EXECUTION COPY
$1,750,000,000
AMENDMENT NO. 2
dated as of April 28, 2006
to the Five-Year Credit Agreement
dated as of July 28, 2003
among
Textron Financial Corporation
The Banks Listed Herein
and
JPMorgan Chase Bank, N.A.,
as Administrative Agent
 
J.P. Morgan Securities Inc.
and
Banc of America Securities LLC,
Lead Arrangers and Joint Bookrunners
Bank of America, N.A.,
Syndication Agent
Barclays Bank PLC
Citibank, N.A.
and
Deutsche Bank Securities Inc.,
Documentation Agents

 

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AMENDMENT NO. 2 TO FIVE-YEAR CREDIT AGREEMENT
     AMENDMENT dated as of April 28, 2006 to the Five-Year Credit Agreement
dated as of July 28, 2003 (as heretofore amended, the “Credit Agreement”) among
TEXTRON FINANCIAL CORPORATION (the “Borrower”), the BANKS party thereto (the
“Banks”) and JPMORGAN CHASE BANK, N.A., as Administrative Agent (the
“Administrative Agent”).
W I T N E S S E T H :
     WHEREAS, the parties hereto desire to amend the Credit Agreement as set
forth herein;
     NOW, THEREFORE, the parties hereto agree as follows:
     Section 1. Defined Terms; References. Unless otherwise specifically defined
herein, each term used herein that is defined in the Credit Agreement has the
meaning assigned to such term in the Credit Agreement. Each reference to
“hereof”, “hereunder”, “herein” and “hereby” and each other similar reference
and each reference to “this Agreement” and each other similar reference
contained in the Credit Agreement shall, after this Amendment becomes effective,
refer to the Credit Agreement as amended hereby.
     Section 2. Amendments.
     (a) The definition of “Bank” in Section 1.01 of the Credit Agreement is
amended to read as follows:
     “Bank” means each bank or other financial institution listed on the
signature pages hereof and each Person which becomes a Bank pursuant to
Section 2.17, 8.06, or 9.06(c), and their respective successors.
     (b) The definition of “Termination Date” in Section 1.01 of the Credit
Agreement is amended by changing the date specified therein from “July 25, 2010”
to “April 28, 2011”.
     (c) Section 2.17(a) of the Credit Agreement is amended by changing the
amount specified therein from “$333,000,000” to “$250,000,000”.
     (d) Section 2.19 of the Credit Agreement is amended to read as follows:
     Section 2.19. Extension Option. (a) The Termination Date may be extended in
the manner set forth in this Section for a period of one year from the
Termination Date then in effect; provided that the Termination Date may only be
extended for two additional one year periods. If the

 

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Borrower wishes to request an extension of the Termination Date, the Borrower
shall give written notice to that effect to the Administrative Agent not less
than 45 days nor more than 90 days prior to each anniversary of the date hereof
that occurs on or prior to the Termination Date then in effect, whereupon the
Administrative Agent shall promptly notify each of the Banks of such request.
Each Bank will use its best efforts to respond to such request, whether
affirmatively or negatively, as it may elect in its sole and absolute
discretion, within 30 days of such notice to the Administrative Agent. If any
Bank shall not have responded affirmatively within such 30-day period, such Bank
shall be deemed to have rejected the Borrower’s proposal to extend its
Commitment and only the Commitments of those Banks which have responded
affirmatively shall be extended, subject to receipt by the Administrative Agent
of counterparts of an Extension Agreement in substantially the form of Exhibit L
hereto (the “Extension Agreement”) duly completed and signed by the Borrower,
the Administrative Agent and all of the Banks which have responded
affirmatively. No extension of the Commitments pursuant to this Section 2.19
shall be legally binding on any party hereto unless and until such Extension
Agreement is so executed and delivered by Banks having at least 66 2/3% of the
aggregate amount of the Commitments.
     (b) If any Bank rejects, or is deemed to have rejected, the Borrower’s
proposal to extend its Commitment, (A) this Agreement shall terminate on the
Termination Date then in effect with respect to such Bank, (B) the Borrower
shall pay to such Bank on such Termination Date any amounts due and payable to
such Bank on such date and (C) the Borrower may, if it so elects, designate a
Person not theretofore a Bank and acceptable to the Administrative Agent to
become a Bank, or agree with an existing Bank that such Bank’s Commitment shall
be increased, provided that any designation or agreement may not increase the
aggregate amount of the Commitments. Upon execution and delivery by the Borrower
and such replacement Bank or other Person of an instrument of assumption in form
and amount satisfactory to the Administrative Agent and execution and delivery
of the Extension Agreement pursuant to Section 2.19(a), such existing Bank shall
have a Commitment as therein set forth or such other Person shall become a Bank
with a Commitment as therein set forth and all the rights and obligations of a
Bank with such a Commitment hereunder. On the date of termination of any Bank’s
Commitment as contemplated by this subsection (b), the respective participations
of the other Banks in all outstanding Letters of Credit shall be redetermined on
the basis of their respective Commitments after giving effect to such
termination, and the participation therein of the Bank whose Commitment is
terminated shall terminate; provided that the Borrower

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shall, if and to the extent necessary to permit such redetermination of
participations in Letters of Credit within the limits of the Commitments which
are not terminated, prepay on such date a portion of the outstanding Loans, and
such redetermination and termination of participations in outstanding Letters of
Credit shall be conditioned upon its having done so.
     (c) The Administrative Agent shall promptly notify the Banks of the
effectiveness of each extension of the Commitments pursuant to this
Section 2.19.
     (e) Section 4.04(a) of the Credit Agreement is amended by changing the
reference to the date “January 1, 2005” to “December 31, 2005” and the reference
to “Borrower’s 2004 Annual Report” to “Borrower’s 2005 Annual Report”.
     (f) Section 4.04(c) of the Credit Agreement is amended by changing the
reference to the date “March 31, 2005” to “December 31, 2005”.
     (g) Section 4.04(b) of the Credit Agreement is deleted.
     Section 3. Changes in Commitments. With effect from and including the
Amendment Effective Date, (i) the Commitment of each Bank shall be the amount
set forth opposite the name of such Bank in the Commitment Schedule attached
hereto and (ii) the Commitment Schedule attached hereto shall replace the
Commitment Schedule attached to the Credit Agreement. On the Amendment Effective
Date, any Bank party to the Credit Agreement which is not listed in the
Commitment Schedule attached hereto (each, an “Exiting Bank”) shall cease to be
a Bank party to the Credit Agreement, and all accrued fees and other amounts
payable under the Credit Agreement for the account of each Exiting Bank shall be
due and payable on such date; provided that the provisions of Sections 8.03,
8.04 and 9.03 of the Credit Agreement shall continue to inure to the benefit of
each Exiting Bank after the Amendment Effective Date.
     Section 4. Changes in Pricing Schedule. The Pricing Schedule attached to
the Credit Agreement (the “Existing Pricing Schedule”) is deleted and replaced
by the Pricing Schedule attached to this Amendment (the “New Pricing Schedule”).
The New Pricing Schedule shall apply to interest and fees accruing under the
Credit Agreement on and after the date hereof. The Existing Pricing Schedule
shall continue to apply to interest and fees accruing under the Credit Agreement
prior to the date hereof.
     Section 5. Representations of Borrower. The Borrower represents and
warrants that (i) the representations and warranties of the Borrower set forth
in Article 4 of the Credit Agreement will be true on and as of the Amendment
Effective Date and (ii) no Event of Default will have occurred and be continuing
on such date.

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     Section 6. Effect of Amendments. Except as expressly set forth herein, the
amendments contained herein shall not constitute a waiver or amendment of any
term or condition of the Credit Agreement, and all such terms and conditions
shall remain in full force and effect and are hereby ratified and confirmed in
all respects.
     Section 7. Governing Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York.
     Section 8. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
     Section 9. Effectiveness. This Amendment shall become effective as of the
date hereof (the “Amendment Effective Date”), subject to satisfaction of the
following conditions:
     (a) the Administrative Agent shall have received from each of the parties
listed in the signature pages hereof a counterpart hereof signed by such party
or facsimile or other written confirmation (in form satisfactory to the
Administrative Agent) that such party has signed a counterpart hereof; and
     (b) the Administrative Agent shall have received an opinion of the General
Counsel or Assistant General Counsel of the Borrower dated as of the Amendment
Effective Date, in form and substance satisfactory to the Administrative Agent;
and
     (c) the Administrative Agent shall have received evidence satisfactory to
it that no loans are outstanding under the 364-Day Credit Agreement dated as of
July 8, 2003, as amended, among the Borrower, the Banks parties thereto and
JPMorgan Chase Bank, N.A., as Administrative Agent (the “Existing 364-Day Credit
Agreement”).
The Borrower and the other parties hereto, which other parties comprise the
“Required Banks” as defined in the Existing 364-Day Credit Agreement, hereby
agree that the “Commitments” under the Existing 364-Day Credit Agreement shall
terminate automatically upon the effectiveness of this Amendment, without need
for notice or other action by any party, and that accrued facility fees and any
other amounts payable under the Existing 364-Day Credit Agreement shall be due
and payable at such time.

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.

                  TEXTRON FINANCIAL CORPORATION    
 
           
 
  By:   /s/ B. F. Lynn    
 
     
 
Name: Brian F. Lynn    
 
      Title: Senior Vice President & Treasurer    

 

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                  JPMORGAN CHASE BANK, N.A., as Administrative Agent    
 
           
 
  By:   /s/ Randolph Cates    
 
     
 
Name: Randolph Cates    
 
      Title: Vice President    

 

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                  JPMORGAN CHASE BANK, N.A.    
 
           
 
  By:   /s/ Randolph Cates    
 
     
 
Name: Randolph Cates    
 
      Title: Vice President    

 

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                  BANK OF AMERICA, N.A.    
 
           
 
  By:   /s/ S. H. Gurnani    
 
     
 
Name: Sanjay H. Gurnani    
 
      Title: Senior Vice President    

 

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                  CITIBANK, N.A.    
 
           
 
  By:   /s/ Diane L. Pockaj    
 
     
 
Name: Diane L. Pockaj    
 
      Title: Managing Director    

 

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                  BARCLAYS BANK PLC    
 
           
 
  By:   /s/ Nicholas Bell    
 
     
 
Name: Nicholas Bell    
 
      Title: Director    

 

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                  DEUTSCHE BANK AG NEW YORK BRANCH    
 
           
 
  By:   /s/ Y. Tilden    
 
     
 
Name: Yvonne Tilden    
 
      Title: Vice President    
 
           
 
  By:   /s/ D. G. Dickinson    
 
     
 
Name: David G. Dickinson, Jr.    
 
      Title: Director    

 

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                  BANK OF TOKYO-MITSUBISHI UFJ
TRUST COMPANY    
 
           
 
  By:   /s/ Christopher J. DeLauro    
 
     
 
Name: Christopher J. DeLauro    
 
      Title: Assistant Vice President    

 

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                      BNP PARIBAS    
 
                    By:   /s/ Richard Pace                  
 
      Name:   Richard Pace    
 
      Title:   Managing Director    
 
                    By:   /s/ Angela B. Arnold                  
 
      Name:   Angela B. Arnold    
 
      Title:   Director    

 

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                      CREDIT SUISSE, Cayman Islands Branch    
 
                    By:   /s/ Jay Chall                  
 
      Name:   Jay Chall    
 
      Title:   Director    
 
                    By:   /s/ James Neira                  
 
      Name:   James Neira    
 
      Title:   Associate    

 

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                      HSBC BANK USA, NATIONAL ASSOCIATION    
 
                    By:   /s/ C J Wannea                  
 
      Name:   C J Wannea    
 
      Title:   Head of Transport, Services and Infrastructure    
 
             

 

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                      MERRILL LYNCH BANK USA    
 
                    By:   /s/ Louis Alder                  
 
      Name:   Louis Alder    
 
      Title:   Director    

 

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                      MORGAN STANLEY BANK    
 
                    By:   /s/ Daniel Twenge                  
 
      Name:   Daniel Twenge    
 
      Title:   Vice President    
 
          Morgan Stanley Bank    

 

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                      UBS LOAN FINANCE LLC    
 
                    By:   /s/ Marc Sileo                  
 
      Name:   Marc Sileo    
 
      Title:   Associate Director    
 
          Banking Products    
 
          Services, US    
 
                    By:   /s/ Douglas Gervolino                  
 
      Name:   Douglas Gervolino    
 
      Title:   Associate Director    
 
          Banking Products    
 
          Services, US    

 

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                      WACHOVIA BANK, NATIONAL ASSOCIATION    
 
                    By:   /s/ Nathan R. Rantala                  
 
      Name:   Nathan R. Rantala    
 
      Title:   Vice President    

 

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                      WILLIAM STREET COMMITMENT CORPORATION (Recourse only to
assets of William Street Commitment Corporation)    
 
                    By:   /s/ Mark Walton                  
 
      Name:   Mark Walton    
 
      Title:   Assistant Vice President    

 

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                      HARRIS NESBITT FINANCING, INC.    
 
                    By:   /s/ Joseph W. Linder                  
 
      Name:   Joseph W. Linder    
 
      Title:   Vice President    

 

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                  THE BANK OF NOVA SCOTIA    
 
           
 
  By:   /s/ Pieter J. Van Schaick
 
Name: Pieter J. Van Schaick    
 
      Title: Managing Director    

 

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                  SOCIETE GENERALE    
 
           
 
  By:   /s/ Ambrish D. Thanawala
 
Name: Ambrish D. Thanawala    
 
      Title: Managing Director    

 

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                  THE BANK OF NEW YORK    
 
           
 
  By:   /s/ Patrick Vatel
 
Name: Patrick Vatel    
 
      Title: Managing Director    

 

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                  MELLON BANK, N.A.    
 
           
 
  By:   /s/ Laurie G. Dunn
 
Name: Laurie G. Dunn    
 
      Title: First Vice President    

 

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COMMITMENT SCHEDULE

          Bank   Commitment  
JPMorgan Chase Bank, N.A.
  $ 160,000,000  
Bank of America, N.A.
  $ 160,000,000  
Citibank, N.A.
  $ 130,000,000  
Barclays Bank PLC
  $ 130,000,000  
Deutsche Bank AG New York Branch
  $ 130,000,000  
Bank of Tokyo-Mitsubishi UFJ Trust Company
  $ 90,000,000  
BNP Paribas
  $ 90,000,000  
Credit Suisse First Boston, acting through its Cayman Islands Branch
  $ 90,000,000  
HSBC Bank USA, National Association
  $ 90,000,000  
Merrill Lynch Bank USA
  $ 90,000,000  
Morgan Stanley Bank
  $ 90,000,000  
UBS Loan Finance LLC
  $ 90,000,000  
Wachovia Bank, National Association
  $ 90,000,000  
William Street Commitment Corporation
  $ 90,000,000  
Harris Nesbitt Financing, Inc.
  $ 65,000,000  
The Bank of Nova Scotia
  $ 65,000,000  
Societe Generale
  $ 45,000,000  
The Bank of New York
  $ 30,000,000  
Mellon Bank, N.A.
  $ 25,000,000  
Total
  $ 1,750,000,000  

 

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PRICING SCHEDULE
     Each of “Facility Fee Rate” and “Euro-Dollar Margin” means, for any date,
the rate set forth below in the row opposite such term and in the row
corresponding to the “Utilization” at such date and, under the column
corresponding to the “Pricing Level” at such date:

                                                      Level I   Level II   Level
III   Level IV   Level V   Level VI
Facility Fee Rate
    0.05 %     0.06 %     0.07 %     0.08 %     0.09 %     0.125 %
Euro-Dollar Margin
                                               
Utilization £ 50%
    0.125 %     0.14 %     0.18 %     0.37 %     0.535 %     0.625 %
Utilization > 50%
    0.175 %     0.19 %     0.23 %     0.42 %     0.585 %     0.675 %
Letter of Credit Fees
    0.175 %     0.19 %     0.23 %     0.42 %     0.585 %     0.675 %

     For purposes of this Schedule, the following terms have the following
meanings, subject to the concluding paragraph of this Schedule with respect to
split ratings:
     “Level I Pricing” applies at any date if, at such date, the Borrower’s
long-term debt is rated A+ or higher by S&P, A1 or higher by Moody’s and A+ or
higher by Fitch.
     “Level II Pricing” applies at any date if, at such date, the Borrower’s
long-term debt is rated A by S&P, A2 by Moody’s and A by Fitch.
     “Level III Pricing” applies at any date if, at such date, the Borrower’s
long-term debt is rated A- by S&P, A3 by Moody’s and A- by Fitch.
     “Level IV Pricing” applies at any date, if at such date, the Borrower’s
long-term debt is rated BBB+ by S&P, Baa1 by Moody’s and BBB+ by Fitch.
     “Level V Pricing” applies at any date if, at such date, the Borrower’s
long-term debt is rated BBB by S&P, Baa2 by Moody’s and BBB by Fitch.
     “Level VI Pricing” applies at any date if, at such date, no other Pricing
Level applies.
     “Fitch” means Fitch Ratings Ltd.
     “Moody’s” means Moody’s Investors Service, Inc.

 

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     “Pricing Level” refers to the determination of which of Level I, Level II,
Level III, Level IV, Level V or Level VI applies at any date.
     “S&P” means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc.
     “Utilization” means, at any date, the percentage equivalent of a fraction
(i) the numerator of which is the Total Outstanding Amount at such date (after
giving effect to any borrowing or payment on such date) and the denominator of
which is the aggregate amount of the Commitments at such date (after giving
effect to any reduction on such date). If for any reason any Loans or Letter of
Credit Liabilities remain outstanding after termination of the Commitments,
Utilization shall be deemed to be 100%.
     The credit ratings to be utilized for purposes of this Schedule are those
assigned to the senior unsecured long-term debt securities of the Borrower
without third-party enhancement (other than the Textron Inc. Support Agreement),
and any rating assigned to any other debt security of the Borrower shall be
disregarded. The rating in effect at any date is that in effect at the close of
business of such date.
     If the Borrower is split-rated, then for purposes of determining the
applicable Pricing Level, (a) if the S&P and Moody’s ratings are the same, all
three ratings will be deemed at that level, (b) if the S&P and Moody’s ratings
are not the same and the ratings differential is one level, then all three
ratings will be deemed to be at the higher level of S&P and Moody’s and (c) if
the S&P and Moody’s ratings are not the same and the ratings differential is two
levels or more, then all three ratings will be deemed to be at a level one notch
lower than the higher of S&P and Moody’s.