect to any Proceeds Deposit Account established on or before the date hereof, at any time prior to the execution and delivery of the account control agreement with respect to such Proceeds Deposit Account required pursuant to subsection (f) above, after receiving notice from the Trustee that a Notice of Acceleration is in effect, each Proceeds Account Bank shall immediately and from time to time thereafter (unless it receives notice from the Trustee stating that such Notice of Acceleration is no longer in effect) transfer all funds held in its Proceeds Deposit Accounts to the Trustee for deposit in the Collateral Account and shall notify the Trustee by electronic transmission as to the details of each such transfer. With respect to any Proceeds Deposit Account that is subject to an account control agreement as required pursuant to subsection (f) above, upon receipt of a Notice of Acceleration, the Trustee shall deliver to the applicable Proceeds Account Bank a notice of sole control with respect to such Proceeds Deposit Account, and instruct the applicable Proceeds Account Bank to immediately and from time to time thereafter (unless it receives notice from the Trustee stating that such notice of sole control is no longer in effect) transfer all funds held in such Proceeds Deposit Account to the Trustee for deposit in the Collateral Account and notify the Trustee by electronic transmission as to the details of each such transfer.
(g) Unless a Notice of Acceleration is in effect, Navistar Financial will, at its expense and in accordance with its normal commercial practices, for the benefit of the Trustee:
(i) ask for, demand, sue for, collect or cause to be collected from the Account Debtor or Account Debtors on each Navistar Financial Receivable, as and when due, any and all amounts, including interest, owing under or on account of such Navistar Financial Receivable;
(ii) compromise and settle any dispute related to any Navistar Financial Receivable; and
(iii) take or cause to be taken such action to repossess goods securing any Navistar Financial Receivable, or to enforce any rights or liens arising thereunder and to dispose of such repossessed goods as Navistar Financial may deem proper;
provided that Navistar Financial will not be required to take any action under this subsection (g) which would be contrary to any applicable law or court order.
(h) Prior to the date hereof, the Trustee has caused the Concentration Bank to deliver a writing to the Trustee and Navistar Financial, confirming that the Concentration Bank has received the instructions of the Trustee and Navistar Financial referred to in subsection (a) of this Section 4.07. The Concentration Bank may at any time, by giving written notice to the Trustee and Navistar Financial, resign its position as the Trustee’s agent and be discharged of its responsibilities hereunder, such resignation to be effective upon the appointment by the Trustee of a successor Concentration Bank (which Navistar Financial shall have the right to designate), the acceptance of such appointment by such successor Concentration Bank and the execution and delivery to the Trustee by Navistar Financial and such successor Concentration Bank of an account control agreement, in form and substance reasonably satisfactory to the Trustee and the Administrative Agent, establishing that the Proceeds Allocation Account with such successor
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Concentration Bank is subject to the Trustee’s “control” as defined in UCC Article 9-104 and whereby such successor Collection Bank maintaining such Proceeds Allocation Account agrees to comply only with the instructions originated by the Trustee, without the further consent of Navistar Financial, upon the delivery of a notice of sole control by the Trustee. If no successor Concentration Bank shall be appointed and shall have accepted such appointment within 30 days after the Concentration Bank gives the aforesaid notice of resignation, the Trustee may appoint a successor Concentration Bank with the consent of Navistar Financial or apply to any court of competent jurisdiction to appoint a successor Concentration Bank. Upon the instruction of Navistar Financial, the Trustee shall, upon ten days’ prior notice, remove the Concentration Bank and appoint as its agent a successor Concentration Bank designated by Navistar Financial, provided that such successor Concentration Bank shall have accepted such appointment and satisfy the conditions set forth in the immediately succeeding sentence. Any successor Concentration Bank (i) shall be a bank having capital, surplus and undivided profits of at least $250,000,000 if there be such a bank with such capital, surplus and undivided profits willing, qualified and able to act as Concentration Bank upon reasonable or customary terms and (ii) together with Navistar Financial, shall have executed and delivered to the Trustee an account control agreement, in form and substance reasonably satisfactory to the Trustee and the Administrative Agent, establishing that the Proceeds Allocation Account with such successor Concentration Bank is subject to the Trustee’s “control” as defined in UCC Article 9-104 and whereby such successor Collection Bank maintaining such Proceeds Allocation Account agrees to comply only with the instructions originated by the Trustee, without the further consent of Navistar Financial, upon the delivery of a notice of sole control by the Trustee.
(i) On or prior to the date that is 60 days after the date hereof (or such later date agreed to by the Administrative Agent in its reasonable discretion), Navistar Financial shall execute and deliver to the Administrative Agent an account control agreement, in form and substance reasonably satisfactory to the Trustee and the Administrative Agent, establishing that the Proceeds Allocation Account listed on Schedule D is subject to the Trustee’s “control” as defined in UCC Article 9-104 and whereby the bank maintaining such Proceeds Allocation Account agrees to comply only with the instructions originated by the Trustee, without the further consent of Navistar Financial, upon the delivery of a notice of sole control by the Trustee.
SECTION 4.08. Delivery of Secured Instruments. Within 30 days after the date hereof, Navistar Financial shall deliver to the Trustee true and complete copies of all Secured Instruments as in effect on the date hereof. Navistar Financial will deliver to the Trustee, promptly upon the execution thereof, a true and complete copy of (i) each Secured Instrument entered into after the date hereof and (ii) each amendment, modification or supplement to any Secured Instrument.
SECTION 4.09. Information as to Secured Parties. Navistar Financial shall deliver to the Trustee between November 1 and November 15 in each year, and from time to time upon reasonable request of the Trustee, a list setting forth as of a date not more than 30 days prior to the date of such delivery, (i) for each Secured Instrument (other than any Secured Instrument referred to in clause (iii), (iv) or (v) below), the aggregate unpaid principal or face amount outstanding thereunder, (ii) for each Secured Instrument (other than any Debt Indenture and the Credit Agreement), to the extent known, the names of the holders of Secured Obligations outstanding thereunder and the unpaid principal or face amount thereof owing to each such holder, (iii) the aggregate unpaid principal amount of Indenture Obligations outstanding under each Debt Indenture and the name and address of the Indenture Trustee thereunder, (iv) the
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aggregate unpaid principal amount of loans outstanding under the Credit Agreement and the name and address of the Administrative Agent thereunder, and (v) in the case of Secured Obligations other than Indenture Obligations and the Credit Agreement, the name and address of any duly authorized representative of the Secured Parties holding such Secured Obligations designated in accordance with Section 7.11(b). Navistar Financial shall furnish to the Trustee within 30 days after the date hereof a list setting forth the name and address of each party to whom notices must be sent under each Secured Instrument in effect on the date hereof and Navistar Financial shall furnish promptly to the Trustee any changes or additions to such list of which it receives notice. The Trustee shall provide a copy of such list to any Secured Party requesting it.
SECTION 4.10. Stamp and Other Similar Taxes. Navistar Financial shall indemnify and hold harmless the Trustee and each Secured Party from any present or future claim or liability for any stamp or any other similar tax and any penalties or interest with respect thereto which may be assessed, levied or collected by any jurisdiction in connection with this Agreement, the Trust Estate or any Collateral.
SECTION 4.11. Filing Fees; Excise Taxes. Navistar Financial shall make any and all payments in respect of all search, filing, recording and registration fees, taxes, excise taxes and other similar imposts which may be payable or determined to be payable in respect of the execution, delivery and performance of this Agreement.
SECTION 4.12. Collateral Reports. Navistar Financial shall furnish or cause to be furnished to the Trustee from time to time, as promptly as feasible upon the Trustee’s reasonable request, schedules or other reports generated by Navistar Financial in the ordinary course of business identifying and describing the Collateral (including, without limitation, the locations of Books and Records and other Collateral), all as the Trustee may reasonably request.
SECTION 4.13. Government Receivables. (a) Navistar Financial’s right, title and interest in any Receivables as to which the United States of America or any agency or a department thereof is the obligor (“Government Receivables”) shall constitute “Navistar Financial Receivables”; provided that nothing in this Agreement shall obligate Navistar Financial to comply with the federal Assignment of Claims Act as set forth in 31 U.S.C.A. § 3727 (1983) and 41 U.S.C.A. § 15 (1987) (the “FACA”) until it is required to do so pursuant to subsection (b) below or to instruct any Account Debtor under any Government Receivable to make any payment into a Lock-box or Collection Account referred to in Section 4.07.
(b) If at any time:
(i) Navistar Financial notifies the Trustee that it desires to comply with the FACA with respect to the assignment to the Trustee of any Government Receivable, or
(ii) the Required Secured Parties notify the Trustee and Navistar Financial that (A) they have determined that Government Receivables at the end of any month are more than $100,000,000 and (B) they have decided to require Navistar Financial to comply with the FACA with respect to the assignment to the Trustee of Government Receivables to the extent necessary so that Government Receivables as to which Navistar Financial has not so complied will be less than $100,000,000,
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then Navistar Financial will file with the appropriate contracting officer, head of department or agency or disbursing officer appropriate written notices of assignment which comply with the FACA
(x) within 30 days after the Trustee’s receipt of a notice described in clause (i) or (ii) above as to Government Receivables arising before the receipt of such notice, and
(y) promptly after the execution of the relevant contract as to Government Receivables arising after receipt of such notice
to the extent required to comply with clause (i) or (ii) above and permitted by the terms of such Government Receivables.
(c) Notwithstanding any other provision of this Agreement, unless a Notice of Acceleration is in effect, any amounts received by the Trustee with respect to any Government Receivables assigned pursuant to the FACA shall be deposited in one or more special demand UCC Deposit Accounts (each a “Government Account”), the balance of which shall be subject to withdrawal or transfer upon the order of Navistar Financial in accordance with the Trustee’s or such agent’s normal rules and regulations governing commercial demand deposit accounts. If a Notice of Acceleration is delivered and so long as it remains in effect, any amounts in Government Accounts shall be held and applied by the Trustee or such agent in accordance with the provisions of Article VI. The Trustee agrees that such reports as may be requested by Navistar Financial as to the source of funds deposited in the Government Accounts will be rendered at reasonable intervals.
ARTICLE V
ACCELERATION OF SECURED OBLIGATIONS; REMEDIES
SECTION 5.01. Notice of Acceleration. (a) Upon receipt of a Notice of Acceleration, the Trustee shall (i) immediately notify Navistar Financial, any co-trustee, each Purchaser, the Concentration Bank, each Proceeds Account Bank and each insurance company that has issued an insurance policy naming the Trustee as an additional named insured, loss payee, beneficiary or otherwise in accordance with Section 4.06 (provided that Navistar Financial shall have notified, and hereby agrees to notify, the Trustee of the proper address or e-mail address for such each such notice) of the receipt and contents thereof and (ii) within ten days thereafter, notify each Secured Party thereof. So long as such Notice of Acceleration is in effect, the Trustee shall exercise the rights and remedies provided in this Article. The Trustee is not empowered to exercise any remedy hereunder unless a Notice of Acceleration is in effect.
(b) A Notice of Acceleration shall become effective upon receipt thereof by the Trustee. A Notice of Acceleration, once effective, shall remain in effect unless and until it is cancelled as provided in Section 5.01(c).
(c) The party or parties giving a Notice of Acceleration shall be entitled to cancel such notice by delivering a written notice of cancellation to the Trustee (i) before the Trustee takes any action to exercise any remedy with respect to the Collateral or (ii) thereafter, if the Trustee believes that all actions it has taken to exercise any remedy or remedies with respect to
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the Collateral can be reversed without undue difficulty; provided that no Notice of Acceleration shall be cancelled more than 30 days after it is received by the Trustee. The Trustee shall immediately notify Navistar Financial as to the receipt and contents of any such notice of cancellation and shall promptly notify Navistar Financial, any co-trustee, the Concentration Bank, each Proceeds Account Bank, each insurance company that has received notice of the relevant Notice of Acceleration in accordance with Section 5.01(a), each Purchaser and each other Secured Party as to the cancellation of any Notice of Acceleration.
SECTION 5.02. General Authority of the Trustee over the Collateral. Navistar Financial hereby irrevocably constitutes and appoints the Trustee and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full power and authority in the name of Navistar Financial or in its own name, from time to time in the Trustee’s discretion, so long as any Notice of Acceleration is in effect, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to carry out the terms of this Agreement and accomplish the purposes hereof and, without limiting the generality of the foregoing, Navistar Financial hereby gives the Trustee the power and right on behalf of Navistar Financial, without notice to or further assent by Navistar Financial, except as provided in Section 5.03(b), to do the following:
(i) to ask for, demand, sue for, collect, receive and give acquittance for any and all moneys due or to become due upon, or in connection with, the Collateral;
(ii) to receive, take, endorse, assign and deliver any and all checks, notes, drafts, acceptances, documents and other negotiable and non-negotiable instruments and Chattel Paper taken or received by the Trustee as, or in connection with, the Collateral;
(iii) to commence, prosecute, defend, settle, compromise or adjust any claim, suit, action or proceeding with respect to, or in connection with, the Collateral;
(iv) to sell, transfer, assign or otherwise deal in or with the Collateral or any part thereof or the proceeds or avails thereof as fully and effectively as if the Trustee were the absolute owner thereof;
(v) to extend the time of payment of any or all thereof and to make any allowance and other adjustments with reference thereto; and
(vi) to do, at its option and at the expense and for the account of Navistar Financial, at any time or from time to time, all acts and things which the Trustee deems necessary to protect or preserve the Collateral and to realize upon the Collateral.
SECTION 5.03. Remedies; Rights Upon Acceleration of Secured Obligations. (a) If a Notice of Acceleration is in effect and the related 30-day cancellation period referred to in the proviso to the first sentence of Section 5.01(c) shall have expired:
(i) The Trustee may at any time, without further notice to Navistar Financial, notify Account Debtors that a security interest in their obligations has been granted to the Trustee and that payments thereunder or in respect thereof should be made directly to the Trustee. If requested by the Trustee, Navistar Financial will so notify Account Debtors. The Trustee may in its own name or in the name of others communicate with Account Debtors.
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(ii) All payments received by Navistar Financial under or in connection with the Collateral shall be held by Navistar Financial in trust for the Trustee, shall be segregated from other funds of Navistar Financial and shall, forthwith upon receipt by Navistar Financial, be turned over to the Trustee, in the same form as received by Navistar Financial (duly endorsed to the Trustee, if required) for deposit in the Collateral Account.
(iii) Any and all such payments so received by the Trustee (whether from Navistar Financial or otherwise) shall be deposited by the Trustee in the Collateral Account. Any Proceeds, whether consisting of cash, checks, notes, drafts, bills of exchange, money orders or commercial paper of any kind whatsoever, shall be deposited or held in the Collateral Account when received.
(b) If a Notice of Acceleration is in effect, the Trustee may exercise, in addition to all other rights and remedies granted to it in this Agreement, all rights and remedies of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights are exercised) and, for the purpose of enforcing any and all rights and remedies of the Trustee under this Agreement, may (i) enter, with or without process of law and without breach of the peace, any premises where any of the Collateral is or may be located, and without charge or liability to the Trustee seize and remove such Collateral from such premises and (ii) have access to and use Navistar Financial’s Books and Records relating to the Collateral. Without limiting the generality of the foregoing, Navistar Financial agrees that in any such event the Trustee, without demand of performance or other demand, advertisement or notice of any kind (except the notice specified below of the time and place of any public or private sale) to or upon Navistar Financial or any other Person (all of which demands, advertisements and/or notices are hereby waived by Navistar Financial), may forthwith withdraw all cash and investments in the Collateral Account and apply such cash and investments and other cash, if any, then held by it as Collateral as specified in Section 6.04, withdraw all or any portion of the funds on deposit in any Deposit Account or Government Account and otherwise collect, receive, appropriate and realize upon the Collateral or any part thereof, and/or forthwith sell, lease, assign, give an option or options to purchase or otherwise dispose of and deliver the Collateral (or contract to do so) or any part thereof in one or more parcels at public or private sale, at any exchange, broker’s board or at any office of the Trustee or elsewhere in such commercially reasonable manner as it may deem best, for cash or on credit or for future delivery and at such price or prices as the Trustee may deem satisfactory. Upon any such sale the Trustee shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral so sold. Each purchaser at any such sale shall hold the Collateral so sold to it absolutely and free from any claim or right of whatsoever kind, including any equity or right of redemption of Navistar Financial which may be waived, and Navistar Financial, to the extent permitted by applicable law, hereby specifically waives all rights of redemption, stay or appraisal which it has or may have under any law now existing or hereafter adopted. The Trustee or any Secured Party shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Trustee may fix in the notice of such sale. The Trustee shall not be obligated to make any such sale pursuant to any such notice. The Trustee may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may be made at any time or place to which the same may be so adjourned. In the case of any sale of all or any part of the Collateral on credit or for future delivery, the Collateral sold
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may be retained by the Trustee until the selling price is paid by the purchaser thereof, but the Trustee shall not incur any liability in case of the failure of such purchaser to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may again be sold upon like notice. The Trustee is authorized, in connection with any such sale, if it deems it advisable so to do, (i) to restrict the prospective bidders on or purchasers of any of the Pledged Securities to a limited number of sophisticated investors who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or sale of any of such Pledged Securities, (ii) to cause to be placed on certificates for any or all of the Pledged Securities or on any other securities pledged hereunder a legend to the effect that such security has not been registered under the Securities Act of 1933, as amended, and may not be disposed of in violation of the provision of said Act, and (iii) to impose such other limitations or conditions in connection with any such sale as the Trustee deems necessary or advisable in order to comply with said Act or any other law. Navistar Financial covenants and agrees that it will and will cause each Navistar Financial Subsidiary to execute and deliver such documents and take such other action as the Trustee deems necessary or advisable in order that any such sale may be made in compliance with the law. Navistar Financial further agrees, at the Trustee’s request, to assemble the Collateral, and to make it available to the Trustee at places which the Trustee shall reasonably select, whether at Navistar Financial’s premises or elsewhere. The Trustee shall deposit the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale in the Collateral Account. To the extent permitted by applicable law, Navistar Financial waives all claims, damages and demands against the Trustee or any other Secured Party arising out of the foreclosure, repossession, retention or sale of the Collateral. The Trustee shall give Navistar Financial not less than 10 Business Days’ notice (which notification shall be deemed given when mailed, postage prepaid, addressed to Navistar Financial at its address determined pursuant to Section 9.01) of the time and place of any public sale or other intended disposition or of the time after which a private sale or other intended disposition may take place and Navistar Financial agrees that such notice is “reasonable notification” within the meaning of Section 9-611 of the UCC; provided that no such notice shall be required in the case of the public or private sale or other intended disposition of any Collateral which is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market. The Trustee may also render any or all of the Collateral unusable at Navistar Financial’s premises and may dispose of such Collateral on such premises without liability for rent or costs. Notwithstanding any provision of this Section 5.03 to the contrary, the rights and remedies of the Trustee with respect to any Collateral subject to a Senior Lien shall be subject to the terms of any subordination agreement with respect thereto executed and delivered in accordance with Section 2.06. The Trustee shall be entitled to consult with financial advisors, accountants and counsel in connection with the sale of any Collateral and the Trustee shall not be liable for any actions it takes in reliance upon the advice of those financial advisors, accountants and counsel selected by it without gross negligence or willful misconduct.
SECTION 5.04. Right to Initiate Judicial Proceedings. If a Notice of Acceleration is in effect, the Trustee (i) shall have the right and power to institute and maintain such suits and proceedings as it may deem appropriate to protect and enforce the rights vested in it by this Agreement and (ii) may proceed by suit or suits at law or in equity to enforce such rights and to foreclose upon the Collateral and to sell all or, from time to time, any of the Collateral under the judgment or decree of a court of competent jurisdiction.
SECTION 5.05. Right to Appoint a Receiver. If a Notice of Acceleration is in effect, upon the filing of a bill in equity or other commencement of judicial proceedings to
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enforce the rights of the Trustee or of the other Secured Parties under this Agreement, the Trustee shall, to the extent permitted by law, be entitled as a matter of right to the appointment of a receiver or receivers (who may be the Trustee) of the Trust Estate, or any part thereof, and of the profits, revenues and other income thereof, pending such proceedings, with such powers as the court making such appointment shall confer, and to the entry of an order directing that the profits, revenues and other income of the property constituting the whole or any part of the Trust Estate be segregated, sequestered and impounded for the benefit of the Trustee and the Secured Parties, and Navistar Financial irrevocably consents to the appointment of such receiver or receivers and to the entry of such order; provided that, notwithstanding the appointment of any receiver, the Trustee shall be entitled to retain possession and control of all cash held by or deposited with it pursuant to this Agreement.
SECTION 5.06. Instructions of Required Secured Parties. (a) The Required Secured Parties shall have the right, by one or more instruments in writing executed and delivered to the Trustee, to direct the time, method and place of conducting any proceeding for any right or remedy available to the Trustee, or of exercising any trust or power conferred on the Trustee, or for the appointment of a receiver, or for the taking of any action authorized by this Article; provided that (i) such direction shall not conflict with the provisions of law or of this Agreement and (ii) the Trustee shall be indemnified as provided in Section 7.04(d). Nothing in this Section shall impair the right of the Trustee in its discretion to take any action which it deems proper and which is not inconsistent with such direction by the Required Secured Parties. In the absence of such direction, the Trustee shall have no duty to take or refrain from taking any action unless explicitly required herein.
(b) If, within 45 days after the Trustee receives a Notice of Acceleration which has not been cancelled, the Trustee shall not have received written directions from the Required Secured Parties pursuant to subsection (a) above for the exercise of rights or remedies by the Trustee, the Trustee shall, until it receives written directions from the Required Secured Parties, follow written directions from Secured Parties holding more than 50% of the Secured Obligations then outstanding under the Secured Instruments in respect of which Notices of Acceleration have been given; provided that (i) such direction shall not conflict with the provisions of applicable law or of this Agreement, (ii) the Trustee shall be indemnified as provided in Section 7.04(d) and (iii) if any Secured Instrument is a Debt Indenture the relevant Indenture Trustee shall be deemed to be the holder of all Secured Obligations outstanding thereunder.
SECTION 5.07. Remedies Not Exclusive. (a) No remedy conferred upon or reserved to the Trustee herein is intended to be exclusive of any other remedy or remedies, but every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or now or hereafter existing at law or in equity or by statute.
(b) No delay or omission by the Trustee to exercise any right, remedy or power hereunder shall impair any such right, remedy or power or shall be construed to be a waiver thereof, and every right, power and remedy given under this Agreement to the Trustee may be exercised from time to time and as often as may be deemed expedient by the Trustee.
(c) If the Trustee shall have proceeded to enforce any right, remedy or power under this Agreement and the proceeding for the enforcement thereof shall have been discontinued or abandoned for any reason or shall have been determined adversely to the
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Trustee, then Navistar Financial, the Trustee and the Secured Parties shall, subject to any determination in such proceeding, severally and respectively be restored to their former positions and rights hereunder with respect to the Trust Estate and in all other respects, and thereafter all rights, remedies and powers of the Trustee shall continue as though no such proceeding had been taken.
(d) All rights of action and of asserting claims upon or under this Agreement may be enforced by the Trustee without the possession of any Secured Instrument or Indenture Obligation or the production thereof in any trial or other proceeding relative thereto, and any suit or proceeding instituted by the Trustee shall be brought in its name as Trustee and any recovery of judgment shall be held as part of the Trust Estate.
SECTION 5.08. Waiver and Estoppel. (a) Navistar Financial agrees, to the extent it may lawfully do so, that it will not at any time in any manner whatsoever claim or take the benefit or advantage of any appraisement, valuation, stay, extension, moratorium, turnover or redemption law, or any law permitting it to direct the order in which the Collateral shall be sold, now or at any time hereafter in force, which may delay, prevent or otherwise affect the performance or enforcement of this Agreement and hereby waives all benefit or advantage of all such laws and covenants that it will not hinder, delay or impede the execution of any power granted to the Trustee in this Agreement but will suffer and permit the execution of every such power as though no such law were in force; provided that this subsection (a) shall not be construed as a waiver of any rights of Navistar Financial under any applicable federal bankruptcy law.
(b) Navistar Financial, to the extent it may lawfully do so, on behalf of itself and all who may claim through or under it, including, without limitation, any and all subsequent creditors, vendees, assignees and lienors, waives and releases all rights to demand or to have any marshalling of the Collateral upon any sale, whether made under any power of sale herein granted or pursuant to judicial proceedings or upon any foreclosure or any enforcement of this Agreement and consents and agrees that all the Collateral may at any such sale be offered and sold as an entirety.
(c) Navistar Financial waives presentment, demand, protest and any notice of any kind (except notices explicitly required hereunder) in connection with this Agreement and any action taken by the Trustee with respect to the Collateral.
SECTION 5.09. Limitation by Law. All rights, remedies and powers provided by this Article and by Article VI may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Article are intended to be subject to all applicable mandatory provisions of law which may be controlling and to be limited to the extent necessary so that they will not render this Agreement invalid or unenforceable in whole or in part.
ARTICLE VI
COLLATERAL ACCOUNT; DISTRIBUTIONS
SECTION 6.01. The Collateral Account. Prior to the date hereof, there has been established and, at all times thereafter until the trusts created by this Agreement shall have
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terminated in accordance with the terms hereof, there shall be maintained with the Trustee at the office of the Trustee’s corporate trust division an account which shall be entitled the “Navistar Financial Collateral Account” (the “Collateral Account”). All moneys which are required by this Agreement to be delivered to the Trustee while a Notice of Acceleration is in effect or which are received by the Trustee or any agent to the Trustee in respect of the Collateral, whether in connection with the exercise of the remedies provided in this Agreement or otherwise, while a Notice of Acceleration is in effect shall be deposited in the Collateral Account and held by the Trustee as part of the Trust Estate and applied in accordance with the terms of this Agreement. Upon the cancellation of any Notice of Acceleration pursuant to Section 5.01(c), the Trustee shall cause all funds on deposit in the Collateral Account to be applied as follows:
(i) all amounts transferred to the Collateral Account from a Proceeds Deposit Account pursuant to Section 4.07(f) shall be returned to such Proceeds Deposit Account or, at the request of Navistar Financial, to any other Proceeds Deposit Account, and
(ii) all other amounts remaining in the Collateral Account (including any amounts transferred to the Collateral Account from a Securities Account pursuant to Section 4.02(e), all dividends and other payments and distributions made upon or with respect to the Subsidiary Shares transferred into the Collateral Account pursuant to Section 4.03(e) and any insurance proceeds transferred into the Collateral Account) shall be paid over by the Trustee to Navistar Financial or as it may direct.
SECTION 6.02. Control of Collateral Account. All right, title and interest in and to the Collateral Account shall vest in the Trustee, and funds on deposit in the Collateral Account shall constitute part of the Trust Estate. The Collateral Account shall be subject to the exclusive dominion and control of the Trustee pursuant to UCC Article 9-104(a)(1).
SECTION 6.03. Investment of Funds Deposited in Collateral Account. The Trustee shall invest and reinvest moneys on deposit in the Collateral Account at any time that a Notice of Acceleration is not in effect at the written direction of Navistar Financial in the investments listed below (such investments, collectively referred to as “Marketable Securities”):
(i) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (provided that the full faith and credit of the United States is pledged in support of those securities) having maturities of not more than twenty-four months from the date of acquisition;
(ii) 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 of America, any state thereof or the District of Columbia having capital and surplus in excess of $500,000,000 and a Thomson Bank Watch Rating of “B” or better;
(iii) repurchase obligations or securities lending arrangements for underlying securities of the types described in clauses (i) and (ii) above entered into with any financial institution meeting the qualifications specified in clause (ii) above;
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(iv) 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;
(v) 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; provided that such commercial bank has, at the time of the investment therein, (1) capital, surplus and undivided profits (as of the date of such institution’s most recently published financial statements) in excess of $100,000,000 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 investment therein, are rated at least “A” from S&P or “A2” from Moody’s;
(vi) 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; provided that (A) such instrument has a final maturity not more than one year from the date of purchase thereof and (B) such depository institution or trust company has at the time of the 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 $100,000,000 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 investment therein or contractual commitment providing for such investment, are rated at least “A” from S&P or “A2” from Moody’s; and
(vii) money market funds at least 95% of the assets of which constitute permitted investments of the kinds described in clauses (i) through (v) above;
provided that the aggregate amount invested in obligations of the types described in clauses (ii), (iii) and (vii) above of any one issuer shall not exceed $10,000,000 at any time. Notwithstanding the foregoing, investments which would otherwise constitute permitted investments of the kinds described in clauses (i), (ii), (iii) and (iv) that are permitted to have maturities in excess of twelve months shall only be deemed to be permitted investments under this section if and only if the total weighted average maturity of all permitted investments of the kinds described in clauses (i), (ii), (iii) and (iv) does not exceed twelve months on an aggregate basis. All such investments and the interest and income received thereon and the net proceeds realized on the sale or redemption thereof shall be held in the Collateral Account as part of the Trust Estate. The Trustee shall not have any liability for any loss sustained as a result of any investment made as provided above, any liquidation of any such investment prior to its maturity, or the failure of an authorized person of Navistar Financial to provide any written instruction to invest or reinvest moneys on deposit in the Collateral Account or any earnings thereon.
SECTION 6.04. Application of Moneys. (a) The Trustee shall have the right at any time to apply moneys of Navistar Financial held by it in the Collateral Account to the payment of due and unpaid Trustee’s Fees. Subject to Section 6.05, all remaining moneys held
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by the Trustee in the Collateral Account while a Notice of Acceleration is in effect shall, to the extent available for distribution (it being understood that the Trustee may liquidate investments prior to maturity in order to make a distribution pursuant to this Section), be distributed by the Trustee on dates fixed by the Trustee (the first of which shall be within 90 days after the Trustee receives a Notice of Acceleration and the remainder of which shall be monthly thereafter on the day of the month corresponding to the first Distribution Date (or, if there is no such corresponding day, the last day of such month) for such distribution (individually a “Distribution Date” and collectively “Distribution Dates”) in the following order of priority:
First: to any Secured Party which has theretofore advanced or paid any unpaid Trustee’s Fees constituting administrative expenses allowable under Section 503(b) of the Bankruptcy Code, an amount equal to the amount thereof so advanced or paid by such Secured Party prior to such Distribution Date;
Second: to any Secured Party which has theretofore advanced or paid any unpaid Trustee’s Fees other than such administrative expenses, an amount equal to the amount thereof so advanced or paid by such Secured Party prior to such Distribution Date;
Third: to the Secured Parties entitled thereto, an amount equal to their respective Catch-up Amounts (as defined in subsection (c) below), if any, and, if such moneys shall be insufficient to pay such Catch-up Amounts in full, then to such Secured Parties ratably in proportion to their respective Catch-up Amounts;
Fourth: to the Secured Parties entitled thereto in an amount equal to the unpaid principal of, premium, if any, and interest on the Secured Obligations (other than Financial Services Obligations) then outstanding whether or not then due and payable, and all unpaid amounts then due and payable by Navistar Financial in respect of the Financial Services Obligations, and all unpaid fees and expenses of any Indenture Trustee under any Debt Indenture, and, if such moneys shall be insufficient to pay such principal, premium, interest and other amounts in full, then ratably (without priority of any one over any other, except in accordance with applicable subordination provisions) to the Secured Parties in proportion to the unpaid amounts thereof on such Distribution Date;
Fifth: to the Secured Parties, amounts equal to all other sums then due and payable in respect of the Secured Obligations, including, without limitation, the costs and expenses of the Secured Parties and their representatives which are due and payable under the relevant Secured Instruments as of such Distribution Date and, if such moneys shall be insufficient to pay such sums in full, then ratably to the Secured Parties in proportion to such sums; and
Sixth: any surplus then remaining shall be paid to Navistar Financial or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.
Notwithstanding the foregoing, no amounts received from Navistar Financial shall be applied to Excluded Swap Obligations of Navistar Financial.
(b) The term “unpaid” as used in clause Fourth of subsection (a) above and in subsection (c) below, with respect to any Secured Obligations, refers:
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(i) in the absence of a bankruptcy proceeding with respect to Navistar Financial, to all amounts of such Secured Obligations outstanding as of a Distribution Date, and
(ii) during the pendency of a bankruptcy proceeding with respect to Navistar Financial, to all amounts which have not been disallowed by the bankruptcy court in respect of such Secured Obligations as a basis for distribution (including estimated amounts, if any, allowed in respect of contingent claims),
to the extent that prior distributions (whether actually distributed or set aside pursuant to Section 6.05) have not been made in respect thereof.
(c) Catch-up Amounts shall be calculated on any Distribution Date before giving effect to any distribution on such Distribution Date pursuant to clauses Fourth, Fifth and Sixth of subsection (a) above. The term “Catch-up Amount” means, with respect to any Secured Instrument, the amount, if any, required to be distributed to the Secured Party or Parties in respect of Secured Obligations thereunder, so that, immediately after such distribution, the ratio of (i) all amounts theretofore distributed hereunder to such Secured Party or Parties in respect of such Secured Instrument to (ii) the unpaid amount then due and payable to such Secured Party or Parties thereunder plus the amount of all distributions theretofore made hereunder in respect thereof, is equal to the highest ratio of (x) all amounts theretofore distributed hereunder in respect of any other Secured Instrument to (y) the unpaid amount then due and payable to the Secured Party or Parties with respect thereto plus the amount of all distributions theretofore made hereunder in respect thereof.
(d) Nothing in this Agreement shall affect the subordinated status of any subordinated Secured Obligation or affect the rights or obligations of any Secured Party under any applicable subordination provisions, and payments made to or by a Secured Party by reason of any subordination provisions shall be disregarded for purposes of computing the amounts of distributions made pursuant to this Section.
SECTION 6.05. Application of Moneys Distributable to Indenture Trustees. If at any time any moneys collected or received by the Trustee pursuant to this Agreement are distributable pursuant to Section 6.04 to an Indenture Trustee and if such Indenture Trustee shall notify the Trustee, which shall then notify Navistar Financial, that no provision is made under the relevant Debt Indenture for the application by such Indenture Trustee of moneys (whether because the Secured Obligations issued under such Debt Indenture have not become due and payable or otherwise) and that such Debt Indenture does not effectively provide for the receipt and the holding by such Indenture Trustee of such moneys pending the application thereof, then the Trustee shall invest such amounts at the written direction of Navistar Financial in obligations of the kinds referred to in clauses (i) and (ii) of Section 6.03 maturing within 90 days after they are acquired by the Trustee and shall hold all such amounts so distributable and all such investments and the net proceeds thereof in trust solely for such Indenture Trustee (in its capacity as trustee) and for no other purpose until such time as such Indenture Trustee shall request the delivery thereof by the Trustee for application pursuant to such Debt Indenture.
SECTION 6.06. Trustee’s Calculations. In making the determinations and allocations required by Sections 6.04 and 6.05, the Trustee may rely upon information supplied by each Secured Party as to the amounts payable with respect to Secured Obligations held by
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such Secured Party or as to the amounts of unpaid principal outstanding under the Debt Indentures, premium, if any, with respect thereto, and interest accrued thereon, as the case may be, and the Trustee shall have no liability to any of the other Secured Parties for actions taken in reliance on such information. All distributions made by the Trustee pursuant to such Sections shall be (subject to any decree of any court of competent jurisdiction) final and the Trustee shall have no duty to inquire as to the application by the Secured Parties of any amounts distributed to them.
SECTION 6.07. Pro Rata Sharing. If, through the operation of any bankruptcy, reorganization, insolvency or other laws or otherwise, the Trustee’s Security Interest is avoided with respect to some, but not all, of the Secured Obligations then outstanding, the Trustee shall nonetheless apply the proceeds of the Collateral (net of any unpaid Trustee’s Fees) collected by it for the benefit of the holders of all Secured Obligations (except any holder as to which such security interest would have been enforced but for the gross negligence or willful misconduct of such holder or any predecessor in interest of such holder) in the proportions and subject to the priorities specified above; provided that, if the Trustee’s Security Interest is avoided with respect to any Additional Secured Obligation, no proceeds of the Collateral collected with respect to other Secured Obligations shall be distributed under this Section with respect to such Additional Secured Obligation. To the extent that the Trustee distributes proceeds collected with respect to Secured Obligations held by one holder to or on behalf of Secured Obligations held by a second holder, the first holder shall be deemed to have purchased a participation in the Secured Obligations held by the second holder, or shall be subrogated to the rights of the second holder to receive any subsequent payments and distributions made with respect to the portion thereof paid or to be paid by the application of such proceeds.
ARTICLE VII
THE TRUSTEE
SECTION 7.01. Acceptance of Trust. The Trustee, for itself and its successors, hereby accepts the trusts created by this Agreement upon the terms and conditions hereof.
SECTION 7.02. Exculpatory Provisions. (a) The Trustee shall not be responsible in any manner whatsoever for the correctness of any recitals, statements, representations or warranties herein, all of which are made solely by Navistar Financial. The Trustee makes no representations as to the value or condition of the Collateral or the Trust Estate or any part thereof, or as to the title of Navistar Financial thereto or as to the security afforded by this Agreement, or as to the validity, execution (except its own execution), enforceability, legality or sufficiency of this Agreement or of the Secured Obligations, and the Trustee shall incur no liability or responsibility in respect of any such matters. The Trustee shall not be responsible for insuring the Collateral or for the payment of taxes, charges or assessments or discharging of Liens upon the Collateral or otherwise as to the maintenance of the Collateral, except that if the Trustee takes possession of any Collateral, the Trustee shall preserve the Collateral in its possession.
(b) The Trustee shall not be required to ascertain or inquire as to the performance by Navistar Financial of any of the covenants or agreements contained herein or in any Secured Instrument or Indenture Obligation. Whenever it is necessary, or in the reasonable opinion of the Trustee advisable, for the Trustee to ascertain the amount of Secured Obligations then held by a
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Secured Party, the Trustee may rely on a certificate of such Secured Party as to such amount and, if any such Secured Party shall not give such information to the Trustee, it shall not be entitled to receive distributions hereunder until it does so, in which case distributions shall be calculated by the Trustee based, with respect to such Secured Party, on the list then most recently delivered by Navistar Financial pursuant to Section 4.09 and the amount so calculated to be distributable to such Secured Party shall be held in trust for such Secured Party until such Secured Party has given such information to the Trustee, whereupon the amount distributable to such Secured Party shall be recalculated on the basis of such information and distributed to it.
(c) Notwithstanding any other provision of this Agreement, the Trustee, in its individual capacity, shall not be personally liable for any action taken or omitted to be taken by it in accordance with this Agreement except for its own gross negligence or willful misconduct. Other than as expressly set forth in this Agreement, nothing in this Agreement shall be construed to require the Trustee to take any action which would cause it to become liable, in its individual capacity, to any Person.
(d) The Trustee shall have the same rights under any Secured Instrument under which it is a party in its own right as any other Secured Party thereunder and may exercise such rights as though it were not the Trustee hereunder, and may accept deposits from, lend money to, and generally engage in any kind of banking or trust business with, Navistar Financial, International and the Parent as if it were not the Trustee.
SECTION 7.03. Delegation of Duties. Subject to the first sentence of Section 4.02(d) and subject to Section 4.07(h), the Trustee may execute any of the trusts or powers hereof and perform any duty hereunder either directly or by or through agents or attorneys-in-fact, who may include officers and employees of Navistar Financial; provided that the Trustee shall directly hold all Pledged Securities and other Instruments and Letters of Credit delivered hereunder. The Trustee shall be entitled to advice of counsel concerning all matters pertaining to such trusts, powers and duties. The Trustee shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it without gross negligence or willful misconduct.
SECTION 7.04. Reliance by Trustee. (a) Whenever in the administration of this Agreement, the Trustee shall deem it necessary or desirable that a factual matter be proved or established in connection with the Trustee taking, suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof is herein specifically prescribed) may be deemed to be conclusively proved or established by a certificate of a Responsible Officer delivered to the Trustee and not challenged by any Secured Party and such certificate shall be full warrant to the Trustee for any action taken, suffered or omitted in reliance thereon, subject, however, to the provisions of Section 7.05.
(b) The Trustee may consult with counsel, and any advice or an Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in accordance therewith. The Trustee shall have the right at any time to seek instructions concerning the administration of this Agreement from any court of competent jurisdiction.
(c) The Trustee may rely, and shall be fully protected in acting, upon any resolution, statement, certificate, instrument, opinion, report, notice, request, consent, order,
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bond or other paper or document which it has no reason to believe to be other than genuine and to have been signed or presented by the proper party or parties or, in the case of electronic transmissions, to have been sent by the proper party or parties. Without limiting the generality of the immediately preceding sentence, the Trustee may rely, and shall be fully protected in acting, upon the information most recently delivered to the Trustee by Navistar Financial in accordance with Section 4.09. In the absence of its gross negligence or willful misconduct, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Agreement.
(d) The Trustee shall not be under any obligation to exercise any of the rights or powers vested in the Trustee by this Agreement at the request or direction of the Required Secured Parties pursuant to this Agreement unless the Trustee shall have been provided adequate security and indemnity against the costs, expenses and liabilities which may be incurred by it in compliance with such request or direction, including such reasonable advances as may be requested by the Trustee.
(e) Upon any application or demand by Navistar Financial to the Trustee to take or permit any action under any of the provisions of this Agreement, Navistar Financial shall furnish to the Trustee a certificate of a Responsible Officer stating that all conditions precedent, if any, provided for in this Agreement relating to the proposed action have been complied with, and in the case of any such application or demand as to which the furnishing of any document is specifically required by any provision of this Agreement relating to such particular application or demand, such additional document shall also be furnished.
(f) Any Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate of a Responsible Officer or representations made by a Responsible Officer in a writing filed with the Trustee.
SECTION 7.05. Limitations on Duties of Trustee. (a) Unless a Notice of Acceleration is in effect, the Trustee shall be obligated to perform such duties and only such duties as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Trustee. If and so long as a Notice of Acceleration is in effect, the Trustee shall exercise the rights and powers vested in it by this Agreement, and shall not be liable with respect to any action taken by it, or omitted to be taken by it, in accordance with the direction of the Required Secured Parties or directions given to the Trustee pursuant to Section 5.06(b).
(b) Except as herein otherwise expressly provided, the Trustee shall not be under any obligation to take any action which is discretionary. The Trustee shall make available for inspection and copying by each Lender and each Indenture Trustee each certificate or other paper furnished to the Trustee by Navistar Financial under or in respect of this Agreement or any of the Collateral.
(c) Beyond the exercise of reasonable care in the custody and preservation thereof, the Trustee shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. The Trustee shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if such items are
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accorded treatment substantially equal to that which it accords its own property, and shall not be liable or responsible for any loss or damage thereto, or for any diminution in the value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or other agent or bailee selected by the Trustee in good faith.
SECTION 7.06. Moneys to be Held in Trust. All moneys received by the Trustee under or pursuant to any provision of this Agreement shall be held in trust for the purposes for which they were paid or are held.
SECTION 7.07. Resignation and Removal of the Trustee. (a) The Trustee may at any time, by giving written notice to Navistar Financial and the Secured Parties, resign and be discharged of the responsibilities hereby created, such resignation to become effective upon (i) the appointment of a successor Trustee, (ii) the approval of such successor Trustee (evidenced in writing) by Navistar Financial and the Administrative Agent (such approval not to be unreasonably withheld), and (iii) the acceptance of such appointment by such successor Trustee. If no successor Trustee shall be appointed and shall have accepted such appointment within 45 days after the Trustee gives the aforesaid notice of resignation, the Trustee shall, or any Secured Party may, apply to any court of competent jurisdiction to appoint a successor Trustee to act until such time, if any, as a successor Trustee shall have been appointed as above provided. Any successor Trustee so appointed by such court shall immediately and without further act be superseded by any successor Trustee appointed by Navistar Financial and the Administrative Agent as provided above. So long as no Event of Default has occurred and is continuing, Navistar Financial may at any time, upon at least 10 days’ prior written notice, remove the Trustee and appoint a successor Trustee with the approval of the Administrative Agent (such approval not to be unreasonably withheld or delayed); provided that such successor Trustee shall have accepted such appointment. If an Event of Default has occurred and is continuing, the Administrative Agent may at any time, upon at least 10 days’ prior written notice, remove the Trustee and appoint a successor Trustee with the approval of Navistar Financial (such approval not to be unreasonably withheld or delayed). Promptly upon receipt of such notice, the Trustee shall inform the Secured Parties of the contents thereof. Any Trustee shall be entitled to Trustee’s Fees to the extent incurred or arising, or relating to events occurring, before such resignation or removal.
(b) If at any time the Trustee shall resign or be removed or otherwise become incapable of acting, or if at any time a vacancy shall occur in the office of the Trustee for any other cause, a successor Trustee may, so long as no Event of Default has occurred and is continuing, be appointed by Navistar Financial with the approval of the Administrative Agent (such approval not to be unreasonably withheld or delayed); provided that if an Event of Default has occurred and is continuing, a successor Trustee shall be appointed by the Administrative Agent with the approval of Navistar Financial (such approval not to be unreasonably withheld or delayed), and the powers, duties, authority and title of the predecessor Trustee shall be terminated and cancelled without procuring the resignation of such predecessor Trustee and without any formality (except as may be required by applicable law) other than appointment and designation of a successor Trustee in writing duly acknowledged and delivered to the predecessor Trustee and Navistar Financial. Such appointment and designation shall be full evidence of the right and authority to make the same and of all the facts therein recited, and this Agreement shall vest in such successor Trustee, without any further act, deed or conveyance, all the estates, properties, rights, powers, trusts, duties, authority and title of its predecessor Trustee; but such predecessor Trustee shall, nevertheless, on the written request of Navistar Financial or
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the successor Trustee, execute and deliver an instrument transferring to such successor Trustee all the estates, properties, rights, powers, trusts, duties, authority and title of such predecessor Trustee hereunder and deliver all Collateral held by it or its agents to such successor Trustee subject to the payment of all unpaid Trustee’s Fees due and owing to the predecessor Trustee. Should any deed, conveyance or other instrument in writing from Navistar Financial be required by any successor Trustee for more fully and certainly vesting in such successor Trustee the estates, properties, rights, powers, trusts, duties, authority and title vested or intended to be vested in the predecessor Trustee, any and all such deeds, conveyances and other instruments in writing shall, on request of such successor Trustee, be executed, acknowledged and delivered by Navistar Financial.
SECTION 7.08. Status of Successor Trustees. Every successor Trustee appointed pursuant to Section 7.07 shall be a bank or trust company in good standing and having power to act as Trustee hereunder, incorporated under the laws of the United States of America or any State thereof or the District of Columbia and having its principal corporate trust office within the 48 contiguous States and shall also have capital, surplus and undivided profits of not less than $250,000,000, if there be such an institution with such capital, surplus and undivided profits willing, qualified and able to accept the trust hereunder upon reasonable or customary terms.
SECTION 7.09. Merger of the Trustee. Any corporation into which the Trustee may be merged, or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Trustee shall be a party, shall be Trustee under this Agreement without the execution or filing of any paper or any further act on the part of the parties hereto.
SECTION 7.10. Co-Trustee; Separate Trustees. (a) If at any time or times it shall be necessary or prudent in order to conform to any law of any jurisdiction in which any of the Collateral shall be located, or the Trustee shall be advised by counsel, satisfactory to it, that it is necessary or prudent in the interest of the Secured Parties, or the Required Secured Parties shall in writing so request, or the Trustee shall deem it desirable for its own protection in the performance of its duties hereunder, the Trustee and Navistar Financial shall, following consultation with each other, execute and deliver all instruments and agreements necessary or proper to constitute another bank or trust company, or one or more Persons approved by the Trustee and Navistar Financial, either to act as co-trustee or co-trustees (each a “co-trustee”) of all or any of the Collateral, jointly with the Trustee, or to act as separate trustee or trustees of any such property. If Navistar Financial shall not have joined in the execution of such instruments and agreements within 10 days after it receives a written request from the Trustee to do so, or if a Notice of Acceleration is in effect, the Trustee may act under the foregoing provisions of this Section without the concurrence of Navistar Financial. Navistar Financial hereby appoints the Trustee as its agent and attorney to act for it under the foregoing provisions of this Section in either of such contingencies.
(b) Every separate trustee and every co-trustee, other than any successor Trustee appointed pursuant to Section 7.07, shall, to the extent permitted by law, be appointed and act and be such, subject to the following provisions and conditions:
(i) except as the Required Secured Parties may otherwise expressly direct in writing, all rights, powers, duties and obligations conferred upon the Trustee in respect of
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the custody and management of moneys, Marketable Securities and other securities (including, without limitation, Pledged Securities) shall be exercised solely by the Trustee or, if applicable, (x) any agent appointed pursuant to Section 4.02(d) and (y) to the extent set forth in Section 4.07(a), the Concentration Bank;
(ii) all rights, powers, duties and obligations conferred or imposed upon the Trustee hereunder shall be conferred or imposed and exercised or performed by the Trustee and such separate trustee or separate trustees or co-trustee or co-trustees, jointly, as shall be provided in the instrument appointing such separate trustee or separate trustees or co-trustee or co-trustees, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations shall be exercised and performed by such separate trustee or separate trustees or co-trustee or co-trustees;
(iii) no power given hereby to, or which it is provided herein may be exercised by, any such co-trustee or co-trustees or separate trustee or separate trustees, shall be exercised hereunder by such co-trustee or co-trustees or separate trustee or separate trustees except jointly with, or with the consent in writing of, the Trustee, anything contained herein to the contrary notwithstanding;
(iv) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder;
(v) each such separate trustee or co-trustee shall be entitled to the benefits of Sections 7.12 and 7.13 to the same extent as if such Person were the Trustee hereunder; and
(vi) following consultation with each other, Navistar Financial and the Trustee, at any time by an instrument in writing executed by them jointly, may accept the resignation of or remove any such separate trustee or co-trustee and, in that case by an instrument in writing executed by them jointly, may appoint a successor to such separate trustee or co-trustee, as the case may be, anything contained herein to the contrary notwithstanding. If Navistar Financial shall not have joined in the execution of any such instrument within 10 days after it receives a written request from the Trustee to do so, or if a Notice of Acceleration is in effect, the Trustee shall have the power to accept the resignation of or remove any such separate trustee or co-trustee and to appoint a successor without the concurrence of Navistar Financial. Navistar Financial hereby appoints the Trustee its agent and attorney to act for it in such connection in such contingency. If the Trustee shall have appointed a separate trustee or separate trustees or co-trustee or co-trustees as above provided, the Trustee may at any time, by an instrument in writing, accept the resignation of or remove any such separate trustee or co-trustee and the successor to any such separate trustee or co-trustee shall be appointed by Navistar Financial and the Trustee, or by the Trustee alone pursuant to this Section.
SECTION 7.11. Treatment of Payee or Indorsee by Trustee; Representatives of Secured Parties. (a) The Trustee may treat the registered holder or, if none, the payee or indorsee of any promissory note or debenture referred to in any Secured Instrument as the absolute owner thereof for all purposes and shall not be affected by any notice to the contrary, whether such promissory note or debenture shall be past due or not.
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(b) Any Person which shall be designated as the duly authorized representative of one or more Secured Parties to act as such in connection with any matters pertaining to this Agreement or the Collateral shall present to the Trustee such documents, including, without limitation, Opinions of Counsel, as the Trustee may reasonably require, in order to demonstrate to the Trustee the authority of such Person to act as the representative of such Secured Parties.
SECTION 7.12. Compensation and Expenses. Navistar Financial shall pay to the Trustee, from time to time promptly upon written demand (together with appropriate backup documentation supporting such demand), (i) reasonable compensation in the amounts agreed upon by Navistar Financial and the Trustee (which shall not be limited by any provision of law in regard to compensation of a trustee of an express trust unless such provision may not effectively be waived) for its services hereunder and for administering the Trust Estate and (ii) all of the reasonable fees, costs and expenses incurred by the Trustee (including, without limitation, the reasonable fees and disbursements of its counsel and such special counsel as the Trustee elects to retain, any fees, costs and expenses arising pursuant to computer software license agreements and any amounts payable by the Trustee to any of its agents, whether on account of fees, indemnities or otherwise) (A) arising in connection with the preparation, execution, delivery, modification, and termination of this Agreement or the enforcement of any of the provisions hereof or (B) incurred or required to be advanced in connection with the administration of the Trust Estate, the sale or other disposition of Collateral hereunder and the preservation, protection or defense of the Trustee’s rights hereunder and in and to the Collateral and the Trust Estate.
SECTION 7.13. Indemnification. (a) Navistar Financial shall pay, and indemnify and hold harmless the Trustee and its officers, directors, employees and agents from and against, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any, kind or nature whatsoever, unless arising from the gross negligence or willful misconduct of the indemnitee, with respect to the execution, delivery, enforcement, performance and administration of this Agreement by the Trustee or any of its directors, officers, agents or employees. As security for such payment and for the payment of all other Trustee’s Fees, the Trustee shall have a Lien prior to all other Secured Parties upon all the Collateral; provided that the foregoing is not intended to relieve Navistar Financial of its obligation to pay Trustee’s Fees.
(b) Navistar Financial shall defend, indemnify, and hold harmless the Trustee from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs, or expenses of whatever kind or nature, known or unknown, contingent or otherwise, arising out of, or in any way related to, (w) the presence, disposal, release, or threatened release of any Hazardous Materials which are on, from, or affecting the soil, water, vegetation, buildings, personal property, persons, animals, or otherwise; (x) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to such Hazardous Materials; (y) any lawsuit brought or threatened, settlement reached, or government order relating to such Hazardous Materials, and/or (z) any violation of laws, orders, regulations, requirements or demands of government authorities, which are based upon or in any way related to such Hazardous Materials including, without limitation, attorney and consultant fees and expenses, investigation and laboratory fees, court costs, and litigation expenses. For purposes of
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this paragraph, “Hazardous Materials” includes, without limit, any flammable explosives, radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic substances, or related materials defined in the U.S. Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et. seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 5108, et seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901, et seq.), and in the regulations adopted and publications promulgated pursuant thereto, or any other Federal, state or local environmental law, ordinance, rule, or regulation. The provisions of this paragraph shall be in addition to any and all other obligations and liabilities that Navistar Financial may have to the Trustee at common law, and shall survive the termination of this Agreement.
(c) In any suit, proceeding or action brought by the Trustee under or with respect to the Collateral for any sum owing hereunder or to enforce any provision hereof, Navistar Financial will save, indemnify and hold harmless the Trustee, its agents, officers, directors and employees and the holders of Secured Obligations from and against all expense, loss or damage suffered by reason of any defense, setoff, counterclaim, recoupment or reduction of liability whatsoever of the obligor thereunder, arising out of a breach by Navistar Financial of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such obligor or its successors from Navistar Financial, and all such obligations of Navistar Financial shall be and remain enforceable against and only against Navistar Financial and shall not be enforceable against the Trustee, its agents or employees or any other Secured Party.
In no event shall the Trustee be liable for any indirect, special, punitive or consequential loss or damage of any kind whatsoever, including, but not limited to, lost profits, even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
In no event shall the Trustee be liable for any failure or delay in the performance of its obligations hereunder because of circumstances beyond their control, including, but not limited to, acts of God, flood, war (whether declared or undeclared), terrorism, fire, riot, embargo, government action, including any laws, ordinances, regulations, governmental action or the like which delay, restrict or prohibit the providing of the services contemplated by this Agreement.
The provisions of this Section 7.13 shall survive the termination of this Agreement or the earlier resignation or removal of the Trustee.
ARTICLE VIII
RELEASE OF COLLATERAL
SECTION 8.01. Permitted Releases. Unless a Notice of Acceleration is in effect, the Trustee may, at any time and from time to time prior to the termination of the Trustee’s Security Interest and release of all Collateral pursuant to Sections 8.02 and 8.03, release any portion of the Collateral with the prior written consent of the Releasing Secured Parties; provided that the Trustee shall have received a certificate of a Responsible Officer of Navistar Financial to the effect that no default, or event or condition which with notice or lapse of time or both would constitute a default, exists or, immediately after such release, will exist
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with respect to any of the Indenture Obligations. Upon any release in accordance with this Section 8.01, the Trustee will promptly, at Navistar Financial’s written request and expense, execute and deliver to Navistar Financial such documents as Navistar Financial shall reasonably request to evidence such release.
SECTION 8.02. Conditions to Termination of Security Interest and Release of All Collateral. The Trustee’s Security Interest shall terminate and all right, title and interest of the Trustee in and to the Collateral shall terminate and shall revert to Navistar Financial and its assigns upon the request of Navistar Financial as provided in Section 8.03 if:
(a) no default, or event or condition which with notice or lapse of time or both would constitute a default, exists or, immediately after such termination, will exist with respect to any of the Indenture Obligations or any letter of credit issued pursuant to Section 2.09 of the Credit Agreement;
(b) all principal of and interest on the Loans and all other amounts due under the Credit Agreement shall have been paid in full or shall have been extended (or refinanced) on an unsecured basis; and
(c) the Commitments of the Lenders under the Credit Agreement shall have terminated (except to the extent that the relevant Lenders shall have agreed to maintain such respective Commitments on an unsecured basis).
SECTION 8.03. Procedure for Termination and Release. (a) Upon satisfaction of the conditions set forth in Section 8.02 necessary for terminating the Trustee’s Security Interest in the Collateral, Navistar Financial may request the termination of such security interest and the release of the Collateral by delivering to the Trustee written notice (a “Collateral Release Notice”), signed by a Responsible Officer of Navistar Financial. Such Collateral Release Notice shall certify that the conditions for release set forth in Section 8.02 have been satisfied. Promptly upon receiving a Collateral Release Notice, the Trustee shall mail a copy thereof (and of the accompanying accountants’ certificate, if any) to each Secured Party.
(b) Upon the termination of the Trustee’s Security Interest and the release of the Collateral, the Trustee will promptly, at Navistar Financial’s written request and expense, (i) execute and deliver to Navistar Financial such documents as Navistar Financial or its assigns shall reasonably request to evidence the termination of such security interest or the release of the Collateral and (ii) deliver or cause to be delivered to Navistar Financial, all property of Navistar Financial then held by the Trustee, any co-trustee or any of their respective agents. Any release of Collateral shall be without prejudice to the rights of the Trustee or any successor Trustee to charge and be reimbursed for any expenditures which it may thereafter incur in connection herewith.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. Unless otherwise specified in this Agreement, all notices, requests, demands, consents or other communications given to Navistar Financial, the Trustee or any Secured Party shall be given in writing (including by pdf, e-mail or other
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electronic delivery) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of electronic delivery, when received, addressed (i) if to Navistar Financial or the Trustee, to such party at its address or e-mail address specified on the signature pages hereof or any other address or e-mail address which such party shall have specified for the purpose of communications hereunder, by notice in writing to the party sending such communication or (ii) if to any Secured Party, to it at its address or e-mail address specified from time to time by it or in the list provided by Navistar Financial to the Trustee pursuant to Section 4.09; provided that any notice, request or demand to or upon the Trustee shall not be effective until received.
SECTION 9.02. No Waivers. No failure on the part of the Trustee, any co-trustee, any separate trustee or any Secured Party to exercise, no course of dealing with respect to, and no delay in exercising, any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
SECTION 9.03. Amendments, Supplements and Waivers. (a) With the consent of the Required Secured Parties, the Trustee and Navistar Financial may, from time to time, enter into written agreements supplemental hereto for the purpose of adding any provisions to this Agreement, waiving any provisions hereof or changing in any manner the rights of the Trustee, the Secured Parties, the holders of Secured Obligations or Navistar Financial hereunder; provided that no such supplemental agreement shall (i) amend, modify or waive any provision of this subsection (a) without the consent of each Secured Party, (ii) change the definition of “Required Secured Parties” or the definition of “Required Lenders” incorporated by reference therein, or change the definition of “Releasing Secured Parties” without the consent of each Secured Party adversely affected thereby, (iii) amend, modify or waive any provision of this Agreement which requires the consent of all of the Releasing Secured Parties without the consent of all of the Releasing Secured Parties, (iv) amend, modify or waive any provision of Section 6.04 or the definition of “Secured Obligations” without the consent of (x) each Secured Party whose rights would be adversely affected thereby and (y) each Indenture Trustee of a Debt Indenture under which rights to equal and ratable security would be adversely affected thereby, or (v) amend, modify or waive any provision of Article VII hereof or alter the duties or obligations of the Trustee hereunder without the consent of the Trustee. Any such supplemental agreement shall be binding upon Navistar Financial, the Secured Parties, the holders of Secured Obligations, the Trustee and their respective successors. The Trustee shall not enter into any such supplemental agreement unless it shall have received an Opinion of Counsel to the effect that such supplemental agreement will not result in a breach of any provision or covenant contained in any Debt Indenture which requires the securing of the indebtedness outstanding thereunder equally and ratably with other obligations or indebtedness of Navistar Financial.
(b) Without the consent of any Secured Party, the Trustee and Navistar Financial, at any time and from time to time, may enter into one or more agreements supplemental hereto, in form satisfactory to the Trustee, (i) to add to the covenants of Navistar Financial for the benefit of the Secured Parties or to surrender any right or power herein conferred upon Navistar Financial, (ii) to mortgage or pledge to the Trustee, or grant a security interest in favor of the Trustee in, any property or assets as additional security for the Secured Obligations, or (iii) to cure any ambiguity, to correct or supplement any provision herein which may be defective or
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inconsistent with any other provision herein, or to make any other provision with respect to matters or questions arising hereunder which shall not be inconsistent with any provision hereof; provided that any such action contemplated by this clause (iii) shall not adversely affect the interests of the Secured Parties.
SECTION 9.04. Headings. The table of contents and the headings of Articles and Sections have been included herein for convenience only and should not be considered in interpreting this Agreement.
SECTION 9.05. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 9.06. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and shall inure to the benefit of each of the Secured Parties and their respective successors and permitted assigns and nothing herein is intended or shall be construed to give any other Person any right, remedy or claim under, to or in respect of this Agreement or any Collateral.
SECTION 9.07. Currency Conversions. In calculating the amount of Secured Obligations for any purpose hereunder, including, without limitation, voting or distribution purposes, the amount of any Secured Obligation which is denominated in a currency other than Dollars shall be converted into Dollars at the spot rate of exchange in London that appears on the display page, applicable to such currency, on the Reuters System (or other such page as may replace such page on such service for the purpose of displaying the spot rate of exchange in London) for the conversion of such currency into Dollars; provided that if at any time there shall no longer exist such a page on such service, the spot rate of exchange shall be determined by reference to another similar rate publishing service selected by the Administrative Agent and if no such similar rate publishing service is available, by reference to the published rate of the Administrative Agent in effect at such date for similar commercial transactions.
SECTION 9.08. Governing Law. This Agreement and the rights and obligations of the parties under this Agreement shall be governed by and construed in accordance with the laws of the State of New York, except as otherwise required by mandatory provisions of law.
SECTION 9.09. Submission to Jurisdiction. Navistar Financial and the Trustee each irrevocably consent and agree that any legal action, suit or proceeding against it with respect to its obligations, liabilities or any other matter arising out of or in connection with this Agreement or the transactions contemplated hereby shall be brought in the courts of the State of New York or the courts of the United States located in the Borough of Manhattan, New York, New York.
SECTION 9.10. Waiver of Jury Trial. NAVISTAR FINANCIAL AND THE TRUSTEE HEREBY IRREVOCABLY WAIVE, 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 AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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SECTION 9.11. Counterparts; Integration. This Agreement may be signed in any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by e-mail or other electronic delivery shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement constitutes the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement amends and restates in its entirety the terms and provisions of the Amended Security, Pledge and Trust Agreement, dated as of July 1, 2005, between Navistar Financial and Deutsche Bank Trust Company Americas, as trustee, and supersedes and replaces the terms thereof in their entirety.
SECTION 9.12. Termination. This Agreement shall terminate when the security interest granted hereunder has terminated and all the Collateral has been released; provided that the provisions of Sections 4.10, 4.11, 7.12 and 7.13 shall not be affected by any such termination.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first written above.
| NAVISTAR FINANCIAL CORPORATION | ||
| By | /s/ Anthony Aiello | |
| Name: | Anthony Aiello | |
| Title: | Vice President and Treasurer | |
| Address for notices: 2701 Navistar Drive Lisle, IL 60532 Attention: Treasurer Email: [email protected]
Copies of notices should be sent to each of the following:
Navistar Financial Corporation 2701 Navistar Drive Lisle, IL 60532 Attention: General Counsel Email: [email protected]
Paul Hastings LLP 71 S. Wacker Drive, 45th Floor Chicago, IL 60606 Attention: Maureen Sweeney Email: [email protected] | ||
Signature Page to the Second Amended and Restated Security Agreement
| DEUTSCHE BANK TRUST COMPANY AMERICAS | ||
| By | /s/ Irina Golovashchuk | |
| Name: | Irina Golovashchuk | |
| Title: | Vice President | |
| By | /s/ Debra A. Schwalb | |
| Name: | Debra A. Schwalb | |
| Title: | Vice President | |
| Deutsche Bank Trust Company Americas | ||
| By Deutsche Bank Trust Company Americas 100 Plaza One, 6th Floor, MS 0699 Jersey City, NJ 07311-3901 | ||
Signature Page to the Second Amended and Restated Security Agreement
| STATE OF ILLINOIS | ) | |||||
| : | ss: | |||||
| COUNTY OF COOK | ) |
On the day of , 2016 before me personally came Anthony Aiello and, to me personally known and known to me to be the persons described in and who executed the foregoing instrument as Vice President and Treasurer of NAVISTAR FINANCIAL CORPORATION, who, being by me duly sworn, did depose and say that he resides at ; that he is Vice President and Treasurer of NAVISTAR FINANCIAL CORPORATION, one of the corporations described in and which executed the foregoing instrument; that said instrument was signed and sealed on behalf of said corporation by order of its Board of Directors; that he signed his name thereto by like order; and that he acknowledged said instrument to be the free act and deed of said corporation.
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| [NOTARIAL SEAL] |
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| My commission expires: | ||||
Signature Page to the Second Amended and Restated Security Agreement
| STATE OF NEW YORK | ) | |||||
| : | ss: | |||||
| COUNTY OF NEW YORK | ) |
On the day of , 2016 before me personally came and , to me personally known and known to me to be the persons described in and who executed the foregoing instrument as and , respectively, of DEUTSCHE BANK TRUST COMPANY AMERICAS, who, being by me duly sworn, did depose and say that they reside at and , respectively; that they are and , respectively, of DEUTSCHE BANK TRUST COMPANY AMERICAS, one of the corporations described in and which executed the foregoing instrument; that said instrument was signed and sealed on behalf of said corporation by order of its Board of Directors; that he signed his name thereto by like order; and that he acknowledged said instrument to be the free act and deed of said corporation.
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| [NOTARIAL SEAL] | ||||
| My commission expires: | ||||
Signature Page to the Second Amended and Restated Security Agreement
SCHEDULE A
PERMITTED RECEIVABLES SALE AGREEMENTS
Navistar Financial Dealer Note Master Owner Trust II
| 1. | Purchase Agreement, dated November 2, 2011, by and between Navistar Financial and NFSC. |
| 2. | Series 2012-VFN Indenture Supplement dated as of August 29, 2012 to Indenture dated as of November 2, 2011. |
| 3. | Series 2014-1 Indenture Supplement dated as of November 5, 2014 to Indenture dated as of November 2, 2011. |
| 4. | Series 2015-1 Indenture Supplement dated as of July 24, 2015 to Indenture dated as of November 2, 2011. |
TRAC Retail Accounts Receivable Sales Agreement
| 5. | Receivable Sales Agreement dated as of May 23, 2014, between Navistar Financial, as Transferor, and Truck Retail Accounts Corporation, as Transferee. |
ITLC Lease Purchase Agreement
| 6. | ITLC Lease Purchase Agreement, dated as of June 30, 2004, between Navistar Financial and International Truck Leasing Corp. |
SCHEDULE B
LIST OF COLLECTION BANKS, LOCK-BOXES,
SUSPENSE ACCOUNTS AND COLLECTION ACCOUNTS
| * | Indicates UCC Deposit Account |
| COLLECTION BANK AND ADDRESS |
LOCK-BOXES |
SUSPENSE ACCOUNTS |
COLLECTION ACCOUNTS | |||
| Bank of America Corporation 231 S. LaSalle St. Chicago, IL 60697 |
No. ******* | Harco Leasing Account No. ******* |
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| No. ******* | Retail Suspense Account No. ******* |
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| No. ******* | Wholesale Suspense Account No. ******* |
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| Dealer ACH Receipts Acct. No. ******* | ||||||
| JPMorgan Chase Bank, N.A. 611 Woodward Ave. Mll-8033 Detroit, MI 48226 |
Foreign Collections Account (Export Receivables) Acct. No. ******* | |||||
| UTC Collections Account Acct. No. ******* | ||||||
SCHEDULE C
LIST OF PROCEEDS
ACCOUNT BANKS AND PROCEEDS DEPOSIT ACCOUNTS
| * | Indicates that such Deposit Account will be a UCC Deposit Account upon execution and delivery of an account control agreement pursuant to Section 4.07(e). |
| PROCEEDS ACCOUNT BANK AND ADDRESS |
PROCEEDS DEPOSIT ACCOUNT | |
| JPMorgan Chase Bank, N.A. | No. ************ | |
| 140 E. 45th Street | ||
| New York, NY 10017 |
SCHEDULE D
PROCEEDS ALLOCATION ACCOUNT
| * | Indicates that such Deposit Account will be a UCC Deposit Account upon execution and delivery of an account control agreement pursuant to Section 4.07(i). |
| CONCENTRATION BANK AND ADDRESS |
PROCEEDS ALLOCATION ACCOUNT | |
| JPMorgan Chase Bank, N.A. | No. ************ | |
| 140 E. 45th Street | ||
| New York, NY 10017 |
SCHEDULE E
SUBSIDIARIES AND CAPITALIZATION
| Subsidiary |
Outstanding share information |
Percent Pledged | ||||
| 1. | Navistar Financial Retail Receivables Corporation, a Delaware corporation | 1,000 shares of common stock, par value $1.00 per share | 100% | |||
| 2. | Navistar Financial Securities Corporation, a Delaware corporation | 1,000 shares of common stock, par value $1.00 per share | 100% | |||
| 3. | Truck Retail Accounts Corporation, a Delaware corporation | 1,000 shares of common stock, par value $0.01 per share | 100% | |||
| 4. | International Truck Leasing Corporation, a Delaware corporation | 1,000 shares of common stock, par value $0.01 per share | 100% | |||
| 5. | Navistar Leasing Services Corporation, a Delaware corporation | 13,618 shares of common stock, par value $100.00 per share | 100% | |||
| 6. | Navistar Financial Fleet Funding Corp., a Delaware corporation | 1,000 shares of common stock, par value $0.01 per share | 100% |
SCHEDULE F
INSTRUMENTS
| A. | Subsidiary Notes |
Navistar Leasing Services Corporation (formerly known as Harco Leasing Company, Inc.) Second Amended and Restated Grid Note in the Amount of $200,000,000
Navistar Financial Securities Corporation Promissory Note in the amount of $25,000,000
Navistar Financial Retail Receivables Corporation Revolving Note
Navistar Financial Securities Corporation Master Revolving Note
International Truck Leasing Corp. Revolving Note
Truck Retail Accounts Corporation Subordinated Note
Navistar Financial Fleet Funding Corp. Revolving Note
| B. | Stock Certificates |
Stock certificate number 1 for 1,000 shares of common stock of Navistar Financial Retail Receivables Corporation, held by Navistar Financial
Stock certificate number 2 for 1,000 shares of common stock of Navistar Financial Securities Corporation, held by Navistar Financial
Stock certificate number C-1 for 1,000 shares of common stock of Truck Retail Accounts Corporation, held by Navistar Financial
Stock certificate number 1 for 1,000 shares of common stock of International Truck Leasing Corporation, held by Navistar Financial
Stock certificate number 34 for 13,615 shares of the capital stock of Navistar Leasing Services Corporation (formerly known as Harco Leasing Company, Inc.), held by Navistar Financial (formerly known as International Harvester Credit Corporation)
Stock certificate number 35 for 3 shares of the capital stock of Navistar Leasing Services Corporation (formerly known as Harco Leasing Company, Inc.), held by Navistar Finnacial (formerly known as International Harvester Credit Corporation)
Stock certificate number 1 for 1,000 shares of common stock of Navistar Financial Fleet Funding Corp., held by Navistar Financial
| C. | Other Instruments |
Navistar Financial Dealer Note Master Owner Trust II Certificate
Navistar Financial Dealer Note Master Owner Trust II Second Amended and Restated Master Revolving Note
Used Truck Financing Secured Note, dated as of July 23, 2014, between Navistar Financial and International, as amended by Amendment No. 1 to Used Truck Financing Secured Note, entered into as of January 29, 2015, and Amendment No. 2 to Used Truck Financing Secured Note, entered into as of March 28, 2016
Amended and Restated Master Note, dated May 20, 2016, and issued by International Truck and Engine Corporation Cayman Islands Holding Company, a company organized in the Cayman Islands
Master Note, dated October 4, 2013, and issued by International Truck and Engine Corporation Cayman Islands Holding Company, a company organized in the Cayman Islands, as amended by the First Amendment to Intercompany Revolving Loan Agreement and Master Note, made as of October 24, 2014, and the Second Amendment to Intercompany Revolving Loan Agreement and Master Note, made as of February 1, 2016
EXHIBIT A
PERFECTION CERTIFICATE
[See attached.]
EXHIBIT B
CONFIRMATION
| To: | Deutsche Bank Trust Company Americas, as Trustee |
Navistar Financial Corporation
| Re: | Purchase for the Account of Deutsche Bank Trust Company Americas, |
as Trustee, of the marketable securities indicated below
Account Number:
Dear Sir or Madam:
Reference is made to the Second Amended and Restated Security, Pledge and Trust Agreement dated as of May 27, 2016 (as the same may be amended from time to time, the “Agreement”) between Navistar Financial Corporation (with its successors, “Navistar Financial”) and Deutsche Bank Trust Company Americas, as trustee (with its successors in such capacity, the “Trustee”). Terms defined in the Agreement and not otherwise defined herein have, as used herein, the respective meanings provided for therein.
We hereby confirm that we have purchased for the account of the Trustee the marketable securities identified on Schedule I hereto as to which ownership or the existence of a security interest is evidenced by entries on the books of a “securities intermediary” (as defined in the UCC), custodian or other entity. In addition, we hereby confirm that (a) we are a Permitted Financial Intermediary for purposes of the Agreement and the above-referenced purchase, (b) we have made such purchase through the above-referenced Securities Account of the Trustee, (c) we have made appropriate entries on our books to identify such marketable securities as being held for the Trustee, (d) we have received a copy of the Agreement executed by Navistar Financial and the Trustee and (e) such marketable securities [consist of direct obligations of the United States held in book-entry form at the Federal Reserve Bank of New York] [consist of specific certificated securities in our possession] [constitute or are part of a fungible bulk of “certificated securities” (as defined in the UCC) in our possession or of “uncertificated securities” (as so defined) registered in our name] [constitute or are part of a fungible bulk of “securities” (as defined in the UCC) shown on our account on the books of another “securities intermediary” (as so defined)].1
We agree as follows with respect to the above-referenced marketable securities: (a) we will have no right of compensation from any Person other than Navistar Financial; (b) we will look solely to Navistar Financial for payment of our expenses and charges, if any, in connection with any marketable securities held for the account of the Trustee or in connection with following the Trustee’s instructions with regard thereto; (c) such marketable securities will be maintained free and clear of all Liens in our favor or in favor of anyone claiming by, through or under us; and (d) if certificates shall at any time be issued to us with regard to such marketable securities, we shall hold such certificates as the Trustee’s bailee and agent.
| 1 | Insert one of the four bracketed clauses, as appropriate. |
This Confirmation shall be governed by and construed in accordance with the laws of the State of New York.
| Very truly yours, | ||
| (Permitted Financial Intermediary) | ||
| By: |
| |
| Title: | ||
SCHEDULE I
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