Exhibit 10.71
EXECUTION COPY
 
ABL CREDIT AGREEMENT
Dated as of June 15, 2007
among
INTERNATIONAL TRUCK AND ENGINE CORPORATION,
IC CORPORATION,
SST TRUCK COMPANY LP,
IC OF OKLAHOMA, LLC
and
INTERNATIONAL DIESEL OF ALABAMA, LLC,
as Borrowers,
THE LENDERS PARTY HERETO,
CREDIT SUISSE,
as Administrative Agent,
BANK OF AMERICA, N.A.,
as Collateral Agent,
BANC OF AMERICA SECURITIES LLC
and
JPMORGAN CHASE BANK, N.A.,
as Co-Syndication Agents,
and
GENERAL ELECTRIC CAPITAL CORPORATION
and
WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL),
as Co-Documentation Agents
 
CREDIT SUISSE SECURITIES (USA) LLC
and
BANC OF AMERICA SECURITIES LLC,
as Joint Lead Arrangers and Joint Bookrunners,
and
J.P. MORGAN SECURITIES INC.,
as Joint Bookrunner
 

 

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Table of Contents

              Page  
ARTICLE I
       
 
       
DEFINITIONS
       
 
       
SECTION 1.01. Defined Terms
    2  
 
       
SECTION 1.02. Classification of Loans and Borrowings
    26  
 
       
SECTION 1.03. Terms Generally
    26  
 
       
SECTION 1.04. Accounting Terms; GAAP
    27  
 
       
ARTICLE II
       
 
       
THE CREDITS
       
 
       
SECTION 2.01. Commitments
    27  
 
       
SECTION 2.02. Loans and Borrowings
    28  
 
       
SECTION 2.03. Requests for Borrowings
    28  
 
       
SECTION 2.04. Protective Advances
    29  
 
       
SECTION 2.05. Swingline Loans
    30  
 
       
SECTION 2.06. Letters of Credit
    31  
 
       
SECTION 2.07. Funding of Borrowings
    35  
 
       
SECTION 2.08. Type; Interest Elections
    35  
 
       
SECTION 2.09. Termination and Reduction of Commitments
    36  
 
       
SECTION 2.10. Repayment of Loans; Evidence of Debt
    37  
 
       
SECTION 2.11. Prepayment of Loans
    38  
 
       
SECTION 2.12. Fees
    39  
 
       
SECTION 2.13. Interest
    40  
 
       
SECTION 2.14. Alternate Rate of Interest
    40  
 
       
SECTION 2.15. Increased Costs
    41  
 
       
SECTION 2.16. Break Funding Payments
    42  

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              Page    
SECTION 2.17. Taxes
    42  
 
       
SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs
    44  
 
       
SECTION 2.19. Mitigation Obligations; Replacement of Lenders
    46  
 
       
SECTION 2.20. Illegality
    47  
 
       
SECTION 2.21. Reserves; Change in Reserves
    47  
 
       
ARTICLE III
       
 
       
REPRESENTATIONS AND WARRANTIES
       
 
       
SECTION 3.01. Organization
    47  
 
       
SECTION 3.02. Borrower Information
    48  
 
       
SECTION 3.03. Powers
    48  
 
       
SECTION 3.04. Governmental Authorization
    48  
 
       
SECTION 3.05. Due Execution
    48  
 
       
SECTION 3.06. No Action, Suit, Etc.
    48  
 
       
SECTION 3.07. No Material Adverse Change
    49  
 
       
SECTION 3.08. Consolidated Financials
    49  
 
       
SECTION 3.09. Information
    49  
 
       
SECTION 3.10. Margin Regulations
    49  
 
       
SECTION 3.11. Investment Company Act
    49  
 
       
SECTION 3.12. Solvency
    49  
 
       
SECTION 3.13. ERISA
    50  
 
       
SECTION 3.14. Environmental
    50  
 
       
SECTION 3.15. Taxes
    51  
 
       
SECTION 3.16. Existing Debt
    51  
 
       
SECTION 3.17. Existing Liens
    51  
 
       
SECTION 3.18. Ownership Change
    51  
 
       
SECTION 3.19. Insurance
    51  

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              Page    
SECTION 3.20. Security Interest in Collateral
    51  
 
       
SECTION 3.21. Sanctioned Persons
    52  
 
       
SECTION 3.22. “In the Business of Selling” Inventory Collateral
    52  
 
       
SECTION 3.23. Labor Disputes
    52  
 
       
ARTICLE IV
       
 
       
CONDITIONS
       
 
       
SECTION 4.01. Closing Date
    52  
 
       
SECTION 4.02. Each Borrowing
    55  
 
       
SECTION 4.03. Determinations Under Sections 4.01 and 4.02
    56  
 
       
ARTICLE V
       
 
       
AFFIRMATIVE COVENANTS
       
 
       
SECTION 5.01. Financial Statements; Borrowing Base and Other Information
    56  
 
       
SECTION 5.02. Notices of Material Events
    60  
 
       
SECTION 5.03. Existence; Conduct of Business
    61  
 
       
SECTION 5.04. Payment of Taxes
    61  
 
       
SECTION 5.05. Maintenance of Properties
    61  
 
       
SECTION 5.06. Books and Records; Inspection Rights; Appraisals; Field
Examinations
    61  
 
       
SECTION 5.07. Compliance with Laws
    62  
 
       
SECTION 5.08. Use of Proceeds
    62  
 
       
SECTION 5.09. Insurance
    63  
 
       
SECTION 5.10. Further Assurances
    63  
 
       
SECTION 5.11. Establishment and Utilization of the Collection Account
    63  
 
       
SECTION 5.12. Speculative Transactions
    64  
 
       
SECTION 5.13. Compliance with Modified Borrowing Base
    64  

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              Page    
ARTICLE VI
       
 
       
NEGATIVE COVENANTS
       
 
       
SECTION 6.01. Debt
    64  
 
       
SECTION 6.02. Liens
    66  
 
       
SECTION 6.03. Change in Nature of Business
    67  
 
       
SECTION 6.04. Mergers, Etc.
    67  
 
       
SECTION 6.05. Sales, Etc. of Assets
    68  
 
       
SECTION 6.06. Investments in Other Persons
    69  
 
       
SECTION 6.07. Restricted Payments
    71  
 
       
SECTION 6.08. Accounting Changes
    71  
 
       
SECTION 6.09. Prepayments, Etc., of Debt
    71  
 
       
SECTION 6.10. Partnerships, Etc.
    72  
 
       
SECTION 6.11. Payment Restrictions Affecting Borrowers
    72  
 
       
SECTION 6.12. Transactions with Affiliates
    72  
 
       
SECTION 6.13. Amendment of Material Documents
    72  
 
       
SECTION 6.14. Sales of Receivables
    72  
 
       
SECTION 6.15. Designation of Designated Senior Debt
    72  
 
       
ARTICLE VII
       
 
       
EVENTS OF DEFAULT
       
 
       
SECTION 7.01. Events of Default
    73  
 
       
ARTICLE VIII
       
 
       
THE AGENTS
       
 
       
SECTION 8.01. The Agents
    76  
 
       
SECTION 8.02. Indemnification by Lenders
    78  

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              Page    
ARTICLE IX
       
 
       
MISCELLANEOUS
       
 
       
SECTION 9.01. Notices
    78  
 
       
SECTION 9.02. Waivers; Amendments
    80  
 
       
SECTION 9.03. Expenses; Indemnity; Damage Waiver
    82  
 
       
SECTION 9.04. Successors and Assigns
    84  
 
       
SECTION 9.05. Survival
    88  
 
       
SECTION 9.06. Counterparts; Integration; Effectiveness
    88  
 
       
SECTION 9.07. Severability
    88  
 
       
SECTION 9.08. Right of Setoff
    89  
 
       
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process
    89  
 
       
SECTION 9.10. WAIVER OF JURY TRIAL
    90  
 
       
SECTION 9.11. Headings
    90  
 
       
SECTION 9.12. Confidentiality
    90  
 
       
SECTION 9.13. Lender Obligations Several; Violation of Law
    90  
 
       
SECTION 9.14. USA PATRIOT Act
    91  
 
       
SECTION 9.15. Disclosure
    91  
 
       
SECTION 9.16. Appointment for Perfection
    91  
 
       
SECTION 9.17. Interest Rate Limitation
    91  
 
       
SECTION 9.18. Borrower Liability
    91  
 
       
SECTION 9.19. Agency of ITEC as Administrative Borrower for Each Other Borrower
    93  
 
       
SECTION 9.20. Additional Borrowers
    93  
 
       
SECTION 9.21. Obligations Absolute
    93  
 
       
SECTION 9.22. Express Waivers and Representations by Borrowers
    94  

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SCHEDULES:
   
 
   
Commitment Schedule
   
Schedule 3.02
  - Borrowers
Schedule 3.06
  - Disclosed Matters
Schedule 3.16
  - Existing Debt
Schedule 3.17
  - Existing Liens
Schedule 3.19
  - Insurance
 
   
EXHIBITS:
   
 
   
Exhibit A
  - Form of Administrative Questionnaire
Exhibit B
  - Form of Assignment and Assumption
Exhibit C
  - Form of Borrowing Base Certificate
Exhibit D
  - Form of Perfection Certificate
Exhibit E
  - Form of Letter of Credit Request
Exhibit F
  - Form of Borrowing Request
Exhibit G
  - Form of Promissory Note
Exhibit H
  - Form of Security Agreement

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ABL CREDIT AGREEMENT
          ABL CREDIT AGREEMENT (this “Agreement”), dated as of June 15, 2007,
among INTERNATIONAL TRUCK AND ENGINE CORPORATION, a Delaware corporation
(“ITEC”), IC CORPORATION, an Arkansas corporation (“IC”), SST TRUCK COMPANY LP,
a Delaware limited partnership (“SST”), IC OF OKLAHOMA, LLC, a Delaware limited
liability company (“ICO”), INTERNATIONAL DIESEL OF ALABAMA, LLC, a Delaware
limited liability company (“IDA” and, together with IC, ITEC, SST and ICO and
any other Person joined to this Credit Agreement as a “Borrower” in accordance
with the terms herein, each a “Borrower” and collectively, the “Borrowers”), THE
LENDERS (as hereinafter defined) from time to time party hereto, CREDIT SUISSE,
as administrative agent for the Lenders hereunder (“Credit Suisse” or, together
with any successor administrative agent appointed pursuant hereto, in such
capacity and including any permitted successor or assign, the “Administrative
Agent”), BANK OF AMERICA, N.A., as collateral agent for the Lenders hereunder
(“BofA” or, together with any successor collateral agent appointed pursuant
hereto, in such capacity and including any permitted successor or assign, the
“Collateral Agent”), BANC OF AMERICA SECURITIES LLC (“BAS”) and JPMORGAN CHASE
BANK, N.A. (“JPM Bank”), as co-syndication agents (in such capacity and
including any permitted successor or assign, each a “Syndication Agent”),
GENERAL ELECTRIC CAPITAL CORPORATION and WACHOVIA CAPITAL FINANCE CORPORATION
(CENTRAL), as co-documentation agents (in such capacity and including any
permitted successor or assign, each a “Documentation Agent”), CREDIT SUISSE
SECURITIES (USA) LLC (“CS Securities”), BAS and J.P. MORGAN SECURITIES INC.
(“JPMS”), as joint lead bookrunners (in such capacity, each a “Bookrunner”), and
CS Securities and BAS, as joint lead arrangers (in such capacity, each an
“Arranger”).
PRELIMINARY STATEMENTS
          (1) The Borrowers have requested that (a) the Lenders extend credit in
the form of Revolving Loans from time to time during the Availability Period, in
an aggregate principal amount at any time outstanding not in excess of
$200,000,000, (b) the Swingline Lender extend credit, from time to time during
the Availability Period, in the form of Swingline Loans, in an aggregate
principal amount at any time outstanding not in excess of $25,000,000, and
(c) the Issuing Banks issue Letters of Credit, in an aggregate face amount at
any time outstanding not in excess of $200,000,000, to support payment
obligations incurred in the ordinary course of business by the Borrowers
(collectively, the “Facility”), so long as, in all cases, the aggregate
Exposures do not exceed the lesser of (i) the Available Commitments and (ii) the
Modified Borrowing Base (subject to Section 2.04).
          (2) The proceeds of the Revolving Loans and the Swingline Loans are to
be used to provide working capital financing and financing for the general
corporate purposes of the Borrowers.
          (3) The Lenders and the Swingline Lender are willing to extend such
credit to the Borrowers, and the Issuing Banks are willing to issue Letters of
Credit for the account of the Borrowers, in each case on the terms and subject
to the conditions set forth herein. Accordingly, the parties hereto herein agree
as follows (with capitalized terms used but not defined in these Preliminary
Statements or in the preamble above to have the meanings set forth in Article I
below):
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ARTICLE I
DEFINITIONS
          SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
          “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.
          “Accommodation Payment” means a repayment by a Borrower under this
Agreement, as a joint and several obligor, of any of the Obligations
constituting Loans made to another Borrower hereunder or other Obligations
incurred directly and primarily by any other Borrower.
          “Account” has the meaning assigned to such term in the Security
Agreement.
          “ACH” means automated clearing house transfers.
          “Adjusted LIBOR means, with respect to any LIBOR Borrowing for any
Interest Period, an interest rate per annum equal to the product of (a) the
LIBOR in effect for such Interest Period and (b) the Statutory Reserve
Percentage.
          “Adjustment Date” means the first day of each February, May, August,
and November as applicable.
          “Administrative Agent” has the meaning assigned to such term in the
preamble to this Agreement.
          “Administrative Borrower” has the meaning assigned to such term in
Section 9.19 of this Agreement.
          “Administrative Questionnaire” means an Administrative Questionnaire
in the form of Exhibit A.
          “Affiliate” means, as applied to any Person, any other Person (other
than, in the case of a Borrower, any other Borrower) directly or indirectly
Controlling, Controlled by, or under common Control with, that Person.
          “Agents” means the Administrative Agent and the Collateral Agent.
          “Agreement Value” means, for each Hedge Agreement, on any date of
determination, an amount reasonably determined by the Administrative Agent equal
to the amount, if any, that would be payable by any Borrower to its counterparty
to such Hedge Agreement in accordance with its terms as if (a) such Hedge
Agreement was being terminated early on such date of determination, and (b) such
Borrower was the sole “Affected Party.”
          “Alternate Base Rate” means, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
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Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
          “Applicable Percentage” means, with respect to any Lender, at any
time, a percentage equal to a fraction the numerator of which is such Lender’s
Commitment and the denominator of which is the aggregate Commitments. If the
commitment of each Lender to make Loans and the obligation of the Issuing Banks
to issue Letters of Credit have been terminated pursuant to this Agreement or if
the aggregate Commitments have expired, then the Applicable Percentage of each
Lender shall be determined based on the Applicable Percentage of such Lender
most recently in effect, giving effect to any subsequent assignments.
          “Applicable Rate” means, for any day, with respect to any ABR Loan or
LIBOR Loan, the applicable rate per annum set forth below under the caption
“LIBOR Spread”, based upon the Average Historical Excess Availability as of the
most recent Adjustment Date; provided that until the first Adjustment Date
occurring at least six full months after the Closing Date, the “Applicable Rate”
shall be the applicable rate per annum set forth below in Category 2:

                  Average Historical   LIBOR     Excess Availability   Spread  
ABR Spread
Category 1
               
Average Historical Excess Availability greater than or equal to $150,000,000.
    1.25 %     0.25 %
 
               
Category 2
               
Average Historical Excess Availability Greater than or equal to $50,000,000, but
less than $150,000,000.
    1.50 %     0.50 %
 
               
Category 3
               
Average Historical Excess Availability less than $50,000,000.
    1.75 %     0.75 %

The Applicable Rate shall be adjusted quarterly on a prospective basis on each
Adjustment Date based upon the Average Historical Excess Availability in
accordance with the table above; provided, however, that if an Event of Default
shall have occurred and be continuing at the time any reduction in the
Applicable Rate would otherwise be implemented, no such reduction shall be
implemented until the date on which such Event of Default shall have been cured
or waived.
          “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 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, advises or manages a Lender.
          “Arranger” has the meaning assigned to such term in the preamble to
this Agreement.
          “Assignment and Assumption” means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent,
substantially in the form of Exhibit B or any other form approved by the
Administrative Agent.
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          “Availability Period” means the period from and including the Closing
Date to but excluding the Maturity Date.
          “Availability Reserves” means, without duplication of any other
Reserves or items that are otherwise addressed or excluded through eligibility
criteria, such reserves as the Agents from time to time determine in their
Permitted Discretion as being appropriate reasonably to reflect any impediments
to the realization upon the Collateral consisting of Eligible Inventory included
in the Borrowing Base or otherwise in accordance with Section 2.21.
          “Available Commitments” means, at any time, an amount equal to (a) the
aggregate Commitments then in effect, minus (b) the Liquidity Block Amount.
          “Average Historical Excess Availability” means, at any Adjustment
Date, the average daily Excess Availability for the three month period
immediately preceding such Adjustment Date (with the Borrowing Base at such time
for any such day used to determine “Excess Availability” calculated by reference
to the most recent Borrowing Base Certificate delivered to the Administrative
Agent on or prior to such day pursuant to Section 5.01(c)).
          “Banking Services” means each and any of the following bank services
provided to any Borrower at the written request of such Borrower by the
Administrative Agent, any Lender or any of their Affiliates: (a) commercial
credit cards, and (b) stored value cards and treasury management services
(including, without limitation, overdraft, controlled disbursement, ACH
transactions, return items and interstate depository network services).
          “Banking Services Obligations” of the Borrowers means any and all
obligations of the Borrowers, whether absolute or contingent and however and
whenever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), in connection
with Banking Services.
          “Bankruptcy Law” means Title 11, U.S. Code, as amended from time to
time, or any similar foreign, federal or state law for the relief of debtors,
including all rules and regulations promulgated thereunder.
          “BAS” has the meaning assigned to such term in the preamble to this
Agreement.
          “Blackout Period” means the first four Business Days of a calendar
month or such lesser period during which ITEC’s computer system is unavailable
due to month-end file maintenance and closing procedures.
          “Blocked Cash Amount” means the amount of unrestricted cash and Cash
Equivalents of the Borrowers, in each case deposited or held in a segregated
depository account or investment account that is subject to a blocked account or
control agreement reasonably satisfactory to the Collateral Agent in favor of
the Collateral Agent (any such account, a “Blocked Cash Account”).
          “Board” means the Board of Governors of the Federal Reserve System of
the United States of America (or any successor thereto).
          “Board of Directors” means (a) with respect to a corporation, the
board of directors of the corporation, (b) with respect to a partnership, the
member, manager(s) or board of directors, as applicable, of the general partner
of the partnership and (c) with respect to any other Person, the member,
manager, the board or committee of such Person serving a similar function.
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          “BofA” has the meaning assigned to such term in the preamble to this
Agreement.
          “Borrower” has the meaning assigned to such term in the preamble to
this Agreement.
          “Borrowing” means any (a) Revolving Loans of the same Type made,
converted or continued on the same date and, in the case of LIBOR Loans, as to
which a single Interest Period is in effect, (b) Swingline Loan or
(c) Protective Advance.
          “Borrowing Base” means, at any time, an amount equal to the Inventory
Component minus, without duplication, the then-current amount of all
Availability Reserves and other Reserves (including any Inventory Reserves not
already reflected in the determination of Net Orderly Liquidation Value, Cost or
market value, as applicable) as the Agents may at any time and from time to time
in the exercise of their Permitted Discretion establish; provided, that (a)
“FMI/Red Tag Items” shall not constitute more than $20,000,000 of the total
Borrowing Base, and (b) used trucks shall not constitute more than $100,000,000
of the total Borrowing Base. The Borrowing Base at any time shall be determined
by reference to the most recent Borrowing Base Certificate delivered to the
Administrative Agent pursuant to Section 5.01(c).
          “Borrowing Base Certificate” means a certificate, signed and certified
as accurate and complete in all material respects by a Financial Officer of the
Administrative Borrower on behalf of the Borrowers, in substantially the form of
Exhibit C or another form which is acceptable to the Agents in their reasonable
discretion.
          “Borrowing Request” means a request by a Borrower for a Borrowing in
accordance with Section 2.03 and substantially in the form attached hereto as
Exhibit F, or such other form as shall be approved by the Administrative Agent.
          “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 LIBOR 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 amount thereof accounted for as
a liability determined in accordance with GAAP; provided, that a change in GAAP
or the interpretation thereof shall not result in any lease of real property
that is, or would be, characterized by a Person as an operating lease in
accordance with GAAP in effect on the date hereof being considered a Capital
Lease Obligation.
          “Capitalized Leases” means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
          “Cash Equivalents” 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
24 months from the date of acquisition;
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     (b) certificates of deposit and eurodollar time deposits with maturities of
24 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 having capital and surplus in excess of
$500,000,000 and, as applicable, a Thomson Bank Watch Rating of “B” or better;
     (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,
(i) capital, surplus and undivided profits (as of the date of such institution’s
most recently published financial statement) in excess of $100,000,000, and
(ii) 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 (i) such instrument has a final maturity not more than one year
from the date of purchase thereof, and (ii) such depository institution or trust
company has at the time of the Investment therein or contractual commitment
providing for such Investment, (A) capital, surplus and undivided profits (as of
the date of such institution’s most recently published financial statement) in
excess of $100,000,000 and (B) 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;
     (g) (i) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (a) through (e) of this
definition, or (ii) money market funds which are rated at least “AAA” from S&P;
or
     (h) United States dollars.
          Notwithstanding the foregoing, any investments which would otherwise
constitute Cash Equivalents of the kinds described in clauses (a), (b), (c) and
(d) hereof that are permitted to have maturities in excess of 12 months shall
only be deemed to be Cash Equivalents under this definition if and only if the
total weighted average maturity of all Cash Equivalents of the kinds described
in clauses (a), (b), (c) and (d) does not exceed twelve months on an aggregate
basis.
          “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 any
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Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such
Lender or by such Lender’s or such Issuing Bank’s holding company, if any) 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
(other than any such request, guideline or directive to comply with any law,
rule or regulation that was in effect on the date of this Agreement).
          “Change of Control” means the occurrence of one or more of the
following events:
     (a) any “person” or “group” (as such terms are used in Section 13(d) and
14(d) of the Exchange Act), other than employee or retiree benefit plans or
trusts sponsored or established by Navistar or any Borrower is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of Navistar representing 35% or more of the
combined voting power of Navistar’s then-outstanding Voting Interests;
     (b) the following individuals cease for any reason to constitute more than
a majority of the number of directors then serving on the Board of Directors of
Navistar: individuals who, on the date hereof, constitute such Board of
Directors and any new director (other than a director whose initial assumption
of the office is in connection with an actual or threatened election contest,
including but not limited to a consent solicitation, relating to the election of
directors of Navistar) whose appointment or election by such Board of Directors
or nomination for election by such Person’s stockholders was approved by the
vote of at least a majority of the directors then still in office or whose
appointment, election or nomination was previously so approved or recommended
with respect to directors whose appointment of election to such Board of
Directors was made by the holders of Navistar’s nonconvertible junior preference
stock, series B, by the holders of such preference stock;
     (c) the shareholders of Navistar or any Borrower shall approve any Plan of
Liquidation (whether or not otherwise in compliance with the provisions hereof),
other than (i) a dissolution or winding up of a Borrower under which all of the
assets of such Borrower are transferred to another Borrower or (ii) as otherwise
expressly permitted herein;
     (d) Navistar consolidates with or merges with or into another Person, other
than a merger or consolidation of Navistar in which the holders of the common
stock of Navistar outstanding immediately prior to the consolidation or merger
hold, directly or indirectly, at least a majority of the common stock of the
surviving corporation immediately after such consolidation or merger;
     (e) Navistar or any Borrower, directly or indirectly, sells, assigns,
conveys, transfers, leases or otherwise disposes of, in one transaction or a
series of related transactions, all or substantially all of the property or
assets of Navistar and its Restricted Subsidiaries or any Borrower and its
Restricted Subsidiaries (determined on a Consolidated basis) to any Person;
provided, that neither (i) the merger of a Restricted Subsidiary of a Borrower
into a Borrower or into any other Restricted Subsidiary, nor (ii) a series of
transactions involving the sale of receivables or interests therein in the
ordinary course of business by a Finance Subsidiary in connection with a
Permitted Receivables Financing, nor (iii) the grant of a lien on assets of
Navistar or any Subsidiary thereof in connection with the Facility nor (iv) the
sale, conveyance, transfer or lease otherwise permitted hereunder shall be
deemed to be a Change of Control; or
     (f) (i) ITEC ceases to be a wholly-owned direct or indirect Subsidiary of
Navistar, or (ii) any of IC, SST, ICO or IDA cease to be a wholly-owned direct
or indirect Subsidiary of ITEC.
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          “Class”, when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Loans, Swingline
Loans or Protective Advances.
          “Closing Date” means June 15, 2007, which is the date on which the
conditions specified in Section 4.01 are satisfied (or are waived in accordance
with Section 9.02).
          “Code” means the Internal Revenue Code of 1986, as amended from time
to time.
          “Collateral” means (a) any and all Inventory and the proceeds thereof
(other than Receivables sold by a Borrower pursuant to, and in accordance with,
a Master Intercompany Agreement); (b) any and all obligations to pay and any
other “payment intangibles” (as defined in the UCC) arising from the sale of
Receivables by a Borrower under any Master Intercompany Agreement, and all
proceeds derived therefrom; and (c) any and all related property owned by any
Borrower subject to a Lien under the Collateral Documents (including, without
limitation, the Collection Account, the Blocked Cash Account and the LC
Collateral Account) and any and all other Inventory of any Borrower, now
existing or hereafter acquired, that may at any time be or become subject to a
Lien in favor of the Collateral Agent, on behalf of itself and the Lenders, to
secure the Secured Obligations.
          “Collateral Access Agreement” has the meaning assigned to such term in
the Security Agreement.
          “Collateral Agent” has the meaning assigned to such term in the
preamble to this Agreement.
          “Collateral Documents” means, collectively, the Security Agreement,
any Collateral Access Agreement, any account control agreement and any other
documents granting and/or perfecting a Lien upon the Collateral as security for
payment of the Secured Obligations.
          “Collection Account” has the meaning assigned to such term in
Section 5.11.
          “Commitment” means, with respect to each Lender, (a) the commitment of
such Lender to make Revolving Loans, acquire participations in Letters of
Credit, make Protective Advances and make Swingline Loans hereunder, expressed
as an amount representing the maximum possible aggregate amount of such Lender’s
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.09, and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04. The
initial amount of each Lender’s Commitment is set forth on the Commitment
Schedule, or in the Assignment and Assumption pursuant to which such Lender
shall have assumed its Commitment, as applicable. The initial aggregate amount
of the Lenders’ Commitments is $200,000,000.
          “Commitment Fee Rate” means (a) for any day from the Closing Date
until the first Adjustment Date occurring at least six full months after the
Closing Date, a rate equal to 0.375% per annum, and (b) for any day thereafter,
the applicable rate per annum set forth below based upon the Total Utilization
of Commitments:

          Total Utilization of Commitments   Commitment Fee Rate
Greater than or equal to $100,000,000
    0.250 %
 
       
Less than $100,000,000
    0.375 %

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The Commitment Fee Rate shall be adjusted quarterly on a prospective basis on
each Adjustment Date in accordance with the table above, based on the average
for the immediately preceding quarter of the Total Utilization of Commitments;
provided, however, that if an Event of Default shall have occurred and be
continuing at the time any reduction in the Commitment Fee Rate would otherwise
be implemented, no such reduction shall be implemented until the date on which
such Event of Default shall have been cured or waived.
          “Commitment Schedule” means the Schedule attached hereto and
identified as such.
          “Consolidated” refers to the consolidation of accounts in accordance
with GAAP.
          “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 or by contract.
“Controlling” and “Controlled” have meanings correlative thereto.
          “Cost” means the cost of purchases of Inventory determined according
to the accounting policies used in the preparation of the Borrowers’ financial
statements (pursuant to which the average cost method of accounting is utilized
for substantially all merchandise Inventories).
          “Credit Extensions” means each of (a) a Borrowing and (b) an LC Credit
Extension.
          “CS” has the meaning assigned to such term in the preamble to this
Agreement.
          “CS Securities” has the meaning assigned to such term in the preamble
to this Agreement.
          “Debt” of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all Obligations of such Person for the
accrued purchase price of property or services (other than obligations under
trade payables, deferred expenses, deferred compensation and similar obligations
arising in the ordinary course of business), (c) all Obligations of such Person
evidenced by notes, bonds, debentures or other similar instruments, (d) all
Obligations of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Capital Lease Obligations of such Person, (f) all Obligations
of such Person under acceptance, letter of credit or similar facilities, (g) all
Obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interests in such Person or any other
Person, to the extent either (i) such Obligations would represent a claim
against such Person in a proceeding under any Bankruptcy Law or (ii) in the case
of Redeemable Preferred Interests, such interests are redeemable by their terms
or at the option of the holder prior to one year after the Maturity Date,
(h) all Obligations of such Person in respect of Hedge Agreements, valued at the
Agreement Value thereof, (i) all Guaranteed Debt and Synthetic Debt of such
Person and (j) all indebtedness and other payment Obligations referred to in
clauses (a) through (i) above of another Person secured by (or for which the
holder of such Debt has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such indebtedness or other payment
Obligations. Debt shall not include customary contractual indemnities or
warranties.
          “Debt for Borrowed Money” of any Person means, at any date of
determination, the sum of (a) all items that, in accordance with GAAP, would be
classified as indebtedness on a Consolidated balance sheet of such Person at
such date, (b) all Obligations of such Person under acceptance, letter of credit
or similar facilities at such date and (c) all Synthetic Debt of such Person at
such date.
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          “Default” means any Event of Default or any event that would
constitute an Event of Default but for the passage of any grace period or the
requirement that notice be given or both.
          “Defaulting Lender” means any Lender that has (a) defaulted in its
obligation to make a Revolving Loan or to fund its participation in a Letter of
Credit, Swingline Loan or Protective Advance required to be made or funded by it
hereunder, (b) notified the Administrative Agent or a Borrower in writing that
it does not intend to satisfy any such obligation, or (c) become insolvent or
the assets or management of which has been taken over by any Governmental
Authority.
          “Disclosed Matters” has the meaning assigned to it in Section 4.01(1).
          “Disclosure Filings” means public filings made by Navistar since
December 31, 2004 pursuant to and in accordance with the Exchange Act filed and
available to the public on or before the date hereof and such further
information as has been disclosed in writing to the Agents and the Lenders on or
before the date hereof.
          “Document” has the meaning set forth in Article 9 of the UCC.
          “Dollars” or “$” refers to lawful money of the United States of
America.
          “Eligible Assignee” means (a) a Lender, (b) a commercial bank,
insurance company or company engaged in the business of making commercial loans
or a commercial finance company, which Person, together with its Affiliates, has
a combined capital and surplus in excess of $1,000,000,000 (provided, that for
purposes of determining eligibility with respect to Section 9.04(b)(i)(A), such
Person, together with its Affiliates, shall only be required to have a combined
capital and surplus of at least $500,000,000 to the extent that an Event of
Default has occurred and is continuing at the time of such assignment, in
accordance with the terms hereof), (c) any Affiliate of a Lender under common
control with such Lender, or (d) an Approved Fund of a Lender; provided that in
any event, “Eligible Assignee” shall not include (i) any natural person,
(ii) any Defaulting Lender, or (iii) Navistar or any Borrower or any Affiliate
of any thereof.
          “Eligible In-Transit Inventory” means, at any time, without
duplication of other Eligible Inventory, Inventory which has been shipped from a
domestic location of any Borrower for receipt by any Borrower or a processor
within the U.S., within ten days of the date of shipment, but, in either case,
which has not yet been delivered to such Borrower or processor, and (a) which
otherwise would constitute Eligible Inventory; (b) for which the purchase order
is in the name of a Borrower and title has passed to such Borrower; and
(c) which is insured in accordance with the terms of this Agreement.
          “Eligible Inventory” means, at any time, all Inventory (including,
without duplication, Eligible In-Transit Inventory) of the Borrowers; provided,
however, that Eligible Inventory shall not include any Inventory:
          (a) which is not subject to a first priority (subject to Permitted
Liens arising by operation of law, as described in clauses (a) and (b) of the
definition of Permitted Liens) perfected Lien in favor of the Collateral Agent;
          (b) which is subject to any Lien other than (i) a Lien in favor of the
Collateral Agent, (ii) a Permitted Lien arising by operation of law, as
described in clauses (a) and (b) of the definition of “Permitted Liens”, (iii) a
Landlord Lien as to which either (x) a subordination agreement reasonably
satisfactory to the Collateral Agent has been obtained or
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(y) a Landlord Lien Reserve applies or (iv) a mechanics lien as to which an
appropriate Reserve has been established by the Agents in their Permitted
Discretion;
          (c) which is (i) Slow Moving or (ii) obsolete, unmerchantable,
defective, or unfit for sale as determined in the ordinary course of business of
the Borrowers consistent with past practices;
          (d) except as otherwise agreed by the Agents, which does not conform
in all material respects to the representations and warranties contained in this
Agreement or the Security Agreement;
          (e) which is not owned only by one or more Borrowers;
          (f) which constitutes packaging and shipping material, supplies,
samples, prototypes, displays or display items, bill-and-hold goods, goods that
are returned or marked for return (but not held for resale and not otherwise
constituting Eligible Inventory) or repossessed, or which constitutes goods held
on consignment or goods which are not of a type held for sale in the ordinary
course of business;
          (g) which is not located in the U.S. or is in transit (other than
Eligible In-Transit Inventory);
          (h) which is located at any location leased by a Borrower, unless
(i) the lessor has delivered to the Collateral Agent a Collateral Access
Agreement as to such location or (ii) up to a three month Reserve for rent,
charges, and other amounts due or to become due with respect to such location
has been established by the Agents in their Permitted Discretion;
          (i) which is located in any third party warehouse or is in the
possession of a bailee (other than a third party processor) and is not evidenced
by a Document, unless (i) such warehouseman or bailee has delivered to the
Collateral Agent a Collateral Access Agreement and such other documentation as
the Agents may reasonably require or (ii) an appropriate Reserve (not to exceed
three months of charges) or lien subordination has been established by the
Agents in their Permitted Discretion;
          (j) which is being processed offsite at a third party location or
outside processor or is in transit (in each case, other than Eligible In-Transit
Inventory) to or from said third party location or outside processor unless an
appropriate Reserve (not to exceed the total amount payable to such processor
based on monthly sales) has been established by the Agents in their Permitted
Discretion;
          (k) which consists of used trucks which are located in, or originated
from, a state which requires such used trucks to be re-titled upon sale and such
used trucks have not been so re-titled;
          (l) which is the subject of a consignment for sale on behalf of a
Borrower as consignor unless a consignment agreement, security agreement, and
UCC filing in each case reasonably satisfactory to the Agents is in place with
respect to such Inventory;
          (m) which contains or bears any intellectual property rights licensed
to any Borrower by any Person other than a Borrower unless the Collateral Agent
may sell or otherwise dispose of such Inventory without (i) infringing the
rights of such licensor, (ii) violating any
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contract with such licensor, or (iii) incurring any liability with respect to
payment of royalties other than royalties incurred pursuant to sale of such
Inventory under the current licensing agreement relating thereto;
          (n) which is not reflected in a current perpetual inventory report of
a Borrower (other than with respect to Eligible In-Transit Inventory);
          (o) which is acquired in connection with an acquisition permitted
pursuant to Section 6.06 hereof, to the extent the Agents shall not have
received a Report in respect of such Inventory, which Report shows results
reasonably satisfactory to the Agents; or
          (p) which falls into a category of ineligibility as may be established
by the Agents in their Permitted Discretion; provided that the Agents shall have
provided the Administrative Borrower at least five Business Days’ prior written
notice of any such establishment.
          “Engagement Letter” means that certain Engagement Letter, dated as of
April 20, 2007, by and among Navistar, the Administrative Borrower, Credit
Suisse, CS Securities, BofA, BAS, JPM Bank and JPMS.
          “Environmental Action” means any action, suit, demand, demand letter,
claim, written notice of non compliance or violation, written notice of
liability or potential liability, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law, any
Environmental Permit or Hazardous Material or arising from alleged injury or
threat to health, safety or the environment, including, without limitation,
(a) by any governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages, and (b) by any
governmental or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
          “Environmental Laws” means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices, promulgated or
entered into by any Governmental Authority, relating to the environment,
preservation or reclamation of natural resources, the management, release or
threatened release of any Hazardous Material or to health and safety matters.
          “Environmental Permit” means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
          “Equity Interests” means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
          “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
          “ERISA Affiliate” means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Borrower, or under common
control with any Borrower, within the meaning of Section 414 of the Internal
Revenue Code.
          “ERISA Event” means (a)(i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to
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such event has been waived by the PBGC or (ii) the requirements of Section
4043(b) of ERISA apply with respect to a contributing sponsor, as defined in
Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph
(10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to
occur with respect to such Plan within the following 30 days; (b) the
application for a minimum funding waiver with respect to a Plan; (c) the
provisions by the administrator of any Plan of a notice of intent to terminate
such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice
with respect to a plan amendment referred to in Section 4041(e) of ERISA);
(d) the cessation of operations at the facilities of any Borrower or any ERISA
Affiliate in the circumstances described in Section 4062(e) of ERISA; (e) the
withdrawal by any Borrower or any ERISA Affiliate from a Multiple Employer Plan
during a plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a Lien under
Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the
adoption of an amendment to a Plan requiring the provisions of security to such
Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to
administer, such Plan.
          “Event of Default” has the meaning assigned to such term in
Section 7.01.
          “Excess Availability” means, at any time, an amount equal to (a) the
lesser of the applicable aggregate Commitments at such time and the applicable
Borrowing Base at such time (as determined by reference to the most recent
Borrowing Base Certificate required to be delivered to the Administrative Agent
pursuant to Section 5.01(c)), minus (b) the Liquidity Block Amount, minus
(c) the aggregate Exposures of all Lenders at such time.
          “Exchange Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
          “Excluded Taxes” means, with respect to any Agent, any Lender, any
Issuing Bank or any other recipient of any payment to be made by or on account
of any obligation of the Administrative Borrower or any other Borrower
hereunder, (a) income or franchise taxes imposed on (or measured by) its net
income by the United States of America, or by the jurisdiction under the laws of
which such recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which the Administrative
Borrower or any other Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by a Borrower under
Section 2.19(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign Lender’s
failure to comply with Section 2.17(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the
Administrative Borrower or any other Borrower with respect to such withholding
tax pursuant to Section 2.17(a).
          “Existing Debt” means Debt of each Borrower outstanding immediately
before the occurrence of the Closing Date.
          “Exposure” means, with respect to any Lender at any time, the sum of
(a) the outstanding principal amount of such Lender’s Revolving Loans, (b) its
LC Exposure, (c) its Applicable Percentage of the aggregate principal amount of
Swingline Loans outstanding at such time, and (d) its Applicable Percentage of
the aggregate principal amount of Protective Advances outstanding at such time.
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          “Facility” has the meaning assigned to such term in the Preliminary
Statements to this Agreement.
          “Facility Obligations” means all unpaid principal of and accrued and
unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and
all expenses, reimbursements, indemnities and other obligations of the Borrowers
to the Lenders or to any Lender, the Agents, any Issuing Bank or any Indemnified
Party arising under the Loan Documents.
          “Federal Funds Effective Rate” means, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or if such day is not a Business Day on the preceding 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 of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
          “Finance Subsidiary” means NFC, any Subsidiary of NFC and any other
Unrestricted Subsidiary or any Restricted Subsidiary, in each case that provides
wholesale, retail, lease or other financing with respect to the business
operations of Navistar and its subsidiaries or to dealers or retail customers of
Navistar and its subsidiaries.
          “Financial Officer” of any Person means the chief financial officer,
treasurer, vice president of finance, controller or assistant treasurer of such
Person.
          “Fiscal Year” means a fiscal year of the Borrowers ending on
October 31 in any calendar year.
          “Foreign Lender” means a person that is not a “United States person”
within the meaning of Section 7701(a)(30) of the Code.
          “Funding Account” has the meaning assigned to such term in
Section 4.02(e).
          “GAAP” means generally accepted accounting principles in the United
States of America in effect and applicable to that accounting period in respect
of which reference to GAAP is being made, subject to the provisions of
Section 1.04.
          “Governmental Authority” means any nation or government, any state,
province, city, municipal entity or other political subdivision thereof, and any
governmental, executive, legislative, judicial, administrative or regulatory
agency, department, authority, instrumentality, commission, board, bureau or
similar body, whether federal, state, provincial, territorial, local or foreign.
          “Governmental Authorization” means any authorization, approval,
consent, franchise, license, covenant, order, ruling, permit, certification,
exemption, notice, declaration or similar right, undertaking or other action of,
to or by, or any filing, qualification or registration with, any Governmental
Authority.
          “Guaranteed Debt” means, with respect to any Person, any Obligation or
arrangement of such Person to guarantee or intended to guarantee any Debt
(“primary obligations”) of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly, including, without limitation but
without duplication, (a) the direct or indirect guarantee (other than customary
contractual indemnities or warranties), endorsement (other than for collection
or deposit in the ordinary course of business), co making, discounting with
recourse or sale with recourse by such Person of the Obligation of a primary
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obligor, (b) the Obligation to make take-or-pay or similar payments, if
required, regardless of nonperformance by any other party or parties to an
agreement or (c) any Obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (A) for the
purchase or payment of any such primary obligation or (B) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
assets, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the holder of such primary obligation against loss in respect thereof. The
amount of any Guaranteed Debt shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Guaranteed Debt is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Guaranteed Debt) or, if not stated or determinable,
the maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder), as determined by such Person in good
faith.
          “Hazardous Materials” means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.
          “Hedge Agreements” means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
forward, future or option contracts, commodity price/index swap, futures or
option contracts, credit default swap or option agreements and other hedging
agreements.
          “Indemnified Party” has the meaning assigned to such term in Section
9.03(b).
          “Indemnified Taxes” means Taxes other than Excluded Taxes.
          “Information” has the meaning set forth in Section 3.09.
          “Information Memorandum” means the Confidential Information
Memorandum, dated May, 2007, relating to the Borrowers and the Transactions.
          “Insufficiency” means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
          “Interest Election Request” means a request by a Borrower to convert
or continue a Borrowing in accordance with Section 2.08.
          “Interest Payment Date” means (a) with respect to any ABR Loan
(including any Swingline Loan), the last Business Day of each March, June,
September and December (commencing September 28, 2007) and the Maturity Date and
(b) with respect to any LIBOR 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
LIBOR Borrowing with an Interest Period of more than three months’ duration,
each day that would have been an Interest Payment Date had successive Interest
Periods of three months’ duration been applicable to such Borrowing.
          “Interest Period” means (a) with respect to any LIBOR Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the
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calendar month that is one, two, three or six months (or, to the extent
available to each Lender, nine or twelve months, or such other period as may be
agreed to by all the Lenders) thereafter, as the applicable 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 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 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 thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.
          “Inventory” has the meaning assigned to such term in the Security
Agreement.
          “Inventory Component” means the lesser of (a) 65% of Eligible
Inventory, valued at the lower of Cost and market value, and (b) 85% of the Net
Orderly Liquidation Value of Eligible Inventory.
          “Inventory Reserves” means (a) such reserves as may be established
from time to time by the Agents, in their Permitted Discretion, with respect to
changes in the determination of the saleability, at retail, of the Eligible
Inventory or which reflect such other factors as negatively affect the market
value of the Eligible Inventory, (b) Shrink Reserves, (c) such Reserves as may
be established from time to time by the Agents, in their Permitted Discretion,
with respect to export parts inventory, based on the Borrowers’ monthly sales of
export parts, and/or (d) such Reserves as shall have been established from time
to time by the Agents in accordance with Section 2.21.
          “Investment” in any Person means any loan or advance to such Person,
any purchase or other acquisition of any Equity Interests or Debt or the assets
comprising a division or business unit or all or substantially all of the
business of such Person, any capital contribution to such Person or any other
direct or indirect investment in such Person, including, without limitation, any
acquisition by way of a merger or consolidation (or similar transaction) and any
arrangement pursuant to which the investor incurs Debt of the types referred to
in clause (i) or (j) of the definition of “Debt” in respect of such Person;
provided, however, that for purposes of calculation, the amount of any
Investment outstanding at any time shall be the aggregate cash Investment less
all cash returns, cash dividends and cash distributions (or the fair market
value of any non-cash returns, dividends and distributions) received by such
Person and less all liabilities expressly assumed by another Person in
connection with the sale of such Investment.
          “Issuing Bank” means each of Credit Suisse, BofA, JPM Bank and any
other Lender which at the request of a Borrower and with the consent of the
Administrative Agent (not to be unreasonably withheld) agrees to become an
Issuing Bank. Each Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case
the term “Issuing Bank” shall include any such Affiliate with respect to Letters
of Credit issued by such Affiliate.
          “January Credit Agreement” means the Credit Agreement, as amended
through the date hereof, dated January 19, 2007, among, inter alia, Navistar,
the subsidiary guarantors of Navistar from time to time party thereto, JPM Bank,
as administrative agent, and the lenders from time to time party thereto as
amended or otherwise modified from time to time in accordance with and subject
to Section 6.13 hereof.
          “January Credit Facility” means the $1,500,000,000 senior term loan
and revolving facilities provided for under the January Credit Agreement.
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          “JPM Bank” has the meaning assigned to such term in the preamble to
this Agreement.
          “JPMS” has the meaning assigned to such term in the preamble to this
Agreement.
          “Landlord Lien” means any Lien of a landlord on any Borrower’s
property, granted by statute.
          “Landlord Lien Reserve” means an amount equal to (a) up to three
months’ rent for all of the Borrowers’ leased locations where Eligible Inventory
is located in each Landlord Lien State, other than leased locations with respect
to which the Collateral Agent shall have received a landlord’s waiver or
subordination of lien in form reasonably satisfactory to the Agents or (b) zero,
to the extent the Agents shall have otherwise waived the landlord waiver or
subordination or Reserve.
          “Landlord Lien State” means (a) each of Washington, Virginia and
Pennsylvania and (b) such other state(s) in which a landlord’s claim for rent
has priority by operation of law over the Lien of the Collateral Agent in any of
the Collateral consisting of Eligible Inventory.
          “LC Collateral Account” has the meaning assigned to such term in
Section 2.06(j).
          “LC Credit Extension” means, with respect to any Letter of Credit, the
issuance thereof (in the face amount thereof) or any increase in the face amount
thereof.
          “LC Disbursement” means a payment made by an Issuing Bank pursuant to
a drawing on a Letter of Credit.
          “LC Exposure” means, at any time of determination, 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 that have not yet been
reimbursed or converted to Loans by or on behalf of the Administrative Borrower
or any other Borrower at such time, less (c) the amount then on deposit in the
LC Collateral Account. The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.
          “Lead Arranger” has the meaning assigned to such term in the preamble
to this Agreement.
          “Lenders” means the Persons listed on the Commitment Schedule and any
other Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption. Unless the context otherwise requires, the term
“Lenders” includes the Swingline Lender.
          “Letter of Credit” means any standby or commercial letter of credit
issued pursuant to this Agreement.
          “Letter of Credit Request” has the meaning assigned to such term in
Section 2.06(b).
          “LIBOR” means, with respect to any Interest Period applicable to any
LIBOR Borrowing, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m. (London time) on the date that is two Business Days
prior to the beginning of the relevant Interest Period by reference to the
British Bankers’ Association Interest Settlement Rates for deposits in Dollars
(as set forth by the Bloomberg Information Service or any successor thereto or
any other service selected by the Administrative Agent which has been nominated
by the British Bankers’ Association as an authorized
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information vendor for the purpose of displaying such rates) for a period equal
to such Interest Period; provided that, to the extent that an interest rate is
not ascertainable pursuant to the foregoing provisions of this definition, the
“LIBOR” shall be the interest rate per annum determined by the Administrative
Agent to be the average of the rates per annum at which deposits in Dollars are
offered for such relevant Interest Period to major banks in the London interbank
market in London, England by the Administrative Agent at approximately
11:00 a.m. (London time) on the date that is two Business Days prior to the
beginning of such Interest Period.
          “Lien” means any lien, security interest, encumbrance or other charge
of any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.
          “Liquidation” means the exercise by the Administrative Agent or
Collateral Agent of those rights and remedies accorded to such Agents under the
Loan Documents and applicable law as a creditor of the Borrowers with respect to
the realization on the Collateral during the continuation of an Event of
Default, or the conduct by the Borrowers acting with the consent of the
Administrative Agent, of any public, private or going out of business sale or
other disposition of the Collateral for the purpose of liquidating the
Collateral. Derivations of the word “Liquidation” (such as “Liquidate”) are used
with like meaning in this Agreement.
          “Liquidity Block Amount” means an amount equal to $15,000,000;
provided, that, except with respect to calculating Excess Availability for the
purpose of determining pricing or fees hereunder, such amount shall be reduced,
on a dollar-for-dollar basis, by the aggregate amount of the then-applicable
Suppressed Availability and the then-available Blocked Cash Amount, up to a
maximum aggregate reduction of $5,000,000.
          “Loan Documents” means this Agreement, any promissory notes issued
pursuant to the Agreement, any Letters of Credit or Letter of Credit
applications, the Engagement Letter and the Collateral Documents. Any reference
in this Agreement or any other Loan Document to a Loan Document shall include
all appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto.
          “Loans” means the loans and advances made by the Lenders pursuant to
this Agreement, including Revolving Loans, Swingline Loans and Protective
Advances.
          “Margin Stock” has the meaning assigned to such term in Regulation U.
          “Master Intercompany Agreements” means (a) the NFC MIA; (b) the
agreement, dated as of December 18, 1986, among Navistar International
Corporation Canada, Navistar Financial Corporation Canada Inc. and General
Electric Canadian Holdings Limited; and (c) one or more similar agreements among
Navistar or one or more of its Restricted Subsidiaries and one or more other
Persons (including, without limitation, Unrestricted Subsidiaries that comprise
Navistar’s financial service operations with terms and conditions consistent
with such Person’s past practice and entered into in the ordinary course of
business) on terms no less favorable to Navistar and its Restricted Subsidiaries
than the agreements in clauses (a) and (b) hereof, as each such agreement may be
amended, modified, supplemented or restated from time to time; provided, that
none of the aforementioned agreements shall be amended, modified, supplemented
or restated in a manner adverse in any material respect to the interests of
Navistar or its Restricted Subsidiaries.
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          “Material Adverse Change” means any material adverse change in the
business, financial condition, operations, performance or properties of the
Borrowers, taken as a whole (other than to the extent disclosed in the
Disclosure Filings).
          “Material Adverse Effect” means (a) a material adverse effect on
(i) the business, financial condition, operations, performance or properties of
the Borrowers and their subsidiaries, taken as a whole, (ii) the rights and
remedies of the Agents and the Lenders under the Loan Documents, or (iii) the
ability of the Borrowers to perform their Facility Obligations under the Loan
Documents, or (b) a material impairment of the rights or remedies, taken as a
whole, available to the Agents and the Lenders under the Loan Documents.
          “Maturity Date” means June 15, 2012 or any earlier date on which the
aggregate Commitments are otherwise terminated pursuant to the terms hereof.
          “Maximum Rate” has the meaning assigned to such term in Section 9.17.
          “Modified Borrowing Base” means, at any time, an amount equal to
(a) the Borrowing Base then in effect, minus (b) the Liquidity Block Amount.
          “Monthly Unaudited Reports” means monthly management financial reports
in respect of the sales and income by segment and cash balances, Debt, capital
expenditures and depreciation and amortization of Navistar and its “Restricted
Subsidiaries” (as defined in the January Credit Agreement) prepared in a manner
consistent with Navistar’s past practices (unless otherwise noted or required to
conform with the restatement of the audit or changes in GAAP) and on the basis
of Navistar’s management’s good faith calculations at the time made, in such
form and detail reasonably satisfactory to the Administrative Agent.
          “Moody’s” means Moody’s Investors Service, Inc. and any successor to
its rating agency business.
          “Multiemployer Plan” means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
          “Multiple Employer Plan” means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Borrower or any ERISA Affiliate and at least one Person other than the Borrowers
and the ERISA Affiliates or (b) was so maintained and in respect of which any
Borrower or any ERISA Affiliate could have liability under Section 4064 or 4069
of ERISA in the event such plan has been or were to be terminated.
          “Navistar” means Navistar International Corporation, a Delaware
corporation.
          “Navistar Party” means Navistar and each of the Borrowers.
          “Net Orderly Liquidation Value” means, with respect to Inventory of
any Person, an amount equal to the orderly liquidation value (net of all costs
and expenses incurred in connection with liquidation) of Eligible Inventory as a
percentage of the Cost of such Inventory, which percentage shall be determined
by reference to the most recent third-party appraisal of such inventory received
by the Agents and distributed to the Borrowers.
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          “NFC” means Navistar Financial Corporation, a Delaware corporation.
          “NFC MIA” means the Amended and Restated Master Intercompany
Agreement, dated as of April 1, 2007, between NFC and ITEC, and its related
manufacturing subsidiaries and affiliates, as amended, modified, supplemented or
restated from time to time in a manner that is not adverse in any material
respect to the interests of ITEC.
          “Non-Consenting Lender” has the meaning assigned to such term in
Section 9.02(d).
          “Obligation” means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 7.01(h). Without limiting the generality of the foregoing, the
Obligations of any Borrower under the Loan Documents include (a) the obligation
to pay principal, interest, charges, expenses, fees, attorneys’ fees and
disbursements, indemnities and other amounts payable by such Borrower under any
Loan Document and (b) the obligation of such Borrower to reimburse any amount in
respect of any of the foregoing that any Lender, in its sole discretion, may
elect to pay or advance on behalf of such Borrower.
          “OFAC” has the meaning assigned to such term in Section 3.21.
          “Other Taxes” means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.
          “Participant” has the meaning assigned to such term in Section 9.04
(c).
          “PBGC” means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
          “Pension Act” means the Pension Protection Act of 2006, as amended.
          “Perfection Certificate” means a certificate substantially in the form
of Exhibit D to this Agreement, or in any other form approved by the Agents
(such approval not to be unreasonably withheld, delayed or conditioned).
          “Permitted Discretion” means an Agent’s commercially reasonable
judgment, exercised in good faith in accordance with customary business
practices for comparable asset-based lending transactions, as to any factor
which such Agent reasonably determines: (a) will or reasonably could be expected
to adversely affect in any material respect the value of any Collateral, the
enforceability or priority of the Collateral Agent’s Liens thereon or the amount
which the Agents, the Lenders or any Issuing Bank would be likely to receive
(after giving consideration to delays in payment and costs of enforcement) in
the liquidation of such Collateral or (b) evidences that any collateral report
or financial information delivered to an Agent by the Administrative Borrower or
any other Borrower is incomplete, inaccurate or misleading in any material
respect; provided, however, that as to financial matters or matters based on
financial statements, the Agents and the Lenders hereby acknowledge that the
existence of the matters set forth in the Disclosure Filings and the results
created by the existence thereof shall not be deemed to constitute a
misrepresentation hereunder, provided, further, that it is understood and agreed
that the foregoing proviso shall not limit the ability of the Agents to require
Reserves or require Collateral
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reappraisals in accordance with the terms hereof. In exercising such judgment,
an Agent may consider, without duplication, such factors already included in or
tested by the definition of Eligible Inventory, as well as any of the following:
(i) changes after the Closing Date in any material respect in demand for,
pricing of, or product mix of Inventory; (ii) changes after the Closing Date in
any material respect in any concentration of risk with respect to the Borrowers’
Collateral; and (iii) any other factors arising after the Closing Date that
change in any material respect the credit risk of lending to any Borrower on the
security of such Borrower’s Collateral.
          “Permitted Joint Venture” means any Person which is, directly or
indirectly, through its subsidiaries or otherwise, engaged principally in any
business in which any Borrower is engaged, or a reasonably related, ancillary or
complementary business, and the Equity Interests of which (a) is owned by such
Borrower or a Restricted Subsidiary thereof and one or more Persons other than
such Borrower or any affiliate of such Borrower or (b) is acquired by such
Borrower or a Restricted Subsidiary.
          “Permitted Liens” means such of the following: (a) Liens for taxes,
assessments and governmental charges or levies to the extent not required to be
paid under Section 5.04; (b) Liens imposed by law, such as materialmen’s,
mechanics’, carriers’, warehousemens’, workmen’s and repairmen’s Liens and other
similar Liens arising in the ordinary course of business securing obligations
that are not overdue for a period of more than 30 days; (c) pledges or deposits
in the ordinary course of business to secure obligations under workers’
compensation laws or similar legislation or to secure public or statutory
obligations; (d) deposits to secure the performance of bids, trade contracts and
leases (other than Debt for Borrowed Money), statutory obligations, surety bonds
(other than bonds related to judgments or litigation), performance bonds and
other obligations of a like nature incurred in the ordinary course of business;
(e) Liens securing judgments (or the payment of money not constituting an Event
of Default under Section 7.01(i) or securing appeal or other surety bonds
related to such judgments, (f) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of nondelinquent customs duties in
connection with the importation of goods in the ordinary course of business;
(g) Liens encumbering deposits made in the ordinary course of business to secure
nondelinquent obligations arising from statutory, regulatory, contractual or
warranty requirements of a Borrower for which a reserve or other appropriate
provision, if any, as may be required by GAAP has been made; (h) Liens arising
out of consignment or similar arrangements for the sale of goods entered into by
a Borrower in the ordinary course of business and in accordance with industry
practice; and (i) easements, rights of way, zoning ordinances and similar
charges, title defects or other irregularities and other encumbrances on title
to real property that do not materially adversely affect the use of such
property for its present purposes.
          “Permitted Receivable Financing” means any receivable financing
facility or arrangement consistent with Navistar’s past practice and entered
into in the ordinary course of the Navistar’s business pursuant to which a
Finance Subsidiary purchases or otherwise acquires accounts receivable of
Navistar or any Restricted Subsidiary of Navistar and enters into a third party
financing thereof on terms that are market and customary to Navistar and its
Restricted Subsidiaries, and in an aggregate amount not to exceed $25,000,000 in
any fiscal year.
          “Person” means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or any other entity.
          “Plan” means a Single Employer Plan or a Multiple Employer Plan.
          “Plan of Liquidation” means, with respect to any Person, a plan
(including by operation of law) that provides for, contemplates or the
effectuation of which is preceded or accompanied by (whether or not
substantially contemporaneously) (a) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of such Person; and
(b) the distribution of all or substantially all of the
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proceeds of sale, lease, conveyance or other disposition and all or
substantially all of the remaining assets of such Person to holders or Equity
Interests of such Person.
          “Preferred Interests” means, with respect to any Person, Equity
Interests issued by such Person that are entitled to a preference or priority
over any other Equity Interests issued by such Person upon any distribution of
such Person’s property and assets, whether by dividend or upon liquidation.
          “Prime Rate” means the rate of interest per annum determined from time
to time by Credit Suisse as its prime rate in effect at its principal office in
New York City and notified to the Administrative Borrower, which rate is not
necessarily the lowest rate offered by Credit Suisse to its customers.
          “Protective Advance” has the meaning assigned to such term in Section
2.04(a).
          “Receivables” means any receivables generated from the sale of
Collateral and required to be sold pursuant to, and in accordance with, the
terms of any Master Intercompany Agreement.
          “Receivables Facility” means the Amended and Restated Credit Agreement
dated as of July 1, 2005, as amended as of January 19, 2007 and as of March 28,
2007, among NFC, JPMorgan Bank and the other parties referred to therein, as
amended and restated or otherwise modified from time to time and the related
guarantees by the Administrative Borrower and Navistar.
          “Receivables Trigger Event” means (a) if any counterparty to a Master
Intercompany Agreement becomes subject to any proceeding of any type referred to
in Section 7.01(h); (b) the failure of any counterparty to a Master Intercompany
Agreement to pay in cash (after giving effect to netting counterpayments made in
the ordinary course of business consistent with the past practices of the
counterparties) to the applicable Borrower that is party thereto the full
purchase price of any Receivables sold to such counterparty thereunder within
two Business Days of the deadline for such payment pursuant to such Master
Intercompany Agreement, provided that, with respect to payments to be made
pursuant to the NFC MIA, if such two-day payment deadline occurs during a
“Blackout Period” then the deadline for payment under this clause (b) shall be
the first Business Day following such Blackout Period; (c) if any counterparty
to a Master Intercompany Agreement gives notice of its intent to terminate such
Master Intercompany Agreement and terminates such Master Intercompany Agreement
without a comparable replacement being in full force and effect; or (d) if any
counterparty to a Master Intercompany Agreement shall not have paid principal or
interest on Debt, which failure to pay continues for three days and which Debt
is in a principal amount of $10,000,000 (“Relevant Debt”) or more, or the
commitments of lenders with respect to Relevant Debt shall have been terminated
by or on behalf of such lenders following a default by such counterparty.
          “Redeemable” means, with respect to any Equity Interest, any such
Equity Interest that (a) the issuer has undertaken to redeem at a fixed or
determinable date or dates, whether by operation of a sinking fund or otherwise,
or upon the occurrence of a condition not solely within the control of the
issuer or (b) is redeemable at the option of the holder.
          “Register” has the meaning assigned to such term in Section 9.04(b).
          “Regulation T” means Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof, and
any successor provision thereto.
          “Regulation U” means Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof, and
any successor provision thereto.
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          “Regulation X” means Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof, and
any successor provision thereto.
          “Related Funds” has the meaning assigned to such term in
Section 9.04(b).
          “Related Parties” means, with respect to any specified Person, such
Person’s Affiliates and the respective directors, officers, trustees, employees,
agents and advisors of such Person and such Person’s Affiliates.
          “Report” means reports prepared by the Agents or another Person
showing the results of appraisals, field examinations or audits pertaining to
the Borrowers’ assets from information furnished by or on behalf of the
Borrowers, after the Agents have exercised their rights of inspection pursuant
to this Agreement, which Reports may be distributed to the Lenders by the
Agents, subject to the provisions of Section 9.12.
          “Required Lenders” means, at any time, Lenders having Exposure and
unused Commitments representing more than 50% of the sum of the total Exposure
and unused Commitments at such time; provided that the Exposure and unused
Commitments of any Defaulting Lender shall be disregarded in the determination
of the Required Lenders at any time.
          “Requirement of Law” means, as to any Person, 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.
          “Reserves” means all (if any) Inventory Reserves and Availability
Reserves (including Landlord Lien Reserves).
          “Responsible Officer” of any Person means the chief executive officer,
president, chief financial officer, treasurer, assistant treasurer, senior vice
president, vice president, controller or chief accounting officer of the
Borrower.
          “Restricted Subsidiary” has the meaning assigned to such term in the
January Credit Agreement.
          “Revolving Loan” means a Loan made pursuant to Section 2.01.
          “S&P” means Standard & Poor’s Ratings Service, a division of the
McGraw-Hill Companies, Inc., and any successor to its rating agency business.
          “Sale/Lease-back Transaction” means an arrangement relating to
property now owned or hereafter acquired whereby a Borrower transfers such
property to a Person and such Borrower thereof leases it from such Person.
          “SEC” means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of its functions.
          “Secured Obligations” means all Facility Obligations, together with
Banking Services Obligations in an aggregate amount of up to $25,000,000.
          “Secured Parties” has the meaning assigned to such term in the
Security Agreement.
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          “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
          “Security Agreement” means the Security Agreement, substantially in
the form of Exhibit H between the Borrowers and the Collateral Agent, for the
benefit of the Collateral Agent and the Lenders, including any amendments,
restatements, modifications or supplements.
          “Shrink” means Inventory identified by the Administrative Borrower as
lost, misplaced, or stolen.
          “Shrink Reserve” means an amount reasonably estimated by the Agents to
be equal to that amount which is required in order that the Shrink reflected in
current stock ledger of the Borrowers would be reasonably equivalent to the
Shrink calculated as part of the Borrowers’ most recent physical inventory (it
being understood and agreed that no Shrink Reserve established by the Agents
shall be duplicative of any Shrink as so reflected in the current stock ledgers
of the Borrowers or estimated by the Borrowers for purposes of computing the
Borrowing Base other than at month’s end).
          “Shy Settlement” shall mean that certain Amended and Restated
Settlement Agreement dated June 30, 1993 in reference to the class action of Shy
et. Al v. Navistar, Civil Action No. C-3-92-333 (S.D. Ohio).
          “Single Employer Plan” means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Borrower or any ERISA Affiliate and no Person other than the Borrowers and the
ERISA Affiliates or (b) was so maintained and in respect of which any Borrower
or any ERISA Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
          “Slow Moving” means (a) with respect to parts, Inventory held in
excess of three years of usage, and (b) with respect to all other Inventory,
such holding times as shall be determined by the Agents in their Permitted
Discretion.
          “Stated Amount” means, at any time, the maximum amount for which a
Letter of Credit may be honored.
          “Statutory Reserve Percentage” means, for any Interest Period, for all
LIBOR Borrowings comprising part of the same Borrowing, the reserve percentage
applicable two Business Days before the first day of such Interest Period under
regulations issued from time to time by the Board for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
LIBOR Borrowings is determined) having a term equal to such Interest Period.
          “Subordinated Debt” means any Debt of any Borrower that is
subordinated to the Obligations of such Borrower under the Loan Documents on and
that otherwise contains, terms and conditions, including as to subordination,
reasonably satisfactory to the Administrative Agent.
          “subsidiary” means, with respect to any Person (the “parent”) at any
date, any 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
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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.
          “Super Majority Lenders” means, at any time, Lenders having Exposure
and unused Commitments representing more than 66-2/3% of the sum of the total
Exposure and unused Commitments at such time; provided that the Exposure and
unused Commitments of any Defaulting Lender shall be disregarded in the
determination of the Super Majority Lenders at any time.
          “Support Agreement” means the Parent’s Side Agreement dated as of
July 1, 2005, between Navistar and ITEC, as it may be amended, modified,
supplemented or restricted from time to time; provided that such agreement shall
not be amended, supplemented, amended and restated or otherwise modified in a
manner adverse in any material respect to the interests of ITEC.
          “Suppressed Availability” means the amount by which the
then-applicable Borrowing Base exceeds the then-effective Commitments.
          “Swingline Lender” means Credit Suisse, in its capacity as lender of
Swingline Loans hereunder.
          “Swingline Loan” means a Loan made pursuant to Section 2.05.
          “Synthetic Debt” means, with respect to any Person, without
duplication of any clause within the definition of “Debt,” all (a) Obligations
of such Person under any lease that is treated as an operating lease for
financial accounting purposes and a financing lease for tax purposes (i.e., a
“synthetic lease”), (b) Obligations of such Person in respect of transactions
entered into by such Person, the proceeds from which would be reflected on the
financial statements of such Person in accordance with GAAP as cash flows from
financings at the time such transaction was entered into (other than as a result
of the issuance of Equity Interests) and (c) Obligations of such Person in
respect of other transactions entered into by such Person that are not otherwise
addressed in the definition of “Debt” or in clause (a) or (b) above that are
intended to function primarily as a borrowing of funds (including, without
limitation, any minority interest transactions that function primarily as a
borrowing).
          “Tax Allocation Agreements” means (a) the Tax Allocation Agreement
among ITEC and its affiliated group, effective as of October 1, 1981, as it has
been and may be amended and/or supplemented from time to time, and (b) the Tax
Allocation Agreement between Navistar and ITEC, effective April 1, 1987, as it
has been and may be amended and/or supplemented from time to time; provided,
that such agreements shall not be amended, supplemented, amended and restated or
otherwise modified in a manner adverse in any material respect to the interests
of ITEC or its subsidiaries.
          “Taxes” means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
          “Total Utilization of Commitments” means the average daily aggregate
Exposures (other than Swingline Loans) of all Lenders.
          “Transaction Costs” means fees and expenses payable or otherwise borne
by the Borrowers in connection with the Transactions and the transactions
contemplated thereby.
          “Transactions” means, collectively, (a) the execution, delivery and
performance by the Borrowers of the Loan Documents to which they are a party and
the making of the Borrowings hereunder, and (b) the payment of the Transaction
Costs.
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          “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 LIBOR or the Alternate
Base Rate.
          “UCC” means the Uniform Commercial Code as in effect from time to time
in the State of New York or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.
          “UFCA” has the meaning assigned to such term in Section 9.18(b).
          “UFTA” has the meaning assigned to such term in Section 9.18(b).
          “Unliquidated Obligations” means, at any time, any Secured Obligations
(or portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (a) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (b) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (c) an obligation to provide collateral to secure any of the foregoing types
of obligations; but excluding unripened or contingent obligations related to
indemnification under Section 9.03 for which no written demand has been made.
          “Unrestricted Subsidiary” has the meaning assigned to such term in the
January Credit Agreement.
          “USA PATRIOT Act” means The Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)), as
amended or modified from time to time.
          “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.
          SECTION 1.02. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
“Revolving Loan”) or by Type (e.g., a “LIBOR Loan”) or by Class and Type (e.g.,
a “LIBOR Revolving Loan”). Borrowings also may be classified and referred to by
Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “LIBOR Borrowing”) or
by Class and Type (e.g., a “LIBOR Revolving Borrowing”).
          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,
amended and restated, supplemented or otherwise modified (subject to any
restrictions on such amendments, amendment and restatements, 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, (e) the words “asset” and “property” shall be
construed to have the same
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meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights and
(f) the words “knowledge” or “aware” or words of similar import shall mean, when
used in reference to the Borrowers, the actual knowledge of any Responsible
Officer.
          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, if the Administrative Borrower notifies the Administrative Agent that any
Borrower requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Administrative 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. Notwithstanding anything to the contrary contained herein,
no Default or Event of Default shall occur as a result of any Borrower breaching
the terms and conditions contained in Articles V and VI as a result of (a) any
change in the accounting treatment (including any recharacterization or new
recognition) of, any Obligations, assets, contractual or other arrangements,
transactions or relationships in connection with the completion of the audit
report for the annual financial statements of the Borrower for each of the 2005
and 2006 Fiscal Years or any restatement of its annual financial statements for
the 2004 Fiscal Year or any prior Fiscal Year or (b) accounting treatment which
is inconsistent with the Borrower’s accounting practices in effect on the
Closing Date. If the Borrower’s determine to modify how they account for Cost of
Inventory pursuant to a restatement of the accounting utilized for audited
financial statements furnished in the future, the Borrowers, the Agents and the
Required Lenders agree to negotiate in good faith to seek to modify the
definition of “Cost” provided for in this Agreement to reflect such
modification, and to take such modification appropriately into account elsewhere
herein, including potentially in the advance ratios reflected in Inventory
Component.
ARTICLE II
THE CREDITS
          SECTION 2.01. Commitments. (a) Subject to the terms and conditions set
forth herein, each Lender agrees, severally and not jointly, to make Revolving
Loans to the Borrowers from time to time during the Availability Period in an
aggregate principal amount that will not result in:
          (i) such Lender’s Exposure exceeding the lesser of (A) such Lender’s
Applicable Percentage of the Available Commitment, and (B) such Lender’s
Applicable Percentage of the Modified Borrowing Base (except as provided for in
Section 2.04); or
          (ii) the total Exposures of all the Lenders exceeding the lesser of
(A) the aggregate Available Commitments, and (B) the Modified Borrowing Base
(except as provided for in Section 2.04).
          (b) Within the foregoing limits and subject to the terms and
conditions set forth herein (including the Administrative Agent’s authority, in
its sole discretion, to make Protective Advances pursuant to the terms of
Section 2.04), the Borrowers may borrow, repay and reborrow Revolving Loans.
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          SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a
Swingline Loan or a Protective Advance) shall be made as part of a Borrowing
consisting of Loans of the same Class and Type made by the Lenders ratably in
accordance with their respective Commitments of the applicable Class. Any
Protective Advance and any Swingline Loan shall be made in accordance with the
procedures set forth in Sections 2.04 and 2.05, respectively.
          (b) Subject to Sections 2.14 and 2.15, each Borrowing shall be
comprised entirely of ABR Loans or LIBOR Loans as any Borrower may request in
accordance herewith. Each Swingline Loan and each Protective Advance shall be an
ABR Loan. Each Lender at its option may make any LIBOR Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided, that (i) any exercise of such option shall not affect the obligation
of the Borrowers to repay such Loan in accordance with the terms of this
Agreement, and (ii) in exercising such option, such Lender shall use reasonable
efforts to minimize any increase in the Adjusted LIBOR or increased costs to the
Borrowers resulting therefrom (which obligation of such Lender shall not require
it to take, or refrain from taking, actions that it determines would result in
increased costs for which it will not be compensated hereunder or that it
otherwise determines would be disadvantageous to it and in the event of such
request for costs for which compensation is provided under this Agreement, the
provisions of Section 2.15 shall apply).
          (c) At the commencement of each Interest Period for any LIBOR
Borrowing, such Borrowing when made shall be in a minimum principal amount of
$1,000,000 and in integral multiples of $1,000,000 thereafter. Each ABR
Borrowing when made shall be in a minimum principal amount of $1,000,000;
provided that an ABR Borrowing may be made in a lesser aggregate amount that is
equal to the entire unused balance of the Available Commitments or that is
required to (i) finance the reimbursement of an LC Disbursement as contemplated
by Section 2.06(e), or (ii) repay Swingline Loans as contemplated by
Section 2.10(a). 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 different Interest Periods in effect for LIBOR Borrowings at any time
outstanding.
          (d) Notwithstanding any other provision of this Agreement, the
Borrowers shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
          SECTION 2.03. Requests for Borrowings. (a) To request a Borrowing, a
Borrower shall notify the Administrative Agent of such request either in writing
by delivery of a Borrowing Request (by hand, facsimile or a “pdf” electronic
transmission) signed by such Borrower or the Administrative Borrower on its
behalf or by telephone (i) in the case of a LIBOR Borrowing, not later than 2:00
p.m., New York City time, three Business Days (or, in the case of a LIBOR
Borrowing to be made on the Closing Date, two Business Days) before the date of
the proposed Borrowing, or (ii) in the case of an ABR Borrowing (including any
such notice of an ABR Borrowing to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.06(e)), not later than 11:00 a.m., New
York City time, on the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery, facsimile or a “pdf” electronic transmission to the Administrative
Agent of a written Borrowing Request signed by the Borrower or the
Administrative Borrower on its behalf. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.01:
               (A) the aggregate amount of the requested Borrowing;
               (B) the date of such Borrowing, which shall be a Business Day;
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               (C) whether such Borrowing is to be an ABR Borrowing or a LIBOR
Borrowing;
 (D) in the case of a LIBOR Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”; and
               (E) the location and number of the Borrowers’ accounts or any
other designated account(s) to which funds are to be disbursed.
          (b) If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested LIBOR Borrowing, then such 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 2.03, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.
          SECTION 2.04. Protective Advances. (a) Subject to the limitations set
forth below (and notwithstanding anything to the contrary in Section 4.02,
including failure to satisfy or waive any of the conditions precedent set forth
in Section 4.02), the Administrative Agent is authorized by the Borrowers and
the Lenders, from time to time in the Administrative Agent’s sole discretion
(but shall have absolutely no obligation to), to make Loans to any Borrower, on
behalf of all Lenders at any time that any condition precedent set forth in
Section 4.02 has not been satisfied or waived, which the Administrative Agent,
in its Permitted Discretion, deems necessary or desirable (i) to preserve or
protect the Collateral, or any portion thereof, (ii) to enhance the likelihood
of, or maximize the amount of, repayment of the Loans and other Obligations, or
(iii) to pay any other amount chargeable to or required to be paid by such
Borrower pursuant to the terms of this Agreement, including payments of
reimbursable expenses (including costs, fees, and expenses as described in
Section 9.03) and other sums payable under the Loan Documents (each such Loan, a
“Protective Advance”). Any Protective Advance may be made in a principal amount
that would cause the aggregate Exposures to exceed the Modified Borrowing Base;
provided that no Protective Advance may be made to the extent that, after giving
effect to such Protective Advance (together with the outstanding principal
amount of any outstanding Protective Advances), the aggregate principal amount
of Protective Advances outstanding hereunder would exceed 5% of the aggregate
Commitments as determined on the date of such proposed Protective Advance; and
provided, further that, the aggregate amount of such proposed Protective
Advances plus the aggregate Exposures shall not exceed the aggregate
Commitments. No Protective Advance may remain outstanding for more than 60 days
without the consent of the Required Lenders. Each Protective Advance shall be
secured by the Liens in favor of the Collateral Agent in and to the Collateral
and shall constitute Obligations and Secured Obligations hereunder. The
Administrative Agent’s authorization to make Protective Advances may be revoked
at any time by the Required Lenders. Any such revocation must be in writing and
shall become effective prospectively upon the Administrative Agent’s receipt
thereof. The making of a Protective Advance on any one occasion shall not
obligate the Administrative Agent to make any Protective Advance on any other
occasion. At any time that the conditions precedent set forth in Section 4.02
have been satisfied or waived, the Administrative Agent may request the Lenders
to make a Revolving Loan to repay a Protective Advance. At any other time, the
Administrative Agent may require the Lenders to fund their risk participations
described in Section 2.04(b).
          (b) Upon the making of a Protective Advance by the Administrative
Agent (whether before or after the occurrence of a Default), each Lender shall
be deemed, without further action by any party hereto, unconditionally and
irrevocably to have purchased from the Administrative Agent without recourse or
warranty, an undivided interest and participation in such Protective Advance in
proportion to
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its Applicable Percentage. From and after the date, if any, on which any Lender
is required to fund its participation in any Protective Advance purchased
hereunder, the Administrative Agent shall promptly distribute to such Lender,
such Lender’s Applicable Percentage of all payments of principal and interest
and all proceeds of Collateral (if any) received by the Administrative Agent in
respect of such Protective Advance.
          SECTION 2.05. Swingline Loans. (a) Subject to the terms and conditions
set forth herein, the Swingline Lender agrees to make Swingline Loans to any
Borrower from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $25,000,000,
(ii) the total Exposures exceeding the lesser of (A) the Available Commitments
and (B) the Modified Borrowing Base, or (iii) the Credit Extensions exceeding
the lesser of (A) the Available Commitments and (B) the Modified Borrowing Base;
provided that the Swingline Lender shall not be required to make a Swingline
Loan to refinance an outstanding Swingline Loan. Each Swingline Loan shall be in
an integral multiple of $100,000 and not less than $1,000,000. Within the
foregoing limits and subject to the terms and conditions set forth herein, a
Borrower may borrow, prepay (without premium or penalty) and reborrow Swingline
Loans. To request a Swingline Loan, such Borrower or the Administrative Borrower
on its behalf shall notify the Swingline Lender of such request by telephone
(confirmed by facsimile or a “pdf” electronic transmission to the Swingline
Lender, with a copy to the Administrative Agent), not later than 2:00 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 and the location and number of
the Borrowers’ accounts or other designated account(s) to which funds are to be
disbursed. The Swingline Lender shall make each Swingline Loan available to such
Borrower by means of a credit to the Funding Account or otherwise in accordance
with the instructions of such Borrower (or, in the case of a Swingline Loan made
to finance the reimbursement of an LC Disbursement as provided in
Section 2.06(e), by remittance to the applicable Issuing Bank, and in the case
of repayment of another Loan or fees or expenses as provided by Section 2.18(c),
by remittance to the Administrative Agent to be distributed to the Lenders) on
the requested date of such Swingline Loan.
          (b) The Swingline Lender may, by written notice given to the
Administrative Agent not later than 1:00 p.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
Applicable 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 Applicable 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 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 2.07 with respect to Loans made by such Lender (and
Section 2.07 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 Administrative 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 any Borrower
(or other party on behalf of the Borrower) in respect of a Swingline Loan after
receipt by the
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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; provided that any such
payment so remitted shall be repaid to the Swingline Lender or to the
Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to such Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
any Borrower of any default in the payment thereof.
          SECTION 2.06. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, (i) each Issuing Bank agrees, in reliance upon the
agreements of the other Lenders set forth in this Section 2.06, from time to
time on any Business Day during the period from the Closing Date to but not
including the 30th day prior to the Maturity Date, upon the request of any
Borrower, to issue standby Letters of Credit denominated in Dollars only and
issued for the account of such Borrower (or any other Borrower to the extent
such Borrower is a co-applicant), and to amend or renew Letters of Credit
previously issued by it, in accordance with Section 2.06(b); and (ii) the
Lenders severally agree to participate in the Letters of Credit issued pursuant
to Section 2.06(d). Subject to the terms and conditions hereof, each Borrower’s
ability to obtain Letters of Credit shall be fully revolving, and accordingly
such Borrower may, during the foregoing period, obtain Letters of Credit to
replace Letters of Credit that have expired or that have been drawn upon and
reimbursed.
          (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 applicable
Borrower or the Administrative Borrower on its behalf shall hand deliver or
facsimile (or transmit by a “pdf” electronic communication) to the applicable
Issuing Bank and the Administrative Agent, at least two Business Days in advance
of the requested date of issuance (or such shorter period as is acceptable to
the applicable Issuing Bank), a request to issue substantially in the form of
Exhibit E attached hereto (each a “Letter of Credit Request”). To request an
amendment, extension or renewal of a Letter of Credit, the applicable Borrower
shall submit such a request on its letterhead, addressed to the applicable
Issuing Bank (with a copy to the Administrative Agent) at least two Business
Days in advance of the requested date of amendment, extension or renewal,
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the proposed date (which shall be a Business Day) and other details
of the amendment, extension or renewal. Requests for issuance, amendment,
renewal or extension must be accompanied by such other information as shall be
necessary to issue, amend, renew or extend such Letter of Credit. If requested
by the applicable Issuing Bank, the applicable Borrower also shall submit a
letter of credit application on such Issuing Bank’s standard form in connection
with any request for a Letter of Credit. 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 such
Borrower to, or entered into by such Borrower with, the applicable Issuing Bank
relating to any Letter of Credit, the terms and conditions of this Agreement
shall control. A Letter of Credit shall be issued, amended, renewed or extended
only if (and on issuance, amendment, renewal or extension of each Letter of
Credit the applicable 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 $200,000,000, and (ii) the aggregate amount of Credit
Extensions shall not exceed the lesser of (A) the Available Commitments and
(B) the Modified Borrowing Base. Promptly after the delivery of any Letter of
Credit or any amendment to a Letter of Credit to an advising bank with respect
thereto or to the beneficiary thereof, the applicable Issuing Bank will also
deliver to the applicable Borrower and the Administrative Agent a true and
complete copy of such Letter of Credit or amendment. Upon receipt of such Letter
of Credit or amendment, the Administrative Agent shall notify the Lenders, in
writing, of such Letter of Credit or amendment, and if so requested by a Lender,
the Administrative Agent will provide such Lender with copies of such Letter of
Credit or amendment.
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          (c) Expiration Date. Each Letter of Credit shall expire not later than
the earlier of (i) the stated expiration date on such Letter of Credit, and
(ii) the date that is five Business Days prior to the Maturity Date (other than
any Letter of Credit with a stated expiry date within 12 months following the
Maturity Date that shall have been fully cash collateralized by the applicable
Borrower with cash equal to 103% of the LC Exposure as of the Maturity Date);
provided, that, the Borrowers may request the issuance of standby Letters of
Credit with tenors in excess of 12 months, so long as the aggregate total of the
stated amounts of all such standby Letters of Credit (with tenors in excess of
12 months) outstanding at any time shall not exceed $25,000,000, and all other
Letters of Credit issued hereunder shall have tenors of 12 months or less;
provided, further, that any standby Letter of Credit with a tenor of 12 months
or less may provide for the automatic extension thereof for any number of
additional periods, each of up to one year in duration (none of which, in any
event, shall extend beyond the date referred to above). Each commercial Letter
of Credit shall expire on the earlier of (A) 180 days after the date of the
issuance of such Letter of Credit and (B) the date that is 30 days prior to the
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 applicable Issuing Bank or the Lenders, the
applicable Issuing Bank hereby grants to each Lender, and each Lender hereby
acquires from such Issuing Bank, a participation in such Letter of Credit equal
to such Lender’s Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of the applicable Issuing Bank, such
Lender’s Applicable Percentage of each LC Disbursement made by such Issuing Bank
and not reimbursed by the Borrowers on the date due as provided in paragraph
(e) of this Section 2.06, or of any reimbursement payment required to be
refunded to the Borrowers for any reason. Each 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 Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.
          (e) Reimbursement. If the applicable Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrowers 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
Business Day immediately following the date the applicable Borrower receives
notice under paragraph (g) of this Section 2.06 of such LC Disbursement;
provided that such Borrower may, subject to the conditions to borrowing set
forth herein, request in accordance with Section 2.03 or 2.05 that such payment
be financed with an ABR Borrowing or Swingline Loan in an equivalent amount and,
to the extent so financed, the Borrowers’ obligation to make such payment shall
be discharged and replaced by the resulting ABR Borrowing or Swingline Loan. If
the Borrowers fail to make such payment when due, or if any payment made by a
Borrower must be disgorged, returned or otherwise relinquished for any reason,
including by reason of any event described in Section 7.01(h), the
Administrative Agent shall notify each Lender of the applicable LC Disbursement,
the payment then due from the Borrowers in respect thereof and such Lender’s
Applicable Percentage thereof. Promptly following receipt of such notice, each
Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrowers, in the same manner as provided in
Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall
apply, mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the applicable Issuing Bank the
amounts so received by it from the Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrowers pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the
applicable Issuing Bank or, to the extent that Lenders have made payments
pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders
and such Issuing Bank as their interests may appear.
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          (f) Obligations Absolute. The Borrowers’ and the Lenders’ obligation
to reimburse LC Disbursements as provided in paragraph (e) of this Section 2.06
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 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 material respect,
(iii) payment by the applicable 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, or (iv) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section 2.06, constitute a legal or equitable discharge of,
or provide a right of setoff against, the Borrowers’ obligations hereunder
(other than payment or performance, to the extent thereof). Neither the
Administrative Agent, the Lenders nor any 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 (irrespective of any of the
circumstances referred to in the preceding sentence), or 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
such Issuing Bank; provided that the foregoing shall not be construed to excuse
such Issuing Bank (or any of its agents, employees, officers or advisors) from
liability to the applicable Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived
by each Borrower to the extent permitted by applicable law) suffered by such
Borrower that are caused by such Issuing Bank’s (or any of its agents,
employees, officers or advisors) (i) failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof, (ii) gross negligence, (iii) willful misconduct or
(iv) bad faith. The parties hereto expressly agree that, in the absence of gross
negligence, bad faith or willful misconduct on the part of applicable Issuing
Bank (or its agents, officers, employees and advisors) (as finally determined by
a court of competent jurisdiction), such Issuing Bank shall be deemed to have
exercised care in each such determination. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the applicable Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
          (g) Disbursement Procedures. The applicable Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. Such Issuing Bank shall
promptly notify the Administrative Agent and the applicable Borrower by
telephone (confirmed by facsimile or electronic transmission) of such demand for
payment and whether such 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 Borrowers of their obligation to reimburse such Issuing
Bank and the Lenders with respect to any such LC Disbursement.
          (h) Interim Interest. If an Issuing Bank shall make any LC
Disbursement, then, unless the Borrowers 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 Borrowers reimburse such LC
Disbursement, at the rate per annum then applicable to Loans that are ABR Loans;
provided that, if the Borrowers fail to reimburse or convert such LC
Disbursement when due pursuant to paragraph (e) of this Section 2.06, then
Section 2.13(c) shall apply. Interest accrued pursuant to this paragraph shall
be for the account of the applicable Issuing Bank, except that interest accrued
on and after the date of payment by any Lender
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pursuant to paragraph (e) of this Section 2.06 to reimburse such Issuing Bank
shall be for the account of such Lender to the extent of such payment.
          (i) Replacement of an Issuing Bank. An Issuing Bank may be replaced
with the consent of the Administrative Agent (not to be unreasonably withheld,
delayed or conditioned) at any time by written agreement among each Borrower,
the Administrative Agent, the replaced Issuing Bank and the successor Issuing
Bank. The Administrative Agent shall notify the Lenders of any such replacement
of an Issuing Bank. At the time any such replacement shall become effective, the
Borrowers shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the replaced Issuing Bank under this Agreement with respect
to Letters of Credit to be issued thereafter and 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 with respect
to Letters of Credit issued by it prior to such replacement to the extent such
Letters of Credit remain outstanding or otherwise with respect to
indemnification and any other amounts owing to it hereunder until such amounts
have been paid in full, but shall not be required to issue additional Letters of
Credit.
          (j) Cash Collateralization. If any Event of Default shall occur and be
continuing, within one Business Day of the date the Administrative Borrower
receives notice from the Administrative Agent acting at the direction of the
Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders
with LC Exposure representing greater than 50% of the total LC Exposure)
demanding the deposit of cash collateral pursuant to this paragraph, upon such
demand, the Administrative Borrower or any other Borrower shall deposit, in an
account with the Collateral Agent, in the name of the Collateral Agent and for
the benefit of the Lenders (the “LC Collateral Account”), an amount in cash
equal to 103% of the LC Exposure as of such date; 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
Administrative Borrower or the other Borrowers described in clause (h) or (i) of
Section 7.01. Such deposit shall be held by the Collateral Agent as collateral
for the payment and performance of the Secured Obligations in accordance with
the provisions of this paragraph (j) during the continuance of any such Event of
Default but shall be promptly released and returned to the Borrowers upon the
cure or waiver of such Event of Default. The Collateral Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account and each Borrower hereby grants the Collateral Agent a
security interest in the LC Collateral Account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
discretion of the Collateral Agent for the Borrowers’ benefit to the extent not
applied to the Obligations or any Banking Services Obligations during the
continuance of an Event of Default in accordance with Section 2.18 and at the
Borrowers’ risk and expense, such deposits 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
applicable Issuing Bank for LC Disbursements 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 Borrowers for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated (but subject to the
consent of Lenders with LC Exposure representing greater than 50% of the total
LC Exposure), be applied to satisfy other Secured Obligations. If the Borrowers
are required to provide an amount of cash collateral hereunder as a result of
the occurrence of an Event of Default, such amount (together with all interest
and other earnings with respect thereto, to the extent not applied as aforesaid)
shall be returned promptly to the applicable Borrower but in no event later than
3 Business Days after such Event of Default has been cured or waived.
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          SECTION 2.07. 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 2:30 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 in an amount equal to such Lender’s respective Applicable
Percentage; provided, that Swingline Loans shall be made as provided in
Section 2.05. The Administrative Agent will make such Loans available to the
applicable Borrower by promptly crediting the amounts so received, in like
funds, to the Funding Account or as otherwise directed by the Borrower; provided
that ABR Revolving Loans made to finance the reimbursement of (i) an LC
Disbursement as provided in Section 2.06(e) shall be remitted by the
Administrative Agent to the applicable Issuing Bank and (ii) a Protective
Advance shall be retained by the Administrative Agent to be applied as
contemplated by Section 2.04 (and the Administrative Agent shall, upon the
request of the Borrower, deliver to the applicable Borrower a reasonably
detailed accounting of either such application).
          (b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this
Section 2.07 and may, in reliance upon such assumption, make available to the
applicable 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 the applicable Borrower
severally agree to pay to the Administrative Agent forthwith on demand (without
duplication) 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 greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of such Borrower, the interest
rate applicable to Loans that are 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. Nothing herein shall be deemed to relieve any Lender
from its obligation to fulfill its Commitment or to prejudice any rights which
the Administrative Agent or the Administrative Borrower, or any other Borrower
may have against any Lender as a result of any default by such Lender hereunder.
          SECTION 2.08. Type; Interest Elections. (a) Each Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a LIBOR Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request. Thereafter, the applicable Borrower or the
Administrative Borrower on its behalf may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a LIBOR
Borrowing, may elect Interest Periods therefor, all as provided in this
Section 2.08. The applicable Borrower or the Administrative Borrower on its
behalf may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders (with respect to Loans), based upon their Applicable
Percentages, and the Loans comprising each such portion shall be considered a
separate Borrowing. This Section 2.08 shall not apply to Swingline Borrowings or
Protective Advances, which may not be converted or continued.
          (b) To make an election pursuant to this Section 2.08, a Borrower or
the Administrative Borrower on its behalf shall notify the Administrative Agent
of such election by telephone or electronic transmission by the time that a
Borrowing Request would be required under Section 2.03 if such Borrower 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 and shall be confirmed promptly by hand delivery,
facsimile or electronic “pdf” transmission to the Administrative Agent of a
written Interest Election Request in a form approved by the Administrative Agent
and signed by such Borrower.
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          (c) Each telephonic and written (including permitted electronic
transmission) Interest Election Request shall specify the following information
in compliance with Section 2.02:
          (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) whether the resulting Borrowing is to be an ABR Borrowing or a
LIBOR Borrowing; and
          (iv) if the resulting Borrowing is a LIBOR 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 LIBOR Borrowing but does not
specify an Interest Period, then such 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 Administrative Borrower or the applicable Borrower fails to
deliver a timely Interest Election Request with respect to a LIBOR Borrowing
prior to the end of the Interest Period applicable thereto, and unless such
Borrowing is repaid as provided herein (including any prepayment notice required
pursuant to Section 2.11), then, at the end of such Interest Period, such
Borrowing shall be converted to an ABR Borrowing. 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
Administrative Borrower, then, so long as an Event of Default is continuing
(i) no outstanding Borrowing may be converted to or continued as a LIBOR
Borrowing and unless repaid, each LIBOR Borrowing shall be converted to an ABR
Borrowing at the end of the then-current Interest Period applicable thereto.
          SECTION 2.09. Termination and Reduction of Commitments. (a) Unless
previously terminated, all Commitments shall terminate on the Maturity Date.
          (b) Upon delivering the notice required by Section 2.09(d), the
Borrowers may at any time terminate the Commitments upon (i) the payment in full
of all outstanding Loans, together with accrued and unpaid interest thereon,
(ii) the cancellation and return of all outstanding Letters of Credit (or
alternatively, with respect to each such Letter of Credit, the cash
collateralization of such Letter of Credit (or at the discretion of the
Administrative Agent a backup standby letter of credit satisfactory to the
Administrative Agent) by depositing in the LC Collateral Account an amount in
cash equal to 103% of the LC Exposure as of such date), and (iii) the payment in
full of all accrued and unpaid fees and all reimbursable expenses and other
Obligations then earned, due, and owing as of such termination together with
accrued and unpaid interest thereon.
          (c) Upon delivering the notice required by Section 2.09(d), the
Administrative Borrower may from time to time reduce the Commitments (without
premium or penalty); provided that (i)
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each reduction of the Commitments shall be in an amount that is not less than
$1,000,000, and in integral multiples of $1,000,000 thereafter, and (ii) the
Administrative Borrower shall not reduce the Commitments if, after giving effect
to any concurrent prepayment of the Revolving Loans in accordance with
Section 2.10, the sum of the Exposures would exceed the Available Commitments.
          (d) The Administrative Borrower shall notify the Administrative Agent
of any election to terminate or reduce the Commitments under paragraph (b) or
(c) of this Section 2.09 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, Administrative
Agent shall advise the Lenders of the contents thereof. Each notice delivered by
the Administrative Borrower pursuant to this Section 2.09 shall be irrevocable;
provided that a notice of termination of the Commitments delivered by the
Administrative 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 Administrative 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 Commitments pursuant to this Section 2.09
shall be permanent. Upon any reduction of the Commitments, the Commitment of
each Lender shall be reduced by such Lender’s Applicable Percentage of such
reduction amount.
          SECTION 2.10. Repayment of Loans; Evidence of Debt. (a) The Borrowers
hereby unconditionally jointly and severally promise to pay (i) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Loan on the Maturity Date, (ii) to the Administrative
Agent the then unpaid amount of each Protective Advance on the earlier of the
Maturity Date and written demand by the Administrative Agent, and (iii) to the
Swingline Lender the then unpaid principal amount of each Swingline Loan on the
earlier of the Maturity Date and the 14th day following the date on which such
Swingline Loan was made; provided that on each date that a Revolving Loan is
made while any Protective Advance is outstanding, the Borrowers shall repay all
Protective Advances with the proceeds of such requested Revolving Loan.
          (b) At all times after the occurrence and during the continuance of an
Event of Default (subject to the provisions of Section 2.18(b) and to the terms
of the Security Agreement), on each Business Day, at or before 1:00 p.m., New
York City time, the Administrative Agent shall apply all immediately available
funds credited to the Collection Account (without any premium or penalty or
commitment reduction) as follows; first to pay any fees or expense
reimbursements then earned, due and owing to any Agent, the Issuing Banks and
the Lenders (other than in connection with Banking Services) pursuant to the
terms of the Loan Documents, pro rata; second to pay interest due and payable in
respect of any Revolving Loans (including Swingline Loans) and any Protective
Advances that may be outstanding, pro rata; third to prepay the principal of any
Protective Advances that may be outstanding, pro rata; and fourth to prepay the
principal of the Loans (including Swingline Loans) and then in the amount
necessary to cash collateralize 103% of the LC Exposure, pro rata. Amounts to be
applied pursuant to this Section 2.10 in prepayment of Revolving Loans shall be
applied, as applicable, first to reduce outstanding ABR Loans. Any amounts
remaining after each such application shall be applied to prepay LIBOR Loans.
          (c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrowers 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.
          (d) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period (if any) applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and
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payable from the Borrowers 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. In addition, the Administrative
Borrower shall receive a monthly statement detailing such accounts from the
Administrative Agent.
          (e) The entries made in the accounts maintained pursuant to paragraph
(d) of this Section 2.10 shall be prima facie evidence of the existence and
amounts of the obligations recorded therein (absent manifest error); 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.
          (f) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the applicable Borrower promptly shall prepare,
execute and deliver to such Lender a promissory note payable to such Lender and
its registered assigns and in substantially the form of Exhibit G hereto;
provided that the Lenders agree to provide at least three Business Days prior
notice of any such request for promissory notes on the Closing Date. Thereafter,
the Loans evidenced by such promissory note and interest thereon shall at all
times (including after assignment pursuant to Section 9.04) be represented by
one or more promissory notes in such form payable to the payee named therein and
its registered assigns.
          SECTION 2.11. Prepayment of Loans. (a) Upon prior notice in accordance
with paragraph (c) of this Section 2.11, the Borrowers shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part
without premium or penalty (but subject to Section 2.16). Prepayments made
pursuant to this Section 2.11(a), first, shall be applied ratably to the
Swingline Loans and to outstanding LC Disbursements; and second, shall be
applied ratably to the outstanding Revolving Loans.
          (b) Mandatory Prepayments. Except for Protective Advances permitted
under Section 2.04, in the event and on each Business Day (or, if such reduction
is due to the imposition of a new Reserve or a change in the methodology of
calculating an existing Reserve, within five Business Days following such
notice), on which a Borrower receives notice that the total Exposure exceeds the
lesser of (i) the Available Commitments and (ii) the Modified Borrowing Base,
the Borrowers shall prepay (on the date of receipt of such notice, if such
notice is received by 11:00 a.m., New York City time, on such day, and by the
next Business Day, if such notice is received after 11:00 a.m., New York City
time, on such day) the Revolving Loans or Swingline Loans and/or reduce LC
Exposure, in an aggregate amount equal to such excess by taking any of the
following actions as it shall determine at its sole discretion: (A) prepayment
of Revolving Loans or Swingline Loans or (B) deposit of cash in the LC
Collateral Account to cash collateralize any outstanding Letters of Credit.
          (c) Voluntary Prepayments. the Administrative Borrower shall notify
the Administrative Agent (and, in the case of prepayment of a Swingline Loan,
the Swingline Lender) by telephone (confirmed by facsimile to the Administrative
Agent (or, in the case of prepayment of a Swingline Loan, by facsimile to the
Swingline Lender, with copy to the Administrative Agent)), or by “pdf”
electronic transmission or by facsimile of any prepayment hereunder (i) in the
case of prepayment of a LIBOR Borrowing, not later than 2:00 p.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,
on the Business Day of prepayment, or (iii) in the case of prepayment of a
Swingline Loan, not later than 2:00 p.m., 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 Commitments as contemplated by
Section 2.09, then such notice of
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prepayment may be revoked if such notice of termination is revoked in accordance
with Section 2.09. Promptly following receipt of any such notice relating to a
Borrowing, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02. Each prepayment of a Borrowing pursuant to this
paragraph (c) shall be applied to Swingline Loans until paid in full, before
application to Revolving Loans. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.13.
          SECTION 2.12. Fees. (a) The Borrowers agree to pay to the
Administrative Agent, for the account of each Lender, a commitment fee, which
shall accrue at the applicable Commitment Fee Rate on the average daily amount
of the Available Commitment, as applicable, of such Lender during the period
from and including the Closing Date to but excluding the date on which the
Lenders’ Commitments terminate; provided that any commitment fee accrued with
respect to the Commitment of a Defaulting Lender during the period prior to the
time such Lender became a Defaulting Lender and unpaid at such time shall not be
payable by the Borrowers so long as such Lender shall be a Defaulting Lender
except to the extent that such commitment fee shall otherwise have been due and
payable by the Borrowers prior to such time; provided, further, that no
commitment fee shall accrue on the Commitment of a Defaulting Lender so long as
such Lender shall be a Defaulting Lender. Accrued commitment fees shall be
payable in arrears on the last Business Day of each March, June, September and
December (commencing September 28, 2007) and on the date on which the
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 365 or
366 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 the
commitment fees only, no portion of the Commitments shall be deemed utilized as
a result of outstanding Swingline Loans.
          (b) The Borrowers agree 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 at the same Applicable Rate used to determine the interest
rate applicable to LIBOR Loans on the daily amount of such Lender’s LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements),
during the period from and including the Closing 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 each Issuing Bank, for
its own account, a fronting fee, in respect of each Letter of Credit issued by
such Issuing Bank for the period from the date of issuance of such Letter of
Credit through the expiration date of such Letter of Credit (or if terminated on
an earlier date, to the termination date of such Letter of Credit), computed at
a rate equal to 0.125% per annum of the daily Stated Amount of such Letter of
Credit, as well as such Issuing Bank’s reasonable and customary standard fees
with respect to the issuance, amendment, renewal or extension of any Letter of
Credit or processing of drawings thereunder. Participation fees and fronting
fees accrued to but excluding the last Business Day of each March, June,
September and December (commencing September 28, 2007) shall be payable on the
first Business Day following such last day, commencing on the first such date to
occur after the Closing 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 any Issuing Bank pursuant to this paragraph shall be payable
within ten Business Days after demand (accompanied by reasonable back-up
documentation therefor). All participation fees and fronting fees shall be
computed on the basis of a year of 365 or 366 days and shall be payable for the
actual number of days elapsed.
          (c) The Borrowers agree to pay to each of the Administrative Agent and
the Collateral Agent, for their own respective accounts, the agency fees set
forth in the Engagement Letter, payable in the amounts and at the times
specified therein or as so otherwise mutually agreed upon by the
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Borrowers and the Administrative Agent or Collateral Agent, as applicable, or
such agency fees as may otherwise be separately agreed upon by the Borrowers and
the Administrative Agent or Collateral Agent.
          (d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent or the Collateral
Agent, as applicable, (or, in each case, to the applicable 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.
          SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing
(including each Swingline Loan and each Protective Advance) shall bear interest
at the Alternate Base Rate plus the Applicable Rate.
          (b) The Loans comprising each LIBOR Borrowing shall bear interest at
the Adjusted LIBOR for the Interest Period in effect for such Borrowing plus the
Applicable Rate.
          (c) Notwithstanding the foregoing, upon the occurrence and during the
continuance of an Event of Default, upon the request of the Required Lenders and
effective thereupon, all (i) all Loans shall bear interest at a rate of 2.00%
plus the rate otherwise applicable to such Loan as provided in the preceding
paragraphs of this Section 2.13, and (ii) all participation fees payable in
accordance with Section 2.12(b)(i) shall be increased by 2.00%, in addition to
the rate otherwise payable thereunder.
          (d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitments;
provided that (i) interest accrued pursuant to paragraph (c) of this
Section 2.13 shall be payable on written 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, and (iii) in the event of any conversion of any LIBOR 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.
          (e) 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 LIBOR or LIBOR shall be determined by the Administrative Agent, and
such determination shall be conclusive absent manifest error.
          SECTION 2.14. Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a LIBOR Borrowing:
          (a) the Administrative Agent reasonably determines (which
determination shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBOR or the LIBOR,
as applicable, for such Interest Period; or
          (b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBOR or the LIBOR, as applicable, for such Interest Period will
not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period;
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then the Administrative Agent shall promptly give written notice thereof to the
Administrative Borrower and the Lenders by telephone or facsimile or “pdf”
electronic transmission as promptly as practicable thereafter and, until the
Administrative Agent notifies the Administrative Borrower 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 LIBOR Borrowing shall be ineffective and
such Borrowing shall be converted to an ABR Borrowing on the last day of the
Interest Period applicable thereof, and (ii) unless withdrawn timely in
accordance with the terms hereof, if any Borrowing Request requests a LIBOR
Borrowing, such Borrowing shall be made as an ABR Borrowing.
          SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
          (i) 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 LIBOR) or Issuing Bank; or
          (ii) impose on any Lender or Issuing Bank or the London interbank
market any other condition affecting this Agreement or LIBOR Loans made by such
Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any LIBOR Loan (or of maintaining its obligation
to make any such Loan) or to increase the cost to such Lender or Issuing Bank 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 Issuing Bank
hereunder (whether of principal, interest or otherwise), then, within 10
Business Days following delivery of the certificate contemplated by paragraph
(c) of this Section 2.15, the applicable Borrower or the Administrative Borrower
on its behalf will pay to such Lender or Issuing Bank, as applicable, such
additional amount or amounts as will compensate such Lender or Issuing Bank, as
applicable, for such additional costs incurred or reduction suffered (except for
any Taxes, which shall be dealt with exclusively pursuant to Section 2.17).
          (b) If any Lender or Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s or Issuing Bank’s capital or on the capital of such
Lender’s or Issuing Bank’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 such Issuing Bank, to a level
below that which such Lender or such Issuing Bank or such Lender’s or such
Issuing Bank’s holding company could have achieved but for such Change in Law
other than due to Taxes, which shall be dealt with exclusively pursuant to
Section 2.17 (taking into consideration such Lender’s or such Issuing Bank’s
policies and the policies of such Lender’s or such Issuing Bank’s holding
company with respect to capital adequacy), then from time to time following
delivery of the certificate contemplated by paragraph (c) of this Section 2.15
the applicable Borrower or the Administrative Borrower on its behalf will pay to
such Lender or such Issuing Bank, as applicable, such additional amount or
amounts as will compensate such Lender or such Issuing Bank or such Lender’s or
such Issuing Bank’s holding company for any such reduction suffered.
          (c) A certificate of a Lender or an Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or Issuing Bank or its
holding company, as applicable, as specified in paragraph (a) or (b) of this
Section 2.15 and setting forth in reasonable detail the manner in which such
amount or amounts was determined shall be delivered to the Administrative
Borrower and shall be conclusive absent manifest error. The applicable Borrower
or the Administrative Borrower on its behalf
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shall pay such Lender or Issuing Bank, as applicable, the amount shown as due on
any such certificate within ten Business Days after receipt thereof.
          (d) Failure or delay on the part of any Lender or Issuing Bank to
demand compensation pursuant to this Section 2.15 shall not constitute a waiver
of such Lender’s or Issuing Bank’s right to demand such compensation; provided
that no Borrower shall not be required to compensate a Lender or an Issuing Bank
pursuant to this Section 2.15 for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender or Issuing Bank, as
applicable, notifies such Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or Issuing Bank’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
180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
          SECTION 2.16. Break Funding Payments. In the event of (a) the payment
of any principal of any LIBOR Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default);
(b) the conversion of any LIBOR Loan other than on the last day of the Interest
Period applicable thereto; (c) the failure to borrow, convert, continue or
prepay any LIBOR Loan on the date specified in any notice delivered pursuant
hereto (regardless of whether such notice may be revoked under Section 2.09(d)
and is revoked in accordance therewith); or (d) the assignment of any LIBOR Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the applicable Borrower pursuant to Section 2.19, then, in any
such event, the applicable Borrower shall compensate each Lender promptly upon
request for the loss, cost and expense attributable to such event (including the
loss of anticipated profits). In the case of a LIBOR Loan, such loss, cost or
expense to any Lender shall be deemed to be the amount determined by such Lender
to be the excess, if any, of (i) the amount of interest which would have accrued
on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBOR that would have been applicable to such Loan, for the period from
the date of such event to the last day of the then-current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section 2.16 and the basis therefor and setting forth in
reasonable detail the manner in which such amount or amounts was determined
shall be delivered to the Administrative Borrower and shall be conclusive absent
manifest error. The applicable Borrower or the Administrative Borrower on its
behalf shall pay (or shall cause the applicable Borrower to pay) such Lender the
amount shown as due on any such certificate within ten Business Days after
receipt thereof.
          SECTION 2.17. Taxes. (a) Any and all payments by or on account of any
obligation of any Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if a Borrower
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.17) the Administrative Agent, Lender or any
Issuing Bank (as applicable) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Borrower shall make such
deductions and (iii) such Borrower shall timely pay the full amount deducted to
the relevant Governmental Authority in accordance with applicable law. If at any
time a Borrower is required by applicable law to make any deduction or
withholding from any sum payable hereunder, such Borrower shall promptly notify
the relevant Lender, Administrative Agent or Issuing Bank upon becoming aware of
the same. In addition, each Lender, the Administrative Agent or Issuing Bank
shall promptly notify any Borrower or the Administrative Borrower upon becoming
aware of any circumstances as a result of which
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such Borrower is or would be required to make any deduction or withholding from
any sum payable hereunder.
          (b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
          (c) Each Borrower shall indemnify each Agent, each Lender and each
Issuing Bank, within ten Business Days after written demand therefor (including
documentation reasonably supporting such request), for the full amount of any
Indemnified Taxes or Other Taxes paid by such Agent, such Lender or such Issuing
Bank, as applicable, on or with respect to any payment by or on account of any
obligation of such Borrower hereunder (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section 2.17) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes 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 the Administrative Borrower by a Lender or an Issuing
Bank, or by an Agent on its own behalf or on behalf of a Lender or an Issuing
Bank, shall be conclusive absent manifest error.
          (d) Promptly after any payment of Indemnified Taxes or Other Taxes by
a Borrower to a Governmental Authority, such Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
          (e) Any Foreign 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 Administrative
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Administrative
Borrower as will permit such payments to be made without withholding or at a
reduced rate. In particular, on or prior to the date which is ten Business Days
after the Closing Date, each Foreign Lender shall deliver to the Administrative
Borrower (with a copy to the Administrative Agent) two duly signed, properly
completed copies of either IRS Form W-8BEN or any successor thereto (relating to
such Foreign Lender and entitling it to an exemption from, or reduction of,
United States withholding tax on all payments to be made to such Foreign Lender
by the Administrative Borrower or any other Borrower pursuant to this Agreement
or any other Loan Document) or IRS Form W-8ECI or W-8IMY or any successor
thereto (relating to all payments to be made to such Foreign Lender by the
Administrative Borrower or any other Borrower pursuant to this Agreement or any
other Loan Document) or such other evidence reasonably satisfactory to the
Administrative Borrower and the Administrative Agent that such Foreign Lender is
entitled to an exemption from, or reduction of, United States withholding tax,
including any exemption pursuant to Section 871(h) or 881(c) of the Code, and in
the case of a Foreign Lender claiming such an exemption under Section 881(c) of
the Code, a certificate that establishes in writing to the Administrative
Borrower and the Administrative Agent that such Foreign Lender is not (i) a
“bank” as defined in Section 881(c)(3)(A) of the Code, (ii) a 10-percent
stockholder within the meaning of Section 881(c)(3)(B) of the Code, or (iii) a
controlled foreign corporation related to any Borrower within the meaning of
Section 881(c)(3)(C) of the Code. Thereafter and from time to time, each such
Foreign Lender shall (A) promptly submit to the Administrative Borrower (with a
copy to the Administrative Agent) such additional duly completed and signed
copies of one or more of such forms or certificates (or such successor forms or
certificates as shall be adopted from time to time by the relevant United States
taxing authorities) as may then be available under then-current United States
Laws and regulations to avoid, or such evidence as is reasonably satisfactory to
the Administrative Borrower and
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the Administrative Agent of any available exemption from, or reduction of,
United States withholding taxes in respect of all payments to be made to such
Foreign Lender by the Administrative Borrower or other Borrower pursuant to this
Agreement, or any other Loan Document, in each case, (1) on or before the date
that any such form, certificate or other evidence expires or becomes obsolete,
(2) after the occurrence of any event requiring a change in the most recent
form, certificate or evidence previously delivered by it to the Administrative
Borrower and (3) from time to time thereafter if reasonably requested by ITEC or
the Administrative Agent, and (B) promptly notify the Administrative Borrower
and the Administrative Agent of any change in circumstances which would modify
or render invalid any claimed exemption or reduction.
          (f) Each Lender, Agent or Issuing Bank that is a United States person,
agrees to complete and deliver to the Administrative Borrower a statement signed
by an authorized signatory of the Lender to the effect that it is a United
States person together with a duly completed and executed copy of Internal
Revenue Service Form W-9 or successor form.
          (g) If the Administrative Agent or a Lender determines, in good faith
in its reasonable discretion, that it has received a refund of any Indemnified
Taxes or Other Taxes as to which it has been indemnified by a Borrower or with
respect to which such Borrower has paid additional amounts pursuant to this
Section 2.17, it shall pay over such refund to such Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by such Borrower
under this Section 2.17 with respect to the Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of the Administrative Agent or
such Lender (including any Taxes imposed with respect to such refund) as is
determined by the Administrative Agent or such Lender in good faith in its
reasonable discretion, and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided, that
such Borrower, upon the request of the Administrative Agent or such Lender,
agrees to repay as soon as reasonably practicable the amount paid over to such
Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender in the event
the Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This Section 2.17 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 such
Borrower or any other Person.
          (h) If the Administrative Borrower determines in good faith that a
reasonable basis exists for contesting any Indemnified Taxes or Other Taxes for
which additional amounts have been paid under this Section 2.17, the relevant
Lender, Agent or Issuing Bank shall cooperate with the Administrative Borrower
in challenging such Indemnified Taxes or Other Taxes, at the Administrative
Borrower’s expense, if so requested by the Administrative Borrower in writing.
          SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of
Set-offs. (a) Unless otherwise specified, the Borrowers shall make each payment
required to be made by them hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to 2:00 p.m., 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 reasonable 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 to the applicable account
designated to the Administrative Borrower by the Administrative Agent, except
payments to be made directly to the applicable Issuing Bank or the Swingline
Lender as expressly provided herein and except that payments pursuant to
Sections 2.15, 2.16, 2.17 and 9.03 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
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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. Any payment required to be made
by the Administrative Agent hereunder shall be deemed to have been made by the
time required if the Administrative Agent shall, at or before such time, have
taken the necessary steps to make such payment in accordance with the
regulations or operating procedures of the clearing or settlement system used by
the Administrative Agent to make such payment.
          (b) All proceeds of Collateral received by the Agents after an Event
of Default has occurred and is continuing, shall, if the Required Lenders direct
that such proceeds be applied to repayment, be applied, first, to, ratably, pay
any fees, indemnities, or expense reimbursements then due to the Agents or any
Issuing Bank from the Borrowers (other than in connection with Banking Services)
under the Loan Documents; second, ratably, to pay any fees or expense
reimbursements then due to the Agents from the Borrowers (other than in
connection with Banking Services) under the Loan Documents; third, to pay
interest due and payable in respect of any Revolving Loans, Swingline Loans and
any Protective Advances, ratably; fourth, to pay the principal of the Protective
Advances; fifth, to prepay principal on the Loans (other than the Protective
Advances) and unreimbursed LC Disbursements, ratably; sixth, to pay an amount to
the Administrative Agent equal to 103% of the LC Exposure on such date, to be
held in the LC Collateral Account as cash collateral for such Obligations;
seventh, to pay any Banking Services Obligations then due with respect to
Banking Services to the extent they constitute Secured Obligations; eighth, to
the payment of any other Secured Obligation then due and owing to the Agents or
any Lender by the Borrowers; and ninth, to the Borrowers or as the
Administrative Borrower shall direct.
          (c) 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, Swingline
Loans or Protective Advances resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and participations in LC
Disbursements, Swingline Loans or Protective Advances 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, Swingline
Loans and Protective Advances of other Lenders at such time outstanding 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, Swingline Loans and Protective Advances; 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 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, Swingline Loans or Protective Advances to
any assignee or participant, other than to any 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 any
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.
          (d) Unless the Administrative Agent shall have received notice from a
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the applicable Issuing Bank 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
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accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the applicable Issuing Bank, as applicable, the amount due. In such
event, if such Borrower has not in fact made such payment, then each of the
Lenders or the applicable Issuing Bank, as applicable, severally agrees to repay
to the Administrative Agent forthwith on demand the amount so distributed to
such Lender or Issuing Bank 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 greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
          (e) If any Lender shall fail to make any payment required to be made
by it pursuant to Sections 2.04(b), 2.05(b), 2.06(d) or (e), 2.07(b), 2.18(c) or
9.03, then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are fully
paid.
          SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.15, or if the Borrowers are
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, 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
reasonable judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as
applicable, in the future and (ii) would not subject such Lender to any material
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender in any material respect; provided, however, that the Borrowers shall not
be liable for such costs and expenses of a Lender requesting compensation if
(i) such Lender becomes a party to this Agreement on a date after the Closing
Date and (ii) the relevant Change in Law occurs on a date prior to the date such
Lender becomes a party hereto. The Borrowers hereby agree to pay all reasonable
costs and out-of-pocket expenses incurred by any Lender in connection with any
such designation or assignment. A certificate setting forth such costs and
expenses shall be submitted by such Lender to the Administrative Borrower, which
shall be presumptive evidence thereof, absent manifest error.
          (b) If any Lender requests compensation under Section 2.15, or if the
Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or is a Defaulting Lender, then the Administrative Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
replace such Lender by requiring such Lender to assign and delegate (and such
Lender shall be obligated to assign and delegate), without recourse (in
accordance with and subject to the restrictions contained in Section 9.04), all
its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Administrative Borrower shall
have received the prior written consent of the Administrative Agent and each
Issuing Bank, which consent in each case shall not unreasonably be withheld,
delayed or conditioned (ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Revolving Loans and participations in
LC Disbursements, Swingline Loans and Protective Advances, 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 Administrative Borrower (in the case of all other amounts), and
(iii) in the case of any such assignment resulting from a claim for compensation
under Section 2.15 or payments required to be made pursuant to Section 2.17,
such assignment will result in a reduction in such compensation or payments. A
Lender (other than a Defaulting 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 Administrative Borrower
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to require such assignment and delegation cease to apply. Nothing in this
Section 2.19 shall be deemed to prejudice any rights that any Borrower may have
against any Lender that is a Defaulting Lender.
          SECTION 2.20. Illegality. If any Lender reasonably determines that any
Change in Law has made it unlawful, or that any Governmental Authority has
asserted after the Closing Date that it is unlawful, for such Lender or its
applicable lending office to make or maintain any LIBOR Loans, then, on notice
thereof by such Lender to the Administrative Borrower through the Administrative
Agent, any obligations of such Lender to make or continue LIBOR Loans or to
convert ABR Borrowings to LIBOR Borrowings shall be suspended until such Lender
notifies the Administrative Agent and the Administrative Borrower that the
circumstances giving rise to such determination no longer exist. Upon receipt of
such notice, the Administrative Borrower shall upon demand from such Lender
(with a copy to the Administrative Agent), either convert all LIBOR Borrowings
of such Lender to ABR Borrowings, either on the last day of the Interest Period
therefor, if such Lender may lawfully continue to maintain such LIBOR Borrowings
to such day, or immediately, if such Lender may not lawfully continue to
maintain such Loans. Upon any such prepayment or conversion, the Borrowers shall
also pay accrued interest on the amount so prepaid or converted. Each Lender
agrees to designate a different lending office if such designation will avoid
the need for such notice and will not, in the determination of such Lender,
otherwise be disadvantageous to it.
          SECTION 2.21. Reserves; Change in Reserves. If Excess Availability is
not equal to at least $25,000,000 (with an up to $10 million credit for
Suppressed Availability then in effect), or if the aggregate amount of funds not
constituting Collateral deposited into the Collection Account exceeds $7,500,000
for any monthly period as reported at the end of such month in the quarterly
report required to be delivered pursuant to Section 5.01 (b)(iii) hereof, the
Agents may in their Permitted Discretion establish a Reserve with respect to
such funds. In addition, the Agents may at any time and from time to time in the
exercise of their Permitted Discretion establish and increase or decrease
Reserves; provided that the Agents shall have provided the Administrative
Borrower at least five Business Days’ prior written notice of any such
establishment or increase. The amount of any Reserve established by the Agents
shall have a reasonable relationship to the event, condition or other matter
that is the basis for the Reserve. Upon delivery of such notice, the Agents
shall be available to discuss the proposed Reserve or increase, and the
Administrative Borrower and the other Borrowers may take such action as may be
required so that the event, condition or matter that is the basis for such
Reserve or increase no longer exists, in a manner and to the extent reasonably
satisfactory to the Agents in the exercise of their Permitted Discretion. In no
event shall such notice and opportunity limit the right of the Agents to
establish or change such Reserve, unless the Agents shall have determined in
their Permitted Discretion that the event, condition or other matter that is the
basis for such new Reserve or such change no longer exists or has otherwise been
adequately addressed by the Borrower. Notwithstanding anything herein to the
contrary, Reserves shall not duplicate eligibility criteria contained in the
definition of “Eligible Inventory” and vice versa, or reserves or criteria
deducted in computing the cost or market value of Eligible Inventory or the Net
Orderly Liquidation Value of Eligible Inventory and vice versa.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
          Each Borrower hereby represents and warrants as follows:
          SECTION 3.01. Organization. Each Borrower (a) is a corporation,
limited liability company or limited partnership duly organized, validly
existing and in good standing (to the extent
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applicable) under the laws of the jurisdiction of its formation, (b) is duly
qualified and in good standing as a foreign corporation or company in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the failure to so
qualify or be licensed would not be reasonably likely to have a Material Adverse
Effect, and (c) has all requisite corporate, limited liability company or
partnership (as applicable) power and authority to enter into the Loan Documents
to which it is a party.
          SECTION 3.02. Borrower Information. Set forth on Schedule 3.02 hereto
is a complete and accurate list of all Borrowers as of the date hereof, showing
as of the date hereof (as to each Borrower) the jurisdiction of its
incorporation or formation, the address of its principal place of business and
its U.S. taxpayer identification number.
          SECTION 3.03. Powers. The execution, delivery and performance by each
Borrower of each Loan Document to which it is or is to be a party is within such
Borrower’s corporate, limited liability company or limited partnership (as
applicable) powers, have been duly authorized by all necessary corporate,
limited liability company or limited partnership (as applicable) action, and do
not (a) contravene such Borrower’s charter, bylaws, limited liability company
agreement, partnership agreement or other constituent documents, (b) violate any
law, rule, regulation (including, without limitation, Regulation X of the
Board), order, writ, judgment, injunction, decree, determination or award
binding upon any Borrower, (c) conflict with or result in the breach of, or
constitute a default or require any payment to be made under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument binding
on any Borrower or any of the Borrowers’ properties except, in the case of
performance by any such Borrower, to the extent that such conflict or breach
would not be reasonably expected to result in a Material Adverse Effect, or (d)
result in or require the creation or imposition of any Lien upon or with respect
to any of the properties of any Borrower. As of the date hereof, no Borrower is
in violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any such contract,
loan agreement, indenture, mortgage, deed of trust, lease or other instrument,
the violation or breach of which would be reasonably likely to have a Material
Adverse Effect, other than to the extent described in the Disclosure Filings.
          SECTION 3.04. Governmental Authorization. No Governmental
Authorization, and no notice to or filing with, any Governmental Authority is
required for (a) the due execution, delivery, recordation, filing or performance
by any Borrower of any Loan Document to which it is or is to be a party, or
(b) the exercise by any Agent or any Lender of its rights under the Loan
Documents, except for authorizations, approvals, actions, notices and filings
which have been duly obtained, taken, given or made and are in full force and
effect, routine renewals of existing licenses and permits of the Borrowers and
their subsidiaries in the ordinary course of business and such filings as may be
required under federal and state securities laws for purposes of disclosure.
          SECTION 3.05. Due Execution. This Agreement has been, and each other
Loan Document will have been, duly executed and delivered by each Borrower
thereto. This Agreement is, and each other Loan Document when delivered
hereunder will be, the legal, valid and binding obligation of each Borrower
party thereto, enforceable against such Borrower 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 3.06. No Action, Suit, Etc. There is no action, suit,
investigation, litigation or proceeding against any Borrower, including any
Environmental Action, pending or threatened in writing before any Governmental
Authority or arbitrator that (i) would be reasonably likely to have a Material
Adverse Effect (other than any shareholder litigation or regulatory
investigation arising from the
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matters described in the Disclosure Filings) or (ii) purports to affect the
legality, validity or enforceability of any Loan Document and there has been no
material adverse change (other than to the extent disclosed in Navistar and the
Borrowers’ filings pursuant to the Securities Exchange Act of 1934, as amended,
made and publicly available on or before the date hereof) in the status, or
financial effect on any Borrower, of the Disclosed Matters from that described
on Schedule 3.06 hereto.
          SECTION 3.07. No Material Adverse Change. There has been no Material
Adverse Change since October 31, 2004 (or, from and after the delivery of the
financial statements pursuant to Section 4.01(c) herein for the year then ended,
October 31, 2006); provided, however, the Agents and the Lenders hereby
acknowledge that the existence of the matters set forth in the Disclosure
Filings shall not be deemed to constitute a misrepresentation hereunder.
          SECTION 3.08. Consolidated Financials. The unaudited financial
statements delivered to the Lenders by the Administrative Borrower pursuant to
Section 4.01(c) prior to the date hereof, and any additional reporting
requirements delivered to the Lenders pursuant to Section 5.01 were prepared in
good faith.
          SECTION 3.09. Information. No written information, exhibit or report
(other than the projections, budgets, estimates, forward-looking information and
general market data) about any Borrower or its subsidiaries prepared by or on
behalf of any Borrower and furnished by or on behalf of any Borrower to any
Agent or any Lender in connection with the negotiation and syndication of the
Loan Documents or pursuant to the terms of the Loan Documents contained, when
furnished and taken as a whole, any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements made therein
not materially misleading in light of the circumstances under which such
statements were made; provided, however, that the Agents and the Lenders hereby
acknowledge that the existence of the matters referred to in the Disclosure
Filings shall not be deemed to constitute a misrepresentation hereunder.
          SECTION 3.10. Margin Regulations. No Borrower is engaged in the
business of extending credit for the purpose of purchasing or carrying Margin
Stock, and no proceeds of any Loan will be used to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or carrying
any Margin Stock.
          SECTION 3.11. Investment Company Act. No Borrower is required to be
registered as an “investment company,” or an “affiliated person” of, or
“promoter” or “principal underwriter” for, an “investment company,” as such
terms are defined in the Investment Company Act of 1940, as amended. Neither the
making of any Loans, nor the application of the proceeds or repayment thereof by
the Borrower, nor the consummation of the other transactions contemplated by the
Loan Documents, will violate any provision of such Act or any rule, regulation
or order of the Securities and Exchange Commission thereunder.
          SECTION 3.12. Solvency. (a) Immediately after the consummation of the
Transactions to occur on the Closing 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 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
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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 Closing Date.
          (b) The Borrowers do not intend to incur debts beyond their ability to
pay such debts as they mature, taking into account the timing and amounts of
cash to be received by the Borrowers and the timing and amounts of cash to be
payable by the Borrowers on or in respect of their Debt.
          SECTION 3.13. ERISA.
          (a) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan that has resulted in or is reasonably expected to
result in a material liability of any Borrower or any ERISA Affiliate.
          (b) Schedule B (Actuarial Information) to the most recent annual
report (Form 5500 Series) for each Plan, copies of which have been filed with
the Department of Labor and furnished to the Administrative Agent, is complete
and accurate in all material respects and fairly presents the funding status of
such Plan, and since the date of such Schedule B there has been no material
adverse change in such funding status.
          (c) Neither any Borrower nor any ERISA Affiliate has incurred or is
reasonably expected to incur any material Withdrawal Liability.
          (d) Neither any Borrower nor any ERISA Affiliate has been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of ERISA,
and no such Multiemployer Plan is reasonably expected to be in reorganization or
to be terminated, within the meaning of Title IV of ERISA.
          SECTION 3.14. Environmental. (a) Except as would not reasonably be
expected to have a Material Adverse Effect, the operations and properties of
each Borrower and comply in all respects with all applicable Environmental Laws
and Environmental Permits, all past non-compliance with such Environmental Laws
and Environmental Permits has been resolved without ongoing obligations or
costs, and no circumstances exist that would be reasonably likely to (i) form
the basis of an Environmental Action against any Borrower or their properties
that could reasonably be expected to have a Material Adverse Effect or
(ii) cause any such property to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
          (b) In each case except as would not reasonably be expected to have a
Material Adverse Effect: (i) none of the properties currently or formerly owned
or operated by any Borrower is listed or proposed for listing on the NPL or on
the CERCLIS or any analogous foreign, state or local list or is adjacent to any
such property; (ii) there are no and never have been any underground or
aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps
or lagoons in which Hazardous Materials are being or have been treated, stored
or disposed on any property currently owned or operated by any Borrower, to the
best of its knowledge, on any property formerly owned or operated by any
Borrower; there is no asbestos or asbestos-containing material on any property
currently owned or operated by any Borrower; and (iii) Hazardous Materials have
not been released, discharged or disposed of on any property currently or
formerly owned or operated by any Borrower.
          (c) In each case except as would not reasonably be expected to have a
Material Adverse Effect: (i) neither any Borrower is undertaking, and has not
completed, either individually or together with other potentially responsible
parties, any investigation or assessment or remedial or
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response action relating to any actual or threatened release, discharge or
disposal of Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any governmental or regulatory authority
or the requirements of any Environmental Law; and (ii) all Hazardous Materials
generated, used, treated, handled or stored at, or transported to or from, any
property currently or formerly owned or operated by any Borrower have been
disposed of in a manner not reasonably expected to result in liability to any
Borrower.
          SECTION 3.15. Taxes. Each Borrower has filed, has caused to be filed
or has been included in all tax returns (Federal and material state, local and
foreign) required to be filed and, except to the extent not required by
Section 5.04 has paid all taxes shown thereon to be due, together with
applicable interest and penalties.
          SECTION 3.16. Existing Debt. Set forth on Part I of Schedule 3.16
hereto is a complete and accurate list of all Existing Debt outstanding in a
principal amount in excess of $50,000,000 (and excluding any intercompany debt
as of the date hereof), showing as of the date hereof the obligor and the
principal amount outstanding thereunder, the maturity date thereof and the
amortization schedule therefor. Set forth on Part II of Schedule 3.16 is a
complete and accurate description as of the date hereof of all defaults under
any Existing Debt, other than defaults resulting from the matters disclosed in
the Disclosure Filings.
          SECTION 3.17. Existing Liens. Set forth on Schedule 3.17 hereto is a
complete and accurate list of all Liens on the property or assets of any
Borrower securing Debt for Borrowed Money outstanding in a principal amount in
excess of $50,000,000 as of the date hereof, showing as of the date hereof the
lienholder thereof, the principal amount of the obligations secured thereby and
the property or assets of such Borrower subject thereto.
          SECTION 3.18. Ownership Change. No “ownership change” as defined in
Section 382(g) of the Internal Revenue Code, and no event that would result in
the application of the “separate return limitation year” or “consolidated return
change of ownership” limitations under the Federal income tax consolidated
return regulations, has occurred with respect to the Borrowers.
          SECTION 3.19. Insurance. Schedule 3.19 sets forth a true, complete and
correct description of all property and liability insurance maintained by or on
behalf of the Borrowers as of the Closing Date. As of the Closing Date, all such
insurance is in full force and effect and all premiums in respect of such
insurance have been duly paid. Each Borrower believes that the insurance
maintained by or on behalf of such Borrower complies with the requirements of
Section 5.09 hereof. It is acknowledged and agreed the insurance set forth on
Schedule 3.19 satisfies the insurance requirements set forth in the Loan
Documents.
          SECTION 3.20. Security Interest in Collateral. The provisions of this
Agreement and the other Loan Documents create legal and valid Liens on all the
Collateral of the type in which a security interest can be created under
Article 9 of the UCC in favor of the Collateral Agent, for the benefit of the
Collateral Agent and the Lenders; and upon the proper filing of UCC financing
statements required pursuant to Section 4.01(k) (and payment of any applicable
fees), such Liens constitute perfected and continuing Liens on the Collateral
(to the extent a security interest in such Collateral and any proceeds of any
item of Collateral can be perfected through the filing of UCC financing
statements), securing the Secured Obligations, enforceable against the
applicable Borrower and all third parties (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 having priority over all
other Liens on the Collateral except in the case of (a) Permitted Liens, to the
extent any such Permitted Liens would have priority over the Liens in favor of
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Collateral Agent pursuant to any applicable law, and (b) Liens perfected only by
possession, notation or control (including possession, notation or control of
any certificate of title) to the extent the Collateral Agent has not obtained or
does not maintain possession of such Collateral; provided, that such possession,
control or notation shall only be required to the extent set forth in the
Security Agreement.
          SECTION 3.21. Sanctioned Persons. None of Navistar, any Borrower, or
any subsidiary thereof, nor, to the knowledge of any Borrower, any director,
officer, agent, employee or Affiliate of Navistar, any Borrower or any
subsidiary thereof is currently subject to any U.S. sanctions administered by
the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”);
and the Borrowers will not directly or indirectly use the proceeds of the Loans
or the Letters of Credit or otherwise make available such proceeds to any
person, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
          SECTION 3.22. “In the Business of Selling” Inventory Collateral. Each
Borrower (a) sells Inventory Collateral, (b) holds Inventory Collateral for
sale, (c) is “in the business of selling” Inventory Collateral for purposes of
the applicability of UCC Section 9-311(d), and (d) does not engage in the
business of leasing trucks.
          SECTION 3.23. Labor Disputes. Except as would not reasonably be
expected to have a Material Adverse Effect: (a) there are no strikes, lockouts
or slowdowns against any Borrower pending or, to the knowledge of any Borrower,
threatened, (b) the hours worked by and payments made to employees of each
Borrower have not been in violation of the Fair Labor Standards Act or any other
applicable Federal, state, local or foreign law dealing with such matters, and
(c) all payments due from any Borrower on account of wages and employee health
and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of each Borrower to the extent required by GAAP;
provided, however, the Agents and the Lenders hereby acknowledge, with respect
to the GAAP accounting treatment in clause (c) above, that the existence of the
matters set forth in the Disclosure Filings and the results created by the
existence thereof shall not be deemed to constitute a misrepresentation
hereunder. Except as would not reasonably be expected to have a Material Adverse
Effect, the consummation of the Transactions will not give rise to a right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which Navistar or any Borrower (or any
predecessor) is a party or by which Navistar or any Borrower (or any
predecessor) is bound.
ARTICLE IV
CONDITIONS
          SECTION 4.01. Closing Date. The obligations of the Lenders to make
Loans, and of any 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 this Agreement):
          (a) Credit Agreement and Loan Documents. The Administrative Agent (or
its counsel) shall have received:
          (i) from each party hereto either (A) a counterpart of this Agreement
signed on behalf of such party, or (B) written evidence reasonably satisfactory
to the Administrative Agent (which may include facsimile or electronic
transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement; and
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          (ii) duly executed copies of the Loan Documents and such other
certificates, documents, instruments and agreements as provided for herein in
connection with the transactions contemplated by this Agreement and the other
Loan Documents, including any promissory notes requested by a Lender at least
three Business Days prior to the Closing Date pursuant to Section 2.10;
          (b) Legal Opinions. The Administrative Agent shall have received, on
behalf of itself, the Lenders and each Issuing Bank on the Closing Date (i) a
written opinion of Kirkland & Ellis LLP, counsel for Navistar, the
Administrative Borrower and the other Borrowers, and (ii) a written opinion of
general counsel of the Administrative Borrower, in each case (A) in form and
substance reasonably satisfactory to the Agents, (B) dated the Closing Date, and
(C) addressed to each Issuing Bank on the Closing Date, the Agents and the
Lenders.
          (c) Financial Statements. The Administrative Agent shall have received
the Monthly Unaudited Reports, in the form delivered under the January Credit
Agreement, for each month since December 31, 2006 and ended at least 30 days
prior to the Closing Date, and if any Monthly Unaudited Report has been
modified, any such modifications made to any Monthly Unaudited Reports issued
within the 24 months prior to the Closing Date
(d) Closing Certificates; Certified Certificate of Incorporation; Good Standing
Certificates. The Administrative Agent shall have received:
          (i) a certificate of each Borrower, dated the Closing Date and
executed by its Secretary or Assistant Secretary, which shall (A) certify as to
the attached resolutions of its Board of Directors, members or other body
authorizing the execution, delivery and performance of the Loan Documents to
which it is a party, (B) identify by name and title and bear the signatures of
the officers of such Borrower authorized to sign the Loan Documents to which it
is a party, and (C) contain appropriate attachments, including the certificate
or articles of incorporation or organization of each Borrower certified by the
relevant authority of the jurisdiction of organization of such Borrower (which
certification shall confirm the payment of all franchise taxes) and a true and
correct copy of its by-laws or operating, management or partnership agreement;
and
          (ii) a copy of a certificate of the Secretary of State of the
jurisdiction of incorporation of each Borrower, dated reasonably near the
Closing Date, which shall certify such Borrower is duly incorporated and in good
standing or presently subsisting under the laws of the State of the jurisdiction
of its incorporation.
          (e) No Default Certificate. The Administrative Agent shall have
received certificate of each Borrower signed on behalf of such Borrower by its
President or a Senior Vice President or Vice President or Treasurer, dated the
Closing Date (the statements made in which certificate shall be true on and as
of the Closing Date), certifying as to:
          (i) the absence of any amendments to the charter of such Borrower
since the date of the Secretary of State’s certificate referred to in
Section 4.01(d)(ii);
          (ii) the truth in all material respects of the representations and
warranties contained in the Loan Documents as though made on and as of the
Closing Date;
          (iii) the absence of any event occurring and continuing, or, if
applicable, resulting from the initial Borrowing, that constitutes a Default;
and
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          (iv) the Excess Availability amount as of the Closing Date (giving
effect to all (A) Borrowings to be made, and (B) Letters of Credit to be issued,
on such date).
          (f) Fees. The Agents shall have received all fees required to be paid
by the Borrowers, and all reasonable out-of-pocket expenses which are
reimbursable pursuant to the Loan Documents and for which invoices have been
presented at least one Business Day prior to the Closing Date (including the
reasonable documented fees and expenses of legal counsel).
          (g) Lien and Judgment Searches. The Administrative Agent shall have
received the results of recent lien and judgment searches in each of the
jurisdictions contemplated by the Perfection Certificate, and such search shall
reveal no material judgments and no Liens on any of the inventory assets of the
Borrowers, except for Liens permitted by Section 6.02 or discharged on or prior
to the Closing Date pursuant to a pay-off letter or other documentation
reasonably satisfactory to the Administrative Agent.
          (h) Solvency. The Administrative Agent shall have received a customary
certificate from the chief financial officer or treasurer of the Administrative
Borrower certifying that the Administrative Borrower, the other Borrowers, and
their subsidiaries, on a consolidated basis after giving effect to the
Transactions contemplated to occur under the Loan Documents, are solvent (within
the meaning of Section 3.12).
          (i) Borrowing Base Certificate. The Administrative Agent shall have
received prior to the Closing Date a Borrowing Base Certificate which calculates
the Borrowing Base as of the last Business Day of the most recent month ended at
least ten Business Days prior to the Closing Date.
          (j) Closing Minimum Excess Availability. After giving effect to all
Borrowings to be made on the Closing Date and the issuance of any Letters of
Credit on the Closing Date, Excess Availability shall be not less than
$100,000,000.
          (k) Perfection Certificate; Filings, Registrations and Recordings. The
Administrative Agent shall have received from each Borrower a completed
Perfection Certificate, dated the Closing Date and signed by a Responsible
Officer each Borrower, together with all attachments contemplated thereby. Each
document (including any UCC financing statement) required by the Collateral
Documents or under law or reasonably requested by the Agents to be filed,
registered or recorded in order to create in favor of the Collateral Agent, for
the benefit of the Lenders, a perfected Lien on the Collateral described
therein, prior and superior in right to any other Person (other than with
respect to Liens permitted by Section 6.02), shall be in proper form for filing,
registration or recordation. The Collateral Agent, on behalf of the Lenders,
shall have a security interest in the Collateral of the type and priority
described in the Collateral Documents (subject to Liens permitted by
Section 6.02).
          (l) No Litigation, Proceeding etc. There shall exist no action, suit,
investigation, litigation or proceeding against the Borrowers (other than
(x) the matters described on Schedule 3.06 hereto (the “Disclosed Matters”), and
(y) the matters set forth in the Disclosure Filings), pending or threatened
before any Governmental Authority that (i) would be reasonably expected to have
a Material Adverse Effect or (ii) purports to affect the legality, validity or
enforceability of any Loan Document, and there shall have been no material
adverse change in the status, or financial effect on Navistar, any Borrower or
any of its subsidiaries, of the Disclosed Matters from that described on
Schedule 3.06 hereto.
          (m) Other Debt. After giving effect to the Transactions, the Borrowers
shall not have any material outstanding Debt in a principal amount in excess of
$50,000,000 (other than existing
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intercompany debt) other than (i) the Facility Obligations and Debt created
hereunder, and (ii) Existing Debt set forth on Schedule 3.16.
          (n) Insurance. The Administrative Agent shall have received a
customary insurance broker’s letter, in form and substance reasonably
satisfactory to the Administrative Agent, confirming that the insurance carried
by the Borrowers complies with the terms of the Security Agreement and is
reasonable and customary, or other evidence thereof reasonably satisfactory to
the Administrative Agent.
          (o) Field Examination, Appraisal. The Agents shall have received
(i) the results of a completed field examination with respect to the Collateral
to be included in calculating the Borrowing Base and of the relevant accounting
systems, policies and procedures of the Borrowers, and (ii) an appraisal of the
Net Orderly Liquidation Value of Inventory in form and substance reasonably
satisfactory to the Agents. The Agents shall be reasonably satisfied with the
Borrowers’ cash management system, blocked account agreements and lockbox
arrangements pertaining to the LC Collateral Account and the Collection Account.
          (p) USA PATRIOT Act. The Administrative Agent shall have received all
documentation and other information required by regulatory authorities under
applicable “know your customer” and anti-money laundering rules and regulations,
including without limitation, the USA PATRIOT Act, such documentation to be
received at least five Business Days prior to the Closing Date.
The Administrative Agent shall notify the Administrative Borrower and the
Lenders of the Closing Date, and such notice shall be conclusive and binding.
          SECTION 4.02. Each Borrowing. The obligation of each Lender to make a
Loan on the occasion of each Borrowing (including any on the Closing Date), and
of any Issuing Bank to issue, amend, renew, extend or convert into a Loan any
Letter of Credit, shall be subject to the further conditions precedent that on
the date of such Borrowing (which term shall, for the purposes of this Section
4.02, include any issuance, renewal, extension or conversion of a Letter Of
Credit pursuant hereto), and both immediately before and after giving effect
thereto, the following statements shall be true:
          (a) the Administrative Agent shall have received, in the case of a
Borrowing, a Borrowing Request as required by Section 2.03 or, in the case of
the issuance of a Letter of Credit, the applicable Issuing Bank and the
Administrative Agent shall have received a notice requesting the issuance of
such Letter of Credit as required by Section 2.06(b) or, in the case of a
Swingline Borrowing, the Swingline Lender and the Administrative Agent shall
have received a request as required by Section 2.05(a), in each case such notice
or request to a calculation, to be based on the most recently reported Borrowing
Base calculation, establishing the existence of sufficient Excess Availability
to make such Borrowing;
          (b) the representations and warranties of each Borrower contained in
each Loan Document shall be correct in all material respects on and as of such
date, immediately before and after giving effect to such Borrowing and to the
application of the proceeds therefrom, as though made on and as of such date,
other than any such representations or warranties that, by their terms, refer to
a specific date other than the date of such Borrowing, in which case as of such
specific date;
          (c) after giving effect to any Borrowing and/or the issuance of any
Letters of Credit, Excess Availability shall be not less than zero;
          (d) At the time of and immediately after giving effect to such
Borrowing (other than an amendment, extension or renewal of a Letter of Credit
without any increase in the Stated Amount of
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such Letter of Credit), as applicable, no Event of Default or Default shall have
occurred and be continuing; and
          (e) By the date of the initial Borrowing or issuance of a Letter of
Credit, the Administrative Agent shall have received a notice setting forth the
deposit account of the Borrowers (including any subsequent deposit account
information provided by the Borrowers, the “Funding Account”) to which the
Administrative Agent is authorized by the Borrowers to transfer the proceeds of
any Borrowings requested or authorized pursuant to this Agreement.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by each
Borrower on the date thereof as to the matters specified in paragraphs (b),
(c) and (d) of this Section 4.02.
          SECTION 4.03. Determinations Under Sections 4.01 and 4.02. For
purposes of determining compliance with the conditions specified in Section 4.01
and 4.02, each applicable Lender shall be deemed to have consented to, approved
or accepted or to be satisfied with each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to
such Lender unless an officer of the Administrative Agent responsible for the
transactions contemplated by the Loan Documents shall have received notice from
such Lender prior to the Closing Date specifying its objection thereto, and such
Lender shall not have made available to the Administrative Agent such Lender’s
ratable portion of such Borrowing.
ARTICLE V
AFFIRMATIVE COVENANTS
          Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees, expenses and other amounts payable under
any Loan Document have been paid in full (other than contingent indemnification
obligations) and all Letters of Credit have expired or terminated (or have been
cash collateralized pursuant to Section 2.09(b)) and all LC Disbursements shall
have been reimbursed, each Borrower covenants and agrees, jointly and severally,
with the Agents and the Lenders that:
          SECTION 5.01. Financial Statements; Borrowing Base and Other
Information. The Administrative Borrower will furnish to the specified Agent
(which will (a) in the case of the Administrative Agent, promptly furnish such
information to the Collateral Agent and the Lenders, and (b) in the case of the
Collateral Agent, upon request from a Lender or the Administrative Agent,
promptly furnish such information to such Lender or the Administrative Agent, as
applicable):
          (a) Annual Financials. At such time as Navistar first files with the
SEC each of its annual reports on Form 10-K and each of its quarterly reports on
Form 10-Q then required to be filed under Section 13 of the Exchange Act,
promptly upon the filing by Navistar with the SEC of their annual report on Form
10-K for any Fiscal Year, and thereafter within 90 days after the end of each
Fiscal Year completed thereafter, deliver to the Administrative Agents a copy of
the annual report for such Fiscal Year for Navistar and its subsidiaries,
including therein (i) Consolidated balance sheets of Navistar and its
subsidiaries as of the end of such Fiscal Year, and (ii) a Consolidated
statement of income and a Consolidated statement of cash flows of Navistar and
its subsidiaries for such Fiscal Year, in each case prepared in accordance with
Rule 3-10 of Regulation S-X, consistent with Navistar’s past practice (unless
otherwise required to conform with the results of the audit or changes in GAAP),
on the basis of management’s good faith calculations and fairly presenting in
all material respects the Consolidated
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financial condition of Navistar and its subsidiaries as at such date and the
Consolidated results of operations of Navistar and its subsidiaries for the
period ended on such date and accompanied by (A) in the case of the annual
report for a Fiscal Year ending on or after October 31, 2007, a certificate of a
Financial Officer of the Administrative Borrower stating that no Event of
Default has occurred and is continuing or, if an Event of Default has occurred
and is continuing, a statement as to the nature thereof and the action that the
Borrowers have taken and proposes to take with respect thereto, provided, that
such certificate shall also include a specific certification that no Borrower is
engaged in the business of leasing trucks, and (B) if otherwise available,
(1) an audit report opinion of KPMG or other registered public accounting firm
of recognized standing, and (2) a report of such registered public accounting
firm as to the internal controls of Navistar required under Section 404 of the
Sarbanes-Oxley Act of 2002; provided, however, that (x) in the event the
Borrowers are able to comply with the provisions of clauses (B)(1) and (2) above
in respect of a Fiscal Year ending on or after October 31, 2007 and (y) such
registered public accounting firm otherwise agrees (which agreement the
Borrowers agree to use commercially reasonable efforts to obtain), such
financial statements shall also be accompanied by a certificate of such
registered public accounting firm stating that in the course of such regular
audit of the business of Navistar and its subsidiaries, which audit was
conducted by such accounting firm in accordance with generally accepted auditing
standards, such accounting firm has obtained no knowledge that an Event of
Default has occurred and is continuing, or if, in the opinion of such accounting
firm, an Event of Default has occurred and is continuing, a statement as to the
nature thereof; provided that, in the event of any change in generally accepted
accounting principles used in the preparation of such financial statements, the
Borrowers shall also provide a reconciliation of such financial statements to
GAAP.
          (b) Other Financials.
          (i) Quarterly Financials. At such time as Navistar first files with
the SEC its annual reports on Form 10-K and each of its quarterly reports on
Form 10-Q then required to be filed under Section 13 of the Exchange Act,
promptly upon the filing by Navistar with the SEC of their report on Form 10-Q
for any Fiscal Quarter and thereafter within 45 days after the end of each of
the first three quarters of each Fiscal Year commencing with the first Fiscal
Quarter completed thereafter deliver to the Administrative Agents, (A) a
Consolidated balance sheet of Navistar and its subsidiaries as of the end of
such quarter, (B) a Consolidated statement of income and a Consolidated
statement of cash flows of Navistar and its subsidiaries for the period
commencing at the end of the previous Fiscal Quarter and ending with the end of
such quarter, and (C) a Consolidated statement of income and a Consolidated
statement of cash flows of Navistar and its subsidiaries for the period
commencing at the end of the previous Fiscal Year and ending with the end of
such quarter, all prepared in accordance with Rule 3-10 of Regulation S-X,
consistent with the Navistar’s past practice (unless otherwise required to
conform with the results of the audit or changes in GAAP), on the basis of
management’s good faith calculations and fairly presenting in all material
respects, subject to year end audit adjustments and the absence of footnotes,
the Consolidated financial condition of Navistar and its subsidiaries as at such
date and the Consolidated results of operations of Navistar and its subsidiaries
for the periods ended on such date, setting forth in each case in comparative
form the corresponding figures for the corresponding date or period of the
preceding Fiscal Year, all in reasonable detail and duly certified (subject to
normal year-end audit adjustments and the absence of footnotes) by a Financial
Officer of Navistar as having been prepared in accordance with GAAP, together
with, in the case of financial statements for any Fiscal Quarter ended on or
after the Closing Date, a certificate by a Financial Officer of the
Administrative Borrower stating that no Event of Default has occurred and is
continuing or, if an Event of Default has occurred and is continuing, a
statement as to the nature thereof and the action that the Borrowers have taken
and proposes to take with respect thereto, provided, that such certificate shall
also include (x) a specific certification that no Borrower is engaged in the
business of leasing trucks, and (y) if any
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Borrower obtains knowledge that the component of such Borrower’s business which
constitutes the “business of leasing” exceeds 5% of such Borrower’s aggregate
revenues for such quarterly period, notice of such event, provided, however
that, in the event of any change in generally accepted accounting principles
used in the preparation of such financial statements, the Borrowers shall also
provide a reconciliation of such financial statements to GAAP;
          (ii) Special Reporting – Monthly Reports. As soon as available, and in
any event within 30 days after the end of each month commencing with the month
of July 2007, deliver to the Administrative Agents monthly management financial
reports in respect of the sales and income by segment and cash balances, Debt
(as defined in the January Credit Agreement), capital expenditures (as defined
in the January Credit Agreement), and depreciation and amortization of Navistar
and its Restricted Subsidiaries (as defined in the January Credit Agreement)
prepared in a manner consistent with the Borrowers’ past practices (unless
otherwise noted or required to conform with the restatement of the audit or
changes in GAAP) and on the basis of Navistar’s management’s good faith
calculations, in such form and detail reasonably satisfactory to the
Administrative Agent (including, without limitation, any financial information
prepared in accordance with generally accepted accounting principles to
determine compliance with the covenants hereunder), provided, however, that such
reporting shall not be required so long as Navistar has filed all reports with
the Securities and Exchange Commission required pursuant to Section 13 of the
Exchange Act; and
          (iii) Special Reporting – Quarterly Financials. As soon as available,
and in any event within 60 days after the end of each fiscal quarter (other than
the last Fiscal Quarter of a Fiscal Year) or 90 days after the end of the last
fiscal quarter of a Fiscal Year, deliver to the Administrative Agents quarterly
condensed manufacturing balance sheet and income statement of Navistar and its
Consolidated Subsidiaries (as defined in the January Credit Agreement), with
Navistar’s finance subsidiaries included on an equity basis, prepared in a
manner consistent with Navistar’s past practices (unless otherwise noted or
required to conform with the restatement of the audit or changes in GAAP) and on
the basis of management’s good faith calculations, to be accompanied by a
certificate of a Financial Officer of the Administrative Borrower stating that
no Event of Default has occurred and is continuing or, if an Event of Default
has occurred and is continuing, a statement as to the nature thereof and the
action that the Borrowers have taken and proposes to take with respect thereto
(provided, that such certificate shall also include (x) a specific certification
that no Borrower is engaged in the business of leasing trucks, and (y) if any
Borrower obtains knowledge that the component of such Borrower’s business which
constitutes the “business of leasing” exceeds 5% of such Borrower’s aggregate
revenues for such quarterly period, notice of such event), together with a
reconciliation report in reasonable detail and reasonably satisfactory to the
Agents commencing with the fiscal quarter ended October 31, 2007, with respect
to the withdrawal of any funds from the Collection Account not constituting
Collateral during the quarterly period covered; provided, however, that such
reporting (other than such reconciliation report) shall not be required so long
as Navistar has filed all reports with the Securities and Exchange Commission
required pursuant to Section 13 of the Exchange Act;
provided further that the Lenders acknowledge that the financial information
delivered pursuant to clauses (ii) and (iii) above will be preliminary and
unaudited and will be prepared by Navistar’s management based on current data
then available in a manner consistent with past practices (unless otherwise
noted or required to conform with the restatement of the audit or changes in the
GAAP), will not have been reviewed by Navistar, the Borrowers or their
independent accountants, and when the accounting review in connection with the
audit of the annual report for Fiscal Years 2005 and 2006 is complete, the
information provided may differ from such annual report and such difference may
be material.
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          (c) Borrowing Base Certificates. As soon as available but in any event
on or prior to the 20th day of each calendar month (or more frequently as
required below), deliver to the Collateral Agent (which shall promptly provide
copies of the same to the Lenders) a Borrowing Base Certificate as of the close
of business on the last day of the immediately preceding fiscal month (or in the
case of a voluntary delivery of a Borrowing Base Certificate at the election of
the Borrower, a subsequent date), together with such supporting information in
connection therewith as the Collateral Agent may reasonably request, which may
include, without limitation, (i) Inventory reports by category and location,
together with a reconciliation to the corresponding Borrowing Base Certificate,
(ii) a reasonably detailed calculation of Eligible Inventory, and (iii) a
reconciliation of the Borrowers’ Inventory between the amounts shown in the
Borrowers’ ledger balance and any Inventory reports delivered pursuant to clause
(i) above, and (iv) if a Receivables Trigger Event shall have occurred and be
continuing, a reasonably detailed aging of the Borrowers’ Accounts that are
subject to an applicable Master Intercompany Agreement; provided that if Excess
Availability is less than $15,000,000 at any time, and in such case continuing
until such time as Excess Availability is greater than or equal to $15,000,000
for a period of 30 consecutive days, as certified by the Borrowers to the
Collateral Agent, the Borrowers shall deliver a Borrowing Base Certificate and
such supporting information on Wednesday of each week (or if Wednesday is not a
Business Day, on the next succeeding Business Day), as of the close of business
on the immediately preceding Saturday, together with such other information in
respect of the Collateral as the Collateral Agent shall reasonably request; and
provided, further, that any Borrowing Base Certificate delivered other than with
respect to month’s end may be based on such estimates by the Borrowers of Shrink
and other amounts as the Borrowers may deem necessary.
          (d) Perfection Certificates. Deliver to the Collateral Agent as soon
as commercially practicable, upon the reasonable request of the Collateral Agent
(but not more than once per calendar year) an updated Perfection Certificate
reflecting all changes since the last-delivered Perfection Certificate was
prepared.
          (e) Used Truck Titles. If Excess Availability is at any time less than
$15,000,000 for three consecutive days, promptly following the Collateral
Agent’s reasonable request therefor, deliver to the Collateral Agent all copies
of the titles of the Inventory to the extent such Inventory consists of used
trucks.
          (f) USA Patriot Act. Promptly following the Administrative Agent’s
request therefor, deliver to the Administrative Agent all documentation and
other information that the Administrative Agent reasonably requests on its
behalf or on behalf of any Lender in order to comply with its ongoing
obligations under applicable “know your customer” and anti-money laundering
rules and regulations, including the USA PATRIOT Act.
     (g) ERISA
          (i) ERISA Events and ERISA Reports. (i) Promptly and in any event
within 15 Business Days after any Borrower or any ERISA Affiliate knows that any
ERISA Event has occurred, a statement of a Financial Officer of the
Administrative Borrower describing such ERISA Event and the action, if any, that
such Borrower or such ERISA Affiliate has taken and proposes to take with
respect thereto, and (ii) promptly and in any event within ten Business Days
after the date any records, documents or other information must be furnished to
the PBGC with respect to any Plan pursuant to Section 4010 of ERISA, a copy of
such records, documents and information.
          (ii) Plan Terminations. Promptly and in any event within 15 Business
Days after receipt thereof by any Borrower or any ERISA Affiliate, copies of
each written notice from
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the PBGC stating its intention to terminate any Plan or to have a trustee
appointed to administer any Plan.
          (iii) Plan Annual Reports. Promptly upon the request of the
Administrative Agent, copies of each Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) with respect to each Plan.
          (iv) Multiemployer Plan Notices. Promptly and in any event within 15
Business Days after receipt thereof by any Borrower or any ERISA Affiliate from
the sponsor of a Multiemployer Plan, copies of each written notice concerning
(A) the imposition of Withdrawal Liability by any such Multiemployer Plan,
(B) the reorganization or termination, within the meaning of Title IV of ERISA,
of any such Multiemployer Plan or (C) the amount of liability incurred, or that
may be incurred, by such Borrower or any ERISA Affiliate in connection with any
event described in clause (A) or (B).
          (h) Creditor Reports. Promptly after the furnishing thereof, copies of
any statement or report furnished to any holder of Debt of any Borrower pursuant
to the terms of any indenture, loan or credit or similar agreement and not
otherwise required to be furnished to the Lenders pursuant to any other clause
of this Section 5.01.
          (i) Insurance. As soon as available and in any event within 30 days
after the end of each Fiscal Year, deliver to the Administrative Agent a report
summarizing the property and liability insurance coverage (specifying type,
amount and carrier) in effect for each of the Borrowers and containing such
additional information as the Administrative Agent may reasonably specify.
          (j) Other Information. Deliver to the Administrative Agent promptly
following the Administrative Agent’s request therefor, such other information
regarding the operations, business affairs and financial condition of Navistar
or any Borrower, or compliance with the terms of any Loan Document, as the
Administrative Agent may reasonably request (on behalf of itself or any Lender).
          SECTION 5.02. Notices of Material Events. The Administrative Borrower
or the applicable Borrower will furnish to the Agents prompt written notice of
the following after any Responsible Officer of the Administrative Borrower or
such Borrower obtains knowledge thereof:
          (a) as soon as possible, but in any event within five Business Days of
obtaining such knowledge, the occurrence of any Event of Default or Default;
          (b) the filing or commencement of, or any written threat or notice of
intention of any person to file or commence, any action, suit or proceeding,
whether at law or in equity or by or before any Governmental Authority or in
arbitration, against any Borrower as to which an adverse determination is
reasonably probable and which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect;
          (c) any loss, damage, or destruction to the Collateral in the amount
of $2,500,000 or more per occurrence, whether or not covered by insurance;
          (d) any Environmental Action against, or of any noncompliance by, any
Borrower with any Environmental Law or Environmental Permit that would
reasonably be expected to have a Material Adverse Effect;
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          (e) as soon as possible, but in any event within two Business Days of
obtaining such knowledge, the occurrence of a Receivables Trigger Event;
          (f) any material breach of the terms of, or the occurrence of a
default or an event of default under, any Master Intercompany Agreement to which
any Borrower is a party, and notice (in reasonable detail) of any written
notices delivered thereunder; and
          (g) any other development that results in, or would reasonably be
expected to result in, a Material Adverse Effect with respect to the Collateral.
Each notice delivered under this Section 5.02 shall be accompanied by a
statement of a Responsible Officer of the Administrative Borrower or the
applicable Borrowers 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 5.03. Existence; Conduct of Business. Each Borrower will, do
or cause to be done all things reasonably necessary (a) to preserve, renew and
keep in full force and effect its legal existence and the rights,
qualifications, licenses, permits, franchises, governmental authorizations,
intellectual property rights, licenses and permits (except as such would
otherwise reasonably expire, be abandoned or permitted to lapse in the ordinary
course of business), necessary or desirable in the normal conduct of its
business except to the extent failure to maintain would not reasonably be
expected to result in a Material Adverse Effect; provided, however, that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under this Agreement; and (b) to maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted, except, other than with respect to any Borrower’s existence, to the
extent such failure to do so would not reasonably be expected to have a Material
Adverse Effect.
          SECTION 5.04. Payment of Taxes. Each Borrower will pay or discharge
all material Tax liabilities, before the same shall become delinquent or in
default, except where (a) (i) the validity or amount thereof is being contested
in good faith by appropriate proceedings, and (ii) such Borrower has set aside
on its books adequate reserves with respect thereto in accordance with GAAP, or
(b) the failure to make payment pending such contest would not reasonably be
expected to result in a Material Adverse Effect.
          SECTION 5.05. Maintenance of Properties. Each Borrower will (a) at all
times maintain and preserve all material property necessary to the normal
conduct of its business in satisfactory repair, working order and condition,
ordinary wear and tear excepted and casualty or condemnation excepted and
(b) make, or cause to be made, all needful and proper repairs, renewals,
additions, improvements and replacements to the Collateral as necessary in
accordance with prudent industry practice in order that the business carried on
in connection therewith, if any, may be properly conducted at all times, except,
in each case, where the failure to do so, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse Effect.
          SECTION 5.06. Books and Records; Inspection Rights; Appraisals; Field
Examinations. (a) Each Borrower will (i) keep proper books of record and account
in accordance with GAAP in which entries full, true and correct in all material
respects are made of dealings and transactions in relation to its business and
activities and (ii) subject to the limitations in Section 5.06(b) so long as no
Event of Default shall have occurred and be continuing, permit any
representatives designated by the Agents (including employees of an Agent or any
consultants, accountants, lawyers and appraisers retained by the Agents), once a
year, upon reasonable prior notice, to visit and inspect its properties, to
examine and make extracts from its books and records, including environmental
assessment reports and Phase I or Phase II studies, and to discuss its affairs,
finances and condition with its officers and independent accountants, all at
such
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reasonable times during normal business hours and at the expense of the
Borrowers; provided, that following the occurrence of an Event of Default, and
so long as such Event of Default shall remain uncured or unwaived, the Borrowers
shall permit any representatives designated by the Agents (including employees
of an Agent or any consultants, accountants, lawyers and appraisers retained by
the Agents) to conduct visits as described above at any time during normal
business hours and on reasonable prior notice as such Agents may deem reasonable
necessary; provided, further that the Borrower shall be given the opportunity to
be present during any discussions between the Agents (or any of their agents)
and the Borrowers’ accountants.
          (b) At reasonable times during normal business hours and upon
reasonable prior notice that the Agents request, independently of or in
connection with the visits and inspections provided for in clause (a) above, the
Borrowers will grant access to the Agents (including employees of an Agent or
any consultants, accountants, lawyers and appraisers retained by the Agents) to
such Person’s books, records, accounts and Inventory so that the Agents or an
appraiser retained by the Agents may conduct an appraisal. In addition to, and
not in limitation of, the foregoing, at any time and from time to time the
Agents may conduct (or engage third parties to conduct) field examinations,
verifications and evaluations as the Agents may deem necessary or appropriate.
All such appraisals, field examinations and other verifications and evaluations
shall be in form and substance reasonably acceptable to the Agents and at the
sole expense of the Borrowers; provided that the Agents shall provide the
Borrowers with a reasonably detailed accounting of all such expenses and
provided, further that (i) absent the existence and continuance of an Event of
Default, the Agents may conduct no more than one field examination and one
appraisal in any calendar year, (ii) if Excess Availability is or has been less
than $35,000,000 for three consecutive Business Days in any calendar year and
absent the existence and continuance of an Event of Default, the Agents may
conduct as many field examinations and as many appraisals deemed necessary by
the Agents in any calendar year in order to maintain such field examination and
appraisal data current within 180 days, and (iii) if an Event of Default has
occurred and is continuing, the Agents may conduct as many field examinations
and as many appraisals in any calendar year as such Agents may deem necessary.
          (c) The Borrowers acknowledge that the Agents, after exercising their
rights of inspection, may prepare and distribute to the Lenders certain Reports
pertaining to the Borrowers’ assets for internal use by the Agents and the
Lenders, subject to the provisions of Section 9.12 hereof.
          (d) Notwithstanding anything to the contrary in this Section 5.06,
none of the Borrowers or any of their subsidiaries will be required to disclose,
permit the inspection, examination or making of extracts, or discussion of, any
documents, information or other matter that (i) constitutes non-financial trade
secrets or non-financial proprietary information, (ii) in respect of which
disclosure to the Agents (or any designated representative) is then prohibited
by law or any agreement binding on the Borrowers or any of their subsidiaries or
(iii) is subject to attorney-client or similar privilege constitutes attorney
work-product.
          SECTION 5.07. Compliance with Laws. Each Borrower will comply in all
material respects with all Requirements of Law applicable to it or its property,
such compliance to include, without limitation, compliance with ERISA and the
Racketeer Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970, in each case except where (a) the failure to do so would
not reasonably be expected to result in a Material Adverse Effect or (b) to the
extent such compliance is not possible as a result of matters described in the
Disclosure Filings.
          SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be used
only for the purposes specified in the introductory statement to this Agreement.
No part of the proceeds of any Loan
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and no Letter of Credit will be used, whether directly or indirectly, for any
purpose that would entail a violation of Regulations T, U or X.
          SECTION 5.09. Insurance. Each Borrower will maintain, with financially
sound and reputable insurance companies (a) insurance in such amounts and
against such risks, as are customarily maintained by similarly situated
companies engaged in the same or similar businesses operating in the same or
similar locations and (b) all insurance required pursuant to the Collateral
Documents (and shall cause the Collateral Agent to be listed as a loss payee on
property policies covering loss or damage to Collateral and as an additional
insured on liability and casualty policies), provided that the Borrower may
self-insure as is customary by similarly situated companies engaged in the same
or similar businesses operating in the same or similar locations, except that
with respect to any Collateral, no Borrower may self-insure above a reasonable
and customary deductible. The Borrowers will furnish to the Agents, upon
request, information in reasonable and customary detail as to the insurance so
maintained.
          SECTION 5.10. Further Assurances. Promptly upon reasonable request,
each Borrower shall deliver such instruments, assignments, title certificates,
or other documents or agreements, and shall take such actions, as the Collateral
Agent deems appropriate under applicable law to evidence or perfect its Lien on
any Collateral, or otherwise to give effect to the intent of this Agreement or
any other Loan Document.
          SECTION 5.11. Establishment and Utilization of the Collection Account.
No later than 60 days after the Closing Date or such later time as the
Administrative Agent shall agree, establish and maintain a concentration account
(the “Collection Account”) subject to an account control agreement and other
documentation providing for springing control by the Collateral Agent, all
reasonably acceptable to the Collateral Agent, into which all cash proceeds
received from any sale of any Collateral shall be deposited, and the Borrowers
hereby agree that, if an Event of Default has occurred and is continuing, the
Collateral Agent will have exclusive dominion over the Collection Account until
such Event of Default is cured or waived for at least three days, provided that
if such Event of Default resulted from the aggregate Exposure exceeding the
Borrowing Base, such cure or waiver shall be required to be in effect for at
least 30 consecutive days unless the overadvance giving rise thereto is
refunded, repaid or prepaid by the Borrowers in accordance with Section 2.11(b),
in which case such cure or waiver shall be effective at the time of such refund,
repayment or prepayment. In the absence of an Event of Default, the Borrowers
will be entitled to direct the application of funds in the Collection Account,
including directing the deposited Agent (or other depository bank, if
applicable) to apply funds to the repayment of the outstanding Loans and other
amounts payable under the Loan Documents and to otherwise withdraw funds from
the Collection Account. If an Event of Default has occurred and is continuing,
(i) the Collateral Agent shall have the right to apply proceeds received into
the Collection Account to the outstanding Secured Obligations as provided in
Article V of the Security Agreement, and (ii) the Borrowers shall not be
entitled to present items drawn on or otherwise to withdraw or direct the
dispositions of funds from the Collection Account nor shall any Borrowers be
entitled to close the Collection Account until all Secured Obligations (other
than contingent indemnification obligations or Banking Services Obligations not
owing) under this Agreement are paid and performed in full. Notwithstanding any
other agreements the Borrowers may have with any Secured Party, the Collateral
Agent shall be entitled, during the continuance of any Event of Default, for
purposes of this Agreement to give instructions as to the withdrawal or
disposition of funds from time to time credited to any deposit account with the
Collateral Agent or the Collection Account, or as to any other matters relating
to any of the forgoing without further consent of the Borrowers. The Collateral
Agent’s power under this Agreement to give instructions as to the withdrawal or
disposition of any funds from time to time credited to the Collection Account or
any other deposit account with the Collateral Agent or as to any other matters
relating to the foregoing includes, without limitation, during an Event of
Default, the power to give stop payment orders for any items being presented to
such accounts for payment. Notwithstanding the foregoing provisions of this
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Section 5.11, irrespective of whether an Event of Default has occurred and is
continuing, if no Borrowings are outstanding hereunder and either no Letters of
Credit are outstanding hereunder or any Letters of Credit which may be
outstanding hereunder are cash collaterized by 103%, and so long as no Banking
Services Obligations are then due which have not been repaid, the Borrowers
shall be entitled to direct the application of funds in the Collection Account.
          SECTION 5.12. Speculative Transactions. In the event that the mark to
market liability of any Borrower in respect of any speculative transactions
exceeds $5,000,000, such Borrower shall promptly close out or unwind such
transactions and discharge all liabilities in respect thereof.
          SECTION 5.13. Compliance with Modified Borrowing Base. Each Borrower
shall conduct any sales, assignments, conveyances, transfers or other
dispositions of Inventory other than in the ordinary course of business in such
a manner so as to remain in compliance with the Modified Borrowing Base at all
times.
ARTICLE VI
NEGATIVE COVENANTS
          Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees, expenses and other amounts payable under
any Loan Document have been paid in full (other than contingent indemnification
obligations) and all Letters of Credit have expired or terminated (or have been
cash collateralized pursuant to Section 2.09(b)) and all LC Disbursements shall
have been reimbursed, the Borrowers covenant and agree, jointly and severally,
that no Borrower will, at any time:
          SECTION 6.01. Debt. Create, incur, assume or suffer to exist any Debt,
except:
          (a) Debt created under the Loan Documents;
          (b) Debt created under the January Credit Agreement and any refunding,
refinancing or replacement, in whole or in part, of any Debt under the January
Credit Agreement, provided that (i) the principal amount of such Debt shall not
be increased above the aggregate revolving commitment and the outstanding
principal amount of term loans constituting such Debt immediately prior to such
extension, refunding or refinancing (plus any accrued interest and expenses or
premiums incurred in connection with refinancing, replacing or refunding such
Debt), and the direct and contingent obligors therefor shall not be changed, as
a result of or in connection with such extension, refunding or refinancing, and
(ii) the other terms and conditions applicable thereto are reasonably
satisfactory to the Agents;
          (c) Other Existing Debt (including obligations outstanding immediately
before the occurrence of the Closing Date that are later recharacterized as
Debt, in connection with the completion of the audit report for the annual
financial statements of Navistar for each of the 2005 and 2006 Fiscal Years or
any restatement of its annual financial statements for the 2004 Fiscal Year or
any prior Fiscal Year), and any Debt extending the maturity of, or refunding,
replacing or refinancing, in whole or in part, any Existing Debt; provided, that
(i) the principal amount of such Debt shall not be increased above the principal
amount outstanding immediately prior to such extension, refunding or refinancing
(plus any expenses or premiums incurred in connection with refinancing,
replacing or refunding such Debt), and the direct and contingent obligors
therefor shall not be changed, as a result of or in connection with such
extension, refunding or refinancing, (ii) the terms and conditions relating to
principal amount, amortization, maturity, collateral (if any) and subordination
(if any), and other material terms taken as a
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whole, of any such extending, refunding, replacement, refinancing or replacement
Debt, and of any agreement entered into and of any instruments issued in
connection therewith, are not materially less favorable to the Borrowers or the
Lenders than the terms of any agreement or instrument governing the Existing
Debt being extended, refunded or refinanced, (iii) any such extension, refunding
or refinancing of Existing Debt shall occur not more than one year before the
scheduled maturity of such Existing Debt, and (iv) the maturity date of such
extending, refunding, replacement or refinancing Debt shall occur after the
Maturity Date;
          (d) Debt secured by Liens permitted by Section 6.02(d) not to exceed
in the aggregate $25,000,000 at any time outstanding;
          (e) Capital Lease Obligations not to exceed in the aggregate
$25,000,000 at any time outstanding;
          (f) Debt in respect of Hedge Agreements incurred in the ordinary
course of business and consistent with prudent business practice;
          (g) intercompany Debt between any Borrower and any other Borrower
and/or a Restricted Subsidiary of Navistar;
          (h) Subordinated Debt not to exceed in the aggregate $200,000,000 at
any time outstanding;
          (i) other Debt not to exceed in the aggregate $150,000,000 at any time
outstanding;
          (j) Guaranteed Debt of the Borrowers with respect to (x) obligations
of NFC under the Receivables Facility and (y) obligations with respect to
Navistar’s financial service operations in Mexico; provided that the aggregate
amount of all such Guaranteed Debt shall not exceed the aggregate amount of such
Guaranteed Debt outstanding on the date hereof;
          (k) Debt under the Master Intercompany Agreements and the Support
Agreement;
          (l) Debt under Permitted Receivables Financings;
          (m) Debt incurred by any Borrower constituting reimbursement
obligations with respect to letters of credit issued in the ordinary course of
business, including, without limitation, letters of credit in response to
worker’s compensation claims or self-insurance;
          (n) Debt arising from agreements of any Borrower providing for
adjustment of purchase price, earn-out or other similar obligations, in each
case, incurred or assumed in connection with any acquisition permitted under
Section 6.06; provided that the amount of such Debt shall not exceed 25% of the
total consideration for such acquisition;
          (o) obligations in respect of performance and surety bonds and
completion guarantees provided by any Borrower in respect of obligations arising
in the ordinary course of business and not constituting Debt for Borrowed Money;
          (p) Debt consisting of notes issued to current or former employees,
officers or directors in connection with the redemption or repurchase of Equity
Interests held by such Persons in an aggregate amount not in excess of
$10,000,000 at any time outstanding;
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          (q) Debt consisting of take-or-pay obligations contained in supply
agreements entered into by any Borrower in the ordinary course of business
consistent with past practices;
          (r) Debt in respect of any Sale/Leaseback Transaction with respect to
the purchase of tooling and related manufacturing equipment in the ordinary
course of business consistent with past practices;
          (s) Subordinated Debt owed by a Borrower to any other Borrower;
          (t) guarantees issued by a Borrower of Debt otherwise permitted
hereunder; and
          (u) Investments to the extent constituting Debt (as defined in clause
(i) or (j) in the definition of “Debt”) or acquired in connection with
Section 6.06(g).
          The accrual of interest and the accretion or amortization of original
issue discount on Debt and the payment of interest in the form of additional
Debt originally incurred in accordance with this Section 6.01 will not
constitute an incurrence of Debt.
          SECTION 6.02. Liens. Create, incur, assume or suffer to exist any Lien
on or with respect to any of its properties of any character (including, without
limitation, accounts) whether now owned or hereafter acquired, or assign any
accounts or other right to receive income, except:
          (a) Liens created under the Loan Documents;
          (b) Permitted Liens;
          (c) Liens existing on the date hereof;
          (d) purchase money Liens upon or in real property or equipment
acquired or held by any Borrower in the ordinary course of business to secure
the purchase price of such property or equipment or to secure Debt incurred for
the purpose of financing the acquisition, construction or improvement of any
such property or equipment to be subject to such Liens, or Liens existing on any
such property or equipment at the time of acquisition (other than any such Liens
created in contemplation of such acquisition that do not secure the purchase
price), or extensions, renewals or replacements of any of the foregoing for the
same or a lesser amount; provided, however, that no such Lien shall extend to or
cover any property other than the property or equipment being acquired,
constructed or improved and such improvements, and no such extension, renewal or
replacement shall extend to or cover any property not theretofore subject to the
Lien being extended, renewed or replaced; and provided further that (i) the
aggregate principal amount of the Debt secured by Liens permitted by this clause
(d) shall not exceed the amount permitted under Section 6.01(d) at any time
outstanding, and (ii) if any real property on which Collateral is stored is
mortgaged pursuant to this clause (d), the Administrative Borrower shall provide
the Collateral Agent with a Collateral Access Agreement (to be reasonably
satisfactory to the Collateral Agent) pertaining to such mortgaged real
property;
          (e) Liens arising under Capitalized Leases permitted under
Sections 6.01(e) and (s); provided that no such Lien shall extend to or cover
any assets other than the assets subject to such Capitalized Leases;
          (f) Liens on property of a Person existing at the time such Person is
merged into or consolidated with a Borrower; provided that (x) such merger or
consolidation is otherwise permitted under the Loan Documents, and (y) such
Liens were not created in contemplation of such merger,
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consolidation or investment and do not extend to any assets other than those of
the Person merged into or consolidated with a Borrower;
          (g) other Liens securing Debt outstanding in an aggregate principal
amount not to exceed $50,000,000 at any time;
          (h) the replacement, extension or renewal of any Lien permitted above
upon or in the same property theretofore subject thereto or the replacement,
extension or renewal (without increase in the amount or change in any direct or
contingent obligor) of the Debt secured thereby;
          (i) Liens incurred pursuant to the Master Intercompany Agreements;
          (j) leases or subleases, licenses, and sublicenses granted to others
that do not materially interfere with the ordinary course of business of any
Borrower or of any Restricted Subsidiary of any Borrower;
          (k) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
          (l) Liens arising to the extent taxes are not required to be paid
pursuant to Section 6.01;
          (m) Liens securing Permitted Receivables Financings; and
          (n) Liens encumbering customary initial deposits and margin deposits,
and other Liens incurred in the ordinary course of business that are within the
general parameters customary in the industry, in each case securing Debt under
any Hedge Agreements.
Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.02 may at any time attach to any Inventory of the Borrowers, any other
Collateral, or to the Collection Account, the LC Collateral Account or any
Blocked Cash Account, other than those permitted under clauses (a), (b), (c) and
(f) of the definition of “Permitted Liens” and clause (a) of this Section 6.02;
          SECTION 6.03. Change in Nature of Business. Make any material change
in the general nature of its business as carried on at the date hereof such that
any Borrower (a) would cease to hold Inventory Collateral (including used
trucks) for sale, (b) would no longer be “in the business of selling” Collateral
Inventory (for purposes of the applicability of UCC Section 9-311(d)), or (c)
would engage in the business of leasing trucks; provided, that the Borrowers may
enter into complementary, ancillary or supportive businesses (other than “in the
business of” leasing trucks).
          SECTION 6.04. Mergers, Etc. Merge into or consolidate with any Person
or permit any Person to merge into it, except that:
          (a) any Borrower may merge into or consolidate with any other
Borrower; and
          (b) as part of any acquisition permitted under Section 6.06, any
Borrower may merge into or consolidate with any other Person or permit any other
Person to merge into or consolidate with it; provided, that (i) the surviving
Person formed by such merger or consolidation shall be a Borrower; (ii) the then
current “corporate family” ratings of the applicable Borrower from S&P or
Moody’s, as applicable, shall not be reduced or withdrawn as a result of such
acquisition and/or merger; (iii) the lines of business of the Person to be
merged shall be substantially the same lines of business as one or more of
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the principal businesses or such Borrower in the ordinary course; (iv) such
Person or such business is not, at the time of such merger, engaged in the
business of leasing trucks; (v) the Agents shall have received five Business
Days notice (or such shorter notice as the Agents may agree upon) prior to the
consummation of such merger; and (vi) such Person shall be a domestic United
States corporation with assets domiciled in the United States;
provided, that (i) the parties to such merger or consolidation shall, prior to
such merger or consolidation, have taken such steps as may be reasonably
required by the Collateral Agent to ensure the continued perfection of the
Collateral Agent’s security interest in the Collateral following such merger or
consolidation (as well as the perfection of the Collateral Agent’s security
interest in any assets previously owned by the other party to such merger or
consolidation); and (ii) following any Borrower’s merger with, or consolidation
into, any Person that is not a Borrower, any assets owned by such other Person
prior to such merger or consolidation shall undergo field exams and an audit by
the Collateral Agent or its designee prior to such assets being included in the
calculation of the Borrowing Base;
provided, further that in each case, immediately before and after giving effect
thereto, no Event of Default shall have occurred and be continuing; and
provided, further, that no Borrower shall merge into or consolidate with any
Person that is engaged in the business of leasing trucks.
          SECTION 6.05. Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of any assets, or grant any irrevocable option or other right
to purchase, lease or otherwise acquire any assets, except:
          (a) sales of Inventory in the ordinary course of its business, in
compliance with the terms of the Loan Documents, and the granting of any option
or other right to purchase, lease or otherwise acquire Inventory in the ordinary
course of its business and in compliance with the terms of the Loan Documents;
          (b) in a transaction authorized by Section 6.04;
          (c) sales, transfers or other dispositions of assets among Borrowers;
          (d) sales, transfers or other dispositions of assets other than
Collateral for consideration consisting of at least 75% cash and for fair value;
          (e) sales of Receivables pursuant to any Master Intercompany
Agreement;
          (f) Sale/Leaseback Transactions with respect to the purchase of
tooling and related manufacturing equipment in the ordinary course of business
consistent with past practices;
          (g) any sale, transfer or other disposition of defaulted receivables
for collection or any sale, transfer or other disposition of property or assets
in the ordinary course of business;
          (h) the grant of any license of patents, trademarks, registrations
therefor and other similar intellectual property in the ordinary course of
business consistent with past practices;
          (i) the granting of any Lien (or foreclosure thereon) securing Debt to
the extent permitted hereunder;
          (j) any sale, transfer or other disposition expressly permitted by
Section 6.06; and
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          (k) any disposition of assets or property in the ordinary course of
business to the extent such property or assets are surplus, negligible,
obsolete, uneconomical, worn-out or no longer useful in the Borrowers’ business;
provided, that any and all net cash proceeds from any sales, transfers, leases
and other dispositions permitted hereby, which sales, transfers, leases or
dispositions shall reduce Excess Availability to zero or less shall, on the date
of receipt of payment for such sales, transfers, leases or dispositions by any
Borrower, be applied to the repayment of outstanding amounts under and in
accordance with Section 2.10(b). To the extent any Collateral is sold,
transferred or otherwise disposed of as permitted by this Section 6.05 to any
Person other than to any Borrower, such Collateral shall be sold free and clear
of the Liens created by the Loan Documents, and the Agents shall be authorized
to take any actions deemed appropriate in order to effect or evidence the
foregoing.
          SECTION 6.06. Investments in Other Persons. Make or hold any
Investment in any other Person, except:
          (a) (i) Investments outstanding on the date hereof by a Borrower in
its subsidiaries, and (ii) additional Investments by a Borrower in another
Borrower; provided, however, that, in the event any Borrower sells, leases,
transfers or otherwise disposes of, in a single transaction or a series of
related transactions, all or substantially all of their assets to one or more of
its subsidiaries that are not Borrowers, such a transaction will be permitted if
(A) such subsidiary is a domestic subsidiary wholly-owned by a Borrower, (B) the
Administrative Borrower and such Borrower shall cause such subsidiaries to
become a Borrower pursuant to the terms of this Agreement and (C) the same
requirements as set forth in clause (e)(vi) below, shall have been complied with
prior to its assets being included in the Borrowing Base;
          (b) loans and advances to employees in the ordinary course of the
business of a Borrower as presently conducted in an aggregate principal amount
not to exceed $5,000,000 at any time outstanding, and made in compliance with
the provisions of the Sarbanes-Oxley Act of 2002;
          (c) Investments by a Borrower in cash or Cash Equivalents;
          (d) Investments existing on the date hereof (including any Obligation,
asset, contractual or other arrangement, transaction or relationship in effect
immediately prior to the date hereof that is recharacterized or newly recognized
as an Investment, in connection with the completion of the audit report for the
annual financial statements of Navistar for each of the 2005 or 2006 Fiscal
Years or any restatement of its annual financial statements for the 2004 Fiscal
Year or any prior Fiscal Year);
          (e) the purchase or other acquisition of a business unit, division or
all of the Equity Interests in any other Person that, upon the consummation
thereof, will be a wholly owned subsidiary of a Borrower (including, without
limitation, as a result of a merger or consolidation) and the purchase or other
acquisition by a Borrower of all or substantially all of the property and assets
of any Person; provided that, with respect to each purchase or other acquisition
made pursuant to this clause (e):
          (i) the lines of business of the Person to be (or the property and
assets of which are to be) so purchased or otherwise acquired shall be
substantially the same lines of business as one or more of the principal
businesses of such Borrower in the ordinary course;
          (ii) such purchase or other acquisition shall not include or result in
any contingent liabilities that could reasonably be expected to be material to
the business, financial condition or operations of such Borrower, taken as a
whole (as determined in good faith by the board of directors (or the persons
performing similar functions) of such Borrower, if the board of
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          directors is otherwise approving such transaction, or, in each other
case, by a Financial Officer of such Borrower);
          (iii) after giving pro forma effect to such purchase or other
acquisition, Excess Availability shall be equal to at least $25,000,000 (with an
up to $5,000,000 credit for Suppressed Availability then in effect) and the then
current “corporate family” ratings of the applicable Borrower from S&P or
Moody’s, as applicable, shall not have been reduced or withdrawn as a result of
such proposed or actual purchase or other acquisition;
          (iv) immediately before and immediately after giving effect to any
such purchase or other acquisition, no Event of Default shall have occurred and
be continuing;
          (v) such Person or such business is not, at the time of its
acquisition, engaged in the business of leasing trucks;
          (vi) any assets owned by such Person or business prior to its
acquisition by a Borrower shall both (A) undergo field exams and an audit by the
Collateral Agent or its designee and (B) be subject to the perfected security
interest of the Collateral Agent therein, prior to such assets being included in
the calculation of the Borrowing Base; and
          (vii) The Administrative Borrower shall have delivered to the
Administrative Agent, on behalf of the Lenders, at least five Business Days
prior to the date on which any such purchase or other acquisition is to be
consummated, a certificate of a Financial Officer, in form and substance
reasonably satisfactory to the Administrative Agent, certifying that all of the
requirements set forth in this clause (e) have been satisfied or will be
satisfied on or prior to the consummation of such purchase or other acquisition;
          (f) Investments in Permitted Joint Ventures; provided that, prior to
making such Investment, the applicable Borrower shall have received confirmation
from S&P or Moody’s, as applicable, that the corporate family ratings then
applicable to such Borrower will not be reduced as a result of such Investment;
          (g) trade receivables and prepaid expenses, in each case arising in
the ordinary course of business; provided, that such receivables and prepaid
expenses would be recorded as assets of such Person in accordance with GAAP;
          (h) Investments received as consideration for asset dispositions
permitted pursuant to Section 6.05;
          (i) Investments for which the sole consideration provided is Equity
Interests of the applicable Borrower;
          (j) Investments in securities of trade creditors, suppliers or
customers received pursuant to any plan of reorganization, restructuring,
workout or similar arrangement of such trade creditor, supplier or customer or
upon the compromise of any debt created in the ordinary course of business owing
to any Borrower or a Subsidiary, whether through litigation, arbitration or
otherwise;
          (k) other Investments, if at the time of the making thereof Excess
Availability shall be equal to at least $50,000,000 (with an up to $10,000,000
credit for Suppressed Availability then in effect), notwithstanding that the
then current “corporate family” ratings of the applicable Borrower from S&P or
Moody’s, as applicable, shall have been reduced or withdrawn; provided that if
any such
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Investment involves any purchase or acquisition, the requirements of clauses
(i) through (vii), other than clause (iii), of paragraph (e) above shall have
been satisfied;
          (l) other Investments in an aggregate amount not to exceed $25,000,000
(measured on the date each Investment was made without giving effect to
subsequent changes in value);
          (m) loans or advances to, guarantees in favor of, and other extensions
of credit to customers and suppliers in the ordinary course of business in an
aggregate amount not to exceed $25,000,000 at any time outstanding; and
          (n) Guaranteed Debt otherwise permitted under Section 6.01 to the
extent constituting an Investment.
For purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value thereof.
          SECTION 6.07. Restricted Payments. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value any of its
Equity Interests now or hereafter outstanding, return any capital to its
stockholders, partners or members (or the equivalent Persons thereof) as such,
make any distribution of assets, Equity Interests, obligations or securities to
its stockholders, partners or members (or the equivalent Persons thereof) as
such, except that:
          (a) a Borrower (A) may declare and pay dividends and make
distributions payable only in common stock of such Borrower, and (B) may
purchase, repurchase, redeem, retire, defease or otherwise acquire shares of its
Equity Interests with the proceeds received contemporaneously from the issue of
new shares of its Equity Interests with equal or inferior voting powers,
designations, preferences and rights;
          (b) so long as no Event of Default shall have occurred and be
continuing, a Borrower may (A) declare and pay cash dividends to its
stockholders, and (B) purchase, repurchase, redeem, retire, defease or otherwise
acquire shares of its Equity Interests (including purchases of stock from
current or former employees, employees’ spouses, estates or estate planning
vehicles in accordance with the terms of employee stock purchase plans);
provided, that, after giving pro forma effect to such payments, Excess
Availability shall be equal to at least $50,000,000 (with an up to $10,000,000
credit for Suppressed Availability then in effect); and
          (c) any Borrower may declare and pay dividends or distributions to any
other Borrower.
          SECTION 6.08. Accounting Changes. Make or permit any change in
(a) accounting policies or reporting practices, except as required (x) by
generally accepted accounting principles, or (y) to rectify the matters
disclosed in the Disclosure Filings or (b) its Fiscal Year.
          SECTION 6.09. Prepayments, Etc., of Debt. (a) Prepay, redeem,
purchase, defease or otherwise satisfy prior to the scheduled maturity thereof
in any manner, or make any payment in violation of any subordination terms of,
any Debt, except: (i) the prepayment of the Borrowings and other amounts
outstanding in accordance with the terms of this Agreement, (ii) regularly
scheduled or required repayments or redemptions of Existing Debt, (iii) any
prepayments or redemptions of Existing Debt in connection with a refunding or
refinancing of such Existing Debt permitted by Section 6.01(c), (iv) the
repayment or prepayment of the amounts under, and in accordance with,
documentation with respect to Debt permitted by Section 6.01(b) on the terms
contained therein and Section 6.01(e), (v) the repayment
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or prepayment of the amounts under, and in accordance with, documentation with
respect to Debt permitted by Section 6.01(r), (vi) any repayment or prepayment
of Debt under any agreement permitting the reborrowing thereof, and (vii) any
other prepayment or redemption of Debt so long as, after giving pro forma effect
to such prepayment or redemption, Excess Availability shall be equal to at least
$50,000,000 (with an up to $10,000,000 credit for Suppressed Availability then
in effect) ; or (b) amend, modify or change in any manner which would have a
Material Adverse Effect or make the term or conditions of such Existing Debt
more onerous, any term or condition of any Existing Debt.
          SECTION 6.10. Partnerships, Etc. Become a general partner in any
general or limited partnership or joint venture, the sole assets of which
consist of its interest in such partnership or joint venture.
          SECTION 6.11. Payment Restrictions Affecting Borrowers. Directly or
indirectly enter into or suffer to exist any agreement or arrangement limiting
the ability of any of the Borrowers to declare or pay dividends or other
distributions in respect of its Equity Interests or repay or prepay any Debt
owed to, make loans or advances to, or otherwise transfer assets to or make
Investments in, any Borrower (whether through a covenant restricting dividends,
loans, asset transfers or investments, a financial covenant or otherwise),
except (a) the Loan Documents, (b) any agreement or instrument evidencing
Existing Debt or any refinancing, extension or replacement thereof permitted
pursuant of Section 6.01(b) and (c), (c) the Shy Settlement, (d) leases,
subleases or licenses, sublicenses or service contracts restricting the
assignment thereof, (e) any agreement in effect on the Closing Date as any such
agreement is in effect on such date, and (f) customary provisions in partnership
agreements, limited liability company organizational governance documents, joint
venture agreements and other similar agreements entered into in the ordinary
course of business that restrict the payment of dividends from such partnership,
limited liability company, joint venture or similar Person.
          SECTION 6.12. Transactions with Affiliates. Conduct any transactions
with an Affiliate otherwise permitted under the Loan Documents on terms that are
not fair and reasonable, and no less favorable to any Borrower than such Person
would obtain in a comparable arm’s length transaction, other than
(a) transactions among the Borrowers, (b) transactions entered into pursuant to
the terms of the Master Intercompany Agreements, the Tax Allocation Agreements
or the Support Agreement and (c) reasonable fees and compensation paid to and
advances of expenses to and indemnity provided on behalf of officers, directors,
employees or consultants of any Borrower, as determined in good faith by such
Borrower’s Board of Directors or senior management.
          SECTION 6.13. Amendment of Material Documents. Amend, modify or waive,
any of the Borrowers’ rights under (a) the January Credit Agreement (or any
instrument or agreement governing any refinancing Indebtedness in respect
thereof permitted under Section 6.01), or (b) its certificate of incorporation,
by-laws, operating, management or partnership agreement or other organizational
documents, to the extent, in the case of each of the foregoing clauses (a) or
(b), any such amendment, modification or waiver would be adverse to the
interests of the Lenders in any material respect.
          SECTION 6.14. Sales of Receivables. Following the occurrence and
during the continuation of a Receivables Trigger Event with respect to a
counterparty under any Master Intercompany Agreement, sell or otherwise transfer
or assign, any Receivables or other receivables or instruments, to the
applicable counterparty under such Master Intercompany Agreement.
          SECTION 6.15. Designation of Designated Senior Debt. Designate any
Debt (or any similar term) (other than the Debt under the January Credit
Agreement or any refinancing, extension or replacement thereof permitted
pursuant to 6.01(b) and Debt under this Agreement or under the other Loan
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Documents) of any Borrower “Designated Senior Debt” (or any similar term) under,
and as defined in any Subordinated Debt of any Borrower which contains such
designations.
ARTICLE VII
EVENTS OF DEFAULT
          SECTION 7.01. Events of Default. If any of the following events
(“Events of Default”) shall occur and be continuing:
          (a) the Borrowers shall fail to pay (i) any principal of any Loan or
any reimbursement obligation in respect of any unconverted 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 by acceleration thereof or otherwise,
or (ii) any interest on any Loan or any fee or any other amount payable under
this Agreement or any other Loan Document within five Business Days after it
shall become due and payable; or
          (b) any representation or warranty made or deemed made by or on behalf
of any Borrower herein or in any other Loan Document or the Borrowing Base
Certificate or any other certificate required to be delivered under Article V
hereof or required to be delivered in connection with the other Loan Documents
shall prove to have been materially incorrect when made or deemed made; or
          (c) any Borrower shall fail to observe or perform any covenant,
condition, term or agreement contained in Article VI, or Section 5.02(a),
5.02(b), 5.02(e), 5.03, 5.06, 5.08, 5.09 or 5.11 of this Agreement or Article IV
of the Security Agreement; or
          (d) any Borrower shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 5.01(a), (b), (c), (d), (g), (h),
(i), or 5.02(c), (d) or (f); or (ii) any other term, covenant or agreement
contained in any Loan Document on its part to be performed or observed if such
failure shall remain unremedied for five days (in the case of the foregoing
clause (i)) or 30 days (in the case of the foregoing clause (ii)) after the
earlier of the date on which (A) any Responsible Officer of a Navistar Party
becomes aware of such failure or (B) written notice thereof shall have been
given to the Administrative Borrower by any Agent or any Lender; or
          (e) (i) any Collateral Document after delivery thereof pursuant to the
terms of the Loan Documents shall for any reason, other than pursuant to the
terms hereunder or thereunder (including as a result of a transaction permitted
under Section 6.03, 6.04 or 6.05), fail to create a valid and perfected security
interest with the priority required by the Collateral Documents with respect to
any significant portion of the Collateral purported to be covered thereby,
except to the extent that any such loss of perfection or priority results from
the failure of the Collateral Agent to maintain possession of certificates
actually delivered to it representing securities pledged under the Collateral
Documents or from the failure of the Administrative Agent to file UCC
continuation statements or (ii) except as otherwise permitted hereunder, any
Collateral Document shall fail to remain in full force or effect or any action
shall be taken by any Borrower to discontinue or to assert the invalidity or
unenforceability of any Collateral Document; or
          (f) any Loan Document, or any material provision therein, at any time
after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder (including as a result of a transaction
permitted under Section 6.03, 6.04 or 6.05) or as a result of the
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satisfaction in full of the Obligations (other than contingent indemnification
obligations), ceases to be in full force and effect, or any Borrower shall
challenge in writing the validity or enforceability of any Loan Document or any
Borrower shall deny in writing that it has any further liability or obligation
under any Loan Document (other than as a result of repayment in full of the
Obligations (other than contingent indemnification obligations) and termination
of the Commitments) or purports in writing to revoke or rescind any Loan
Document; or
          (g) Navistar or any of its subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect of
any Debt for Borrowed Money of Navistar or such Borrower or such subsidiary (as
the case may be) that is outstanding in a principal amount (or, in the case of
any Hedge Agreement, an Agreement Value) of at least $50,000,000 either
individually or in the aggregate for all such Borrowers and subsidiaries when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or condition
shall exist under any agreement or instrument relating to any such Debt and
shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt or
otherwise to cause, or to permit the holder thereof to cause, such Debt to
mature; or any such Debt shall be declared to be due and payable or required to
be prepaid or redeemed (other than by a regularly scheduled required prepayment
or redemption), purchased or defeased, or an offer to prepay, redeem, purchase
or defease such Debt shall be required to be made, in each case prior to the
stated maturity thereof; provided, however, that (i) none of the events
described in this subsection (g), to the extent set forth in the Disclosure
Filings or as further disclosed in writing by the Administrative Borrower to the
Agents and the Lenders on or prior to the date hereof shall constitute an Event
of Default hereunder and (ii) any defaults under sale-lease back transactions
entered into prior to February 9, 2006 arising from any financial reporting
requirements, so long as no amounts thereunder have been accelerated, shall not
constitute an Event of Default hereunder; or
          (h) Navistar or any of its material subsidiaries shall generally not
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against any Borrower
or any of its material subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it (but not
instituted by it) that is being diligently contested by it in good faith, either
such proceeding shall remain undismissed or unstayed for a period of 45 days or
any of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or any Borrower or any of its material subsidiaries shall
take any corporate action to authorize any of the actions set forth above in
this subsection (h), provided that any Borrower may dissolve or wind up so long
as the assets of such Borrower are transferred to another Borrower; or
          (i) any judgments or orders, either individually or in the aggregate,
for the payment of money in excess of $50,000,000 shall be rendered against any
Borrower and either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order, or (ii) there shall be any period of 20
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
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          (j) any non-monetary judgment or order shall be rendered against any
Borrower that could reasonably be expected to have a Material Adverse Effect,
and there shall be any period of 20 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
          (k) any ERISA Event shall have occurred with respect to a Plan and the
sum (determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other Plans with
respect to which an ERISA Event shall have occurred and then exist (or the
liability of the Borrowers and the ERISA Affiliates related to such ERISA Event)
exceeds $10,000,000; or
          (l) any Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Borrowers and the
ERISA Affiliates as Withdrawal Liability (determined as of the date of such
notification), exceeds $10,000,000 or requires payments exceeding $2,500,000 per
annum; or
          (m) any Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
and as a result of such reorganization or termination the aggregate annual
contributions of the Borrowers and the ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years of such Multiemployer Plans immediately preceding the plan year in which
such reorganization or termination occurs by an amount exceeding $10,000,000; or
          (n) a Change of Control shall occur;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by written notice to the
Administrative Borrower, declare the Commitments of each Lender and the
obligation of each Lender to make Loans or of any Issuing Bank to issue a Letter
of Credit to be terminated, whereupon the same shall forthwith terminate; (ii)
shall at the request, or may with the consent, of the Required Lenders, by
written notice to the Borrower, declare the Loans, all interest thereon and all
other amounts payable by the Administrative Borrower under this Agreement and
the other Loan Documents to be forthwith due and payable, whereupon the Loans,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by each of the Borrowers; and (iii) shall
at the request, or may with the consent, of the Required Lenders, by written
notice to the Administrative Borrower, require that the Borrowers deposit in the
LC Collateral Account an amount in cash equal to 103% of the then-outstanding LC
Exposure; provided, however, that, upon the occurrence of an event with respect
to any Borrower described in clause (h) of this Article VII, (x) the Commitments
of each Lender and the obligation of each Lender to make Loans and of any
Issuing Bank to issue Letters of Credit shall automatically be terminated and
(y) the principal of the Loans then outstanding, all such interest and all such
amounts shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by each Borrower, and the obligation of the Borrower to cash
collateralize the outstanding Letters of Credit as aforesaid shall automatically
become effective, in each case without further act of the Agents or any Lender.
Upon the occurrence and during the continuance of an Event of Default, the
Agents may, and at the request of the Required Lenders shall, exercise any
rights and remedies provided to the Agents under the Loan Documents or at law or
equity, including all remedies provided under the UCC.
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ARTICLE VIII
THE AGENTS
          SECTION 8.01. The Agents.
          (a) Each of the Lenders and the Issuing Banks hereby irrevocably
appoints the Administrative Agent and the Collateral Agent as its agents and
authorizes the Agents to take such actions on its behalf, including execution of
the other Loan Documents and acting as agent for purposes of perfection, and to
exercise such powers as are delegated to the Agents by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.
          (b) Each Person serving as an 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 an Agent, and such Person and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrowers or any subsidiary of a Borrower or other
Affiliate thereof as if it were not an Agent hereunder.
          (c) The Agents shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (i) neither Agent shall be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(ii) neither Agent shall have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the applicable Agent is
required to exercise in writing as directed by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (iii) except as expressly set
forth in the Loan Documents, the Agents 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
Person serving as an Agent or any of its Affiliates in any capacity. Neither
Agent shall be liable for any action taken or not taken by it with the consent
or at the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in
Section 9.02) or in the absence of its own gross negligence or willful
misconduct. Neither Agent shall be deemed to have knowledge of any Default
unless and until written notice thereof is given to such Agent by the
Administrative Borrower or a Lender, and the Agents shall not be responsible for
or have any duty to ascertain or inquire into (A) any statement, warranty or
representation made in or in connection with any Loan Document, (B) the contents
of any certificate, report or other document delivered hereunder or in
connection with any Loan Document, (C) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth in any Loan
Document, (D) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, (E) the creation,
perfection or priority of Liens on the Collateral or the existence of the
Collateral, or (F) the satisfaction of any condition set forth in Article IV or
elsewhere in any Loan Document, other than to confirm receipt of items expressly
required to be delivered to the Agents.
          (d) The Agents 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. Each 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. Each Agent may consult with legal counsel (who may be counsel for the
Borrower), 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
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counsel, accountants or experts except to the extent such action or inaction
constitutes gross negligence, willful misconduct or bad faith.
          (e) Each 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 such
Agent. Each 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 Agents 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 Agent.
          (f) Subject to the appointment and acceptance of a successor Agent as
provided in this paragraph, each Agent may resign at any time by notifying the
other Agent, the Lenders, the Issuing Banks and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, with the consent (not to
be unreasonably withheld or delayed) of the Administrative Borrower, to appoint
a successor Agent; provided that, during the existence and continuation of an
Event of Default, no consent of the Administrative Borrower shall be required.
If no successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring Agent gives
notice of its resignation, then the retiring Agent may, on behalf of the other
Agent, the Lenders and the Issuing Banks, appoint a successor Agent which shall
be a commercial bank or an Affiliate of any such commercial bank reasonably
acceptable to the Borrower. Upon the acceptance of its appointment as an Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
The fees payable by the Borrowers to a successor Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrowers
and such successor. After an Agent’s resignation hereunder, the provisions of
this Article and Section 9.03 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting
as an Agent.
          (g) Each Lender acknowledges that it has, independently and without
reliance upon either 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 either 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 other Loan Document or related agreement
or any document furnished hereunder or thereunder.
          (h) Each Lender hereby agrees that (i) it has requested a copy of each
Report prepared by or on behalf of the Agents; (ii) neither Agent (A) makes any
representation or warranty, express or implied, as to the completeness or
accuracy of any Report or any of the information contained therein or any
inaccuracy or omission contained in or relating to a Report and (B) shall be
liable for any information contained in any Report; (iii) the Reports are not
comprehensive audits or examinations, and that any Person performing any field
examination will inspect only specific information regarding the Borrowers and
will rely significantly upon the Borrowers’ books and records, as well as on
representations of the Borrowers’ personnel and that the Agents undertake no
obligation to update, correct or supplement the Reports; (iv) it will keep all
Reports confidential and strictly for its internal use, not share the Report
with any Borrower or any other Person except as otherwise permitted pursuant to
this Agreement; and (v) without limiting the generality of any other
indemnification provision contained in this Agreement, it will pay and protect,
and indemnify, defend, and hold the Agents and any such other Person preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including reasonable attorneys’ fees)
incurred by either Agent or such other
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Person as the direct or indirect result of any third parties who might obtain
all or part of any Report through the indemnifying Lender.
          (i) The Arrangers, the Bookrunners, the Documentation Agents and the
Syndication Agents shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such.
          SECTION 8.02. Indemnification by Lenders. (a) Each Lender severally
agrees to indemnify each Agent (to the extent not promptly reimbursed by the
Borrowers) from and against such Lender’s ratable share (determined as provided
below) of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against such
Agent, arising solely in such Agent’s capacity as an Agent hereunder and under
the other Loan Documents, or any action taken or omitted by such Agent solely in
its capacity as an Agent under the Loan Documents (collectively, the
“Indemnified Costs”); provided, however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Agent’s
gross negligence or willful misconduct as found in a final, non-appealable
judgment by a court of competent jurisdiction. Without limitation of the
foregoing, each Lender agrees to reimburse each Agent promptly upon demand for
its ratable share of any costs and expenses (including, without limitation, fees
and expenses of counsel) payable by the Borrowers under Section 9.03, to the
extent that such Agent, acting solely in its capacity as an Agent hereunder, is
not promptly reimbursed for such costs and expenses by the Borrowers. In the
case of any investigation, litigation or proceeding giving rise to any
Indemnified Costs, this Section 8.02 applies whether any such investigation,
litigation or proceeding is brought by any Lender or any other Person.
          (b) For purposes of this Section 8.02, each Lender’s ratable share of
any amount shall be determined, as at the incurrence of the relevant Indemnified
Costs, according to its share of the aggregate principal amount of the Advances
outstanding at such time and the aggregate participation in the LC Disbursements
at such time. The failure of any Lender to reimburse any Agent promptly upon
demand for its ratable share of any amount required to be paid by the Lenders to
such Agent as provided herein shall not relieve any other Lender of its
obligation hereunder to reimburse such Agent for its ratable share of such
amount, but no Lender shall be responsible for the failure of any other Lender
to reimburse such Agent for such other Lender’s ratable share of such amount.
Without prejudice to the survival of any other agreement of any Lender
hereunder, the agreement and obligations of each Lender contained in this
Section 8.02 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the other Loan Documents.
ARTICLE IX
MISCELLANEOUS
          SECTION 9.01. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile, as follows:
               (i) if to the Administrative Borrower (or to any other Borrower
care of the Administrative Borrower):
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International Truck and Engine Corporation
4201 Winfield Road
Warrenville, Illinois 60555
Attention: Treasurer
Facsimile No: (630) 753-2305
Email: terry.endsley@nav-international.com
               (ii) if to Credit Suisse, as the Administrative Agent, an Issuing
Bank or the Swingline Lender, at:
Eleven Madison Avenue
New York, NY 10010
Attention: Agency Group
Facsimile No.: (212) 325-8304
Email: Matthew.carter.2@credit-suisse.com
               (iii) if to Bank of America, N.A., as the Collateral Agent, at:
231 S. LaSalle Street, 7th Floor
IL1-231-07-49
Chicago, IL 60604
Attention: Loan Administration Manager
Facsimile No.: (312) 755-3345
Email: robert.lund@BankofAmerica.com
               (iv) if to any other Lender, to it at its address or facsimile
number set forth in its Administrative Questionnaire.
All such notices and other communications (x) sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received or (y) sent by facsimile shall be deemed to have been given
when sent and when receipt has been confirmed by telephone; provided that if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient.
          (b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply, except to the
extent expressly provided for therein, to notices pursuant to Article II or to
compliance and no Event of Default certificates delivered pursuant to
Section 5.01 unless otherwise agreed by the Administrative Agent and the
applicable Lender. Each Agent or the Administrative Borrower (on behalf of the
Borrowers) will agree to accept notices and other communications to it hereunder
by electronic “pdf” communications of actual signed documents which shall be
directed to the specific name of the individual person previously identified by
the Administrative Agent to receive such notice and otherwise pursuant to
procedures that may be approved by it; provided that approval of such procedures
may be limited to particular notices or communications. All such notices and
other communications (i) sent to the e-mail address of the specific individual
person specified previously identified by the Administrative Agent to receive
such notice shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other
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written acknowledgement); provided, that if not given during the normal business
hours of the recipient, such notice or communication shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient, and (ii) posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor.
          (c) Any party hereto may change its address or facsimile number or
email address for notices and other communications hereunder by notice to the
other parties hereto.
          SECTION 9.02. Waivers; Amendments. (a) No failure or delay by any
Agent, Issuing Bank or Lender in exercising any right or power hereunder or
under any other Loan Document 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 the Agents, the Issuing Banks and the Lenders hereunder and
under any other Loan Document are cumulative and are not exclusive of any rights
or remedies that they would otherwise have. No waiver of any provision of any
Loan Document 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 9.02, 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, to the extent permitted by law, 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 any Agent, Lender or Issuing Bank may have had
notice or knowledge of such Default at the time.
          (b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except (i) in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by each Borrower and the Required Lenders (or the Administrative
Agent with the consent of the Required Lenders), or (ii) in the case of any
other Loan Document (other than any such amendment to effectuate any
modification thereto expressly contemplated by the terms of such other Loan
Documents), pursuant to an agreement or agreements in writing entered into by
the Administrative Agent and the Borrowers that are parties thereto, with the
consent of the Required Lenders; provided that no such agreement shall
(A) increase the Commitment of any Lender without the written consent of such
Lender; it being understood that a waiver of any condition precedent set forth
in Article IV or the waiver of any default interest, Default or Event of Default
that is not otherwise expressly required to be waived by more than Required
Lenders, mandatory prepayment or mandatory reduction of the Commitments, or the
making of any Protective Advance, so long as in compliance with the provisions
of Section 2.04, shall not constitute an increase of any Commitment of any
Lender, provided that any change to the second proviso to the second sentence of
Section 2.04(a) shall require the written consent of each Lender; (B) reduce or
forgive the principal amount of any Loan or LC Disbursement or reduce the rate
of interest thereon, or reduce or forgive any interest or fees payable
hereunder, without the written consent of each Lender directly affected thereby,
provided that only the consent of the Required Lenders shall be necessary to
amend the provisions of Section 2.13(c) providing for the default rate of
interest, or to waive any obligations of the Borrowers to pay interest at such
default rate, Event of Default or Default that is not otherwise expressly
required to be waived by more than Required Lenders; (C) postpone any scheduled
date of payment of the principal amount of any Loan or LC Disbursement, or any
date for the payment of any interest, fees or other Obligations 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 directly affected thereby, provided that only the consent
of the Required Lenders shall be necessary to amend the provisions of
Section 2.13(c) providing for the default rate of interest, or to waive any
obligations of the Borrowers to pay interest at such default rate, Event of
Default or Default that is not otherwise expressly required to be
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waived by more than Required Lenders; (D) change Section 2.18(b) or (c) or
Section 2.10(b) in a manner that would alter the manner in which payments are
shared, without the written consent of each Lender directly affected thereby;
(E) change the definition of the term “Liquidity Block Amount” or “Borrowing
Base” or any respective component definition thereof if as a result thereof the
amounts available to be borrowed by the Borrowers would be increased (provided
that the foregoing shall not limit the discretion of the Agents to change,
establish or eliminate any Reserves without the consent of any Lenders), or
reduce the Dollar amount set forth in the definition of “Blocked Cash Amount”,
in each case without the written consent of the Super Majority Lenders;
(F) change any of the provisions of this Section 9.02 or reduce the minimum
percentage set forth in the definition of “Required Lenders” or the definition
of “Super Majority Lenders” or any other provision of any Loan Document
specifying the number or percentage of Lenders (or Lenders of any Class)
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender; or (G) except as provided in clause (c) or (d) of this Section 9.02
or in any Collateral Document, release all or substantially all of the
Collateral, without the written consent of each Lender; provided, further that
no such agreement shall amend, modify or otherwise affect the rights or duties
of any Agent, any Issuing Bank or the Swingline Lender hereunder without the
prior written consent of such Agent, such Issuing Bank or the Swingline Lender,
as the case may be. The Administrative Agent may also amend the Commitment
Schedule to reflect assignments entered into pursuant to Section 9.04.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased without the
consent of such Lender (it being understood that any Commitment or Loan held or
deemed held by any Defaulting Lender shall be excluded from a vote of the
Lenders hereunder requiring any consent of the Lenders).
          (c) The Lenders hereby irrevocably agree that the Liens granted to the
Collateral Agent by the Borrowers on any Collateral shall be automatically
released (i) upon the termination of the Commitments, payment and satisfaction
in full in cash of all Secured Obligations owing as of the date of such
termination (other than Unliquidated Obligations), the termination, expiration
or, to the extent effected in a manner reasonably acceptable to the relevant
Issuing Banks or as otherwise provided for herein, cash collateralization or
back-stopping of all outstanding Letters of Credit in an amount equal to 103% of
the face amount of all outstanding Letters of Credit; (ii) upon the sale or
other disposition of the property constituting such Collateral (including as
part of or in connection with any other sale or other disposition permitted
hereunder) to any Person other than another Borrower, to the extent such sale or
other disposition is made in compliance with the terms of this Agreement;
(iii) subject to paragraph (b) of this Section 9.02, if the release of such Lien
is approved, authorized or ratified in writing by the Required Lenders, (iv) as
required to effect any sale or other disposition of such Collateral in
connection with any exercise of remedies of the Agents and the Lenders pursuant
to the Collateral Documents, or (v) as required pursuant to, and in accordance
with the terms of, any Master Intercompany Agreement provided that the Agents
may, in their discretion, release the Lien on Collateral valued in the aggregate
not in excess of $5,000,000 during each fiscal year without the consent of any
Lender. Any such release shall not in any manner discharge, affect, or impair
the Obligations or any Liens (other than those expressly being released) upon
(or obligations of the Borrowers in respect of) all interests retained by the
Borrowers, including the proceeds of any sale, all of which shall continue to
constitute part of the Collateral to the extent required under the provisions of
the Loan Documents.
          (d) If, in connection with any proposed amendment, waiver or consent
requiring the consent of “each Lender” or “each Lender directly affected
thereby” or the “Super Majority Lenders”, the consent of the Required Lenders is
obtained, but the consent of other necessary Lenders is not obtained (any such
Lender whose consent is necessary but not obtained being referred to herein as a
“Non-Consenting Lender”), then the Borrowers may elect to replace a
Non-Consenting Lender as a Lender party to this Agreement; provided, that,
concurrently with such replacement, (i) another bank or other
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entity which is reasonably satisfactory to the Administrative Borrower and the
Administrative Agent shall agree, as of such date, to purchase for cash the
Loans and other Obligations due to the Non-Consenting Lender pursuant to an
Assignment and Assumption and to become a Lender for all purposes under this
Agreement and to assume all obligations of the Non-Consenting Lender to be
terminated as of such date and to comply with the requirements of
Section 9.04(b), (ii) the replacement Lender shall pay the processing and
recordation fee referred to in Section 9.04(b)(ii)(C), if applicable, in
accordance with the terms of such Section, (iii) the replacement Lender shall
grant its consent with respect to the applicable proposed amendment, waiver or
consent and (iv) the Borrowers shall pay to such Non-Consenting Lender in same
day funds on the day of such replacement (1) all interest, fees and other
amounts then accrued but unpaid to such Non-Consenting Lender by the Borrowers
hereunder to and including the date of termination, including, without
limitation, payments due to such Non-Consenting Lender under Sections 2.15 and
2.17, and (2) an amount, if any, equal to the payment which would have been due
to such Lender on the day of such replacement under Section 2.16 had the Loans
of such Non-Consenting Lender been prepaid on such date rather than sold to the
replacement Lender.
Notwithstanding anything to the contrary contained in this Section 9.02, if the
Agents and the Borrowers shall have jointly identified an obvious error or any
error or omission of a technical or immaterial nature, in each case, in any
provision of this Agreement or any other Loan Document, then the Agents and the
Borrowers shall be permitted to amend such provision and such amendment shall
become effective without any further action or consent of any other party to
this Agreement or any other Loan Document if the same is not objected to in
writing by the Required Lenders within five Business Days following receipt of
notice thereof.
          SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) Subject to any
express limitations that may be set forth in this Agreement with respect to the
frequency of appraisals, the Borrowers agree to pay within (x) one Business Day
(in the case of demands prior to the Closing Date) and (y) ten Business Days (in
the case of demands thereafter) after written demand (which includes
documentation reasonably supporting such request) (i) all reasonable
out-of-pocket costs and expenses of the Agents in connection with the
preparation, execution, delivery, administration, modification and amendment of,
or any consent or waiver under, the Loan Documents (including, without
limitation, (A) all due diligence, syndication, transportation, computer,
duplication, appraisal, audit, field examination, Report preparation, Collection
Account setup and maintenance, insurance, consultant, search, filing and
recording fees and expenses, and (B) the reasonable fees and out-of-pocket
expenses of one counsel for the Agents with respect thereto, with respect to
advising the Agents as to their rights and responsibilities, or the protection
or preservation of rights or interests, under the Loan Documents, with respect
to negotiations with any Borrower or with other creditors of any Borrower
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors’ rights generally and any proceeding ancillary thereto) and (ii) all
out-of-pocket costs and expenses of the Agents and each Lender in connection
with the enforcement of the Loan Documents, whether in any action, suit or
litigation, or any bankruptcy, insolvency or other similar proceeding affecting
creditors’ rights generally (including, without limitation, the reasonable fees
and out-of-pocket expenses of counsel for the Administrative Agent and each
Lender with respect thereto; provided that the Borrowers shall only be required
to reimburse the fees and expenses of one legal counsel per jurisdiction to the
extent no conflict exists).
          (b) Each Borrower agrees, jointly and severally, to indemnify, defend
and save and hold harmless each Agent, each Lender and each of their respective
Affiliates, successors and permitted assigns, and their respective officers,
directors, employees, agents, members, controlling persons and advisors (each,
an “Indemnified Party”) from and against, and shall pay within ten Business Days
of written demand, any and all claims, damages, actual losses, liabilities and
expenses (including, without
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limitation, reasonable fees, disbursements and other charges of counsel), joint
or several, that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith)
(i) the Facilities, the actual or proposed use of the proceeds of the Advances,
the Loan Documents or any of the transactions contemplated thereby, including,
without limitation, any transaction by any Borrower or Affiliates, or (ii) the
actual or alleged presence of Hazardous Materials on any property of any
Borrower or any of its subsidiaries or any Environmental Action relating in any
way to any Borrower or any of its subsidiaries, except (i) to the extent such
claim, damage, loss, liability or expense is determined by a court of competent
jurisdiction to have resulted from the bad faith, gross negligence, willful
misconduct or bad faith of such Indemnified Party or its officers, directors,
employees or agents to the extent acting at the direction of such Indemnified
Party, (ii) from a material breach of a Loan Document by such Indemnified Party
or its officers, directors, employees or agents or (iii) that the dispute is
solely between Indemnified Parties or their respective officers, affiliates,
directors, employees, agents, advisors, controlling persons, members and
successors and permitted assigns, except in respect of any agent under the
Facilities, in its capacity as an Agent. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 9.03(b)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Borrower, its directors, shareholders
or creditors, any Indemnified Party or any other Person, whether or not any
Indemnified Party is otherwise a party thereto and whether or not the
transactions set forth in the Loan Documents are consummated, but excluding from
this indemnity any disputes which are solely between or among Indemnified
Parties, except in respect of any Agent in its capacity as an Agent hereunder).
Each Borrower also agrees not to assert any claim against any Agent, any Lender
or any of their Affiliates, or any of their respective officers, directors,
employees, agents and advisors, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise relating
to the Facilities, the actual or proposed use of the proceeds of the Advances,
the Loan Documents or any of the transactions contemplated by the Loan
Documents.
          (c) If any payment of principal of, or Conversion of, any LIBOR
Borrowing is made by an Eligible Assignee to a Lender other than on the last day
of the Interest Period for such Borrowing upon an assignment of rights and
obligations under this Agreement pursuant to Section 9.04, as a result of a
demand by any Borrower pursuant to Section 2.20, or if such Borrower fails to
make any payment or prepayment of an Borrowing for which a notice of prepayment
has been given or that is otherwise required to be made, whether pursuant to
Section 2.10, 2.11 or Article VII or otherwise, such Borrower shall, upon demand
by such Lender (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment or Conversion or such failure to
pay or prepay, as the case may be, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Borrowing.
          (d) If any Borrower fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
fees and expenses of counsel and indemnities, with 3 days’ prior written notice
to the Administrative Borrower such amount may be paid on behalf of such
Borrower by the Administrative Agent or any Lender, in its sole discretion.
          (e) Without prejudice to the survival of any other agreement of any
Borrower hereunder or under any other Loan Document, the agreements and
obligations of the Borrowers contained in Sections 2.15 and 2.17 and this
Section 9.03 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under any of the other Loan Documents.
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          SECTION 9.04. 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 permitted assigns permitted hereby
(including any Affiliate of an Issuing Bank that issues any Letter of Credit),
except that (i) the Borrowers may not (except as permitted under Section 6.04)
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 any Borrower without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section 9.04 (any attempted assignment
or transfer not complying with the terms of this Section 9.04 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 (including any Affiliate of an Issuing
Bank that issues any Letter of Credit), Participants (to the extent provided in
paragraph (c) of this Section 9.04) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Agents, the Issuing Banks and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
          (b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more Eligible Assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld or delayed) of:

  (A)   The Administrative Borrower; provided that no consent of the
Administrative Borrower shall be required for an assignment to another Lender,
an Affiliate of a Lender, an Approved Fund or, if an Event of Default has
occurred and is continuing, any other Eligible Assignee, and provided, further
that no consent of the Administrative Borrower shall be required for an
assignment during the primary syndication of the Loans to Persons identified by
the Administrative Agent to the Administrative Borrower on or prior to the
Closing Date and reasonably acceptable to the Administrative Borrower;     (B)  
the Administrative Agent;     (C)   the Swingline Lender; and     (D)   each
Issuing Bank.

          (ii) Assignments shall be subject to the following additional
conditions:

  (A)   except in the case of an assignment to another Lender, an Affiliate of a
Lender or an Approved Fund or an assignment of the entire remaining amount of
the assigning Lender’s Commitment or Loans of any Class, the amount of the
Commitment or the principal amount of Loans of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent and
further determined on an aggregate basis for all concurrent assignments to
Related Funds (as defined below)) shall be in a minimum amount of $5,000,000 and
increments of $1,000,000 in excess thereof unless each of the Administrative
Borrower and the Administrative Agent otherwise

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consent; provided that no such consent of the Administrative Borrower shall be
required if an Event of Default has occurred and is continuing;
(B)  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
(except that this clause (B) shall not limit the right of a Lender to assign all
or any portion of its Commitment (without the necessity of assigning a
proportionate portion of both));
(C)  the parties to each assignment shall (1) electronically execute and deliver
to the Administrative Agent an Assignment and Assumption via an electronic
settlement system acceptable to the Administrative Agent (which initially shall
be ClearPar, LLC) or (2) manually execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation
fee of $3,500 (provided that such fee may be waived or reduced in the sole
discretion of the Administrative Agent; and
(D)  the assignee, if it shall not be a Lender, shall deliver on or prior to the
effective date of such assignment, to the Administrative Agent (1) an
Administrative Questionnaire and (2) if applicable, an appropriate Internal
Revenue Service form (such as Form W-8BEN or W-8ECI or any successor form
adopted by the relevant United States taxing authority) as required by
applicable law supporting such assignee’s position that no withholding by the
Borrowers or the Administrative Agent for United States income tax payable by
such assignee in respect of amounts received by it hereunder is required.
The term “Related Funds” shall mean with respect to any Lender that is an
Approved Fund, any other Approved Fund that is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment advisor.
          (iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section 9.04, from and after the effective date
specified in each Assignment and Assumption the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have 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 Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption 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 Sections 2.15, 2.16, 2.17 and 9.03 with respect to facts and
circumstances occurring on or prior to the effective date of such assignment).
Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 9.04 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 (c) of this Section 9.04.
          (iv) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders and their respective successors and assigns, and
the Commitment of, and principal amount of and interest on the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof
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from time to time (the “Register”). The entries in the Register shall be
conclusive, absent manifest error, and the Borrowers, the Agents, the Issuing
Banks 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. The Register shall be
available for inspection by the Borrowers, the Issuing Banks and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
          (v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire and tax certifications required by
Section 9.04(b)(ii)(D)(2) (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section 9.04, if applicable, and any written consent to such assignment
required by paragraph (b) of this Section 9.04, the Administrative Agent shall
promptly accept such Assignment and Assumption and record the information
contained therein in the Register; provided that if either the assigning Lender
or the assignee shall have failed to make any payment required to be made by it
pursuant to Section 2.05, 2.06(d) or (e), 2.07(b), 2.18(c) or 9.03, the
Administrative Agent shall have no obligation to accept such Assignment and
Assumption and record the information therein in the Register unless and until
such payment shall have been made in full, together with all accrued interest
thereon. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
          (vi) By executing and delivering an Assignment and Assumption, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment, and the outstanding balances of its Revolving Loans, in each
case without giving effect to assignments thereof which have not become
effective, are as set forth in such Assignment and Assumption, (ii) except as
set forth in (i) above, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement, or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto, or the financial condition of the Borrowers
or any respective Subsidiary or the performance or observance by the Borrowers
or any respective Subsidiary of any of its obligations under this Agreement, any
other Loan Document or any other instrument or document furnished pursuant
hereto; (iii) such assignee represents and warrants that it is an Eligible
Assignee, legally authorized to enter into such Assignment and Assumption; (iv)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the most recent financial statements referred to in Section 3.08
or delivered pursuant to Section 5.01 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Assumption; (v) such assignee will independently
and without reliance upon the Agents, such assigning Lender 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 this Agreement; (vi) such assignee appoints and authorizes each Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to such Agent, by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.
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          (c) (i) Any Lender may, without the consent of the Administrative
Borrower, the Administrative Agent, the Issuing Banks 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 (A) such Lender’s obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) the Borrowers, the
Agents, the Issuing Banks 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 9.02(b) that directly affects such
Participant. Subject to paragraph (c)(ii) of this Section 9.04, each Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.15,
2.16 and 2.17 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section 9.04.
          (ii) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 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
Administrative Borrower’s 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 2.17 unless the Administrative Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrowers, to comply with Section 2.17(e) as though it were a Lender.
          (d) Any Lender may at any time pledge or grant a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including without limitation any pledge or grant to secure
obligations to a Federal Reserve Bank, and this Section 9.04 shall not apply to
any such pledge or grant of a security interest; provided that no such pledge or
grant of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
          (e) 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 Administrative Borrower, the option to
provide to any Borrower all or any part of any Loan that such Granting Lender
would otherwise be obligated to make to such Borrower 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 Commitment 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 (i) neither the grant to any SPC nor the
exercise by any SPC of such option shall increase the costs or expenses or
otherwise increase or change the obligations of the Borrowers under this
Agreement (including its obligations under Section 2.15, 2.16 or 2.17), (ii) 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) and
the Granting Lender shall for all purposes including approval of any amendment,
waiver or other modification of any provision of the Loan Documents, remain the
Lender of record hereunder. In addition, notwithstanding anything to the
contrary contained in this Section 9.04, any SPC may (i) with notice to, but
without the prior written consent of, ITEC or 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 to any financial institutions
(consented
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to by ITEC and Administrative Agent) providing liquidity and/or credit support
to or for the account of such SPC to support the funding or maintenance of Loans
and (ii) disclose on a confidential basis any 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, which person shall
agree to be bound by the terms of confidentiality continued herein.
          (f) In the event that any Lender shall become a Defaulting Lender,
then an Issuing Bank or the Swingline Lender shall have the right, but not the
obligation, at its own expense, upon notice to such Lender and the
Administrative Agent, to replace such Lender with an assignee (in accordance
with and subject to the restrictions contained in paragraph (b) above), and such
Lender hereby agrees to transfer and assign without recourse (in accordance with
and subject to the restrictions contained in paragraph (b) above) all its
interests, rights and obligations in respect of its Commitment to such assignee;
provided, however, that (i) no such assignment shall conflict with any law, rule
and regulation or order of any Governmental Authority, and (ii) such Issuing
Bank or the Swingline Lender, as applicable, or such assignee, as the case may
be, shall pay to such Lender in immediately available funds on the date of such
assignment the principal of and interest accrued to the date of payment on the
Loans made by such Lender hereunder and all other amounts accrued for such
Lender’s account or owed to it hereunder.
          SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Borrowers in the Loan Documents and in the certificates
or other instruments delivered in connection with or pursuant to this Agreement
or any other Loan Document shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that an Agent, an 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 Sections 2.15, 2.16, 2.17 and 9.03 and
Article VIII 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 9.06. Counterparts; Integration; Effectiveness. 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. This Agreement, the other
Loan Documents and the Engagement Letter and any separate letter agreements with
respect to fees payable to the Agents 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. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Agents and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by facsimile or electronic transmission
shall be effective as delivery of a manually executed counterpart of this
Agreement.
          SECTION 9.07. Severability. To the extent permitted by law, any
provision of any Loan Document 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
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the validity, legality and enforceability of the remaining provisions thereof;
and the invalidity of a particular provision in a particular jurisdiction shall
not invalidate such provision in any other jurisdiction.
           SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates, with the
prior written consent of the Agents, 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)
(other than payroll, petty cash, trust or tax accounts) at any time held and
other obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of any Borrower against any of and all the Secured
Obligations held by such Lender, irrespective of whether or not such Lender
shall have made any demand under the Loan Documents and although such
obligations may be unmatured. The applicable Lender shall notify ITEC and the
Administrative Agent of such set-off or application; provided that any failure
to give or any delay in giving such notice shall not affect the validity of any
such set-off or application under this Section 9.08. The rights of each Lender
under this Section 9.08 are in addition to other rights and remedies (including
other rights of setoff) which such Lender may have.
           SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN LETTERS OF
CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH LETTER
OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE
LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES
ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS MOST
RECENTLY PUBLISHED AND IN EFFECT, ON THE DATE SUCH LETTER OF CREDIT WAS ISSUED,
BY THE INTERNATIONAL CHAMBER OF COMMERCE (THE “UNIFORM CUSTOMS”) AND, AS TO
MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
           (b) Each Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the exclusive jurisdiction of any U.S. Federal or
New York State court sitting in the Borough of Manhattan, New York, New York in
any action or proceeding arising out of or relating to any Loan Documents, or
for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that any Agent, any Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Document against any Borrower or its properties in the courts
of any jurisdiction.
           (c) Each Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (ii) of this Section 9.09. Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
           (i) To the extent permitted by law, each party to this Agreement
hereby irrevocably waives personal service of any and all process upon it and
agrees that all such service of process may be made by registered mail (return
receipt requested) directed to it at its address for notices as provided for in
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Section 9.01. Nothing in this Agreement or any other Loan Document will affect
the right of any party to this Agreement to serve process in any other manner
permitted by law.
          SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.10.
          SECTION 9.11. 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 9.12. Confidentiality. Each Agent, each Issuing Bank and each
Lender agrees (and each Lender agrees to cause its SPC, if any and agrees to be
liable for any breach thereof by its SPC) 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 (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, governmental or
administrative authority; (c) to the extent required by law or by any subpoena
or similar legal process; (d) to any other party to this Agreement; (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder; (f) subject to an agreement
containing provisions substantially the same as those of this Section 9.12, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement,
including, without limitation, any SPC, (ii) any pledgee referred to in
Section 9.04(d), or (iii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrowers and
their obligations; (g) with the consent of the Borrower; or (h) to the extent
such Information (x) becomes publicly available other than as a result of a
breach of this Section 9.12, or (y) becomes available to an Agent, an Issuing
Bank or any Lender on a nonconfidential basis other than as a result of a breach
of this Section 9.12 from a source other than the Borrower. For the purposes of
this Section 9.12 only, “Information” means all information received from any
Borrower relating to the Borrowers or their businesses or the Transactions,
other than any such information that is available to any Agent, any Issuing Bank
or any Lender on a nonconfidential basis prior to disclosure by any Borrower.
Any Person required to maintain the confidentiality of Information as provided
in this Section 9.12 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 9.13. Lender Obligations Several; Violation of Law. The
respective obligations of the Lenders hereunder are several and not joint and
the failure of any Lender to make any Loan or perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations
hereunder. Anything contained in this Agreement to the contrary notwithstanding,
neither the
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Issuing Banks nor any Lender shall be obligated to extend credit to the
Borrowers in violation of any Requirement of Law.
          SECTION 9.14. USA PATRIOT Act. Each Lender and each Agent (for itself
and not on behalf of any Lender) hereby notifies the Borrowers that pursuant to
the requirements of the USA PATRIOT Act, it is required to obtain, verify and
record information that identifies each Borrower, which information includes the
name and address of such Borrower and other information that will allow such
Lender or such Agent, as applicable, to identify such Borrower in accordance
with the USA PATRIOT Act. Each Borrower shall, and shall cause each of the other
Borrowers to, provide such information and take such actions as are reasonably
requested by any Agent or any Lender in order to assist the Agents and the
Lenders in maintaining compliance with the USA PATRIOT Act.
          SECTION 9.15. Disclosure. Each Borrower and each Lender hereby
acknowledges and agrees that the Agents and/or their Affiliates from time to
time may hold investments in, make other loans to or have other relationships
with any of the Borrowers and their respective Affiliates. In addition, each
Borrower and each Lender hereby acknowledges that the Agents and/or their
Affiliates may make a loan to the Borrowers under the Senior Secured Term Loan
Facility.
          SECTION 9.16. Appointment for Perfection. Each Lender hereby appoints
each other Lender as its agent for the purpose of perfecting Liens, for the
benefit of the Collateral Agent and the Lenders, in assets which, in accordance
with Article 9 of the UCC or any other applicable law can be perfected only by
possession. Should any Lender (other than the Collateral Agent) obtain
possession of any such Collateral, such Lender shall notify the Collateral Agent
thereof, and, promptly upon the Collateral Agent’s request therefor shall
deliver such Collateral to the Collateral Agent or otherwise deal with such
Collateral in accordance with the Collateral Agent’s instructions.
          SECTION 9.17. 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 9.17 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 9.18. Borrower Liability.
          (a) Joint and Several Liability. All Loans, upon funding, shall be
deemed to be jointly funded to and received by the Borrowers. Each Borrower
jointly and severally agrees to pay, and shall be jointly and severally liable
under this Agreement for, all Obligations, regardless of the manner or amount in
which proceeds of Loans are used, allocated, shared, or disbursed by or among
the Borrowers themselves, or the manner in which an Agent and/or any Lender
accounts for such Loans or other extensions of credit on its books and records.
Each Borrower shall be liable for all amounts due to an Agent and/or any Lender
under this Agreement, regardless of which Borrower actually receives Loans or
other extensions of credit hereunder or the amount of such Loans and extensions
of credit received or the manner in which such Agent and/or such Lender accounts
for such Loans or other extensions of credit on its books and records. Each
Borrower’s Obligations with respect to Loans and other extensions of credit
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made to it, and such Borrower’s Obligations arising as a result of the joint and
several liability of such Borrower hereunder, with respect to Loans made to the
other Borrowers hereunder, shall be separate and distinct obligations, but all
such Obligations shall be primary obligations of such Borrower. The Borrowers
acknowledge and expressly agree with the Agents and each Lender that the joint
and several liability of each Borrower is required solely as a condition to, and
is given solely as inducement for and in consideration of, credit or
accommodations extended or to be extended under the Loan Documents to any or all
of the other Borrowers and is not required or given as a condition of extensions
of credit to such Borrower. Each Borrower’s obligations under this Agreement
shall be separate and distinct obligations. Each Borrower’s obligations under
this Agreement shall, to the fullest extent permitted by law, be unconditional
irrespective of (i) the validity or enforceability, avoidance, or subordination
of the Secured Obligations of any other Borrower or of any promissory note or
other document evidencing all or any part of the Secured Obligations of any
other Borrower, (ii) the absence of any attempt to collect the Secured
Obligations from any other Borrower, or any other security therefor, or the
absence of any other action to enforce the same, (iii) the waiver, consent,
extension, forbearance, or granting of any indulgence by an Agent and/or any
Lender with respect to any provision of any instrument evidencing the Secured
Obligations of any other Borrower, or any part thereof, or any other agreement
now or hereafter executed by any other Borrower and delivered to an Agent and/or
any Lender, (iv) the failure by an Agent and/or any Lender to take any steps to
perfect and maintain its security interest in, or to preserve its rights to, any
security or collateral for the Secured Obligations of any other Borrower, (v) an
Agent’s and/or any Lender’s election, in any proceeding instituted under the
Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy
Code, (vi) any borrowing or grant of a security interest by any other Borrower,
as debtor-in-possession under Section 364 of the Bankruptcy Code, (vii) the
disallowance of all or any portion of an Agent’s and/or any Lender’s claim(s)
for the repayment of the Obligations of any other Borrower under Section 502 of
the Bankruptcy Code, or (viii) any other circumstances which might constitute a
legal or equitable discharge or defense of a guarantor or of any other Borrower
(other than payment or performance, to the extent thereof). With respect to any
Borrower’s Secured Obligations arising as a result of the joint and several
liability of the Borrowers hereunder with respect to Loans or other extensions
of credit made to any of the other Borrowers hereunder to the extent permitted
by applicable law, such Borrower waives, until the Secured Obligations (other
than contingent indemnification obligations) shall have been paid in full and
this Agreement shall have been terminated, any right to enforce any right of
subrogation or any remedy which an Agent and/or any Lender now has or may
hereafter have against any other Borrower, any endorser or any guarantor of all
or any part of the Secured Obligations, and any benefit of, and any right to
participate in, any security or collateral given to an Agent and/or any Lender
to secure payment of the Secured Obligations of any Borrower to an Agent and/or
any Lender. Upon any Event of Default, the Agents may proceed directly and at
once, without notice, against any Borrower to collect and recover the full
amount, or any portion of the Secured Obligations, without first proceeding
against any other Borrower or any other Person, or against any security or
collateral for the Secured Obligations. Each Borrower consents and agrees that
the Agents shall be under no obligation to marshal any assets in favor of any
Borrower or against or in payment of any or all of the Secured Obligations.
          (b) Contribution and Indemnification among the Borrowers. Each
Borrower is obligated to repay the Facility Obligations as joint and several
obligor under this Agreement. To the extent that any Borrower shall make an
Accommodation Payment, then the Borrower making such Accommodation Payment shall
be entitled to contribution and indemnification from, and be reimbursed by, each
of the other Borrowers in an amount, for each of such other Borrowers, equal to
a fraction of such Accommodation Payment, the numerator of which fraction is
such other Borrower’s Allocable Amount (as defined below) and the denominator of
which is the sum of the Allocable Amounts of all of the Borrowers. As of any
date of determination, the “Allocable Amount” of each Borrower shall be equal to
the maximum amount of liability for Accommodation Payments which could be
asserted against such Borrower hereunder without (i) rendering such Borrower
“insolvent” within the meaning of Section 101
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(31) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act
(“UFTA”) or Section 2 of the Uniform Fraudulent Conveyance Act (“UFCA”),
(ii) leaving such Borrower with unreasonably small capital or assets, within the
meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or
Section 5 of the UFCA, or (iii) leaving such Borrower unable to pay its debts as
they become due within the meaning of Section 548 of the Bankruptcy Code or
Section 4 of the UFTA, or Section 5 of the UFCA. All rights and claims of
contribution, indemnification, and reimbursement under this Section 9.18 shall
be subordinate in right of payment to the prior payment in full of the Facility
Obligations (other than contingent indemnification obligations). The provisions
of this Section 9.18 shall, to the extent expressly inconsistent with any
provision in any Loan Document, supersede such inconsistent provision.
          SECTION 9.19. Agency of ITEC as Administrative Borrower for Each Other
Borrower. Each of the other Borrowers irrevocably appoints ITEC as its agent for
all purposes relevant to this Agreement (in such capacity, the “Administrative
Borrower”), including the giving and receipt of notices and execution and
delivery of all documents, instruments, and certificates contemplated herein
(including, without limitation, execution and delivery to the Agents of
Borrowing Base Certificates, Borrowing Requests, Letter of Credit Requests and
Interest Election Requests) and all modifications hereto. Any acknowledgment,
consent, direction, certification, or other action which might otherwise be
valid or effective only if given or taken by all or any of the Borrowers or
acting singly, shall be valid and effective if given or taken only by the
Administrative Agent, whether or not any of the other Borrowers joins therein,
and the Agents and the Lenders shall have no duty or obligation to make further
inquiry with respect to the authority of the Administrative Agent under this
Section 9.19; provided that nothing in this Section 9.19 shall limit the
effectiveness of, or the right of the Agents and the Lenders to rely upon, any
notice (including without limitation a Borrowing Request, a Letter of Credit
Request or an Interest Election Request), document, instrument, certificate,
acknowledgment, consent, direction, certification, or other action delivered by
any Borrower pursuant to this Agreement.
          SECTION 9.20. Additional Borrowers. Any addition of any Person as a
Borrower under this Agreement is subject to consent by the Agents, which consent
may not be unreasonably withheld, delayed or conditioned, which conditions may
include, without limitation, (a) the furnishing of such financial and other
information (including, but not limited to, a completed audit and field
examination of such Person) as the Agents may reasonably request; (b) approval
by all appropriate approval authorities of the Agents; and (c) execution and
delivery by the Borrowers, such Person, the Administrative Agent, and the
Collateral Agent of such agreements and other documentation, and the furnishing
by such Person or any of the Borrowers of such certificates, opinions, and other
documentation, as the Administrative Agent and any such Lender may reasonably
request; provided, that the written consent of each Lender shall be required for
the addition of any Person that is not a “United States person” (within the
meaning of Section 7701(a)(30) of the Code) as a Borrower.
          SECTION 9.21. Obligations Absolute. Each Borrower hereby covenants and
agrees, jointly and severally, that the Facility Obligations will be paid
strictly in accordance with the terms of the Loan Documents, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of any Lender with respect thereto.
The joint and several liability of each Borrower under this Agreement shall be
irrevocable, absolute and unconditional irrespective of, and to the extent
permitted by applicable law, each Borrower hereby irrevocably waives any
defenses it may now have or hereafter acquire in any way relating to, any or all
of the following:
          (a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
          (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Facility Obligations or any other Obligations
of any other Borrower under or in respect of
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the Loan Documents, or any other amendment or waiver of or any consent to
departure from any Loan Document, including, without limitation, any increase in
the Facility Obligations resulting from the extension of additional credit to
any Borrower or any of its subsidiaries or otherwise;
          (c) any taking, release or amendment or waiver of, or consent to
departure from, any guaranty, for all or any of the Facility Obligations;
          (d) any change, restructuring or termination of the corporate
structure or existence of any Borrower or any of its subsidiaries;
          (e) any failure of any Lender or affiliate thereof to disclose to any
Borrower any information relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of any other
Borrower now or hereafter known to such Lender (each Borrower waiving any duty
on the part of the Lenders to disclose such information);
          (f) the failure of any other Person to execute or deliver this
Agreement or any other agreement or the release or reduction of liability of any
Borrower with respect to the Facility Obligations; or
          (g) any other circumstance (including, without limitation, any statute
of limitations) or any existence of or reliance on any representation by any
Lender that might otherwise constitute a defense available to, or a discharge
of, any Borrower or any other guarantor or surety, in each case other than
payment or performance of the Facility Obligations (other than contingent
indemnification obligations).
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Facility Obligations is rescinded
or must otherwise be returned by any Lender or any other Person upon the
insolvency, bankruptcy or reorganization of any Borrower or otherwise, all as
though such payment had not been made.
          SECTION 9.22. Express Waivers and Representations by Borrowers. Each
Borrower agrees as follows, to the extent permitted by applicable law:
          (a) Each Borrower hereby unconditionally and irrevocably waives:
(i) notice of acceptance of this Agreement; (ii) notice of the making of any
Loans, the issuance of any Letter of Credit or any other financial
accommodations made or extended under the Loan Documents or the creation or
existence of any Obligations; (iii) notice of the amount of the Obligations,
subject, however, to such Borrower’s right to make inquiry of the Administrative
Agent to ascertain the amount of the Obligations at any reasonable time;
(iv) notice of any adverse change in the financial condition of any other
Borrower or of any other fact that might increase such Borrower’s risk with
respect to such other Borrower under the Loan Documents; (v) notice of
presentment for payment, demand, protest, and notice thereof as to any
promissory notes or other instruments among the Loan Documents; and (vii) all
other notices (except if such notice is specifically required to be given to
such Borrower hereunder or under any of the other Loan Documents to which such
Borrower is a party) and demands to which such Borrower might otherwise be
entitled;
          (b) Each Borrower hereby unconditionally and irrevocably waives the
right by statute or otherwise to require an Agent or any Lender to institute
suit against any other Borrower or to exhaust any rights and remedies which an
Agent or any Lender has or may have against any other Borrower. Each Borrower
further waives any defense arising by reason of any disability or other defense
of any other Borrower (other than the defense that the Obligations shall have
performed and paid, to the
ITEC ABL Credit Agreement

- 94 -

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extent thereof) or by reason of the cessation from any cause whatsoever of the
liability of any such Borrower in respect thereof.
          (c) Each Borrower hereby unconditionally and irrevocably waives
promptness, diligence, notice of acceptance, presentment, demand for
performance, notice of nonperformance, default, acceleration, protest or
dishonor and any other notice with respect to any of the Obligations and any
requirement that any Lender protect, secure, perfect or insure any Lien or any
property subject thereto or exhaust any right or take any action against any
Borrower or any other Person.
          (d) Each Borrower hereby unconditionally and irrevocably waives any
right to revoke its joint and several liability hereunder, and acknowledges that
such liability is continuing in nature and applies to all Obligations, whether
existing now or in the future.
          (e) Each Borrower hereby unconditionally and irrevocably waives
(i) any defense arising by reason of any claim or defense based upon an election
of remedies by any Lender that in any manner impairs, reduces, releases or
otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of such Borrower or other rights of such
Borrower to proceed against any of the other Borrowers or any other Person, and
(ii) any defense based on any right of set-off or counterclaim against or in
respect of the Obligations of Borrower hereunder.
          (f) Each Borrower hereby unconditionally and irrevocably waives any
duty on the part of any Lender to disclose to such Borrower any matter, fact or
thing relating to the business, condition (financial or otherwise), operations,
performance, properties or prospects of any other Borrower or any of its
subsidiaries now or hereafter known by such Lender.
          (g) Each Borrower acknowledges that it will receive substantial direct
and indirect benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in Section 9.18 and this Section 9.22
are knowingly made in contemplation of such benefits.
          (h) Each Borrower hereby represents and warrants to the Agents and the
Lenders that such Borrower is currently informed of the financial condition of
all other Borrowers and all other circumstances which a diligent inquiry would
reveal and which bear upon the risk of nonpayment of the Obligations. Each
Borrower further represents and warrants that such Borrower has read and
understands the terms and conditions of the Loan Documents. Each Borrower agrees
that none of the Agents, any Lender, or any Issuing Bank has any responsibility
to inform any Borrower of the financial condition of any other Borrower or of
any other circumstances which bear upon the risk of nonpayment or nonperformance
of the Obligations.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
ITEC ABL Credit Agreement

- 95 -

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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 above written.

            INTERNATIONAL TRUCK AND ENGINE CORPORATION
      By:   /s/ TM Endsley         Name:   TM Endsley        Title:   SVP &
Treasurer     

Signature Page to ITEC ABL Credit Agreement

 

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            IC CORPORATION
      By:   /s/ Michael A. Cancelliere         Name:   Michael A. Cancelliere   
    Title:   VP     

Signature Page to ITEC ABL Credit Agreement

 

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            IC OF OKLAHOMA, LLC
      By:   /s/ Michael A. Cancelliere         Name:   Michael A. Cancelliere   
    Title:   VP     

Signature Page to ITEC ABL Credit Agreement

 

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            INTERNATIONAL DIESEL OF ALABAMA, LLC
      By:   /s/ T. M. Endsley         Name:   T. M. Endsley        Title:  
Treasurer     

Signature Page to ITEC ABL Credit Agreement

 

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            SST TRUCK COMPANY LP
      By:   /s/ TM Endsley         Name:   TM Endsley        Title:   SVP &
Treasurer     

Signature Page to ITEC ABL Credit Agreement

 

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                  CREDIT SUISSE, CAYMAN ISLANDS BRANCH,     as Administrative
Agent, Issuing Bank and Swingline Lender
 
           
 
  By:   /s/ Ian Nalitt    
 
           
 
      Name: Ian Nalitt    
 
           
 
      Title: Vice President    
 
           
 
  By:   /s/ James Neira    
 
           
 
      Name: James Neira    
 
           
 
      Title: Associate    

Signature Page to ITEC ABL Credit Agreement

 

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                  CREDIT SUISSE SECURITIES (USA) LLC,     as Lead Arranger and
Bookrunner    
 
           
 
  By:   /s/ James S. Finch    
 
           
 
      Name: James S. Finch    
 
           
 
      Title: Managing Director    

Signature Page to ITEC ABL Credit Agreement

 

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                  JPMORGAN CHASE BANK, N.A.,     as Syndication Agent and Lender
 
           
 
  By:   /s/ Richard W. Duker    
 
           
 
      Name: Richard W. Duker    
 
           
 
      Title: Managing Director    

Signature Page to ITEC ABL Credit Agreement

 

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                  J.P. MORGAN SECURITIES INC.,     as Bookrunner
 
           
 
  By:   /s/ Donald R. Benson    
 
           
 
      Name: Donald R. Benson    
 
           
 
      Title: Managing Director    

Signature Page to ITEC ABL Credit Agreement

 

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                  BANK OF AMERICA, N.A.,     as Collateral Agent and Lender
 
           
 
  By:   /s/ Robert J. Lund    
 
           
 
      Name: Robert J. Lund    
 
           
 
      Title: Senior Vice President    

Signature Page to ITEC ABL Credit Agreement

 

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                  BANC OF AMERICA SECURITIES LLC,     as Syndication Agent, Lead
Arranger and Bookrunner
 
           
 
  By:   /s/ Janet Jarrett    
 
           
 
      Name: Janet Jarrett    
 
           
 
      Title: Managing Director    

Signature Page to ITEC ABL Credit Agreement

 

--------------------------------------------------------------------------------

 

                  GENERAL ELECTRIC CAPITAL CORPORATION,     as Documentation
Agent and Lender
 
           
 
  By:   /s/ Rebecca L. Milligan    
 
           
 
      Name: Rebecca L. Milligan      
 
      Title: Duly Authorized Signatory    

Signature Page to ITEC ABL Credit Agreement

 

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                  WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL),     as
Documentation Agent and Lender
 
           
 
  By:   /s/ Steven Linderman    
 
           
 
      Name: Steven Linderman      
 
      Title: Managing Director    

Signature Page to ITEC ABL Credit Agreement

 

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                  UPS CAPITAL CORPORATION,         as Lender    
 
           
 
  By:   /s/ John P. Holloway    
 
           
 
      Name: John P. Holloway      
 
      Title: Director of Portfolio Management    

Signature Page to ITEC ABL Credit Agreement

 

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                  WELLS FARGO FOOTHILL, LLC,         as Lender    
 
           
 
  By:   /s/ Eunnie Kim    
 
           
 
      Name: Eunnie Kim      
 
      Title: Vice President    

Signature Page to ITEC ABL Credit Agreement

 

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COMMITMENT SCHEDULE

      Lender   Commitment
Credit Suisse
  $30,000,000
Bank of America, N.A.
  $30,000,000
JPMorgan Chase Bank, N.A.
  $25,000,000
General Electric Capital Corporation
  $35,000,000
Wachovia Capital Finance Corporation (Central)
  $35,000,000
Wells Fargo Foothill, LLC
  $30,000,000
UPS Capital Corporation
  $15,000,000
 
   
Total
  $200,000,000

ITEC ABL Credit Agreement

 

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Schedule 3.02
Borrower Information

                  Jurisdiction of   Principal Place of     Name   Organization  
Business   Tax ID Number
International Truck and Engine Corporation
  Delaware   4201 Winfield Road
P.O. Box 1488 Warrenville, IL
60555   36-1264810
 
           
IC Corporation
  Arkansas   751 S. Harkrider
Conway, Arkansas
72035   71-0537857
 
           
SST Truck Company, LP
  Delaware   4030 Forest Lane
Garland, Texas
75042   75-2688054
 
           
IC of Oklahoma, LLC
  Delaware   2322 North Mingo
Road, Tulsa, OK
74116   36-4362728
 
           
International Diesel of Alabama, LLC
  Delaware   646 James Record
Road Huntsville, Alabama
35824   36-4321267

 

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Schedule 3.06
Disclosed Matters
The Borrowers are subject to various claims arising in the ordinary course of
business, and are parties to various legal proceedings that constitute ordinary
routine litigation incidental to the business of the company and its
subsidiaries. The majority of these claims and proceedings relate to commercial,
product liability and warranty matters. In the opinion of the Borrowers’
management, apart from the actions set forth below, the disposition of these
proceedings and claims, after taking into account established reserves and the
availability and limits of the company’s insurance coverage, will not have a
material adverse affect on the business or the financial condition of the
company.
On October 13, 2004, Navistar International Corpation (“NIC”), the Borrowers’
parent company, received a request from the staff of the U.S. Securities and
Exchange Commission (“SEC”) to voluntarily produce certain documents and
information related to the company’s accounting practices with respect to
defined benefit pension plans and other postretirement benefits. NIC is fully
cooperating with this request. Based on the status of the inquiry, the company
is not able to predict the final outcome of this matter.
On January 31, 2005, NIC announced that it would restate its financial results
for fiscal years 2002 and 2003 and the first three quarters of fiscal 2004. The
SEC notified NIC on February 9, 2005, that it was conducting an informal inquiry
into such restatement. On March 17, 2005, NIC was advised by the SEC that the
status of the inquiry had been changed to a formal investigation. On April 7,
2006, NIC announced that it would restate its financial results for fiscal years
2002 through 2004 and for the first nine months of fiscal 2005. NIC is fully
cooperating with the SEC on this investigation. Based on the status of the
investigation, NIC is not able to predict the final outcome of this
investigation.
On January 11, 2007, a complaint was filed against ITEC in Oakland County
Circuit Court in Michigan by Ford Motor Company claiming damages relating to
warranty and pricing disputes with respect to certain engines purchased by Ford
Motor Company from ITEC. While Ford has not quantified its alleged damages, ITEC
estimates from Ford’s allegations that the range of damages that Ford Motor
Company is seeking to be between $500 million and $600 million. ITEC has filed
an answer to the complaint denying Ford’s allegations in all material respects.
ITEC has also asserted affirmative defenses to Ford’s claims, as well as
counterclaims alleging that, among other things, Ford has materially breached
contracts between it and ITEC in several different respects. ITEC has also
raised counterclaims against Ford for breach of the covenant of good faith and
fair dealing, tortious interference, conversion, and misrepresentation. Based on
ITEC’s investigation to date, ITEC believes it has meritorious defenses to this
matter, and ITEC intends to vigorously defend itself. There can be no assurance,
however, that ITEC will be successful in its defense, and an adverse resolution
of the lawsuit could have a material adverse effect on ITEC’s financial position
and results of operations.
Along with other vehicle manufacturers, ITEC and certain of its subsidiaries
have been subject to an increase in the number of asbestos-related claims in
recent years. In general these claims relate to illnesses alleged to have
resulted from asbestos exposure from component parts found in older vehicles,
although some cases relate to the presence of asbestos in company facilities. In

 

--------------------------------------------------------------------------------

 

these claims ITEC is not the sole defendant, and the claims name as defendants
numerous manufacturers and suppliers of a wide variety of products allegedly
containing asbestos. Management has strongly disputed these claims, and it has
been ITEC’s policy to defend against them vigorously. Historically, the actual
damages paid out to claimants have not been material to ITEC’s results of
operations and financial condition. However, management believes ITEC and other
vehicle manufacturers are being more aggressively targeted, largely as a result
of bankruptcies of manufacturers of asbestos and products containing asbestos.
It is possible that the number of these claims will continue to grow, and that
the costs for resolving asbestos related claims could become significant in the
future.

 

--------------------------------------------------------------------------------

 

Schedule 3.16
Existing Debt (Non-Intercompany) in Excess of $50,000,000
Part I.

                              Outstanding       Maturity     Debtor   Guarantor
  Amount   Rate   Date   Comments
ITEC
  NIC   $356,621,713   Various   6/5/2014   Guarantee to various 3rd Party
 
                  Lessors for Sale Leasebacks -
 
                  Remaining Lease Payments with
 
                  various lease termination dates
 
                  thru 2014
 
                   
NIC
  ITEC   $1,445,000,000   L+325   1/19/2012   Term Loan/Synthetic Revolver
 
                  entered into on January 19,2007.
 
                  Excludes standby letters of credit
 
                  issued under the Synthetic
 
                  Revolver
 
                   
NIC
  ITEC   $29,846,600 *   N/A   Various   Standby letters of credit issued
 
                  under the Synthetic Revolver

 
* Amount shown represents the aggregate amount of Standby Letters of Credit
issued under the January 19, 2007 Credit Facility. This amount is not Debt (i.e.
the company is not paying interest expense for the amount shown).
[Note: Excludes $78.85 million of Real Estate Operating Leases where ITEC is
either the Lessee or Guarantor. These leases will be treated as Operating Leases
for GAAP. It is expected that these will be treated as Operating Leases for Tax
purposes (and therefore not considered as Debt for covenant purposes), but the
determination is not yet final.]
Part II.
None.

 

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Schedule 3.17
Existing Liens Securing Debt for Borrowed Money in Excess of $50,000,000
None.

 

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Schedule 3.19
Insurance

                  Coverage   Type   Exp. Date   Policy Limit ($000)   Insurer
Property
  Replacement Cost       $500 Property Damage   Self-Insured Retention
 
          $1,000 Business Interruption   Self-Insured Retention
 
               
 
      15-Dec-07   $3,929,586 Property Damage   FM Global
 
               
Automobile Liability
  Occurrence   01-Jan-08   $2,000   Zurich American
 
               
General Liability
  Occurrence Reported       $2,000 Each Occurrence   Self-Insured Retention
Products Liability
  Occurrence Reported       $10,000 Each Occurrence   Self-Insured Retention
 
               
 
      14-Aug-07   $25,000 (inclusive of SIR)   Lexington (w/ Starr PD wrap)
 
      14-Aug-07   $25,000 excess $25,000   XL Europe
 
      14-Aug-07   $50,000 excess $50,000   Gerling
 
      14-Aug-07   $50,000 excess $100,000   Swiss Re
 
      14-Aug-07   $100,000 excess $150,000   XL Bermuda
 
               
D&O Liability
  Claims Made       $10,000 Each Occurrence — Side B   Self-Insured Retention
 
               
 
      15-Apr-08   $25,000   National Union
 
      15-Apr-08   $10,000 excess $25,000   Federal
 
      15-Apr-08   $10,000 excess $35,000   Twin City
 
      15-Apr-08   $10,000 excess $45,000   American Casualty

 

--------------------------------------------------------------------------------

 

                  Coverage   Type   Exp. Date   Policy Limit ($000)   Insurer
 
      15-Apr-08   $10,000 excess $55,000   Zurich American
 
      15-Apr-08   $20,000 excess $65,000   AWAC
 
      15-Apr-08   $15,000 excess $85,000   Starr Excess
 
               
D&O Liability — IDL
  Claims Made   15-Apr-08   $15,000   Illinois National
 
               
Blanket Crime
          $1,000   Self-Insured Retention
 
               
 
      01-Nov-08   $10,000   Zurich American
 
               

               
Workers Compensation / Employers Liability
  Occurrence   01-Jan-08   “A” Statutory   Zurich American
 
          “B” $2,000 per Accident    
 
               
Excess Work Comp / EL
  Occurrence   01-Jan-08   “A” Statutory excess $1,000 SIR   Zurich American
(IL, IN, OH, AR, AL, OK)
          “B” $1,000 per Accident excess    
 
          $1,000 SIR    

 

--------------------------------------------------------------------------------

 

EXHIBIT A
FORM OF ADMINISTRATIVE QUESTIONNAIRE
[INTERNATIONAL TRUCK AND ENGINE CORPORATION]
[IC CORPORATION]
[SST TRUCK COMPANY LP]
[IC OF OKLAHOMA, LLC]
[INTERNATIONAL DIESEL OF ALABAMA, LLC]1
Please accurately complete the following information and return via Fax to the
attention of Agency Administration at Credit Suisse as soon as possible, at Fax
No. 212-325-8304.
LENDER LEGAL NAME TO APPEAR IN DOCUMENTATION:
GENERAL INFORMATION — DOMESTIC LENDING OFFICE:
Institution Name:
                                                                  
                                                                          
Street Address:
                                                                  
                                                                          
City, State, Zip Code:
                                                                 
                                                                           
GENERAL INFORMATION — EURODOLLAR LENDING OFFICE:
Institution Name:
                                                                 
                                                                           
Street Address:
                                                                 
                                                                           
City, State, Zip Code:
                                                                 
                                                                           
POST-CLOSING, ONGOING CREDIT CONTACTS/NOTIFICATION METHODS:
CREDIT CONTACTS:
Primary
Contact:                                                                  
                                                                          
Street
Address:                                                                     
                                                                       
 

1   To be cloned out — one for each Borrower.

                Form of ITEC ABL Administrative Questionnaire
Ex. A-1

 

--------------------------------------------------------------------------------

 

City, State, Zip
Code:                                                                 
                                                                           
Phone Number:                                                                  
                                                                          
Fax Number:                                                                   
                                                                         
Backup
Contact:                                                                      
                                                                       
Street
Address:                                                                      
                                                                       
City, State, Zip
Code:                                                                 
                                                                           
Phone Number:                                                                   
                                                                          
Fax Number:                                                                    
                                                                         
TAX WITHHOLDING:
Nonresident Alien           Y*       N
 
* Form 4224 Enclosed
Tax ID Number                                         
POST-CLOSING, ONGOING ADMIN. CONTACTS / NOTIFICATION METHODS:
ADMINISTRATIVE CONTACTS — BORROWINGS, PAYDOWNS, FEES, ETC.
Contact:                                                                   
                                                                              
               
Street
Address:                                                                  
                                                                          
City, State, Zip
Code:                                                                 
                                                       
Phone Number:                                                                  
                                                                          
                Form of ITEC ABL Administrative Questionnaire
Ex. A-2

 

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Fax Number:
               
 
 
               
 
                PAYMENT INSTRUCTIONS:
 
                Name of Bank to which funds are to be transferred:        
 
 
                 
 
                Routing Transit/ABA number of Bank to which funds are to be
transferred:    
 
 
                Name of Account, if applicable:                
 
 
               
Account Number: 
                   
 
                Additional information:                
 

MAILINGS:
Please specify the person to whom the Borrower should send financial and
compliance information received subsequent to the closing (if different from
primary credit contact):

         
Name:
           
 
        Street Address:    
 
 
 
 
        City, State, Zip Code:    
 
       

It is very important that all the above information be accurately completed and
that this questionnaire be returned to the person specified in the introductory
paragraph of this questionnaire as soon as possible. If there is someone other
than yourself who should receive this questionnaire, please notify us of that
person’s name and Fax number and we will Fax a copy of the questionnaire. If you
have any questions about this form, please call Agency Administration at Credit
Suisse.
Form of ITEC ABL Administrative Questionnaire
Ex. A-3

 

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EXHIBIT B
FORM OF ASSIGNMENT AND ASSUMPTION
     This Assignment and Assumption (the “Assignment and Assumption”) is dated
as of the Effective Date set forth below and is entered into by and between
[Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the ABL Credit Agreement identified below (as amended,
amended and restated supplemented or otherwise modified from time to time, the
“Credit Agreement”), 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 Assumption 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 as contemplated 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 Assumption, without representation or warranty by the
Assignor.

         
1. Assignor:
       
 
 
 
   
 
       
2. Assignee:
       
 
 
 
   
 
            [and is an Affiliate/Approved Fund of [identify Lender]2]
 
            [International Truck and Engine Corporation]     [IC Corporation]  
  [SST Truck Company LP] 3. Borrower:   [IC of Oklahoma, LLC]
[International Diesel of Alabama, LLC] 4. Administrative Agent:   Credit Suisse,
as administrative agent under the Credit Agreement.

 

2 Select as applicable

Form of ITEC ABL Assignment and Assumption

Ex. B-1

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5. Credit Agreement:
  The ABL Credit Agreement dated as of June 15, 2007, among, inter alia,
International Truck and Engine Corporation, a Delaware corporation (“ITEC”), IC
Corporation, an Arkansas corporation (“IC”), SST Truck Company LP, a Delaware
limited partnership (“SST”), IC of Oklahoma, LLC, a Delaware limited liability
company (“ICO”), International Diesel of Alabama, LLC, a Delaware limited
liability company (“IDA” and, together with ITEC, IC, SST and ICO, each a
“Borrower” and collectively, the “Borrowers”), the Lenders from time to time
party hereto (the “Lenders”), Credit Suisse, as administrative agent for the
Lenders (“Credit Suisse” or, together with any successor administrative agent
appointed pursuant hereto, in such capacity, the “Administrative Agent”) and
Bank of America, N.A., as collateral agent for the Lenders (“BofA” or, together
with any successor collateral agent appointed pursuant hereto, in such capacity,
the “Collateral Agent” and, together with the Administrative Agent, the
“Agents”).
 
   
6. Assigned Interest
   

                  Aggregate Amount of   Amount of   Percentage Assigned of
Commitment/Loans   Commitment/Loans Assigned   Commitment/Loans3
$
  $         %  
$
  $         %  
$
  $         %  

Effective Date:___  ___, 20___ [TO BE INSERTED BY THE ADMINISTRATIVE AGENT AND
WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:

            ASSIGNOR

[NAME OF ASSIGNOR]
      By:           Name:           Title:           ASSIGNEE

[NAME OF ASSIGNEE]
                       

 

3 Set forth, to at least [9] decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.

Form of ITEC ABL Assignment and Assumption

Ex. B-2

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                  By:           Name:           Title:        

Consented to and Accepted:
CREDIT SUISSE, as Administrative Agent, Swingline
Lender and Issuing Bank

                  By:           Name:        Title:                 By:        
  Name:           Title:           [ISSUING BANK], as Issuing Bank
      By:           Name:           Title:           Consented to:

INTERNATIONAL TRUCK AND ENGINE CORPORATION
      By:           Name:           Title:        

Form of ITEC ABL Assignment and Assumption

Ex. B-3

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ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
          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,
(iii) its Commitment, and the outstanding balances of its Revolving Loans, in
each case without giving effect to assignments thereof which have not become
effective, are as set forth herein, and (iv) it has full power and authority,
and has taken all action necessary, to execute and deliver this Assignment and
Assumption 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 Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by the Borrower, any of its
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 is
an Eligible Assignee and has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption 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 referred
to in Section 3.08 or delivered pursuant to Section 5.01 thereof, as applicable,
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
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on any Agent
or any other Lender, and (v) if it is a Foreign Lender, attached to the
Assignment and Assumption 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 any 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, (ii) it appoints and authorizes the Agents to take such action on its
behalf and to exercise such powers under the Credit Agreement as are delegated
to the Agents, by the terms thereof, together with such powers as are reasonably
incidental thereto, and (iii) 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.
          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,
Form of ITEC ABL Assignment and Assumption

Ex. B-4

--------------------------------------------------------------------------------

 

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 Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
permitted successors and assigns. This Assignment and Assumption 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
Assumption by facsimile shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption
shall be construed in accordance with and governed by the laws of the State of
New York.
Form of ITEC ABL Assignment and Assumption

Ex. B-5

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Exhibit C
Borrowing Certificate

                                                                  International
Truck and Engine Corporation   Raw                                          
Used   Grand Report #: xx Report Date: x/xx/xx   Material   Parts   WIP   Red
Tag   Sold Inv.   FG’s   Trucks   Total  
Gross (per perpetuals) (in $000’s)
    —       —       —       —       —       —       —       —  
Ineligible
    —       —       —       —       —       —       —       —  
 
                                                               
Eligible Inventory
    —       —       —       —       —       —       —       —  
Advance Rate (lesser of 65% or 85% NOLV)
                                                               
Gross Available
    —       —               —       —               —       —  
 
                                                               
Less:
                                                               
Red Tag in Excess of $20MM
                                                            —  
Used Trucks in Excess of $100MM
                                                            —  
Reserve for A/P Contra (Applies to Sold & Used Trucks)
                                                            —  
Rent Reserve (3 mo’s)
                                                               
Availability before Line Limit
                                                            —  
Liquidity Block (from collateral)
                                                               
Suppressed Availability -Net of Block-
                                                               
Availability Net of Suppressed
                                                               
Liquidity Block (from availability)
                                                               
Net Availability
                                                               
 
                                                               
Appraised NOLV
                                                               
NOLV @ 85%
                                                               
 
                                                               
Ineligible Categories:
                                                               
Obsolete and Surplus
    —                                                          
Book Std to Actual Writedown (LCM)
    —                                                          
Returnable Containers
    —                                                          
Perpetual to GL Overstatements
    —                                                          
Non-Conforming/Major Repair/Return
    —                                                          
 
                                                               
Other
    —                                                          
 
                                                           
Total Ineligible
    —                                                          

The foregoing information is delivered to Bank of America Business Capital in
accordance with the Security Agreement (as may be amended, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement”),
dated as of June 15, 2007, among International Truck and Engine Corporation, a
Delaware corporation (the “Administrative Borrower”), IC Corporation, an
Arkansas corporation (“IC”), SST Truck Company LP, a Delaware limited
partnership (“SST”), IC of Oklahoma, LLC, a Delaware limited liability company
(“IC OK”), International Diesel of Alabama, LLC, a Delaware limited liability
company (“IDA”), Bank of America, N.A., as collateral agent (the “Collateral
Agent”) and Credit Suisse, as administrative agent (the “Administrative Agent”),
and in accordance with the ABL Credit Agreement (as may be amended, amended and
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), dated as of June 15, 2007, among, inter alia, the Administrative
Borrower, IC, SST, IC OK, IDA, the Lenders (as defined therein), the
Administrative Agent and the Collateral Agent.
Dated:                                        
I hereby certify, solely on behalf of the Administrative Borrower and not in my
individual capacity that the information contained herein is true and correct as
of the dates shown herein. Nothing contained herein shall constitute a waiver,
modification, or limitation of any of the terms or conditions set forth in the
referenced Security Agreement or the referenced Credit Agreement.

             
 
  Prepared by:                  
 
           
 
  Title:   Date:              
 
           
 
  Approved by:                  
 
           
 
  Title:   Date:              

 

--------------------------------------------------------------------------------

 

Availability Detail

                                                                               
                  A   B   C   D   E   F   G   H   I   J   K   L 1   NAVISTAR -
ITEC AVAILABILITY @ ______, 20__                         Parts                  
Truck - SST                                     Used Truck   Distribution   Trk
Plant - IC   Trk Plant - IC   Truck Garland,   Truck - ITEC   Sold Inventory  
Engine -   Engine -   Engine - Melrose 2   (In $000’s)   Grand Total   Centers
(UTC)   Centers (PDC)   Corp Conway, AK   Corp Tulsa, OK   TX   Springfield, OH
  (Corp Books)   Huntsville, AL   Indianapolis, IN   Park, IL   3  
Raw Material Inventory
                                                                               
        4  
Perpetual Value @__ , 20__
    —       —       —       —       —       —       —       —       —       —  
    —   5  
 
                                                                               
        6  
Less Ineligibles:
                                                                               
        7  
Returnable Containers (perpetual)
    —       —       —       —       —       —       —       —       —       —  
    —   8  
Standard Cost Resets (Cost Test)
    —       —       —       —       —       —       —       —       —       —  
    —   9  
Non Conforming Inventory (perpetual)
    —       —       —       —       —       —       —       —       —       —  
    —   10  
Returns/Teardowns (perpetual)
    —       —       —       —       —       —       —       —       —       —  
    —   11  
Service Parts (perpetual)
    —       —       —       —       —       —       —       —       —       —  
    —   12  
Major Repair Items (perpetual)
    —       —       —       —       —       —       —       —       —       —  
    —   13  
Consigned Inv (perpetual)
    —       —       —       —       —       —       —       —       —       —  
    —   14  
DSW/NON — Lost Material Warehouses (perpetual)
    —       —       —       —       —       —       —       —       —       —  
    —   15  
RTV — Return to Vendor Warehouse (perpetual)
    —       —       —       —       —       —       —       —       —       —  
    —   16  
Obsolete & Surplus Calculations (GL & Actual)
    —       —       —       —       —       —       —       —       —       —  
    —   17  
Book Std to Actual Cost Writedown -LCM (GL)
    —       —       —       —       —       —       —       —       —       —  
    —   18  
Inventory Located in Dubai, UAE (perpetual)
    —       —       —       —       —       —       —       —       —       —  
    —   19  
Book to Physical/Inv Corrections Reserve (GL)
    —       —       —       —       —       —       —       —       —       —  
    —   20  
Inventory Revluation Contra (GL)
    —       —       —       —       —       —       —       —       —       —  
    —   21  
Perpetual to GL overstatement
    —       —       —       —       —       —       —       —       —       —  
    —             22  
Total Ineligibles
    —       —       —       —       —       —       —       —       —       —  
    —   23  
 
                                                                               
        24  
Net Eligible RM Inventory
    —       —       —       —       —       —       —       —       —       —  
    —   25  
Advance Rate
                                                                               
                  26  
RM Inventory Availability
    —       —       —       —       —       —       —       —       —       —  
    —             27  
 
                                                                               
                  28  
Work In Process Inventory
                                                                               
        29  
Perpetual Value @__ , 20__
    —       —       —       —       —       —       —       —       —       —  
    —   30  
 
                                                                               
        31  
Less Ineligibles:
                                                                               
        32  
Obsolescence, Shrink & Surplus Reserve (GL)
    —       —       —       —       —       —       —       —       —       —  
    —   33  
Book Std to Actual Cost Writedown -LCM (GL)
    —       —       —       —       —       —                       —       —  
    —   34  
Perpetual to GL overstatement
    —       —       —       —       —       —       —       —       —       —  
    —             35  
Total Ineligibles
    —       —       —       —       —       —       —       —       —       —  
    —   36  
 
                                                                               
        37  
Net Eligible WIP Inventory
    —       —       —       —       —       —       —       —       —       —  
    —   38  
Advance Rate
                                                                               
                  39  
WIP Inventory Availability
    —       —       —       —       —       —       —       —       —       —  
    —             40  
 
                                                                               
                  41  
Red Tag Inventory
                                                                               
        42  
Perpetual Value @__ , 20__
    —       —       —       —       —       —       —       —       —       —  
    —   43  
 
                                                                               
        44  
Less Ineligibles:
                                                                               
        45  
None
    —       —       —       —       —       —       —       —       —       —  
    —             46  
Total Ineligibles
    —       —       —       —       —       —       —       —       —       —  
    —   47  
 
                                                                               
        48  
Net Eligible WIP Inventory
    —       —       —       —       —       —       —       —       —       —  
    —   49  
Advance Rate
                                                                               
                  50  
Red Tag Inventory Availability
    —       —       —       —       —       —       —               —       —  
    —             51  
 
                                                                               
                  52  
Finished Goods Inventory & Truck Inventory
                                                                               
        53  
Perpetual Value @__ , 20__
    —       —       —       —       —       —       —       —       —       —  
    —   54  
 
                                                                               
        55  
Less Ineligibles:
                                                                               
        56  
Returned Engines (perpetual)
    —       —       —       —       —       —       —       —       —       —  
    —   57  
Major Repair Items (perpetual)
    —       —       —       —       —       —       —       —       —       —  
    —   58  
Demo Unit Trucks (perpetual)
    —       —       —       —       —       —       —       —       —       —  
    —   59  
Trucks — Orders Cancelled — Stock Unit by Order (per
    —       —       —       —       —       —       —       —       —       —  
    —   60  
Trucks — Sold to Canadian Customers (perpetual)
    —                                                       —                  
        61  
Obsolescence, Shrink & Surplus Reserve (GL)
    —       —       —       —       —       —       —       —       —       —  
    —   62  
Book Std to Actual Cost Writedown -LCM (GL)
    —       —       —       —       —       —       —       —       —       —  
    —   63  
Repossessed Trucks (perpetual)
    —       —                                                                  
        64  
Perpetual to GL overstatement
    —       —       —       —       —       —       —       —       —       —  
    —             65  
Total Ineligibles
    —       —       —       —       —       —       —       —       —       —  
    —   66  
 
                                                                               
        67  
Net Eligible FG Inventory
    —       —       —       —       —       —       —       —       —       —  
    —   68  
Advance Rate
                                                                               
                  69  
FG & Truck Inventory Availability
    —       —       —       —       —       —       —       —       —       —  
    —             70  
 
                                                                               
                  71  
Grand Total Gross Inventory Availability
    —       —       —       —       —       —       —       —       —       —  
    —            

 

--------------------------------------------------------------------------------

 

EXHIBIT D
FORM OF PERFECTION CERTIFICATE
     Reference is hereby made to (i) the Security Agreement dated as of June 15,
2007 (as such Security Agreement may be amended, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement”),
among International Truck and Engine Corporation, a Delaware corporation
(“ITEC”), IC Corporation, an Arkansas corporation (“IC”), SST Truck Company LP,
a Delaware limited partnership (“SST”), IC of Oklahoma, LLC, a Delaware limited
liability company (“ICO”), International Diesel of Alabama, LLC, a Delaware
limited liability company (“IDA”, and together with ITEC, IC, SST and ICO, the
“Borrowers”), Bank of America, N.A. (“BofA” and, in its capacity as collateral
agent for the Lenders (as defined below), the “Collateral Agent”), and Credit
Suisse (“CS”) and, in its capacity as administrative agent for the Lenders (as
defined below), the “Administrative Agent”, and together with the Collateral
Agent, the “Agents”); and (ii) the ABL Credit Agreement dated as of June 15,
2007 (as such ABL Credit Agreement may be amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among, inter alia, ITEC, IC, SST, ICO, IDA, each Lender party thereto from time
to time (the “Lenders”), the Administrative Agent and the Collateral Agent.
Capitalized terms used herein and not otherwise defined have the respective
meanings assigned in the Security Agreement.
     Each of the undersigned hereby certifies, solely in such person’s capacity
as an officer and not individually, to the Collateral Agent as follows as of the
date hereof:
     1. Names. (a) The exact legal name of each of Borrower, as such name
appears in its respective certificate of incorporation or certificate of
formation, is as set forth in Schedule 1(a) hereto. Each Borrower is (i) the
type of entity disclosed next to its name in Schedule 1(a) and (ii) a registered
organization except to the extent otherwise disclosed in Schedule 1(a) . Also
set forth in Schedule 1(a) is the respective organizational identification
number, of each Borrower that is a registered organization, the Federal Taxpayer
Identification Number of each Borrower and the state of formation of each
Borrower.
     (b) Set forth in Schedule 1(b) hereto is each other corporate or
organizational name (if any) that each Borrower has had [On the Closing Date: in
the past year] [Subsequent to the Closing Date: since the date of its last
Perfection Certificate delivered to the Collateral Agent], together with the
date of the relevant name change, and attached to such schedule are all amended
certificates of incorporation or certificates of formation and any attachments
thereto filed with the relevant state authority or other related corporate
documents.
     (c) Set forth in Schedule 1(c) hereto is a list of any other business or
organization to which any Borrower became the successor by merger,
consolidation, acquisition, change in form, nature or jurisdiction of
organization or otherwise, [On the Closing Date: in the past year] [Subsequent
to the Closing Date: since the date of its last Perfection Certificate delivered
to the Collateral Agent] and attached to such schedule are all certificates of
merger and any attachments thereto filed by any Borrower with the relevant state
authority. Also set forth in Schedule 1(c) is the information required by
Section 1 of this certificate for any other business or organization to which
ITEC, IC, SST, ICO and IDA became the successor by merger, consolidation,
acquisition, change in form, nature or jurisdiction of organization or
otherwise, [On the Closing Date: in the past year] [Subsequent to the Closing
Date: since the date of its last Perfection Certificate delivered to the
Collateral Agent] and attached to such schedule are all related certificates of
merger and any attachments thereto filed with the relevant state authority.
Form of ITEC ABL Perfection Certificate

Ex. D - 1

--------------------------------------------------------------------------------

 

2. Current Locations. (a) The chief executive office of each Borrower is located
at the respective address for each set forth in Schedule 2(a) hereto.
     (b) Attached hereto as Schedule 2(b) hereto is a list that includes all
locations (other than locations where Collateral is stored for repair) where
each Borrower maintains any material books or records relating to any
Collateral.
     (c) Set forth in Schedule 2(c) hereto are all other locations where each
Borrower maintains any of the Collateral consisting of inventory not identified
above (with an aggregate value in excess of $5.0 million at any one location).
     (d) Set forth in Schedule 2(d) hereto are the names and addresses of all
persons or entities, other than the Borrowers, such as lessees, consignees,
warehousemen or purchasers of chattel paper, which have possession of any of the
Collateral consisting of Instruments or Chattel Paper (with an aggregate value
in excess of $1.0 million at any one location) or Inventory (with an aggregate
value in excess of $5.0 million at any one location).
3. Good Standing. Attached hereto as Schedule 3 are all of the good standing
certificates of each of the Borrowers dated within 45 days of the date hereof
from the relevant state authority.
4. File Search Reports. The file search reports and financing statements and
other filings attached hereto as Schedule 4 include the reports of file searches
conducted within 45 days of the date hereof by the Borrowers, and related copies
of each financing statement or other filing identified in such file search
reports from the applicable Uniform Commercial Code filing offices (a) in each
jurisdiction identified in Section 1(a) or Section 2 with respect to each legal
name set forth in Section 1, and (b) in each jurisdiction described in
Schedule 1(c) relating to any of the transactions described in Schedule 1(c)
with respect to each legal name of the person or entity from which such Borrower
purchased or otherwise acquired any of the Collateral or merged or consolidated
with or acquired (except to the extent provided to the Collateral Agent at the
time of such merger, consolidation or acquisition).
5. UCC Filings. (a) Attached hereto as Schedule 5(a) are copies of UCC-1
financing statements containing the indications of the Collateral, which are to
be filed in the filing offices in the jurisdictions identified in Schedule 6
hereto.
     (b) Attached as Schedule 5(b) are copies of the UCC-3 financing statement
amendments, which are to be filed in the filing offices in the jurisdictions
identified in Schedule 6 hereto.
6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule setting
forth, with respect to the filings described in Section 5 above, each filing and
the filing office in which such filing is to be made.
7. Pledged Accounts. Attached hereto as Schedule 7 is a true and complete list
of all Pledged Accounts (as defined in the Security Agreement) maintained by the
Borrowers.
8. Counterparts. This Perfection Certificate may be executed in two or more
counterparts, each of which shall constitute an original but all of which, when
taken together, shall constitute but one Perfection Certificate. Delivery of a
counterpart by facsimile or pdf electronic transmission shall constitute
delivery of an original.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
Form of ITEC ABL Perfection Certificate

Ex. D - 2

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate as
of this 15th day of June, 2007.

            INTERNATIONAL TRUCK AND ENGINE CORPORATION
      By:           Name:           Title:           IC CORPORATION
      By:           Name:           Title:           SST TRUCK COMPANY LP
      By:           Name:           Title:           IC OF OKLAHOMA, LLC
      By:           Name:           Title:           INTERNATIONAL DIESEL OF
ALABAMA, LLC
      By:           Name:           Title:        

Form of ITEC ABL Perfection Certificate

 

--------------------------------------------------------------------------------

 

Schedule 1(a)
Exact legal name of each Borrower, as such name appears in its respective
certificate of incorporation or
certificate of formation, type of entity, organizational identification number,
Federal Taxpayer
Identification Number and the state of formation
Form of ITEC ABL Perfection Certificate

Ex. D - 4

--------------------------------------------------------------------------------

 

Schedule 1(b)
Corporate or organizational name that each Borrower has had [On the Closing
Date: in the past year]
[Subsequent to the Closing Date: since the date of its last Perfection
Certificate delivered to the Collateral
Agent], together with the date of the relevant change
Form of ITEC ABL Perfection Certificate

Ex. D - 5

--------------------------------------------------------------------------------

 

Schedule 1(c)
List of all other names used by each Borrower, or any other business or
organization to which any
Borrower became the successor by merger, consolidation or otherwise, [On the
Closing Date: in the past
year] [Subsequent to the Closing Date: since the date of its last Perfection
Certificate delivered to the
Collateral Agent]
Form of ITEC ABL Perfection Certificate

Ex. D - 6

--------------------------------------------------------------------------------

 

Schedule 2(a)
Chief Executive Offices of each Borrower
Form of ITEC ABL Perfection Certificate

Ex. D - 7

--------------------------------------------------------------------------------

 

Schedule 2(b)
Locations of material books or records relating to any Collateral
Form of ITEC ABL Perfection Certificate

Ex. D - 8

--------------------------------------------------------------------------------

 

Schedule 2(c)
All other locations where the Borrowers maintain Collateral with an aggregate
value in excess of $5.0
million at any one location
Form of ITEC ABL Perfection Certificate

Ex. D - 9

--------------------------------------------------------------------------------

 

Schedule 2(d)
Details of all persons other than the Borrowers in possession or intended to
have possession of any
Collateral consisting of Instruments or Chattel Paper (with an aggregate value
in excess of $1.0 million at
any one location) or Inventory (with an aggregate value in excess of
$5.0 million at any one location)
Form of ITEC ABL Perfection Certificate

Ex. D - 10

--------------------------------------------------------------------------------

 

Schedule 3
Good standing certificates of each Borrower
Form of ITEC ABL Perfection Certificate

Ex. D - 11

--------------------------------------------------------------------------------

 

Schedule 4
File search reports, financing statements and other filings
Form of ITEC ABL Perfection Certificate

Ex. D - 12

--------------------------------------------------------------------------------

 

Schedule 5(a)
UCC-1 financing statements
Form of ITEC ABL Perfection Certificate

Ex. D - 13

--------------------------------------------------------------------------------

 

Schedule 5(b)
UCC-3 financing statement amendments
Form of ITEC ABL Perfection Certificate

Ex. D - 14

--------------------------------------------------------------------------------

 

Schedule 6
Filings and the relevant Filing Office
Form of ITEC ABL Perfection Certificate

Ex. D - 15

--------------------------------------------------------------------------------

 

Schedule 7
Pledged Accounts
Form of ITEC ABL Perfection Certificate

Ex. D - 16

--------------------------------------------------------------------------------

 

EXHIBIT E
FORM OF LETTER OF CREDIT REQUEST
[Applicable Issuing Bank],1
as Issuing Bank

Attention:   [Name]
[Address]
Fax: [•]

with a copy to:   Credit Suisse,
as Administrative Agent for the Lenders referred to below

Attention:   Agency Group
Eleven Madison Avenue
New York, NY 10010
Fax: (212) 325-8304

[Date]
Ladies and Gentlemen:
     We hereby request that [•]2, as an Issuing Bank, in its individual
capacity, issue a [Standby][Commercial] Letter of Credit on [•]3, which Letter
of Credit shall be denominated in United States Dollars, shall be in the
aggregate amount of [•]4 and shall be for the account of [•]5. For the purposes
of this Letter of Credit Request, unless otherwise defined herein, all
capitalized terms used herein and defined in the ABL Credit Agreement dated as
of June 15, 2007 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among, inter alia,
International Truck and Engine Corporation, a Delaware corporation (“ITEC”), IC
Corporation, an Arkansas corporation (“IC”), SST Truck Company LP, a Delaware
limited partnership (“SST”), IC of Oklahoma, LLC, a Delaware limited liability
company (“ICO”), International Diesel of Alabama, LLC (“IDA” and, together with
ITEC, IC, SST and ICO, each a “Borrower” and collectively, the “Borrowers”), the
Lenders from time to time party hereto (the “Lenders”), Credit Suisse, as
administrative agent for the Lenders (“Credit Suisse” or, together with any
successor administrative agent appointed pursuant hereto, in such capacity, the
“Administrative Agent”) and Bank of America, N.A., as collateral agent for the
Lenders (“BofA” or, together with any successor collateral agent appointed
pursuant hereto, in such capacity, the “Collateral Agent” and, together with the
Administrative Agent, the “Agents”), shall have the respective meaning assigned
to such terms in
 

1   Insert name and address of the applicable Issuing Bank.   2   Insert name of
the applicable Issuing Bank.   3   Insert date of issuance, which must be a
Business Day.   4   Insert aggregate initial amount of the Letter of Credit.   5
  Insert name of account party, which must be the Borrower or, so long as the
Borrower is a joint and several co-applicant, a Subsidiary of the Borrower.

Form of ITEC ABL Letter of Credit Request

Ex. E-1

--------------------------------------------------------------------------------

 

the Credit Agreement. The beneficiary of the requested Letter of Credit is [l]6,
and such Letter of Credit will have a stated expiration date of [l]7.
 

6   Insert name and address of beneficiary.   7   Date may not be later than the
date referred to in Section 2.06(c) of the Credit Agreement.

Form of ITEC ABL Letter of Credit Request

Ex. E-2

--------------------------------------------------------------------------------

 

            INTERNATIONAL TRUCK AND ENGINE
CORPORATION
      By:           Name:           Title:        

Form of ITEC ABL Letter of Credit Request

Ex. E-3

--------------------------------------------------------------------------------

 

EXHIBIT F
FORM OF BORROWING REQUEST
Credit Suisse,
as Administrative Agent for the Lenders referred to below
Eleven Madison Avenue
New York, NY 10010
Attention: Agency Group
[l], 200[l]1
Ladies and Gentlemen:
     Reference is made to the ABL Credit Agreement dated as of June 15, 2007,
among, inter alia, International Truck and Engine Corporation, a Delaware
corporation (“ITEC”), IC Corporation, an Arkansas corporation (“IC”), SST Truck
Company LP, a Delaware limited partnership (“SST”), IC of Oklahoma, LLC, a
Delaware limited liability company (“ICO”), International Diesel of Alabama, LLC
(“IDA” and, together with ITEC, IC, SST and ICO, each a “Borrower” and
collectively, the “Borrowers”), the Lenders from time to time party hereto (the
“Lenders”), Credit Suisse, as administrative agent for the Lenders (“Credit
Suisse” or, together with any successor administrative agent appointed pursuant
hereto, in such capacity, the “Administrative Agent”) and Bank of America, N.A.,
as collateral agent for the Lenders (“BofA” or, together with any successor
collateral agent appointed pursuant hereto, in such capacity, the “Collateral
Agent” and, together with the Administrative Agent, the “Agents”) (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”). Terms defined in the Credit Agreement are used herein with
the same meanings.
     The undersigned hereby gives you notice pursuant to Section 2.03 of the
Credit Agreement that it requests a Borrowing under the Credit Agreement, and in
that connection sets forth below the terms on which such Borrowing is requested
to be made:

             
(A)
  Date of Borrowing        
 
  (which shall be a Business Day)  
 
   
 
           
(B)
  Principal Amount of Borrowing2        
 
     
 
   
 
           
(C)
  Type of Borrowing3        
 
     
 
   

 

1   Must be notified in writing or by telephone (with such telephonic
notification to be confirmed promptly in writing by hand delivery, facsimile or
a “pdf” electronic transmission) (i) in the case of a LIBOR Borrowing, not later
than 2:00 p.m., New York City time, three (3) Business Days (or, in the case of
a LIBOR Borrowing to be made on the Closing Date, two (2) Business Days) before
the date of the proposed Borrowing or (ii) in the case of an ABR Borrowing, not
later than 11:00 a.m., New York City time, on the date of the proposed
Borrowing.   2   Not less than the minimum principal amount as indicated in
Section 2.02(c) and in an integral multiple as indicated therein.   3   Specify
a LIBOR Borrowing or an ABR Borrowing.

Form of ITEC ABL Borrowing Request

Ex. F-1

--------------------------------------------------------------------------------

 

             
(D)
  Interest Period and the last day thereof (in the case of a LIBOR Borrowing)4  
     
 
     
 
   
 
           
(E)
  Account Number and Location  
 
   

            [INTERNATIONAL TRUCK AND ENGINE CORPORATION]
[IC CORPORATION]
[SST TRUCK COMPANY LP]
[IC OF OKLAHOMA, LLC]
[INTERNATIONAL DIESEL OF OKLAHOMA, LLC]
      By:           Name:           Title:        

 

4   The initial Interest Period applicable to a LIBOR Borrowing shall be subject
to the definition of “Interest Period”.

Form of ITEC ABL Borrowing Request

Ex. F-2

--------------------------------------------------------------------------------

 

EXHIBIT G
FORM OF PROMISSORY NOTE

      $[     ]   New York, New York
[l], 200[l]

     FOR VALUE RECEIVED, the undersigned, INTERNATIONAL TRUCK AND ENGINE
CORPORATION, a Delaware corporation (the “Borrower”), hereby promises to pay to
[     ] (the “Lender”) or its registered assigns, at the office of Credit Suisse
(the “Administrative Agent”) at [Eleven Madison Avenue, New York, New York
10010], on the dates and in the amounts set forth in the ABL Credit Agreement
dated as of June 15, 2007 (as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among International Truck and Engine Corporation, a Delaware corporation
(“ITEC”), IC Corporation, an Arkansas corporation (“IC”), SST Truck Company, LP,
a Delaware limited partnership (“SST”), IC of Oklahoma, LLC, a Delaware limited
liability company (“ICO”), International Diesel of Oklahoma, a Delaware limited
liability company (“IDA” and, together with ITEC, IC, SST and ICO, each a
“Borrower” and collectively, the “Borrowers”), the Lenders (as hereinafter
defined) from time to time party hereto, Credit Suisse, as administrative agent
for the Lenders hereunder (“Credit Suisse” or, together with any successor
administrative agent appointed pursuant hereto, in such capacity, the
“Administrative Agent”), Bank of America, N.A., as collateral agent for the
Lenders hereunder (“BofA” or, together with any successor collateral agent
appointed pursuant hereto, in such capacity, the “Collateral Agent”), Banc of
America Securities LLC (“BAS”) and JPMorgan Chase Bank, N.A. (“JPM Bank”), as
co-syndication agents (in such capacity, each a “Syndication Agent”), Credit
Suisse Securities (USA) LLC (“CS Securities”), BAS and J.P. Morgan Securities
Inc. (“JPMS”), as joint lead bookrunners (in such capacity, each a
“Bookrunner”), CS Securities and BAS, as joint lead arrangers (in such capacity,
each an “Arranger”), and Wachovia Capital Finance Corporation (Central)
(“Wachovia”) and General Electric Capital Corporation (“GECC”) as
co-documentation agents (in such capacity, each a “Documentation Agent”), in
lawful money of the United States of America in immediately available funds, the
aggregate unpaid principal amount of all Loans made by the Lender to the
Borrower pursuant to the Credit Agreement and to pay interest from the date of
such Loans on the principal amount thereof from time to time outstanding, in
like funds, at said office, at the rate or rates per annum and payable on the
dates provided in the Credit Agreement. Terms used but not defined herein shall
have the meanings assigned to them in the Credit Agreement.
     The Borrower promises to pay interest, on demand, on any overdue principal
and, to the extent permitted by law, overdue interest from the due dates at a
rate or rates provided in the Credit Agreement.
     The Borrower hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder hereof of any of
its rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any other instance.
     All borrowings evidenced by this promissory note and all payments and
prepayments of the principal hereof and interest hereon and the respective dates
thereof shall be
Form of ITEC ABL Promissory Note

Ex. G-1

--------------------------------------------------------------------------------

 

endorsed by the holder hereof on the schedules attached hereto and made a part
hereof or on a continuation thereof which shall be attached hereto and made a
part hereof, or otherwise recorded by such holder in its internal records;
provided, however, that the failure of the holder hereof to make such a notation
or any error in such notation shall not affect the obligations of the Borrower
under this Note.
     This promissory note is one of the promissory notes referred to in the
Credit Agreement that, among other things, contains provisions for the
acceleration of the maturity hereof upon the happening of certain events, for
optional and mandatory prepayment of the principal hereof prior to the maturity
hereof and for the amendment or waiver of certain provisions of the Credit
Agreement, all upon the terms and conditions therein specified. This promissory
note is entitled to the benefit of the Credit Agreement and is guaranteed and
secured as provided therein and in the other Loan Documents referred to in the
Credit Agreement. THIS PROMISSORY NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

            INTERNATIONAL TRUCK AND ENGINE
CORPORATION
      By:           Name:           Title:        

Form of ITEC ABL Promissory Note

Ex. G-2

--------------------------------------------------------------------------------

 

Schedule A to Note
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS

                          Date   Amount of ABR
Loans   Amount Converted
to ABR Loans   Amount of
Principal of ABR
Loans Repaid   Amount of ABR
Loans Converted to
LIBO Rate Loans   Unpaid Principal
Balance of ABR
Loans   Notation Made By                                                        
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
     

Form of ITEC ABL Promissory Note

Ex. G-3

--------------------------------------------------------------------------------

 

Schedule B to Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF LIBO RATE LOANS

                          Date   Amount of LIBO
Rate Loans   Amount Converted
to LIBO Rate
Loans   Interest Period and
Adjusted LIBO
with Respect
Thereto   Amount of
Principal of LIBO
Rate Loans Repaid   Unpaid Principal
Balance of LIBO
Rate Loans   Notation Made By                                                  
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
           

Form of ITEC ABL Promissory Note

Ex. G-4

--------------------------------------------------------------------------------

 

EXHIBIT H
FORM OF SECURITY AGREEMENT
[Circulated Separately]
Form of ITEC ABL Security Agreement

Ex. H-1

--------------------------------------------------------------------------------

 

EXECUTION COPY
 
SECURITY AGREEMENT
Dated as of June 15, 2007
Among
INTERNATIONAL TRUCK AND ENGINE CORPORATION,
IC CORPORATION,
SST TRUCK COMPANY LP,
IC OF OKLAHOMA, LLC,
and
INTERNATIONAL DIESEL OF ALABAMA, LLC
as Grantors,
CREDIT SUISSE,
as Administrative Agent
and
BANK OF AMERICA, N.A.,
as Collateral Agent
 
ITEC ABL Security Agreement

 

--------------------------------------------------------------------------------

 

Table of Contents

              Page  
Article I DEFINITIONS
    1  
 
       
Section 1.1. Terms Defined in Credit Agreement
    1  
 
       
Section 1.2. Terms Defined in UCC
    1  
 
       
Section 1.3. Definitions of Certain Terms Used Herein
    1  
 
       
Article II GRANT OF SECURITY INTEREST
    3  
 
       
Article III REPRESENTATIONS AND WARRANTIES
    4  
 
       
Section 3.1. Title, Perfection and Priority
    4  
 
       
Section 3.2. Pledged Accounts Information
    4  
 
       
Section 3.3. Accounts and Chattel Paper
    4  
 
       
Section 3.4. Inventory
    5  
 
       
Section 3.5. No Financing Statements, Security Agreements
    5  
 
       
Section 3.6. Pledged Collateral
    5  
 
       
Section 3.7. Perfection Certificate
    6  
 
       
Article IV COVENANTS
    6  
 
       
Section 4.1. General
    6  
 
       
Section 4.2. Receivables
    8  
 
       
Section 4.3. Inventory Count; Inventory Reporting System
    9  
 
       
Section 4.4. Delivery of Instruments, Chattel Paper and Documents
    9  
 
       
Section 4.5. Exercise of Rights in Pledged Collateral
    9  
 
       
Section 4.6. No Interference
    9  
 
       
Section 4.7. Insurance
    9  
 
       
Section 4.8. Collateral Access Agreement and Certain Payments
    10  
 
       
Article V REMEDIES
    10  

ITEC ABL Security Agreement

 

--------------------------------------------------------------------------------

 

              Page  
Section 5.1. Remedies
    10  
 
       
Section 5.2. Grantor’s Obligations Upon Default
    12  
 
       
Article VI ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY
    12  
 
       
Section 6.1. Account Verification
    12  
 
       
Section 6.2. Authorization for Secured Party to Take Certain Action
    12  
 
       
Section 6.3. PROXY
    13  
 
       
Section 6.4. NATURE OF APPOINTMENT; LIMITATION OF DUTY
    13  
 
       
Article VII GENERAL PROVISIONS
    14  
 
       
Section 7.1. Waivers
    14  
 
       
Section 7.2. Limitation on Collateral Agent’s and Secured Party’s Duty with
Respect to the Collateral
    14  
 
       
Section 7.3. Compromises and Collection of Collateral
    15  
 
       
Section 7.4. Secured Party Performance of Debtor Obligations
    15  
 
       
Section 7.5. Specific Performance of Certain Covenants
    15  
 
       
Section 7.6. Dispositions Not Authorized
    16  
 
       
Section 7.7. No Waiver; Amendments; Cumulative Remedies
    16  
 
       
Section 7.8. Limitation by Law; Severability of Provisions
    16  
 
       
Section 7.9. Reinstatement
    16  
 
       
Section 7.10. Benefit of Agreement
    16  
 
       
Section 7.11. Survival of Representations
    17  
 
       
Section 7.12. Expenses
    17  
 
       
Section 7.13. Additional Borrowers
    17  
 
       
Section 7.14. Headings
    17  
 
       
Section 7.15. Termination or Release
    17  
 
       
Section 7.16. Entire Agreement
    18  
 
       
Section 7.17. CHOICE OF LAW
    18  

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              Page  
Section 7.18. CONSENT TO JURISDICTION
    18  
 
       
Section 7.19. WAIVER OF JURY TRIAL
    18  
 
       
Section 7.20. Indemnity
    18  
 
       
Section 7.21. Counterparts
    19  
 
       
Article VIII NOTICES
    19  
 
       
Section 8.1. Sending Notices
    19  
 
       
Section 8.2. Change in Address for Notices
    19  
 
       
Article IX THE AGENT
    19  
 
       
Section 9.1. The Collateral Agent
    19  
 
       
Schedules
       
 
       
Schedule 4.8 — Leased locations for Collateral Access Agreements
       
 
       
Exhibits
       
 
       
Exhibit A — Offices in which financing statements and Security Agreements have
been filed
       
Exhibit B — Details of Pledged Accounts
       
Exhibit C — Form of Amendment
       
Exhibit D — Form of Perfection Certificate
       
Exhibit E — Form of Supplement
       

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SECURITY AGREEMENT
          SECURITY AGREEMENT (as it may be amended, amended and restated,
supplemented or otherwise modified from time to time, this “Security
Agreement”), dated as of June 15, 2007, among INTERNATIONAL TRUCK AND ENGINE
CORPORATION, a Delaware corporation (“ITEC” or the “Administrative Borrower”),
IC CORPORATION, an Arkansas corporation (“IC”), SST TRUCK COMPANY LP, a Delaware
limited partnership (“SST”), IC OF OKLAHOMA, LLC, a Delaware limited liability
company (“ICO”), INTERNATIONAL DIESEL OF ALABAMA, LLC, a Delaware limited
liability company (“IDA”, and together with ITEC, IC, SST and ICO, the
“Borrowers”), BANK OF AMERICA, N.A. (“BofA”), as collateral agent for the
lenders party to the Credit Agreement referred to below (in such capacity, the
“Collateral Agent”), and CREDIT SUISSE, as administrative agent for the lenders
party to the Credit Agreement referred to below (in such capacity, the
“Administrative Agent”, and together with the Collateral Agent, the “Agents”).
PRELIMINARY STATEMENT
          Contemporaneously with their execution and delivery of this Security
Agreement, the Grantors and the Agents are entering into the ABL Credit
Agreement, dated as of the date hereof, among, inter alia, the Borrowers, the
Lenders (as defined therein) and the Agents, which ABL Credit Agreement provides
for an inventory-secured, asset-based revolving credit facility in an aggregate
principal amount at any time outstanding not in excess of $200,000,000 (such ABL
Credit Agreement, as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”). The Borrowers are entering
into this Security Agreement in order to induce the Lenders to enter into and
extend credit to the Borrowers under the Credit Agreement, and to secure the
Secured Obligations (as defined in the Credit Agreement) created thereunder.
          ACCORDINGLY, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
     Section 1.1. Terms Defined in Credit Agreement. All capitalized terms used
herein and not otherwise defined shall have the meanings ascribed to them in the
Credit Agreement.
     Section 1.2. Terms Defined in UCC. Terms defined in the UCC that are not
otherwise defined in this Security Agreement or the Credit Agreement are used
herein as defined in the UCC.
     Section 1.3. Definitions of Certain Terms Used Herein. As used in this
Security Agreement, in addition to the terms defined in the preamble and
Preliminary Statement above, the following terms shall have the following
meanings:
          “Account” shall have the meaning set forth in Article 9 of the UCC.
          “Article” means a numbered article of this Security Agreement, unless
another document is specifically referenced.
          “Chattel Paper” shall have the meaning set forth in Article 9 of the
UCC.
          “Collateral” shall have the meaning set forth in Article II hereof.
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     “Collateral Access Agreement” means a landlord waiver or other agreement,
in such form as shall be reasonably satisfactory to the Collateral Agent and the
Borrowers, between the Collateral Agent and any third party (including any
bailee, consignee, customs broker, or other similar Person) in possession of any
Collateral or any landlord of any premises where any Collateral is located, as
such landlord waiver or other agreement may be amended, restated, or otherwise
modified from time to time.
     “Collateral Report” means any certificate (including, without limitation,
any Borrowing Base Certificate, Compliance Certificate or Perfection
Certificate), report or other document delivered by any Grantor to any Agent
with respect to the Collateral pursuant to any Loan Document.
     “Control” shall have the meaning set forth in Article 8 or, if applicable,
in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.
     “Deposit Account” shall have the meaning set forth in Article 9 of the UCC.
     “Document” shall have the meaning set forth in Article 9 of the UCC.
     “Exhibit” refers to a specific exhibit to this Security Agreement, unless
another document is specifically referenced.
     “Export Trucks” means any trucks that are manufactured outside of the
United States and sold to any Borrower for the purpose of resale by such
Borrower to customers, distributors or dealers located outside of the United
States.
     “General Intangible” shall have the meaning set forth in Article 9 of the
UCC.
     “Goods” shall have the meaning set forth in Article 9 of the UCC.
     “Grantors” means each of the Borrowers, including any additional Borrowers
which may become parties to the Credit Agreement, pursuant to the terms thereof.
     “Instrument” shall have the meaning set forth in Article 9 of the UCC.
     “Inventory” shall have the meaning set forth in Article 9 of the UCC,
provided that Inventory consisting of Export Trucks shall not be included.
     “Investment Property” shall have the meaning set forth in Article 9 of the
UCC.
     “MIA Receivables” means any receivables generated from the sale of
Collateral and required to be sold pursuant to, and in accordance with, the
terms of any Master Intercompany Agreement.
     “Payment Intangible” shall have the meaning set forth in Article 9 of the
UCC.
     “Perfection Certificate” means a certificate, substantially in the form of
Exhibit D hereto, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by a Responsible Officer of each
Borrower.
     “Pledged Accounts” means, collectively, the LC Collateral Account, the
Blocked Cash Account and the Collection Account.
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          “Pledged Collateral” means all Instruments, Securities and other
Investment Property owned by any Grantor, whether or not physically delivered to
the Collateral Agent pursuant to this Security Agreement.
          “Receivables” means the Accounts, Chattel Paper, Documents, Investment
Property, Instruments and any other rights or claims to receive money that are
General Intangibles arising from the sale or other disposition of Inventory, or
that are otherwise derived from the sale or other disposition of Inventory and
are included as Collateral.
          “Secured Parties” means (a) the Lenders, (b) each Agent, (c) each
Issuing Bank, (d) the Swingline Lender, (e) the beneficiaries of each
indemnification obligations undertaken by any Borrower under any Loan Document,
and (f) the successors and permitted assigns of each of the foregoing.
          “Security” shall have the meaning set forth in Article 8 of the UCC.
          “UCC” means the Uniform Commercial Code as in effect from time to time
in the State of New York.
          The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
GRANT OF SECURITY INTEREST
          (a) Each Grantor hereby pledges and grants to the Collateral Agent, on
behalf of and for the ratable benefit of the Secured Parties, a security
interest in all of its right, title and interest in, to and under all personal
property and other assets of the Grantors described below, whether now owned by
or owing to, or hereafter acquired by or arising in favor of such Grantor, and
regardless of where located (subject to clause(b) of this Article II, all of
which are collectively referred to as the “Collateral”), including:

  (i)   all Inventory;     (ii)   all Receivables;     (iii)   all Payment
Intangibles, Accounts, cash, Documents and Instruments, in each case arising
from the sale of MIA Receivables;     (iv)   all Pledged Accounts;     (v)   all
Investment Property held in any Pledged Account;     (vi)   all cash or Cash
Equivalents held in any Pledged Account; and     (vii)   all accessions to,
substitutions for and replacements, proceeds, insurance proceeds and products of
the foregoing, together with all books and records, customer lists, credit
files, computer files, programs, printouts and other computer materials and
records related thereto and any General Intangibles at any time evidencing or
relating to any of the foregoing

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to secure the payment and performance of the Secured Obligations.
          (b) Notwithstanding the foregoing or anything herein to the contrary,
automatically upon the sale of any Receivables pursuant to a Master Intercompany
Agreement, any and all security interests in such Receivables granted hereunder
shall be immediately released and the term “Collateral” as used herein shall no
longer include any such Receivable; provided, that such release shall not be in
derogation or limitation of any rights in any other Collateral, including
Collateral described in clause (a)(iii) above (and such release shall be deemed
to be in exchange for Collateral described in clause (a)(iii) above).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
          The Grantors, jointly and severally, represent and warrant to the
Agents, for the benefit of the Secured Parties, that:
     Section 3.1. Title, Perfection and Priority. Each Grantor has good and
valid rights in or the power to transfer the Collateral and title to the
Collateral with respect to which it has purported to grant a security interest
hereunder, free and clear of all Liens except for Liens permitted under
Section 4.1(e), and has full power and authority to grant to the Collateral
Agent the security interest in such Collateral pursuant hereto. When financing
statements have been filed in the appropriate offices against such Grantor in
the locations listed on Exhibit A hereto, the Collateral Agent will have a fully
perfected first priority security interest in that Collateral in which a
security interest may be perfected by filing under the Uniform Commercial Code
in effect in the applicable jurisdiction, subject only to Liens permitted under
Section 4.1(e).
     Section 3.2. Pledged Accounts Information. The names of the account banks,
the account numbers and the other details with respect to the Pledged Accounts
are and will be correctly stated, at the time furnished, on Exhibit B hereto (as
amended from time to time).
     Section 3.3. Accounts and Chattel Paper.
          (a) As of the Closing Date, there is no Collateral consisting of
Chattel Paper, and all further references to Chattel Paper in this Section 3.3
shall be with respect to reporting requirements occurring subsequent to the
Closing Date.
          (b) Except as may be disclosed on the most recent Collateral Report,
(i) all Accounts represent bona fide sales of Inventory or rendering of services
to Account Debtors in the ordinary course of the applicable Grantor’s business
and, unless the procedures set forth in Section 4.1(c)(ii) have been complied
with, are not evidenced by a judgment, Instrument or Chattel Paper; (ii) there
are no setoffs, claims or disputes existing or asserted with respect to any
Accounts referred to in such Collateral Report, except any setoff, claim or
dispute occurring in the ordinary course of business or except to the extent
notice has been provided pursuant to Section 4.2(c), and no Grantor has made any
agreement with any Account Debtor with respect to any material Account for any
extension of time for the payment thereof, any compromise or settlement for less
than the full amount thereof, any release of any Account Debtor from liability
therefor, or any deduction therefrom except a discount or allowance allowed by a
Grantor in the ordinary course of its business for prompt payment; and (iii) to
the knowledge of such Grantor, there are no facts, events or occurrences that in
any way impair the validity or enforceability (except as enforceability may be
limited by 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) thereof or could reasonably be expected to reduce the
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amount payable thereunder as shown on such Grantor’s books and records, with
respect to any material portion of the Collateral.
          (c) In addition, no payments have been or shall be made on any
Accounts except, from and after the date the Collection Account is established
in accordance with Section 5.11 of the Credit Agreement, payments delivered to
the Collection Account or the Blocked Cash Account.
     Section 3.4. Inventory. With respect to any Inventory scheduled or listed
on the most recent Collateral Report as of the date of such Collateral Report,
except as disclosed therein: (a) no Inventory (other than Inventory in transit)
is now, or shall at any time or times hereafter be stored at any other location
not set forth in the Perfection Certificate except as permitted by
Section 4.1(h), (b) the Grantors have good title to such Inventory and such
Inventory is not subject to any Lien or security interest or document whatsoever
except for the Lien granted to the Collateral Agent, for the benefit of the
Secured Parties, and except for other Liens permitted under Section 4.1(e),
(c) such Inventory is Eligible Inventory, (d) such Inventory which contains or
bears any intellectual property rights licensed to any Borrower by any Person
other than a Borrower is not subject to any licensing, patent, royalty,
trademark, trade name or copyright agreements with any third parties that would,
upon sale or other disposition of such Inventory by the Collateral Agent in
accordance with the terms hereof (i) infringe the rights of such licensor,
(ii) violate any contract with such licensor, or (iii) cause the Collateral
Agent to incur any liability with respect to payment of royalties other than
royalties incurred pursuant to sale of such Inventory under the current
licensing agreement relating thereto and (e) the sale or other disposition of
such Inventory (other than Inventory that is not material) by the Collateral
Agent following the occurrence and during the continuance of an Event of Default
shall not require the consent of any Person and shall not constitute a breach or
default under any contract or agreement to which such Inventory is subject.
     Section 3.5. No Financing Statements, Security Agreements. No financing
statement or security agreement describing all or any portion of the Collateral
that has not lapsed or been terminated naming a Grantor as debtor has been filed
or is of record in any jurisdiction except (a) for financing statements or
security agreements naming the Collateral Agent on behalf of the Secured Parties
as the secured party and (b) as permitted by Section 4.1(e) and 4.1(f).
     Section 3.6. Pledged Collateral.
          (a) As of the date hereof, the Perfection Certificate sets forth a
complete and accurate list of all of the Pledged Collateral. As of the date
hereof, each Grantor is the direct, beneficial owner and holder of record of the
Pledged Collateral listed in the Perfection Certificate as being owned by it,
free and clear of any Liens, except for the security interest granted to the
Collateral Agent for the ratable benefit of the Secured Parties hereunder and
nonconsensual Liens permitted under Section 4.1(e). Each Grantor further
represents and warrants that (i) each Grantor has provided all material relevant
information to the Collateral Agent so that the Collateral Agent may take steps
to perfect its security interest therein as a General Intangible, (ii) from and
after the date the Collection Account is established in accordance with
Section 5.11 of the Credit Agreement, all Pledged Collateral held by a
depository bank is covered by a control agreement among the applicable Grantor,
the depository bank and the Collateral Agent pursuant to which the Collateral
Agent has Control, and (iii) all Pledged Collateral that represents Indebtedness
owed to any Grantor to the best of such Grantor’s knowledge, has been duly
authorized, authenticated or issued and delivered by the issuer of such
Indebtedness, is the legal, valid and binding obligation of such issuer and such
issuer is not in default thereunder.
          (b) (i) None of the Pledged Collateral is or will be subject to any
contractual or other restriction of any material nature that might prohibit,
impair, delay or otherwise adversely affect the
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pledge of such Pledged Collateral hereunder, or the exercise by the Collateral
Agent of rights and remedies hereunder; (ii) no material consent, approval,
authorization, or other action by, and no giving of notice, filing with, any
governmental authority or any other Person is required for the pledge by the
Grantors of the Pledged Collateral pursuant to this Security Agreement or for
the execution, delivery and performance of this Security Agreement by the
Grantors, or for the exercise by the Collateral Agent of remedies in respect of
the Pledged Collateral provided for pursuant to this Security Agreement, except
for authorizations, approvals, actions, notices and filings which have been duly
obtained, taken, given or made and are in full force and effect, routine
renewals of existing licenses and permits of the Borrowers and their
subsidiaries in the ordinary course of business and such filings as may be
required under federal and state securities laws for purposes of disclosure.
     Section 3.7. Perfection Certificate. The information set forth in the
Perfection Certificate delivered on the date hereof is correct and complete in
all material respects as of the date hereof.
ARTICLE IV
COVENANTS
     From the date hereof, and thereafter until this Security Agreement is
terminated, each Grantor agrees that:
     Section 4.1. General.
          (a) Collateral Records. Each Grantor will maintain complete and
accurate books and records as is consistent with its practices as of the date
hereof in all material respects with respect to the Collateral, and furnish to
each Agent such reports required pursuant to the Credit Agreement relating to
the Collateral as such Agent shall from time to time reasonably request,
provided, however, that as to financial matters or matters based on financial
statements, the Agents and the Lenders hereby acknowledge that the existence of
the matters set forth in the Disclosure Filings and the results created by the
existence thereof shall not be deemed to constitute a misrepresentation
hereunder and this provision is subject in all respects to the provisions of the
last sentence of Section 1.04 of the Credit Agreement.
          (b) Authorization to File Financing Statements; Ratification. Each
Grantor hereby authorizes either Agent to file, and if requested will deliver to
the requesting Agent, all financing statements and other documents and take such
other actions as may from time to time be reasonably requested by such Agent in
order to maintain a first priority perfected security interest in and, if
applicable, Control (to the extent required by the terms hereof) of, the
Collateral. Any financing statement filed by any Agent may be filed in any
filing office in any appropriate Uniform Commercial Code jurisdiction and may
(i) indicate the Collateral by any description which reasonably approximates the
description contained in this Security Agreement, and (ii) contain any other
information required by part 5 of Article 9 of the UCC for the sufficiency or
filing office acceptance of any financing statement or amendment, including
whether the Grantor is an organization, the type of organization and any
organizational identification number issued to the Grantor. Each Grantor also
agrees to furnish any such information to either Agent promptly upon reasonable
request. Each Grantor also ratifies its authorization for each Agent to have
filed in any Uniform Commercial Code jurisdiction any initial financing
statements or amendments thereto if filed prior to the date hereof, upon
reasonable approval of such financing statements by the Administrative Borrower.
          (c) Further Assurances. (i) Each Grantor agrees to take any and all
reasonable actions necessary to defend title to the Collateral against all
persons and to defend the security interest of the Collateral Agent in the
Collateral and the priority thereof against any Lien not permitted under
Section 4.1(e).
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               (ii) Each Grantor agrees that from time to time, at the expense
of such Grantor, such Grantor will promptly execute and deliver, or otherwise
authenticate, all further instruments and documents, and take all further action
that the Collateral Agent may reasonably request, in order to perfect and
protect any pledge or security interest granted or purported to be granted by
such Grantor hereunder or to enable the Collateral Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral of such
Grantor. Without limiting the generality of the foregoing, each Grantor will
promptly with respect to Collateral of such Grantor: (1) at the request of the
Collateral Agent, mark conspicuously each Document included in Inventory, each
Chattel Paper included in Receivables, any other Documents and, at the request
of the Collateral Agent, each of its records pertaining to such Collateral with
a legend, in form and substance reasonably satisfactory to the Collateral Agent,
indicating that such Document, Chattel Paper or other Collateral is subject to
the security interest granted hereby; (2) if any such Collateral shall be
evidenced by a promissory note or other instrument or Chattel Paper valued in
excess of $1,000,000, promptly deliver and pledge to the Collateral Agent
hereunder such note or instrument or Chattel Paper duly indorsed and accompanied
by duly executed instruments of transfer or assignment, all in form and
substance reasonably satisfactory to the Collateral Agent; (3) file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Collateral
Agent may reasonably request, in order to perfect and preserve the security
interest granted or purported to be granted by such Grantor hereunder; and
(4) at the reasonable request of the Collateral Agent, in the circumstances
outlined in Section 5.01(e) of the Credit Agreement, promptly take all action to
ensure that the Collateral Agent’s security interest is noted on any certificate
of title related to any used truck Collateral which is evidenced by a
certificate of title.
          (d) Disposition of Collateral. No Grantor will sell, lease, transfer
or otherwise dispose of the Collateral except for sales, leases, transfers and
other dispositions of Inventory in the ordinary course of business and other
sales, leases, transfers and other dispositions permitted under Section 6.05 of
the Credit Agreement.
          (e) Liens. No Grantor will create, incur, or suffer to exist any Lien
on the Collateral except Liens permitted by Section 6.02 of the Credit
Agreement.
          (f) Other Financing Statements. No Grantor will authorize the filing
of any financing statement naming it as debtor covering all or any portion of
the Collateral, except to cover security interests as permitted by
Section 4.1(e). Until the termination of this Security Agreement pursuant to
Section 7.15, each Grantor acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with respect to any
financing statement naming the Collateral Agent as secured party without the
prior written consent of the Agents, subject to such Grantor’s rights under
Section 9-509(d)(2) of the UCC.
          (g) Change of Name, Etc. Each Grantor agrees to furnish to the
Collateral Agent prompt written notice of any change in: (i) such Grantor’s
name; (ii) the location of such Grantor’s chief executive office or its
principal place of business; (iii) such Grantor’s organizational legal entity
designation or jurisdiction of incorporation or formation; (iv) such Grantor’s
organizational identification number assigned to it by its jurisdiction of
incorporation or formation; or (v) the acquisition by such Grantor of any
material property for which additional filings or recordings are necessary to
perfect and maintain the Collateral Agent’s security interest therein (to the
extent perfection of the security interest in such property is required by the
terms hereof). Each Grantor agrees not to effect or permit any change referred
to in the preceding sentence unless all filings have been made under the Uniform
Commercial Code or other applicable law that are required in order for the
Collateral Agent to continue at all times following such change to have a valid,
legal and perfected, first priority security interest (subject to Liens
permitted under Section 4.1(e) that have priority by operation of applicable
law) in the Collateral for its benefit and the benefit of the other Secured
Parties.
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          (h) Locations of Collateral. No Grantor will maintain any Collateral
consisting of Inventory the aggregate value of which, at cost, is $5,000,000 or
more at any location other than those locations listed in the Perfection
Certificate or facilities purchased or leased in the United States by any
Grantor after the date hereof not in violation of the Credit Agreement, unless,
in the case of any U.S. location (other than a dealer or a location that is
owned by a Grantor and that is not subject to any mortgage) where any Collateral
consisting of Inventory the aggregate value of which, at cost, is $5,000,000 or
more is located, such Grantor shall promptly notify the Collateral Agent of such
new location.
          (i) Compliance with Terms. Each Grantor will perform and comply in all
material respects with all obligations in respect of the Collateral and all
material agreements relating to the Collateral to which it is a party or by
which it is bound, that would reasonably be expected to have a Material Adverse
Effect.
     Section 4.2. Receivables.
          (a) Certain Agreements on Receivables Collateral. Except to the extent
that notice has been provided as required by Section 4.2(c), no Grantor will
make or agree to make any material discount, credit, rebate or other reduction
in the original amount owing on a Receivable comprising Collateral or accept in
satisfaction of a Receivable comprising Collateral less than the original amount
thereof, other than in the ordinary course of business; provided that during the
continuance of an Event of Default, after notice from the Collateral Agent, the
Grantor will not make or agree to make any discount, credit, rebate or other
reduction in the original amount owing on a Receivable comprising Collateral or
accept in satisfaction of a Receivable comprising Collateral less than the
original amount thereof.
          (b) Collection of Receivables. Except as otherwise provided in this
Security Agreement, each Grantor will use commercially reasonable efforts to
collect and enforce, in the ordinary course of business, all amounts due or
hereafter due to such Grantor under the Receivables comprising Collateral.
          (c) Disclosure of Counterclaims on Receivables. If (other than in the
ordinary course of business) (i) any material discount, credit or agreement to
make a rebate or to otherwise reduce the amount owing on a material Receivable
comprising Collateral exists or (ii) if, to the knowledge of any Grantor, any
material dispute, setoff, claim, counterclaim or defense exists or has been
asserted or threatened in writing with respect to a material Receivable
comprising Collateral, the Grantors will promptly disclose such fact to the
Collateral Agent in writing.
          (d) Electronic Chattel Paper. If any Grantor at any time holds or
acquires an interest in any Electronic Chattel Paper or any “transferable
record”, as that term is defined in Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act (other than as shall constitute
MIA Receivables), or in Section 16 of the Uniform Electronic Transactions Act as
in effect in any relevant jurisdiction constituting Collateral, in each case
with a value in excess of $1,000,000, such Grantor shall promptly notify the
Collateral Agent thereof and, at the request of the Collateral Agent, shall take
such action as the Collateral Agent may reasonably request to vest in the
Collateral Agent Control under UCC Section 9-105 of such Electronic Chattel
Paper or control (to the extent the meaning of “control” has not been clearly
established under such provisions, “control” in this paragraph (c) to have such
meaning as the Collateral Agent shall in good faith specify in writing after
consultation with the Borrower) under Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or, as the case may be, Section
16 of the Uniform Electronic Transactions Act, as so in effect in such
jurisdiction, of such transferable record. The Collateral Agent agrees with such
Grantor that the Collateral Agent will arrange, pursuant to procedures
reasonably satisfactory to the Collateral Agent and so long as such
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procedures will not result in the Collateral Agent’s loss of Control or control,
as applicable, for the Grantor to make alterations to the Electronic Chattel
Paper or transferable record permitted under UCC Section 9-105 or, as the case
may be, Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or Section 16 of the Uniform Electronic Transactions Act for a
party in Control to allow without loss of Control or control, as applicable,
unless an Event of Default has occurred and is continuing or would occur after
taking into account any action by such Grantor with respect to such Electronic
Chattel Paper or transferable record.
     Section 4.3. Inventory Count; Inventory Reporting System. The Grantors
shall continue to conduct all cycle counts consistent with past practices or
other inventory control measures reasonably acceptable to the Collateral Agent,
and shall supply the Collateral Agent with mutually acceptable reports providing
reasonable detail of the results of such counts, reconciliations related thereto
and other reports on a monthly basis, under procedures to be mutually agreed by
the Collateral Agent and the Administrative Borrower, provided that the
Collateral Agent agrees that any inventory count measure consistent with
industry practice is acceptable. The Grantors will maintain a perpetual
inventory reporting system at all times.
     Section 4.4. Delivery of Instruments, Chattel Paper and Documents. Each
Grantor will (a) hold for the benefit of the Collateral Agent upon receipt and
promptly thereafter deliver to the Collateral Agent any Chattel Paper and
Instruments constituting Collateral received after the date hereof, in each case
with a value in excess of $1,000,000, (b) upon the Collateral Agent’s request,
deliver to the Collateral Agent, and thereafter hold for the benefit of the
Collateral Agent upon receipt and promptly deliver to the Collateral Agent any
Document (other than certificates of title with respect to Collateral except in
accordance with Section 5.01(e) of the Credit Agreement) evidencing or
constituting Collateral with a value in excess of $1,000,000, and (c) upon the
Collateral Agent’s reasonable request, deliver to the Collateral Agent a duly
executed amendment to this Security Agreement, in the form of Exhibit C hereto
(each, an “Amendment”), pursuant to which such Grantor will pledge any
additional Collateral to the extent required hereby or by the Credit Agreement.
Each Grantor hereby authorizes the Collateral Agent to attach each Amendment to
this Security Agreement and agrees that all additional collateral set forth in
such Amendments shall be considered to be part of the Collateral.
     Section 4.5. Exercise of Rights in Pledged Collateral Each Grantor shall be
entitled to receive and retain any and all interest, principal and other
distributions paid on or distributed in respect of the Pledged Collateral to the
extent and only to the extent that such interest, principal and other
distributions are permitted by, and otherwise paid or distributed in accordance
with, the terms and conditions of the Credit Agreement, the other Loan Documents
and applicable law; provided, however, that any non-cash distributions that
would constitute Pledged Collateral, whether received in exchange for Pledged
Collateral or any part thereof, or in redemption thereof, or as a result of any
merger, consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the Pledged
Collateral, and, if received by any Grantor, shall not be commingled by such
Grantor with any of its other funds or property but shall be held separate and
apart therefrom, shall be held for the benefit of the Secured Parties and shall
be promptly delivered to the Collateral Agent in the same form as so received
(with any necessary endorsement or instrument of assignment).
     Section 4.6. No Interference. Each Grantor agrees that it will not
interfere with any right, power and remedy of the Collateral Agent provided for
in this Security Agreement or now or hereafter existing at law or in equity or
by statute or otherwise, or the exercise or beginning of the exercise by the
Collateral Agent of any one or more of such rights, powers or remedies.
     Section 4.7. Insurance.
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          (a) In the event any Collateral is located in any area that has been
designated by the Federal Emergency Management Agency as a “Special Flood Hazard
Area”, the applicable Grantor shall purchase and maintain flood insurance on
such Collateral (including any personal property which is located on any real
property leased by such Loan Party within a “Special Flood Hazard Area”). The
amount of all insurance required by this Section shall at a minimum comply with
applicable law, including the Flood Disaster Protection Act of 1973, as amended.
All premiums on such insurance shall be paid when due by such Grantor, and
copies of the policies delivered to the Collateral Agent. If any Grantor fails
to obtain any insurance as required by this Section, the Collateral Agent at the
direction of the Required Lenders may obtain such insurance at the Borrower’s
expense. By purchasing such insurance, the Collateral Agent shall not be deemed
to have waived any Default arising from the Grantors’ failure to maintain such
insurance or pay any premiums therefor.
          (b) All insurance policies required under Section 5.09 of the Credit
Agreement shall name the Collateral Agent (for the benefit of the Collateral
Agent and the other Secured Parties) as an additional insured or as loss payee
with respect to the Collateral, as applicable, and shall contain loss payable
clauses, through endorsements in form and substance reasonably satisfactory to
the Collateral Agent.
     Section 4.8. Collateral Access Agreement and Certain Payments. The Grantors
shall use commercially reasonable efforts to obtain as soon as commercially
reasonable, Collateral Access Agreements from the lessor with respect to the
locations reflected on Schedule 4.8 hereto, comprising their leased parts
distribution centers, leased used trucks centers and leased manufacturing
plants. In addition, if any Grantor leases any other warehouse, distribution
facility or manufacturing plant after the Closing Date, such Grantor shall use
commercially reasonable efforts to promptly obtain a Collateral Access Agreement
for such leased warehouse, distribution facility or manufacturing plant. Except
as would not reasonably be expected to have a Material Adverse Effect, each
Grantor shall perform its obligations under all leases and other agreements with
respect to any such leased location or third-party warehouse where any
Collateral is or may be located.
ARTICLE V
REMEDIES
     Section 5.1. Remedies.
          (a) Upon the occurrence and during the continuance of an Event of
Default, the Collateral Agent may exercise any or all of the following rights
and remedies:
          (i) those rights and remedies provided in this Security Agreement, the
Credit Agreement, or any other Loan Document; provided, that this Section 5.1(a)
shall not be understood to limit any rights available to the Agents and the
Lenders prior to an Event of Default;
          (ii) those rights and remedies available to a secured party under the
UCC (whether or not the UCC applies to the affected Collateral) or under any
other applicable law (including, without limitation, any law governing the
exercise of a bank’s right of setoff or bankers’ Lien) when a debtor is in
default under a security agreement;
          (iii) give notice of sole control or any other instruction under any
blocked account or account control agreement (with respect to the Blocked Cash
Account and the
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Collection Account), Collateral Access Agreement or any other control or similar
agreement and take any action provided therein with respect to the applicable
Collateral;
          (iv) without notice (except as specifically provided in Section 7.1 or
elsewhere herein), demand or advertisement of any kind to any Grantor or any
other Person, enter the premises of any Grantor where any Collateral is located
(through self-help and without judicial process) to collect, receive, assemble,
process, appropriate, sell, lease, assign, grant an option or options to
purchase or otherwise dispose of, deliver, or realize upon, the Collateral or
any part thereof in one or more parcels at public or private sale or sales
(which sales may be adjourned or continued from time to time with or without
notice and may take place at such Grantor’s premises or elsewhere), for cash, on
credit or for future delivery without assumption of any credit risk, and upon
such other terms as the Collateral Agent may deem commercially reasonable; and
          (v) concurrently with written notice to the Grantors, transfer and
register in its name or in the name of its nominee the whole or any part of the
Pledged Collateral, to exercise all other rights as a holder with respect
thereto, to collect and receive all cash, interest, principal and other
distributions made thereon and to otherwise act with respect to the Pledged
Collateral as though the Collateral Agent was the outright owner thereof.
          (b) Each Grantor acknowledges and agrees that the compliance by the
Collateral Agent, on behalf of the Secured Parties, with any applicable state or
federal law requirements in connection with a disposition of the Collateral will
not be considered to adversely affect the commercial reasonableness of any sale
of the Collateral.
          (c) The Collateral Agent shall have the right upon any public sale or
sales and, to the extent permitted by law, upon any private sale or sales, to
purchase for the benefit of the Collateral Agent and the Secured Parties, the
whole or any part of the Collateral so sold, free of any right of equity
redemption, which equity redemption each Grantor hereby expressly releases.
          (d) Until the Collateral Agent is able to effect a sale, lease,
transfer or other disposition of Collateral, the Collateral Agent shall have the
right to hold or use Collateral, or any part thereof, to the extent that it
deems appropriate for the purpose of preserving Collateral or the value of the
Collateral. The Collateral Agent may, if it so elects, seek the appointment of a
receiver or keeper to take possession of Collateral and to enforce any of the
Collateral Agent’s remedies (for the benefit of the Collateral Agent and Secured
Parties), with respect to such appointment without prior notice or hearing as to
such appointment.
          (e) [Reserved].
          (f) Notwithstanding the foregoing, none of the Collateral Agent, any
other Agent or the Secured Parties shall be required to (i) make any demand
upon, or pursue or exhaust any of their rights or remedies against, the
Grantors, any other obligor, guarantor, pledgor or any other Person with respect
to the payment of the Secured Obligations or to pursue or exhaust any of their
rights or remedies with respect to any Collateral therefor or any direct or
indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the
Secured Obligations or to resort to the Collateral or any such guarantee in any
particular order, or (iii) effect a public sale of any Collateral.
          (g) Each Grantor recognizes that the Collateral Agent may be unable to
effect a public sale of any or all the Pledged Collateral and may be compelled
to resort to one or more private sales thereof. Each Grantor also acknowledges
that any private sale may result in prices and other terms
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less favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall not
be deemed to have been made in a commercially unreasonable manner solely by
virtue of such sale being private.
     Section 5.2. Grantor’s Obligations Upon Default. Upon the reasonable
request of the Collateral Agent after the occurrence and during the continuance
of an Event of Default, each Grantor will:
          (a) assemble and make available to the Collateral Agent the Collateral
and all books and records relating thereto at any place or places reasonably
specified by the Collateral Agent, whether at such Grantor’s premises or
elsewhere; and
          (b) permit the Collateral Agent, by the Collateral Agent’s
representatives and agents, to enter, occupy and use any premises where all or
any part of the Collateral, or the books and records relating thereto, or both,
are located, to take possession of all or any part of the Collateral or the
books and records relating thereto, or both, to remove all or any part of the
Collateral or the books and records relating thereto, or both, and to conduct
sales of the Collateral, without any obligation to pay any Grantor for such use
and occupancy.
ARTICLE VI
ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY
     Section 6.1. Account Verification. The Collateral Agent may (a) at any time
and from time to time, in the name of a nominee of the Collateral Agent or in
the name of any Grantor, and (b) upon substantially contemporaneous notice to
the Grantor, at any time and from time to time following the occurrence and
during the continuance of an Event of Default, in the Collateral Agent’s own
name, in the name of a nominee of the Collateral Agent or in the name of any
Grantor, communicate (by mail, telephone, facsimile or otherwise) with the
Account Debtors of such Grantor, parties to contracts with such Grantor and
obligors in respect of Instruments of such Grantor to verify with such Persons,
to the Collateral Agent’s satisfaction, the existence, amount, terms of, and any
other matter relating to, Accounts, Instruments, Chattel Paper, Payment
Intangibles and/or other Receivables that are Collateral.
     Section 6.2. Authorization for Secured Party to Take Certain Action.
          (a) Each Grantor irrevocably authorizes the Collateral Agent and
appoints the Collateral Agent as its attorney in fact (i) at any time and from
time to time in the sole discretion of the Collateral Agent (A) to execute on
behalf of such Grantor as debtor and to file financing statements necessary or
desirable in the Collateral Agent’s reasonable discretion to perfect and to
maintain the perfection and priority of the Collateral Agent’s security interest
in the Collateral, (B) to file a carbon, photographic or other reproduction of
this Security Agreement or any financing statement with respect to the
Collateral as a financing statement and to file any other financing statement or
amendment of a financing statement (which would not add new collateral or add a
debtor, except as otherwise provided for herein or in any other Loan Document)
in such offices as the Collateral Agent in its reasonable discretion deems
necessary or desirable to perfect and to maintain the perfection and priority of
the Collateral Agent’s security interest in the Collateral, and (C) to discharge
past due taxes, assessments, charges, fees or Liens on the Collateral (except
for such Liens as are permitted hereunder); (ii) at any time following the
occurrence and during the continuance of an Event of Default, (A) to endorse and
collect any cash proceeds of the Collateral and to apply the proceeds of any
Collateral received by the Collateral Agent to the Secured Obligations as
provided herein or in the Credit Agreement or any other Loan Document, (B) to
demand payment or enforce payment of the Receivables in the name of the
Collateral Agent or any Grantor and to endorse any and all checks, drafts, and
other instruments for the payment of
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money relating to the Receivables, (C) upon substantially contemporaneous notice
to such Grantor, to sign any Grantor’s name on any invoice or bill of lading
relating to the Receivables, drafts against any Account Debtor of such Grantor,
assignments and verifications of Receivables, (D) upon substantially
contemporaneous notice to such Grantor, to exercise all of any Grantor’s rights
and remedies with respect to the collection of the Receivables and any other
Collateral, (E) upon substantially contemporaneous notice to such Grantor, to
settle, adjust, compromise, extend or renew the Receivables, (F) to settle,
adjust or compromise any legal proceedings brought to collect Receivables,
(G) to prepare, file and sign any Grantor’s name on a proof of claim in
bankruptcy or similar document against any Account Debtor of such Grantor,
(H) to prepare, file and sign any Grantor’s name on any notice of Lien,
assignment or satisfaction of Lien or similar document in connection with the
Receivables, and (I) to change the address for delivery of mail addressed to any
Grantor to such address as the Collateral Agent may designate and to receive,
open and dispose of all mail addressed to such Grantor; and (iii) with 5
Business Days prior notice to such Grantor, to do all other acts and things
necessary to carry out the terms of this Security Agreement; and each Grantor
agrees to reimburse the Collateral Agent within 10 Business Days of written
demand for any reasonable payment made or any reasonable documented
out-of-pocket expense incurred by the Collateral Agent in connection with any of
the foregoing; provided that, this authorization shall not relieve any Grantor
of any of its obligations under this Security Agreement or under the Credit
Agreement.
          (b) All acts of said attorney or designee are hereby ratified and
approved by the Grantors. The powers conferred on the Collateral Agent, for the
benefit of the Collateral Agent and Secured Parties, under this Section 6.2 are
solely to protect the Collateral Agent’s interests in the Collateral and shall
not impose any duty upon the Collateral Agent or any Secured Party to exercise
any such powers.
     Section 6.3. PROXY. EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND
APPOINTS THE COLLATERAL AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN
SECTION 6.2 ABOVE) WITH RESPECT TO THE PLEDGED COLLATERAL, INCLUDING THE RIGHT
TO VOTE SUCH PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN
ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF
THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO
EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF
SUCH PLEDGED COLLATERAL WOULD BE ENTITLED. SUCH PROXY SHALL BE EFFECTIVE,
AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF
ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY
PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR AGENT
THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT.
          Section 6.4. NATURE OF APPOINTMENT; LIMITATION OF DUTY. THE
APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS
ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE
ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 7.15.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE COLLATERAL AGENT, NOR ANY
SECURED PARTY, NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT
OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE
LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT TO THE
EXTENT SUCH DAMAGES ARE ATTRIBUTABLE TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL
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FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO
EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR
CONSEQUENTIAL DAMAGES.
ARTICLE VII
GENERAL PROVISIONS
     Section 7.1. Waivers. Each Grantor hereby waives notice of the time and
place of any public sale or the time after which any private sale or other
disposition of all or any part of the Collateral may be made. To the extent such
notice may not be waived under applicable law, any notice made shall be deemed
reasonable if sent to the Grantors, addressed as set forth in Article VIII, at
least ten days prior to (a) the date of any such public sale or (b) the time
after which any such private sale or other disposition may be made. To the
maximum extent permitted by applicable law, each Grantor waives all claims,
damages, and demands against the Collateral Agent or any Secured Party arising
out of the repossession, retention or sale of the Collateral, except such as
arise solely out of the gross negligence or willful misconduct of the Collateral
Agent or such Secured Party as finally determined by a court of competent
jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and
irrevocably waives and relinquishes the benefit and advantage of, and covenants
not to assert against the Collateral Agent or any Secured Party, any valuation,
stay, appraisal, extension, moratorium, redemption or similar laws and any and
all rights or defenses it may have as a surety now or hereafter existing which,
but for this provision, might be applicable to the sale of any Collateral made
under the judgment, order or decree of any court, or privately under the power
of sale conferred by this Security Agreement, or otherwise. Except as otherwise
specifically provided herein, each Grantor hereby waives presentment, demand,
protest or any notice (to the maximum extent permitted by applicable law) of any
kind in connection with this Security Agreement or any Collateral.
     Section 7.2. Limitation on Collateral Agent’s and Secured Party’s Duty with
Respect to the Collateral. (a) The Collateral Agent shall have no obligation to
clean-up or otherwise prepare the Collateral for sale. The Collateral Agent and
each Secured Party shall use reasonable care with respect to the Collateral in
its possession or under its control. None of the Collateral Agent, any other
Agent or any Secured Party shall have any other duty as to any Collateral in its
possession or control or in the possession or control of any agent or nominee of
the Collateral Agent, any other Agent or such Secured Party, or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. To the extent that applicable law imposes duties on
the Collateral Agent to exercise remedies in a commercially reasonable manner,
each Grantor acknowledges and agrees that it would be commercially reasonable
for the Collateral Agent (i) to fail to incur expenses deemed significant by the
Collateral Agent, in its reasonable discretion, to prepare Collateral for
disposition or otherwise to transform raw material or work in process into
finished goods or other finished products for disposition, (ii) to fail to
obtain third party consents for access to Collateral to be disposed of, or to
obtain or, if not required by other law, to fail to obtain governmental or third
party consents for the collection or disposition of Collateral to be collected
or disposed of, (iii) to fail to exercise collection remedies against Account
Debtors or other Persons obligated on Collateral or to remove Liens on or any
adverse claims against Collateral, (iv) to exercise collection remedies against
Account Debtors and other Persons obligated on Collateral directly or through
the use of collection agencies and other collection specialists, (v) to
advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (vi) to
contact other Persons, whether or not in the same business as the Grantor, for
expressions of interest in acquiring all or any portion of such Collateral,
(vii) to hire one or more professional auctioneers to assist in the disposition
of Collateral, whether or not the Collateral is of a specialized nature,
(viii) to dispose of Collateral by utilizing internet sites that provide for the
auction of assets of the types included in the Collateral or that have the
reasonable capacity of doing so, or that match buyers and sellers of assets,
(ix) to dispose of assets in wholesale
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rather than retail markets, (x) to disclaim disposition warranties, such as
title, possession or quiet enjoyment, (xi) to purchase insurance or credit
enhancements to insure the Collateral Agent against risks of loss, collection or
disposition of Collateral or to provide to the Collateral Agent a guaranteed
return from the collection or disposition of Collateral, or (xii) to the extent
deemed appropriate by the Collateral Agent, to obtain the services of other
brokers, investment bankers, consultants and other professionals to assist the
Collateral Agent in the collection or disposition of any of the Collateral. Each
Grantor acknowledges that the purpose of this Section 7.2 is to provide
non-exhaustive indications of what actions or omissions by the Collateral Agent
would be commercially reasonable in the Collateral Agent’s exercise of remedies
against the Collateral and that other actions or omissions by the Collateral
Agent shall not be deemed commercially unreasonable solely on account of not
being indicated in this Section 7.2. Without limitation upon the foregoing,
nothing contained in this Section 7.2 shall be construed to grant any rights to
any Grantor or to impose any duties on the Collateral Agent that would not have
been granted or imposed by this Security Agreement or by applicable law in the
absence of this Section 7.2.
          (b) Anything herein to the contrary notwithstanding, (i) each Grantor
shall remain liable under the contracts and agreements included in such
Grantor’s Collateral to the extent set forth therein to perform all of its
duties and obligations thereunder to the same extent as if this Security
Agreement had not been executed, (ii) the exercise by the Collateral Agent of
any of the rights hereunder shall not release any Grantor from any of its duties
or obligations under the contracts and agreements included in the Collateral and
(iii) no Secured Party shall have any obligation or liability under the
contracts and agreements included in the Collateral by reason of this Security
Agreement or any other Loan Document, nor shall any Secured Party be obligated
to perform any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.
     Section 7.3. Compromises and Collection of Collateral. Each Grantor and the
Collateral Agent recognize that setoffs, counterclaims, defenses and other
claims may be asserted by obligors with respect to certain of the Receivables,
that certain of the Receivables may be or become uncollectible in whole or in
part and that the expense and probability of success in litigating a disputed
Receivable may exceed the amount that reasonably may be expected to be recovered
with respect to a Receivable. In view of the foregoing, each Grantor agrees that
the Collateral Agent may at any time and from time to time, if an Event of
Default has occurred and is continuing, and upon substantially contemporaneous
notice to such Grantor, compromise with the obligor on any Receivable, accept in
full payment of any Receivable such amount as the Collateral Agent in its sole
discretion shall determine or abandon any Receivable, and any such action by the
Collateral Agent shall be commercially reasonable so long as the Collateral
Agent acts in good faith based on information known to it at the time it takes
any such action.
     Section 7.4. Secured Party Performance of Debtor Obligations. Without
having any obligation to do so, the Collateral Agent may perform or pay any
obligation which any Grantor has agreed to perform or pay under this Security
Agreement and the Grantor shall reimburse the Collateral Agent for any amounts
paid by the Collateral Agent pursuant to this Section 7.4. Each Grantor’s
obligation to reimburse the Collateral Agent pursuant to the preceding sentence
shall be a Secured Obligation payable on demand.
     Section 7.5. Specific Performance of Certain Covenants. The Grantor
acknowledges and agrees that a breach of any of the covenants contained in
Sections 4.1(d), 4.1(e), 4.4, 4.5, 4.7, 4.8, or 5.2, will cause irreparable
injury to the Collateral Agent and the Secured Parties, that the Collateral
Agent and the Secured Parties have no adequate remedy at law in respect of such
breaches and therefore agrees, without limiting the right of the Collateral
Agent or the Secured Parties to seek and obtain specific performance of other
obligations of any Grantor contained in this Security Agreement, that the
covenants of such Grantor contained in the Sections referred to in this
Section 7.5 shall be specifically enforceable against such Grantor.
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     Section 7.6. Dispositions Not Authorized. No Grantor is authorized to sell
or otherwise dispose of the Collateral, except as set forth in Section 4.1(d),
and notwithstanding any course of dealing between any Grantor and the Collateral
Agent or other conduct of the Collateral Agent, no authorization to sell, lease
or transfer or otherwise dispose of the Collateral (except as set forth in
Section 4.1(d)) shall be binding upon the Collateral Agent or the Secured
Parties unless such authorization is in writing signed by the Collateral Agent
with the consent or at the direction of the Required Lenders.
     Section 7.7. No Waiver; Amendments; Cumulative Remedies. No delay or
omission of the Collateral Agent, the Administrative Agent or any Secured Party
to exercise any right or remedy granted under this Security Agreement shall
impair such right or remedy or be construed to be a waiver of any Default or an
acquiescence therein, and any single or partial exercise of any such right or
remedy shall not preclude any other or further exercise thereof or the exercise
of any other right or remedy. No waiver, amendment or other variation of the
terms, conditions or provisions of this Security Agreement whatsoever shall be
valid unless in writing signed by the Collateral Agent with the concurrence or
at the direction of the Lenders required under Section 9.02 of the Credit
Agreement and then only to the extent in such writing specifically set forth.
All rights and remedies contained in this Security Agreement or by law afforded
shall be cumulative and all shall be available to the Collateral Agent, the
Administrative Agent and the Secured Parties until termination of this Security
Agreement in accordance with Section 7.15 below.
     Section 7.8. Limitation by Law; Severability of Provisions. All rights,
remedies and powers provided in this Security Agreement 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 Security Agreement are intended to be
subject to all applicable mandatory provisions of law that may be controlling
and to be limited to the extent necessary so that they shall not render this
Security Agreement invalid, unenforceable or not entitled to be recorded or
registered, in whole or in part. Any provision in this Security Agreement that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of this Security Agreement are declared to be severable.
     Section 7.9. Reinstatement. This Security Agreement shall remain in full
force and effect and continue to be effective should any petition be filed by or
against any Grantor for liquidation or reorganization, should any Grantor become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of its
Grantor’s assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Secured Obligations,
or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the Secured
Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Secured Obligations shall be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
     Section 7.10. Benefit of Agreement. The terms and provisions of this
Security Agreement shall be binding upon and inure to the benefit of each
Grantor, each Agent and the Secured Parties and their respective successors and
permitted assigns (including all Persons who become bound as a debtor to this
Security Agreement), except that no Grantor shall have the right to assign its
rights or delegate its obligations under this Security Agreement or any interest
herein, without the prior written consent of the Collateral Agent. No sales of
participations, assignments, transfers, or other dispositions of any agreement
governing the Secured Obligations or any portion thereof or interest therein
shall in any
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manner impair the Lien granted to the Collateral Agent, for the benefit of the
Collateral Agent and the Secured Parties, hereunder.
     Section 7.11. Survival of Representations. All representations and
warranties of each Grantor contained in this Security Agreement shall survive
the execution and delivery of this Security Agreement.
     Section 7.12. Expenses. Each Grantor jointly and severally agrees to
reimburse each Agent within 10 Business Days of written demand for any and all
reasonable documented out-of-pocket expenses paid or incurred by such Agent in
the administration, collection, preservation or sale of the Collateral
(including the reasonable documented expenses and charges associated with any
periodic or special audit or analysis of the Collateral to the extent provided
in the Credit Agreement). Any and all costs and expenses incurred by any Grantor
in the performance of actions required pursuant to the terms hereof shall be
borne solely by such Grantor.
     Section 7.13. Additional Borrowers. Pursuant to and in accordance with
Section 9.20 of the Credit Agreement, any addition of any Person as a Borrower
under the Credit Agreement is subject to execution and delivery by the
Borrowers, such Person, the Administrative Agent, and the Collateral Agent of
this Security Agreement promptly upon becoming a Borrower. Upon execution and
delivery by the Collateral Agent and such Additional Borrower of an instrument
substantially in the form of Exhibit E hereto, such Borrower shall become a
Borrower hereunder with the same force and effect as if originally named as a
Borrower herein. The execution and delivery of any such instrument shall not
require the consent of any other Loan Party hereunder. The rights and
obligations of each Loan Party hereunder shall remain in full force and effect
notwithstanding the addition of any new Loan Party as a party to this Security
Agreement.
     Section 7.14. Headings. The title of and section headings in this Security
Agreement are for convenience of reference only, and shall not govern the
interpretation of any of the terms and provisions of this Security Agreement.
     Section 7.15. Termination or Release.
          (a) This Security Agreement shall continue in effect until (i) the
Credit Agreement has terminated pursuant to its express terms, and (ii) payment
and satisfaction in full in cash of all Secured Obligations (other than
unripened, contingent indemnity obligations) owing as of the date of such
termination (or with respect to any outstanding Letters of Credit, have been
cash collateralized as required by the Credit Agreement) and no Commitments of
any Agent or the Lenders which would give rise to any Obligations are
outstanding.
          (b) Upon any sale, lease, transfer or other disposition by any Grantor
of any Collateral that is permitted under Section 4.1(d) to any Person that is
not another Grantor or, upon the effectiveness of any written consent to the
release of the security interest granted hereby in any Collateral pursuant to
Section 9.02 of the Credit Agreement, the security interest in such Collateral
shall be automatically released.
          (c) In connection with any termination or release pursuant to
paragraph (a) or (b) above, the Collateral Agent shall promptly execute and
deliver to any Grantor, at such Grantor’s expense, all UCC termination
statements and similar documents that such Grantor shall reasonably request to
evidence such termination or release. Any execution and delivery of documents
pursuant to this Section 7.15 shall be without recourse to or representation or
warranty by the Collateral Agent or any Secured Party. Without limiting the
provisions of Section 7.12, the Borrower shall reimburse the Collateral Agent
promptly upon demand for all reasonable and documented costs and out-of-pocket
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expenses, including the reasonable and documented fees, charges and expenses of
one primary counsel (plus any applicable local counsel), incurred by it in
connection with any action contemplated by this Section 7.15.
     Section 7.16. Entire Agreement. This Security Agreement, together with the
other Loan Documents, embodies the entire agreement and understanding between
each Grantor and the Collateral Agent relating to the Collateral and supersedes
all prior agreements and understandings between any Grantor and the Collateral
Agent relating to the Collateral.
     Section 7.17. CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
     Section 7.18. CONSENT TO JURISDICTION. EACH GRANTOR HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE
COURT SITTING IN NEW YORK, NEW YORK IN THE BOROUGH OF MANHATTAN IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE GRANTOR HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF ANY AGENT OR ANY SECURED PARTY TO BRING
PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY ANY GRANTOR AGAINST ANY AGENT OR ANY SECURED PARTY OR ANY
AFFILIATE OF ANY AGENT OR ANY SECURED PARTY INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT
IN NEW YORK, NEW YORK IN THE BOROUGH OF MANHATTAN.
     Section 7.19. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH GRANTOR, EACH AGENT AND EACH SECURED PARTY HEREBY WAIVE TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
     Section 7.20. Indemnity. (b) Each Grantor agrees, jointly and severally, to
indemnify, defend and save and hold harmless each Agent, each Secured Party and
each of their respective Affiliates, successors and permitted assigns, and their
respective officers, directors, employees, agents, members, controlling persons
and advisors (each, an “Indemnified Party”) from and against, and shall pay
within 10 Business Days of written demand, any and all claims, damages, actual
losses, liabilities and expenses (including, without limitation, reasonable
fees, disbursements and other charges of counsel), joint or several, that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) this Security Agreement, or
the ownership, delivery, lease, possession, use, operation, condition, sale,
return or other disposition of any Collateral; provided, that such indemnity
shall not be available to the extent that such
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losses, claims, damages, penalties, liabilities or related expenses are
determined by a court of competent jurisdiction to have resulted from (i) the
bad faith, gross negligence or willful misconduct of such Indemnified Party or
its officers, directors, employees or agents to the extent acting at the
direction of such Indemnified Party, (ii) from a material breach of this
Security Agreement by such Indemnified Party or its officers, directors,
employees or agents or (iii) that the dispute is solely between Indemnified
Parties or their respective officers, affiliates, directors, employees, agents,
advisors, controlling persons, members and successors and permitted assigns,
except in respect of any agent under this Security Agreement, in its capacity as
an Agent.
     Section 7.21. Counterparts. This Security Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Security Agreement by
signing any such counterpart.
ARTICLE VIII
NOTICES
     Section 8.1. Sending Notices. Any notice required or permitted to be given
under this Security Agreement (a) sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received, (b) sent by facsimile shall be deemed to have been given when sent and
when receipt has been confirmed by telephone (provided, that if not given during
normal business hours for the recipient, shall be deemed to have been given at
the opening of business on the next Business Day for the recipient) or
(c) delivered or furnished by electronic communications (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the Agents and
the Administrative Borrower as set forth in Section 9.01 of the Credit
Agreement, in each case addressed to the Administrative Borrower at the address
set forth in Section 9.01 of the Credit Agreement, and to the Agents and the
Lenders at the addresses set forth in accordance with Section 9.01 of the Credit
Agreement.
     Section 8.2. Change in Address for Notices. Each of the Grantors, the
Agents and the Lenders may change the address or facsimile number for service of
notice upon it by a notice in writing to the other parties.
ARTICLE IX
THE AGENT
     Section 9.1. The Collateral Agent. Bank of America, N.A. has been appointed
Collateral Agent for the Lenders hereunder pursuant to Article VIII of the
Credit Agreement. It is expressly understood and agreed by the parties to this
Security Agreement that any authority conferred upon the Collateral Agent
hereunder is subject to the terms of the delegation of authority made by the
Lenders to the Collateral Agent pursuant to the Credit Agreement, and that the
Collateral Agent has agreed to act (and any successor Collateral Agent shall
act) as such hereunder only on the express conditions contained in such
Article VIII. Any successor Collateral Agent appointed pursuant to Article VIII
of the Credit Agreement shall be entitled to all the rights, interests and
benefits of the Collateral Agent hereunder.
[SIGNATURE PAGE FOLLOWS]
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     IN WITNESS WHEREOF, each Grantor and each Agent have executed this Security
Agreement as of the date first above written.
Grantors:

            INTERNATIONAL TRUCK AND ENGINE CORPORATION
      By:   /s/ TM Endsley         Name:   TM Endsley        Title:   SVP &
Treasurer     

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            IC CORPORATION
      By:   /s/ Michael A. Cancelliere         Name:   Michael A. Cancelliere   
    Title:   VP     

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              IC OF OKLAHOMA, LLC.
        By:   /s/ Michael A. Cancelliere           Name:   Michael A.
Cancelliere          Title:   VP     

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              INTERNATIONAL DIESEL OF ALABAMA, LLC
        By:   /s/ TM Endsley           Name:   TM Endsley          Title:  
Treasurer     

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              SST TRUCK COMPANY LP
        By:   /s/ TM Endsley           Name:   TM Endsley          Title:   SVP
& Treasurer     

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            CREDIT SUISSE, CAYMAN ISLANDS BRANCH,
as Administrative Agent
      By:   /s/ Ian Nalitt         Name: Ian Nalitt        Title:   Vice
President              By:   /s/ James Neira         Name:   James Neira        
Title:   Associate     

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            BANK OF AMERICA, N.A.,
as Collateral Agent
      By:   /s/ Robert J. Lund         Name:   Robert J. Lund        Title:  
Senior Vice President     

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Schedule 4.8
Leased Locations for Collateral Access Agreements

              PDC CENTERS             1300 Oakley Industrial Blvd.   Fairburn  
GA   30213 1160 Powis Road   West Chicago   IL   60185 1717 W. Harvester Road  
West Chicago   IL   60185 3101 N. Lamb Blvd.   Las Vegas   NV   89115 22638 NE
Townsend Way   Fairview   OR   97024 105 Steamboat Blvd.   Manchester   PA  
17345 4038 Rock Quarry Road   Dallas   TX   75211

     
UTO CENTERS
   
3355 Moreland Ave.
  4030 North Point Rd.
Conley, GA 30288
  Baltimore, MD 21222
 
   
7510 Brighton Rd.
  37750 Northline Rd.
Commerce City, CO 80022
  Romulus, MI 48174
 
   
10 Hegenberger Court
  4505 West Capitol Ave.
Oakland, CA 94621
  West Sacramento, CA 95691
 
   
3325 Rotary Dr.
  163 Industrial Blvd.
Charlotte, NC 28269
  LaVergne, TN 37086
 
   
1429 Harding Court
  1475 N. Corrington Ave.
Indianapolis, IN 46217
  Kansas City, MO 64120
 
   
8800 State Rd.
  7900 Greenwood Rd.
Philadelphia, PA 19136
  Shreveport, LA 71119
 
   
16 West 020 79th St.
  5909 Adamo Dr.
Burr Ridge, IL 60521
  Tampa, FL 33619
 
   
1400 East Terra Lane
  I-70 & Route 310
O’fallon, MO 63366
  Etna, OH 43018
 
   
MANUFACTURING PLANTS
   
 
   
646 James Record Road
  2322 North Mingo Road
Huntsville, AL 35824
  Tulsa, OK 74116

ITEC ABL Security Agreement
Schedule 4.8

 

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EXHIBIT A
(See Section 3.1 of Security Agreement)
OFFICES IN WHICH FINANCING STATEMENTS AND SECURITY AGREEMENTS
HAVE BEEN FILED

      Grantor   Filing Office
International Truck and Engine Corporation
  Secretary of State of the State of Delaware  
IC Corporation
  Secretary of State of the State of Arkansas  
SST Truck Company, LP
  Secretary of State of the State of Delaware  
IC of Oklahoma, LLC
  Secretary of State of the State of Delaware  
International Diesel of Alabama, LLC
  Secretary of State of the State of Delaware

ITEC ABL Security Agreement
Ex - A

 

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EXHIBIT B
(See Section 3.2 of Security Agreement)
DETAILS OF PLEDGED ACCOUNTS

              No.   Name of Account   Account Bank   Account Number
1.
  Collection Account   To be established post-closing   To be established
post-closing
 
           
2.
  L/C Collateral Account   To be established post-closing   To be established
post-closing
 
           
3
  Blocked Cash Account   To be established post-closing   To be established
post-closing

ITEC ABL Security Agreement
Ex – B

 

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EXHIBIT C
(See Section 4.4 of Security Agreement)
FORM OF AMENDMENT
          This Amendment, dated as of [
                                        ], 20[___] is delivered pursuant to
Section 4.4 of the Security Agreement (as defined below). All capitalized terms
used herein shall have the respective meanings ascribed thereto or incorporated
by reference in the Security Agreement. The undersigned hereby certifies that
the representations and warranties set forth in Article III of the Security
Agreement are, and continue to be, true and correct in all material respects
(expect to the extent such representations and warranties relate to any earlier
date, and in such case are true and correct in all material respects as of such
date). The undersigned further agrees that this Amendment may be attached to
that certain Security Agreement, dated as of June 15, 2007, among the
undersigned, the other Grantors, Bank of America, N.A., as the Collateral Agent,
and Credit Suisse, as the Administrative Agent (as amended, restated, modified
or supplemented from time to time, the “Security Agreement”) and that the
Collateral listed on Schedule I to this Amendment shall be and become a part of
the “Collateral” referred to in such Security Agreement, and shall secure all
Secured Obligations referred to in such Security Agreement.

                  [NAME OF GRANTOR]    
 
           
 
  By:        
 
  Name:        
 
           
 
  Title:        
 
           

ITEC ABL Security Agreement
Ex – C - 1

 

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SCHEDULE I TO AMENDMENT
[ADDITIONAL COLLATERAL]
ITEC ABL Security Agreement
Ex – C - 2

 

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EXHIBIT D
FORM OF PERFECTION CERTIFICATE
     Reference is hereby made to (i) the Security Agreement dated as of June 15,
2007 (as such Security Agreement may be amended, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement”),
among International Truck and Engine Corporation, a Delaware corporation
(“ITEC”), IC Corporation, an Arkansas corporation (“IC”), SST Truck Company LP,
a Delaware limited partnership (“SST”), IC of Oklahoma, LLC, a Delaware limited
liability company (“ICO”), International Diesel of Alabama, LLC, a Delaware
limited liability company (“IDA”, and together with ITEC, IC, SST and ICO, the
“Borrowers”), Bank of America, N.A. (“BofA” and, in its capacity as collateral
agent for the Lenders (as defined below), the “Collateral Agent”), and Credit
Suisse (“CS”) and, in its capacity as administrative agent for the Lenders (as
defined below), the “Administrative Agent”, and together with the Collateral
Agent, the “Agents”); and (ii) the ABL Credit Agreement dated as of June 15,
2007 (as such ABL Credit Agreement may be amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among, inter alia, ITEC, IC, SST, ICO, IDA, each Lender party thereto from time
to time (the “Lenders”), the Administrative Agent and the Collateral Agent.
Capitalized terms used herein and not otherwise defined have the respective
meanings assigned in the Security Agreement.
     Each of the undersigned hereby certifies, solely in such person’s capacity
as an officer and not individually, to the Collateral Agent as follows as of the
date hereof:
1. Names. (a) The exact legal name of each of Borrower, as such name appears in
its respective certificate of incorporation or certificate of formation, is as
set forth in Schedule 1(a) hereto. Each Borrower is (i) the type of entity
disclosed next to its name in Schedule 1(a) and (ii) a registered organization
except to the extent otherwise disclosed in Schedule 1(a). Also set forth in
Schedule 1(a) is the respective organizational identification number, of each
Borrower that is a registered organization, the Federal Taxpayer Identification
Number of each Borrower and the state of formation of each Borrower.
     (b) Set forth in Schedule 1(b) hereto is each other corporate or
organizational name (if any) that each Borrower has had [On the Closing Date: in
the past year] [Subsequent to the Closing Date: since the date of its last
Perfection Certificate delivered to the Collateral Agent], together with the
date of the relevant name change, and attached to such schedule are all amended
certificates of incorporation or certificates of formation and any attachments
thereto filed with the relevant state authority or other related corporate
documents.
     (c) Set forth in Schedule 1(c) hereto is a list of any other business or
organization to which any Borrower became the successor by merger,
consolidation, acquisition, change in form, nature or jurisdiction of
organization or otherwise, [On the Closing Date: in the past year] [Subsequent
to the Closing Date: since the date of its last Perfection Certificate delivered
to the Collateral Agent] and attached to such schedule are all certificates of
merger and any attachments thereto filed by any Borrower with the relevant state
authority. Also set forth in Schedule 1(c) is the information required by
Section 1 of this certificate for any other business or organization to which
ITEC, IC, SST, ICO and IDA became the successor by merger, consolidation,
acquisition, change in form, nature or jurisdiction of organization or
otherwise, [On the Closing Date: in the past year] [Subsequent to the Closing
Date: since the date of its last Perfection Certificate delivered to the
Collateral Agent] and attached to such schedule are all related certificates of
merger and any attachments thereto filed with the relevant state authority.
     2. Current Locations. (a) The chief executive office of each Borrower is
located at the respective address for each set forth in Schedule 2(a) hereto.
Form of ITEC ABL Perfection Certificate

Ex. D - 1

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     (b) Attached hereto as Schedule 2(b) hereto is a list that includes all
locations (other than locations where Collateral is stored for repair) where
each Borrower maintains any material books or records relating to any
Collateral.
     (c) Set forth in Schedule 2(c) hereto are all other locations where each
Borrower maintains any of the Collateral consisting of inventory not identified
above (with an aggregate value in excess of $5.0 million at any one location).
     (d) Set forth in Schedule 2(d) hereto are the names and addresses of all
persons or entities, other than the Borrowers, such as lessees, consignees,
warehousemen or purchasers of chattel paper, which have possession of any of the
Collateral consisting of Instruments or Chattel Paper (with an aggregate value
in excess of $1.0 million at any one location) or Inventory (with an aggregate
value in excess of $5.0 million at any one location).
3. Good Standing. Attached hereto as Schedule 3 are all of the good standing
certificates of each of the Borrowers dated within [45 days] of the date hereof
from the relevant state authority.
4. File Search Reports. The file search reports and financing statements and
other filings attached hereto as Schedule 4 include the reports of file searches
conducted within 45 days of the date hereof by the Borrowers, and related copies
of each financing statement or other filing identified in such file search
reports from the applicable Uniform Commercial Code filing offices (a) in each
jurisdiction identified in Section 1(a) or Section 2 with respect to each legal
name set forth in Section 1, and (b) in each jurisdiction described in
Schedule 1(c) relating to any of the transactions described in Schedule 1(c)
with respect to each legal name of the person or entity from which such Borrower
purchased or otherwise acquired any of the Collateral or merged or consolidated
with or acquired (except to the extent provided to the Collateral Agent at the
time of such merger, consolidation or acquisition).
5. UCC Filings. (a) Attached hereto as Schedule 5(a) are copies of UCC-1
financing statements containing the indications of the Collateral, which are to
be filed in the filing offices in the jurisdictions identified in Schedule 6
hereto.
     (b) Attached as Schedule 5(b) are copies of the UCC-3 financing statement
amendments, which are to be filed in the filing offices in the jurisdictions
identified in Schedule 6 hereto.
6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule setting
forth, with respect to the filings described in Section 5 above, each filing and
the filing office in which such filing is to be made.
7. Pledged Accounts. Attached hereto as Schedule 7 is a true and complete list
of all Pledged Accounts (as defined in the Security Agreement) maintained by the
Borrowers.
8. Counterparts. This Perfection Certificate may be executed in two or more
counterparts, each of which shall constitute an original but all of which, when
taken together, shall constitute but one Perfection Certificate. Delivery of a
counterpart by facsimile or pdf electronic transmission shall constitute
delivery of an original.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
Form of ITEC ABL Perfection Certificate

Ex. D - 2

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          IN WITNESS WHEREOF, we have hereunto signed this Perfection
Certificate as of this ___ day of ___, 20___.

            INTERNATIONAL TRUCK AND ENGINE CORPORATION
      By:           Name:           Title:           IC CORPORATION
      By:           Name:           Title:           SST TRUCK COMPANY LP
      By:           Name:           Title:           IC OF OKLAHOMA, LLC
      By:           Name:           Title:           INTERNATIONAL DIESEL OF
ALABAMA, LLC
      By:           Name:           Title:        

Form of ITEC ABL Perfection Certificate

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Schedule 1(a)
Exact legal name of each Borrower, as such name appears in its respective
certificate of incorporation or
certificate of formation, type of entity, organizational identification number,
Federal Taxpayer
Identification Number and the state of formation
Form of ITEC ABL Perfection Certificate

Ex. D - 4

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Schedule 1(b)
Corporate or organizational name that each Borrower has had [On the Closing
Date: in the past year]
[Subsequent to the Closing Date: since the date of its last Perfection
Certificate delivered to the Collateral
Agent], together with the date of the relevant change
Form of ITEC ABL Perfection Certificate

Ex. D - 5

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Schedule 1(c)
List of all other names used by each Borrower, or any other business or
organization to which any
Borrower became the successor by merger, consolidation or otherwise, [On the
Closing Date: in the past
year] [Subsequent to the Closing Date: since the date of its last Perfection
Certificate delivered to the
Collateral Agent]
Form of ITEC ABL Perfection Certificate

Ex. D - 6

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Schedule 2(a)
Chief Executive Offices of each Borrower
Form of ITEC ABL Perfection Certificate

Ex. D - 7

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Schedule 2(b)
Locations of material books or records relating to any Collateral
Form of ITEC ABL Perfection Certificate

Ex. D - 8

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Schedule 2(c)
All other locations where the Borrowers maintain Collateral with an aggregate
value in excess of $5.0 
million at any one location
Form of ITEC ABL Perfection Certificate

Ex. D - 9

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Schedule 2(d)
Details of all persons other than the Borrowers in possession or intended to
have possession of any
Collateral consisting of Instruments or Chattel Paper (with an aggregate value
in excess of $1.0 million at
any one location) or Inventory (with an aggregate value in excess of
$5.0 million at any one location)
Form of ITEC ABL Perfection Certificate

Ex. D - 10

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Schedule 3
Good standing certificates of each Borrower
Form of ITEC ABL Perfection Certificate

Ex. D - 11

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Schedule 4
File search reports, financing statements and other filings
Form of ITEC ABL Perfection Certificate

Ex. D - 12

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Schedule 5(a)
UCC-1 financing statements
Form of ITEC ABL Perfection Certificate

Ex. D - 13

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Schedule 5(b)
UCC-3 financing statement amendments
Form of ITEC ABL Perfection Certificate

Ex. D - 14

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Schedule 6
Filings and the relevant Filing Office
Form of ITEC ABL Perfection Certificate

Ex. D - 15

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Schedule 7
Pledged Accounts
Form of ITEC ABL Perfection Certificate

Ex. D - 16

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EXHIBIT E
FORM OF SUPPLEMENT
(See Section 7.13 of Security Agreement)
          SUPPLEMENT NO. [•] dated as of [•] (this “Supplement”), to the
Security Agreement dated as of June 15, 2007 (the “Security Agreement”), among
INTERNATIONAL TRUCK AND ENGINE CORPORATION, a Delaware corporation (“ITEC”), IC
CORPORATION, an Arkansas corporation (“IC”), SST TRUCK COMPANY LP, a Delaware
limited partnership (“SST”), IC OF OKLAHOMA, LLC (“ICO”), a Delaware limited
liability company, INTERNATIONAL DIESEL OF ALABAMA, LLC, a Delaware limited
liability company (“IDA” and together with ITEC, IC, SST and ICO, the
“Grantors”), BANK OF AMERICA, N.A. (“BofA”), as collateral agent for the lenders
party to the Credit Agreement referred to below (in such capacity, the
“Collateral Agent”), and Credit Suisse, as administrative agent for the lenders
party to the Credit Agreement referred to below (in such capacity, the
“Administrative Agent”, and together with the Collateral Agent, the “Agents”).
          A. Reference is made to the Credit Agreement dated as of June 15, 2007
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among, inter alia, the Borrowers, the Lenders
(as defined therein) and the Agents.
          B. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement and the
Security Agreement referred to therein.
          C. The Grantors have entered into the Security Agreement in order to
induce the Lenders to make Loans and the Issuing Bank to issue Letters of
Credit. Section 7.13 of the Security Agreement and Section 9.20 of the Credit
Agreement provide that Additional Borrowers may become Parties under the
Security Agreement by execution and delivery of an instrument in the form of
this Supplement. The undersigned Borrower (the “Additional Borrower”) is
executing this Supplement in accordance with the requirements of the Credit
Agreement to become an Additional Borrower under the Security Agreement in order
to induce the Lenders to make additional Loans and the Issuing Bank to issue
additional Letters of Credit and as consideration for Loans previously made and
Letters of Credit previously issued.
          Accordingly, the each Agent and the Additional Borrower agree as
follows:
          SECTION 1. In accordance with Section 7.13 of the Security Agreement,
the Additional Borrower by its signature below becomes an Additional Borrower
and a Grantor under the Security Agreement with the same force and effect as if
originally named therein as a Borrower and the Additional Borrower hereby
(a) agrees to all the terms and provisions of the Security Agreement applicable
to it as an Additional Borrower and Grantor thereunder and (b) represents and
warrants that the representations and warranties made by it as a Grantor
thereunder are true and correct in all material respects on and as of the date
hereof other than any such representations or warranties that, by their terms,
refer to a specific date other than the date hereof, in which case as of such
specific date. In furtherance of the foregoing, the Additional Borrower, as
security for the payment and performance in full of the Secured Obligations,
does hereby create and grant to the Collateral Agent, its successors and
permitted assigns, for the benefit of the Secured Parties, their successors and
permitted assigns, a security interest in and Lien on all of the Additional
Borrower’s right, title and interest in and to the Collateral of the Additional
Borrower. Each reference to a “Grantor” in the Security Agreement shall be
deemed to include the Additional Borrower. The Security Agreement is hereby
incorporated herein by reference.
ITEC ABL Security Agreement

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          SECTION 2. The Additional Borrower represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency or similar laws affecting
creditors’ rights generally and to general principles of equity.
          SECTION 3. This Supplement 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. This Supplement shall become effective when the Collateral
Agent shall have received a counterpart of this Supplement that bears the
signature of the Additional Borrower and the Collateral Agent has executed a
counterpart hereof. Delivery of an executed signature page to this Supplement by
facsimile or electronic transmission shall be as effective as delivery of a
manually signed counterpart of this Supplement.
          SECTION 4. The Additional Borrower hereby represents and warrants
that, in each case as of the date hereof, (a) set forth on Schedule I attached
hereto is a true and correct schedule of the location of any and all Collateral
constituting Inventory of the Additional Borrower, and (b) set forth under its
signature hereto, is the true and correct legal name of the Additional Borrower,
its jurisdiction of formation and the location of its chief executive office.
          SECTION 5. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect.
          SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
          SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
          SECTION 8. All communications and notices hereunder shall be in
writing and given as provided in Section 8.1 of the Security Agreement.
          SECTION 9. The Additional Borrower agrees to reimburse each Agent for
its reasonable and documented out-of-pocket expenses in connection with this
Supplement, including the reasonable and documented fees, other charges and
disbursements of counsel for such Agent.
ITEC ABL Security Agreement

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          IN WITNESS WHEREOF, the Additional Borrower and each Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.

                      [NAME OF ADDITIONAL BORROWER]    
 
               
 
      by        
 
               
 
         
 
Name:    
 
          Title:    
 
               
 
          Legal Name:    
 
          Jurisdiction of Formation:    
 
          Location of Chief Executive office:    
 
                    BANK OF AMERICA, N.A.
as Collateral Agent    
 
               
 
      by        
 
               
 
         
 
Name:    
 
          Title:    

                  CREDIT SUISSE,
as Administrative Agent    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

ITEC ABL Security Agreement

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SCHEDULE I TO SUPPLEMENT
LOCATIONS OF INVENTORY COLLATERAL

          Description   Location  
 
       

ITEC ABL Security Agreement

Ex – E - 4