Base Warrants Confirmation



 Exhibit 10.2(a) 
 

 
 JPMorgan Chase Bank, National Association 
 P.O. Box 161 
 60 Victoria Embankment 
 London EC4Y 0JP 
 England 
 October 22, 2009 
  

			
	To: Navistar International Corporation
	4201 Winfield Road
	Warrenville, Illinois 60555
	Attention: Treasurer
	Telephone No.:	  	630-753-5000
	Facsimile No.:	  	630-753-2305

 Re: Base Warrants 
 The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the Warrants issued by Navistar International Corporation (“Company”)
to JPMorgan Chase Bank, National Association, London Branch (“Dealer”) as of the Trade Date specified below (the “Transaction”). This letter agreement constitutes a “Confirmation” as referred to in the
ISDA Master Agreement specified below. This Confirmation shall replace any previous agreements and serve as the final documentation for this Transaction. 
 The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern. This Transaction shall be deemed to be a
Share Option Transaction within the meaning set forth in the Equity Definitions. 
 Each party is hereby advised, and each such
party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation
relates on the terms and conditions set forth below. 
 1. This Confirmation evidences a complete and binding agreement between Dealer and
Company as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the “Agreement”) as if Dealer
and Company had executed an agreement in such form (but without any Schedule except for the election of the laws of the State of New York as the governing law (without reference to choice of law doctrine)) on the Trade Date. In the event of any
inconsistency between provisions of that Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby agree that no Transaction other than the Transaction
to which this Confirmation relates shall be governed by the Agreement. 
 2. The Transaction is a Warrant Transaction, which shall be considered
a Share Option Transaction for purposes of the Equity Definitions. The terms of the particular Transaction to which this Confirmation relates are as follows: 
  

			
	 General Terms.
	 	
		
	 Trade Date:
	 	October 22, 2009
		
	 Effective Date:
	 	The third Exchange Business Day immediately prior to the Premium Payment Date

 JPMorgan Chase Bank, National Association 
 Organised under the laws of the United States as a National Banking Association 
 Main Office 1111 Polaris Parkway, Columbus, Ohio 43271 
 Registered as a branch in England & Wales branch No. BR000746 
 Registered Branch Office 125 London Wall,
London EC2Y 5AJ 
 Authorised and regulated by the Financial Services Authority 








 

 
  


			
	 Warrants:
	 	Equity call warrants, each giving the holder the right to purchase one Share at the Strike Price, subject to the Settlement Terms set forth below. For the purposes of the Equity
Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option.
		
	 Warrant Style:
	 	European
		
	 Seller:
	 	Company
		
	 Buyer:
	 	Dealer
		
	 Shares:
	 	The common stock of Company, par value USD 0.10 per Share (Exchange symbol “NAV”).
		
	 Number of Warrants:
	 	3,102,996, subject to adjustment as provided herein. For the avoidance of doubt, the Number of Warrants shall be reduced by any Warrants exercised by Dealer. In no event will the
Number of Warrants be less than zero.
		
	 Warrant Entitlement:
	 	One Share per Warrant
		
	 Strike Price:
	 	USD 60.1426
		
	 Premium:
	 	USD 23,992,800.00
		
	 Premium Payment Date:
	 	October 28, 2009
		
	 Exchange:
	 	The New York Stock Exchange
		
	 Related Exchange(s):
	 	All Exchanges
		
	 Procedures for Exercise.
	 	
		
	 Expiration Time:
	 	The Valuation Time
		
	 Expiration Date(s):
	 	Each Scheduled Trading Day during the period from and including the First Expiration Date and to but excluding the 80th Scheduled Trading Day following the First Expiration Date shall be an “Expiration Date” for a number of
Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding anything to the contrary in the Equity Definitions, if any such date is a Disrupted Day, the Calculation Agent shall make adjustments, if applicable,
to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an Expiration Date and shall designate a Scheduled Trading Day or a number of Scheduled Trading Days as the Expiration Date(s) for the
remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date; and provided further that if such Expiration Date has not occurred pursuant to this clause as of the eighth Scheduled Trading Day following
the last scheduled Expiration Date under this Transaction, the Calculation Agent shall have the right to declare such Scheduled Trading Day to be the final Expiration Date and the Calculation Agent shall determine its good faith estimate of the fair
market value for the Shares as of the Valuation

  

 2 









 

 
  


			
		 	Time on that eighth Scheduled Trading Day or on any subsequent Scheduled Trading Day, as the Calculation Agent shall determine using commercially reasonable means.
		
	 First Expiration Date:
	 	December 15, 2014 (or if such day is not a Scheduled Trading Day, the next following Scheduled Trading Day), subject to Market Disruption Event below.
		
	 Daily Number of Warrants:
	 	For any Expiration Date, the Number of Warrants that have not expired or been exercised as of such day, divided by the remaining number of Expiration Dates (including such
day), rounded down to the nearest whole number, subject to adjustment pursuant to the provisos to “Expiration Date(s)”.
		
	 Automatic Exercise:
	 	Applicable; and means that for each Expiration Date, a number of Warrants equal to the Daily Number of Warrants (as adjusted pursuant to the terms hereof) for such Expiration Date
will be deemed to be automatically exercised.
		
	 Market Disruption Event:
	 	Section 6.3(a)(ii) of the Equity Definitions is hereby amended by replacing clause (ii) in its entirety with “(ii) an Exchange Disruption, or” and inserting immediately
following clause (iii) the phrase “; in each case that the Calculation Agent determines is material.”
		
	 Valuation Terms.
	 	
		
	 Valuation Time:
	 	Scheduled Closing Time; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion.

		
	 Valuation Date:
	 	Each Exercise Date.
		
	 Settlement Terms.
	 	
		
	 Settlement Method:
	 	Net Share Settlement.
		
	 Net Share Settlement:
	 	On the relevant Settlement Date, Company shall deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto
free of payment through the Clearance System.
		
	 Share Delivery Quantity:
	 	For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the Net Share Settlement Amount for such Settlement Date divided by the
Settlement Price on the Valuation Date in respect of such Settlement Date, rounded down to the nearest whole number plus any Fractional Share Amount.
		
	 Net Share Settlement Amount:
	 	For any Settlement Date, an amount equal to the product of (i) the Number of Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the Strike Price
Differential on the Valuation Date in respect of such Settlement Date and (iii) the Warrant Entitlement.

  

 3 









 

 
  


			
	 Settlement Price:
	 	For any Valuation Date, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page NAV.N <equity> AQR (or any
successor thereto) in respect of the period from the scheduled open of trading on the Exchange to the Scheduled Closing Time on such Valuation Date (or if such volume-weighted average price is unavailable, the market value of one Share on such
Valuation Date, as determined by the Calculation Agent). Notwithstanding the foregoing, if (i) any Expiration Date is a Disrupted Day and (ii) the Calculation Agent determines that such Expiration Date shall be an Expiration Date for fewer than the
Daily Number of Warrants, as described above, then the Settlement Price for the relevant Valuation Date shall be the volume-weighted average price per Share on such Valuation Date on the Exchange, as determined by the Calculation Agent based on such
sources as it deems appropriate using a volume-weighted methodology, for the portion of such Valuation Date for which the Calculation Agent determines there is no Market Disruption Event.
		
	 Settlement Date(s):
	 	As determined in reference to Section 9.4 of the Equity Definitions, subject to Section 9(k)(i) hereof.
		
	 Other Applicable Provisions:
	 	The provisions of Sections 9.1(c), 9.8, 9.9, 9.11, 9.12 and 10.5 of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-
settled” shall be read as references to “Net Share Settled.” “Net Share Settled” in relation to any Warrant means that Net Share Settlement is applicable to that Warrant.
		
	 Representation and Agreement:
	 	Notwithstanding Section 9.11 of the Equity Definitions, the parties acknowledge that any Shares delivered to Dealer may be, upon delivery, subject to restrictions and limitations
arising from Company’s status as issuer of the Shares under applicable securities laws.
	
	 3.      Additional Terms applicable to the
Transaction.

		
	 Adjustments applicable to the Warrants:
	 	
		
	 Method of Adjustment:
	 	Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may make adjustments, if any, to any one or
more of the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or distributions on the Shares, whether or not extraordinary, shall be governed by Section
9(f) of this Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity Definitions.
		
	 Extraordinary Events applicable to the Transaction:
	 	
		
	 New Shares:
	 	Section 12.1(i) of the Equity Definitions is hereby amended (a) by deleting the text in clause (i) thereof in its entirety (including the word “and” following clause (i))


  

 4 









 

 
  


			
		 	and replacing it with the phrase “publicly quoted, traded or listed (or whose related depositary receipts are publicly quoted, traded or listed) on any of the New York Stock
Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors)” and (b) by inserting immediately prior to the period the phrase “and (iii) of an entity or person organized under the laws of the
United States, any State thereof or the District of Columbia that also becomes Company under the Transaction following such Merger Event or Tender Offer”.
		
	 Consequence of Merger Events:
	 	
		
	 Merger Event:
	 	Applicable; provided that if an event occurs that constitutes both a Merger Event under Section 12.1(b) of the Equity Definitions and an Additional Termination Event under
Section 9(h)(ii)(B) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.1(b) of the Equity Definitions or Section 9(h)(ii)(B) will apply.
		
	 Share-for-Share:
	 	Modified Calculation Agent Adjustment
		
	 Share-for-Other:
	 	Cancellation and Payment (Calculation Agent Determination)
		
	 Share-for-Combined:
	 	Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect, in its commercially reasonable judgment, Component Adjustment (Calculation Agent
Determination).
		
	 Consequence of Tender Offers:
	 	
		
	 Tender Offer:
	 	Applicable; provided however that if an event occurs that constitutes both a Tender Offer under Section 12.1(d) of the Equity Definitions and Additional Termination Event
under Section 9(h)(ii)(A) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.3 of the Equity Definitions or Section 9(h)(ii)(A) will apply.
		
	 Share-for-Share:
	 	Modified Calculation Agent Adjustment
		
	 Share-for-Other:
	 	Modified Calculation Agent Adjustment
		
	 Share-for-Combined:
	 	Modified Calculation Agent Adjustment
		
	 Nationalization, Insolvency or Delisting:
	 	Cancellation and Payment (Calculation Agent Determination); provided that, in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also
constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their
respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or

  

 5 









 

 
  


			
		 	The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange.
		
	 Additional Disruption Events:
	 	
		
	 Change in Law:
	 	Applicable; provided that Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge
Positions.”
		
	 Failure to Deliver:
	 	Not Applicable
		
	 Insolvency Filing:
	 	Applicable
		
	 Hedging Disruption:
	 	Applicable; provided that Section 12.9(a)(v) of the Equity Definitions is hereby modified by inserting the following two phrases at the end of such Section: “For the
avoidance of doubt, the term “equity price risk” shall be deemed to include, but shall not be limited to, stock price and volatility risk. And, for the further avoidance of doubt, any such transactions or assets referred to in phrases (A)
or (B) above must be available on commercially reasonable pricing terms.”
		
	 Increased Cost of Hedging:
	 	Not Applicable
		
	 Loss of Stock Borrow:
	 	Applicable
		
	 Maximum Stock Loan Rate:
	 	200 basis points
		
	 Increased Cost of Stock Borrow:
	 	Applicable
		
	 Initial Stock Loan Rate:
	 	50 basis points
		
	 Hedging Party:
	 	For all applicable Additional Disruption Events, Dealer.
		
	 Determining Party:
	 	For all applicable Extraordinary Events, Dealer.
		
	 Non-Reliance:
	 	Applicable
		
	 Agreements and Acknowledgments Regarding Hedging Activities:
	 	Applicable
		
	 Additional Acknowledgments:
	 	Applicable
		
	 4.      Calculation Agent.
	 	Dealer
		
	 5.      Account Details.
	 	

  

	 	(a)	Account for payments to Company: 

 JP Morgan Chase Bank N.A. 
 ABA# 021-000-021 
 Acct: Navistar, Inc. 
 Acct No.: 144008108 
 Account for delivery of Shares from Company: 
 To be provided by Company. 
  

 6 









 

 
  


	 	(b)	Account for payments to Dealer: 

 JPMorgan Chase Bank, National Association, New York 
 ABA: 021 000 021 
 Favour: JPMorgan Chase Bank National Association, London 
 A/C: 0010962009 
 CHASUS33 
 Account for delivery of Shares to Dealer: 
 DTC 0060 
  

	6.	Offices. 

  

	 	(a)	The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party. 

  

	 	(b)	The Office of Dealer for the Transaction is: London 

 JPMorgan Chase Bank, National Association 
 London Branch 
 P.O. Box 161 
 60
Victoria Embankment 
 London EC4Y 0JP 
 England 
  

	7.	Notices. 

  

					
	(a)	  	Address for notices or communications to Company:
		
		  	Navistar International Corporation
		  	4201 Winfield Road
		  	Warrenville, Illinois 60555
		  	Attention: Treasurer
		  	Telephone No.:	  	630-753-5000
		  	Facsimile No.:	  	630-753-2305
		
	(b)	  	Address for notices or communications to Dealer:
		
		  	JPMorgan Chase Bank, National Association
		  	4 New York Plaza, Floor 18
		  	New York, NY 10004-2413
		  	Attention:	  	Mariusz Kwasnik
		  	Title:	  	Operations Analyst, EDG Corporate Marketing
		  	Telephone No:	  	(212) 623-7223
		  	Facsimile No:	  	(212) 623-7719

  

	8.	Representations and Warranties of Company. 

 Each of the representations and warranties of Company set forth in Section 2 of the Underwriting Agreement (the “Underwriting Agreement”) dated as of October 22, 2009 between
Company and J.P. Morgan Securities Inc. and Credit Suisse Securities (USA) LLC, as representatives of the Underwriters party thereto (the “Underwriters”), are true and correct and are hereby deemed to be repeated to Dealer on the
date hereof and on and as of the Premium Payment Date as if set forth herein. Company hereby further represents and warrants to Dealer on the date hereof and on and as of the Premium Payment Date that: 
  

	 	(a)	 Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of this Transaction; such execution,
delivery and performance have been duly authorized by all necessary corporate action on Company’s part; and this Confirmation has been duly and validly executed and delivered by Company and constitutes its valid and binding



  

 7 









 

 
  


	 	 
obligation, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. 


  

	 	(b)	Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach
of the certificate of incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument
to which Company or any of its subsidiaries is a party or by which Company or any of its subsidiaries is bound or to which Company or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any
such agreement or instrument. 

  

	 	(c)	No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or
performance by Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “Securities Act”) or state securities laws.


  

	 	(d)	The Shares of Company initially issuable upon exercise of the Warrant by the net share settlement method (the “Warrant Shares”) have been reserved for
issuance by all required corporate action of Company. The Warrant Shares have been duly authorized and, when delivered against payment therefor (which may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the terms of
the Warrant following the exercise of the Warrant in accordance with the terms and conditions of the Warrant, will be validly issued, fully-paid and non-assessable, and the issuance of the Warrant Shares will not be subject to any preemptive or
similar rights. 

  

	 	(e)	Company is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.


  

	 	(f)	Company is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended).


  

	 	(g)	Company and each of its affiliates is not, on the date hereof, in possession of any material non-public information with respect to Company. 


 

	9.	Other Provisions. 

  

	 	(a)	Opinions. Company shall deliver to Dealer an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Dealer in form and substance,
with respect to the matters set forth in Sections 8(a) through (d) of this Confirmation. Delivery of such opinion to Dealer shall be a condition precedent for the purpose of Section 2(a)(iii) of the Agreement with respect to each
obligation of Dealer under Section 2(a)(i) of the Agreement. 

  

	 	(b)	 Repurchase Notices. Company shall, on any day on which Company effects any repurchase of Shares, promptly give Dealer a written notice of
such repurchase (a “Repurchase Notice”) on such day if following such repurchase, the number of outstanding Shares on such day, subject to any adjustments provided herein, is (i) less than 69,620,000 (in the case of the first
such notice) or (ii) thereafter more than 745,000 less than the number of Shares included in the immediately preceding Repurchase Notice. Company agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers,
directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of
becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with



  

 8 









 

 
  


	 	 
respect to this Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, which an Indemnified Person actually may become
subject to, as a result of Company’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any
reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person, such Indemnified Person shall promptly notify Company in writing, and Company, upon request of the Indemnified Person, shall retain counsel
reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Company may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Company shall not be liable
for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Company agrees to indemnify any Indemnified Person from and against any loss or liability
by reason of such settlement or judgment. Company shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been
a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on
terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein,
then Company under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies
provided for in this paragraph are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall
remain operative and in full force and effect regardless of the termination of this Transaction. 


  

	 	(c)	Regulation M. Company is not on the date hereof engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), of any securities of Company, other than the concurrent distributions being made on the date hereof of USD 550,000,000 principal amount of 3.00% senior subordinated convertible notes due 2014 and USD
1,000,000,000 principal amount of 8.25% senior notes due 2021. Company shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. 

  

	 	(d)	No Manipulation. Company is not entering into this Transaction to create actual or apparent trading activity in the Shares (or any security convertible
into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. 

  

	 	(e)	 Transfer or Assignment. Company may not transfer any of its rights or obligations under this Transaction without the prior written
consent of Dealer. Dealer may, without Company’s consent, transfer or assign all or any part of its rights or obligations under this Transaction to any third party. If at any time at which (A) the Section 16 Percentage exceeds 7.5%,
(B) the Warrant Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”),
Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Warrants to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no
Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination
no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a Terminated Portion, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date
had been designated in respect of a Transaction having terms identical to this Transaction and a Number of Warrants equal to the



  

 9 









 

 
  


	 	 
number of Warrants underlying the Terminated Portion, (2) Company were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole
Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(j) shall apply to any amount that is payable by Company to Dealer pursuant to this sentence as if Company was not the Affected Party). The “Section 16
Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16
of the Exchange Act and rules promulgated thereunder (the “Dealer Group”) directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and
(B) the denominator of which is the number of Shares outstanding. The “Warrant Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of
the Number of Warrants and the Warrant Entitlement and (2) the aggregate number of Shares underlying any other warrants purchased by Dealer from Company, and (B) the denominator of which is the number of Shares outstanding. The
“Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule,
regulation, regulatory order or contract that is applicable to ownership of Shares (“Applicable Laws”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of
ownership of under the Applicable Laws, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that would give rise to reporting or
registration obligations or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or would result in an adverse effect on a Dealer Person, under the Applicable Laws, as determined by Dealer in its
reasonable discretion, minus (B) 1% of the number of Shares outstanding. Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other
securities to or from Company, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities and otherwise to perform Dealer’s obligations in respect of this Transaction and any such designee
may assume such obligations. Dealer shall be discharged of its obligations to Company to the extent of any such performance. 


  

	 	(f)	Dividends. If at any time during the period from and including the Effective Date, to and including the Expiration Date, an ex-dividend date for a cash
dividend occurs with respect to the Shares (an “Ex-Dividend Date”), then the Calculation Agent will adjust any of the Strike Price, Number of Warrants and/or Daily Number of Warrants to preserve the fair value of the Warrants to
Dealer after taking into account such dividend. 

  

	 	(g)	Role of Agent. Each party agrees and acknowledges that (i) J.P. Morgan Securities Inc., an affiliate of Dealer (“JPMSI”), has acted
solely as agent and not as principal with respect to this Transaction and (ii) JPMSI has no obligation or liability, by way of guaranty, endorsement or otherwise, in any manner in respect of this Transaction (including, if applicable, in
respect of the settlement thereof). Each party agrees it will look solely to the other party (or any guarantor in respect thereof) for performance of such other party’s obligations under this Transaction. 

  

	 	(h)	Additional Provisions. 

  

	 	(i)	Amendments to the Equity Definitions: 

  

	 	(A)	Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the words
“an”; and adding the phrase “or Warrants” at the end of the sentence. 

  

	 	(B)	 Section 11.2(c) of the Equity Definitions is hereby amended by (x) replacing the words “a diluting or concentrative” with
“an”, (y) adding the phrase “or Warrants” after the words “the relevant Shares” in the same sentence and (z) deleting the phrase “(provided that no adjustments will be made to account solely for changes
in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)” and replacing it with the phrase “(and, for the



  

 10 









 

 
  


	 	 
avoidance of doubt, adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares).”



  

	 	(C)	Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the word
“a material”; and adding the phrase “or Warrants” at the end of the sentence. 

  

	 	(D)	Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the fourth line thereof the word “or” after the word
“official” and inserting a comma therefor, and (2) deleting the semi-colon at the end of subsection (B) thereof and inserting the following words therefor “or (C) at Dealer’s option, the occurrence of any of the events
specified in Section 5(a)(vii) (1) through (9) of the ISDA Master Agreement with respect to that Issuer.” 

  

	 	(E)	Section 12.9(b)(iv) of the Equity Definitions is hereby amended by: 

  


	 	(x)	deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each
case” in subsection (B); and 

  

	 	(y)	deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence.


  

	 	(F)	Section 12.9(b)(v) of the Equity Definitions is hereby amended by: 

  

	 	(x)	adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); and 

  

	 	(y)	(1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C) and (3) deleting the
penultimate sentence in its entirety and replacing it with the sentence “The Hedging Party will determine the Cancellation Amount payable by one party to the other.” 

  

	 	(ii)	Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to this Transaction, (1) Dealer
shall have the right to designate such event an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, (2) Company shall be deemed the sole Affected Party with respect to such
Additional Termination Event and (3) the Transaction shall be deemed the sole Affected Transaction: 

  

	 	(A)	A “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than Company, its subsidiaries and its and their employee
benefit plans, has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the common equity of Company representing more than 50% of the voting power of such common equity.


  

	 	(B)	 Consummation of (I) any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or
combination) as a result of which the Shares would be converted into, or exchanged for, stock, other securities, other property or assets or (II) any share exchange, consolidation or merger of Company pursuant to which the Shares will be converted
into cash, securities or other property or any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of Company and its subsidiaries, taken as a whole, to any person other
than one of Company’s subsidiaries; provided, however, that a transaction where the holders of all classes of Company’s common equity



  

 11 









 

 
  


	 	 
immediately prior to such transaction (each a “Pre-Transaction Holder”) that is a share exchange, consolidation or merger own, directly or indirectly, more than 50% of all
classes of common equity of the continuing or surviving corporation or transferee or the parent thereof immediately after such event shall not be an Additional Termination Event so long as the proportion of the respective ownership of each
Pre-Transaction Holder remains substantially the same relative to all other Pre-Transaction Holders. Notwithstanding the foregoing, any event set forth in this clause (B) shall not constitute an Additional Termination Event if at least 90% of
the consideration received or to be received by holders of the Shares, excluding cash payments for fractional shares, in connection with such event consists of shares of common stock traded on a national securities exchange in the United States or
which will be so traded or quoted when issued or exchanged in connection with such event. 


  

	 	(C)	If (I) the directors who were members of Company’s board of directors on the Trade Date or (II) the directors who become members of Company’s board of
directors subsequent to that date and whose appointment or election by the board of directors or nomination for election by Company’s stockholders is approved (a) by the vote of at least a majority of the directors then still in office or
whose appointment, election or nomination was previously so approved or recommended or (b) with respect to directors whose appointment or election to the board of directors is made by the holders of Company’s non-convertible junior
preference stock, series B, by the holders of such preference stock, cease to constitute at least a majority of Company’s board of directors. 

  

	 	(D)	(I) Company or any of its subsidiary defaults (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or
interest on any debt that is outstanding in an aggregate principal amount of at least $50,000,000 beyond any period of grace provided with respect thereto (a “Monetary Default”) or (II) Company or any of its subsidiaries fails to
perform or comply with any term of any evidence of any debt in an aggregate outstanding principal amount of at least $50,000,000 or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of
such failure or condition such debt could (including with the giving of notice or passage of time) or has become, or has been declared, due and payable before its stated maturity or before its regularly scheduled dates of payment, or (III) as a
consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of debt to convert such debt into cash or cash and equity interests), (x) Company or any of its subsidiaries has
become obligated to purchase or repay debt before its stated maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $50,000,000, or (y) as a result of a Monetary Default, one or more
persons have the right to require Company or any of its subsidiaries so to purchase or repay such debt. 

  

	 	(E)	Dealer, despite using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal, to hedge its exposure with respect to this
Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are
imposed by law or have been voluntarily adopted by Dealer). 

  

	 	(i)	 No Collateral or Setoff. Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the
obligations of Company hereunder are not secured by any collateral. Obligations under this Transaction shall not be set off by Company against any other obligations of the parties, whether arising under the Agreement, this Confirmation, under any
other agreement between the parties hereto, by operation of law or otherwise. Any provision in



  

 12 









 

 
  


	 	 
the Agreement with respect to the satisfaction of Company’s payment obligations to the extent of Dealer’s payment obligations to Company in the same currency and in the same Transaction
(including, without limitation Section 2(c) thereof) shall not apply to Company and, for the avoidance of doubt, Company shall fully satisfy such payment obligations notwithstanding any payment obligation to Company by Dealer in the same
currency and in the same Transaction. In calculating any amounts under Section 6(e) of the Agreement, notwithstanding anything to the contrary in the Agreement, (1) separate amounts shall be calculated as set forth in such
Section 6(e) with respect to (a) this Transaction and (b) all other Transactions, and (2) such separate amounts shall be payable pursuant to Section 6(d)(ii) of the Agreement. For the avoidance of doubt and notwithstanding
anything to the contrary provided in this Section 9(i), in the event of bankruptcy or liquidation of either Company or Dealer, neither party shall have the right to set off any obligation that it may have to the other party under this
Transaction against any obligation such other party may have to it, whether arising under the Agreement, this Confirmation or any other agreement between the parties hereto, by operation of law or otherwise. 


  

	 	(j)	Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If, in respect of this Transaction, an amount is payable by
Company to Dealer, (i) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Company shall have the right, in its
sole discretion, to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) (except that Company shall not make such an election in the event of a Nationalization, Insolvency, Merger Event or Tender Offer in which
the consideration to be paid to holders of shares consists solely of cash or an Event of Default in which Company is the Defaulting Party or a Termination Event in which Company is the Affected Party, other than an Event of Default of the type
described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b) of the Agreement, in each case that resulted from an event or events outside Company’s
control) and shall give irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 12:00 p.m. (New York City time) on the Merger Date, Tender Offer Date, Announcement Date (in the case of a
Nationalization, Insolvency or Delisting), Early Termination Date or date of cancellation, as applicable; provided that if Company does not validly elect to satisfy its Payment Obligation by the Share Termination Alternative, Dealer shall
have the right to require Company to satisfy its Payment Obligation by the Share Termination Alternative. Notwithstanding the foregoing, Company’s or Dealer’s right to elect satisfaction of a Payment Obligation in the Share Termination
Alternative as set forth in this clause shall only apply to Transactions under this Confirmation and, notwithstanding anything to the contrary in the Agreement, (1) separate amounts shall be calculated with respect to (a) Transactions
hereunder and (b) all other Transactions under the Agreement, and (2) such separate amounts shall be payable pursuant to Section 6(d)(ii) of the Agreement, subject to, in the case of clause (a), Company’s Share Termination
Alternative right hereunder. 

  

					
		 	Share Termination Alternative:	 	If applicable, Company shall deliver to Dealer the Share Termination Delivery Property on the date (the “Share Termination Payment Date”) on which the Payment
Obligation would otherwise be due pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, subject to paragraph (k)(i) below, in satisfaction, subject to paragraph (k)(ii) below, of the
Payment Obligation in the manner reasonably requested by Dealer free of payment.
			
		 	Share Termination Delivery Property:	 	A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation
Agent shall adjust the amount of Share Termination Delivery Property by replacing any fractional portion of a

  

 13 









 

 
  


					
	 	 	 	 	security therein with an amount of cash equal to the value of such fractional
security based on the values used to calculate the Share Termination Unit Price.
			
		 	Share Termination Unit Price:	 	The value to Dealer of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination
Delivery Property, as determined by the Calculation Agent in its discretion by commercially reasonable means. The Calculation Agent shall notify Company of such Share Termination Unit Price at the time of notification of the Payment Obligation. In
the case of a Private Placement of Share Termination Delivery Units that are Restricted Shares (as defined below), as set forth in paragraph (k)(i) below, the Share Termination Unit Price shall be determined by the discounted price applicable to
such Share Termination Delivery Units. In the case of a Registration Settlement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in paragraph (k)(ii) below, the Share Termination Unit Price shall be the
Settlement Price on the Merger Date, the Tender Offer Date, the Announcement Date (in the case of a Nationalization, Insolvency or Delisting), the date of cancellation or the Early Termination Date, as applicable.
			
		 	Share Termination Delivery Unit:	 	In the case of a Termination Event, Event of Default Additional Disruption Event or Delisting, one Share or, in the case of Nationalization, Insolvency, Tender Offer or Merger
Event, a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such
Nationalization, Insolvency, Tender Offer or Merger Event. If such Nationalization, Insolvency, Tender Offer or Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the
maximum possible amount of cash.
			
		 	Failure to Deliver:	 	Inapplicable
			
		 	Other applicable provisions:	 	If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9, 9.11, 9.12 and 10.5 (as modified above) of the Equity Definitions will be applicable, except
that all references in such provisions to “Physically-settled” shall be read as references to “Share Termination Settled” and all references to “Shares” shall be read as references to “Share Termination Delivery
Units”. “Share Termination Settled” in relation to this Transaction means that Share Termination Alternative is applicable to this Transaction.

  

 14 









 

 
  


	 	(k)	Registration/Private Placement Procedures. If, in the reasonable opinion of Dealer, following any delivery of Shares or Share Termination Delivery
Property to Dealer hereunder, such Shares or Share Termination Delivery Property would be in the hands of Dealer subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement
for such Shares or Share Termination Delivery Property pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or
Share Termination Delivery Property being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph
(c) of Rule 145 under the Securities Act) (such Shares or Share Termination Delivery Property, “Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or
(ii) below at the election of Company, unless Dealer waives the need for registration/private placement procedures set forth in (i) and (ii) below. Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants
exercised or deemed exercised on any Expiration Date, Company shall elect, prior to the first Settlement Date for the First Expiration Date, a Private Placement Settlement or Registration Settlement for all deliveries of Restricted Shares for all
such Expiration Dates which election shall be applicable to all Settlement Dates for such Warrants and the procedures in clause (i) or clause (ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing
after the final Settlement Date for such Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement or Registration Settlement for such aggregate
Restricted Shares delivered hereunder. 

  

	 	(i)	If Company elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by
Company shall be effected in customary private placement procedures with respect to such Restricted Shares reasonably acceptable to Dealer; provided that Company may not elect a Private Placement Settlement if, on the date of its election, it
has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Company to Dealer (or any affiliate designated by Dealer) of the Restricted Shares or
the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Dealer (or any such affiliate of Dealer). The Private Placement Settlement of such Restricted Shares shall include
customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights (for Dealer or any designated buyer of the Restricted Shares by Dealer), opinions and certificates, and
such other documentation as is customary for private placement agreements, all reasonably acceptable to Dealer. In the case of a Private Placement Settlement, Dealer shall determine the appropriate discount to the Share Termination Unit Price (in
the case of settlement of Share Termination Delivery Units pursuant to paragraph (j) above) or any Settlement Price (in the case of settlement of Shares pursuant to Section 2 above) applicable to such Restricted Shares in a commercially
reasonable manner and appropriately adjust the number of such Restricted Shares to be delivered to Dealer hereunder; provided that in no event shall Company deliver a number of Restricted Shares greater than 1.18 times the Number of Shares
(the “Maximum Number of Shares”) (as adjusted pursuant to the terms of Section 9(p)). Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day
following notice by Dealer to Company, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted Shares shall be due as set forth in the previous
sentence and not be due on the Share Termination Payment Date (in the case of settlement of Share Termination Delivery Units pursuant to paragraph (j) above) or on the Settlement Date for such Restricted Shares (in the case of settlement in
Shares pursuant to Section 2 above). 

 In the event Company shall not have delivered the full number of
Restricted Shares otherwise applicable as a result of the proviso above relating to the Maximum Number of

  

 15 









 

 
  

 
Shares (such deficit, the “Deficit Restricted Shares”), Company shall be continually obligated to deliver, from time to time until the full number of Deficit Restricted Shares
have been delivered pursuant to this paragraph, Restricted Shares when, and to the extent, that (i) Shares are repurchased, acquired or otherwise received by Company or any of its subsidiaries after the Trade Date (whether or not in exchange
for cash, fair value or any other consideration), including, without limitation, any Shares received by Company upon settlement or termination of any options or other derivatives, (ii) authorized and unissued Shares reserved for issuance in
respect of other transactions prior to such date which prior to the relevant date become no longer so reserved and (iii) Company additionally authorizes any unissued Shares that are not reserved for other transactions. Company shall immediately
notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Restricted Shares to be delivered) and promptly deliver such Restricted
Shares thereafter. 
  

	 	(ii)	If Company elects to settle the Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Company shall promptly (but in any
event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance
reasonably satisfactory to Dealer, to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if
applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary for equity resale underwriting agreements, all reasonably acceptable to Dealer. If Dealer, in its sole reasonable discretion, is
not satisfied with such procedures and documentation Private Placement Settlement shall apply. If Dealer is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a period
(the “Resale Period”) commencing on the Exchange Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) the Share Termination Payment Date in case of settlement in Share
Termination Delivery Units pursuant to paragraph (j) above or (y) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the earliest of (i) the Exchange Business Day on which
Dealer completes the sale of all Restricted Shares or, in the case of settlement of Share Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales equals or exceeds the Payment Obligation
(as defined above), (ii) the date upon which all Restricted Shares have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act and
(iii) the date upon which all Restricted Shares may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act. If
the Payment Obligation exceeds the realized net proceeds from such resale, Company shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the last day of the Resale
Period the amount of such excess (the “Additional Amount”) in cash or in a number of Shares (“Make-whole Shares”) in an amount that, based on the Settlement Price on the last day of the Resale Period (as if such day
was the “Valuation Date” for purposes of computing such Settlement Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If Company elects to pay the
Additional Amount in Shares, the requirements and provisions for Registration Settlement shall apply. This provision shall be applied successively until the Additional Amount is equal to zero. In no event shall Company deliver a number of Restricted
Shares greater than the Maximum Number of Shares. 

  

	 	(iii)	 Without limiting the generality of the foregoing, Company agrees that any Restricted Shares delivered to Dealer, as purchaser of such Restricted
Shares, (i) may be transferred



  

 16 









 

 
  


	 	 
by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer and (ii) after the period of 6 months from the Trade Date (or 1 year from
the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company) has elapsed after any Settlement Date for such Restricted Shares, Company shall promptly remove, or cause the transfer agent for
such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Dealer (or such affiliate of Dealer) to Company or such transfer agent, without any requirement for the
delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer). 


 If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii), as
applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Company shall be the Defaulting Party. 
  

	 	(l)	Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Dealer may not exercise any Warrant hereunder, have the “right to
acquire” (within the meaning of NYSE Rule 312.04(g)) Shares upon exercise of any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not apply with respect to any Warrant
hereunder, to the extent (but only to the extent) that, after such receipt of any Shares upon the exercise of such Warrant or otherwise hereunder, (i) the Share Amount would exceed the Applicable Share Limit, or (ii) Dealer Group would
directly or indirectly beneficially own (as such term is defined for purposes of Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) in excess of the lesser of (A) 7.5% of the then outstanding Shares or
(B) 3,465,354 Shares (the “Threshold Number of Shares”). Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery, (i) the Share Amount would exceed
the Applicable Share Limit, or (ii) Dealer Group would directly or indirectly so beneficially own in excess of the Threshold Number of Shares. If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this
provision, Company’s obligation to make such delivery shall not be extinguished and Company shall make such delivery as promptly as practicable after, but in no event later than one Business Day after, Dealer gives notice to Company that, after
such delivery, (i) the Share Amount would not exceed the Applicable Share Limit, and (ii) Dealer Group would not directly or indirectly so beneficially own in excess of the Threshold Number of Shares. 

  

	 	(m)	 Share Deliveries. Company acknowledges and agrees that, to the extent the holder of this Warrant is not then an affiliate and has not
been an affiliate for 90 days (it being understood that Dealer will not be considered an affiliate under this paragraph solely by reason of its receipt of Shares pursuant to this Transaction), and otherwise satisfies all holding period and other
requirements of Rule 144 of the Securities Act applicable to it, any delivery of Shares or Share Termination Delivery Property hereunder at any time after 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational
requirements of Rule 144(c) are not satisfied with respect to Company) shall be eligible for resale under Rule 144 of the Securities Act and Company agrees to promptly remove, or cause the transfer agent for such Shares or Share Termination Delivery
Property, to remove, any legends referring to any restrictions on resale under the Securities Act from the Shares or Share Termination Delivery Property. Company further agrees that any delivery of Shares or Share Termination Delivery Property prior
to the date that is 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company), may be transferred by and among Dealer and its affiliates and
Company shall effect such transfer without any further action by Dealer. Notwithstanding anything to the contrary herein, Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer
through the facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary. Notwithstanding anything to the
contrary herein, to the extent the provisions of Rule 144 of the Securities Act or any successor rule are amended, or the applicable interpretation



  

 17 









 

 
  


	 	 
thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of Company herein shall be deemed modified to the extent necessary, in the opinion of
outside counsel of Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Delivery Property. 


  

	 	(n)	Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any
suit, action or proceeding relating to this Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a
suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into this Transaction, as applicable, by, among other things, the mutual waivers and certifications
provided herein. 

  

	 	(o)	Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Company and each of its employees, representatives, or
other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Company relating
to such tax treatment and tax structure. 

  

	 	(p)	Maximum Share Delivery. Notwithstanding any other provision of this Confirmation or the Agreement, in no event will Company at any time be required to
deliver more than the Maximum Number of Shares to Dealer in connection with the Transaction, subject to the provisions regarding Deficit Restricted Shares in Section 9(k). Company represents and warrants (which representation and warranty shall
be deemed to be repeated on each day that the Transaction is outstanding) that the Maximum Number of Shares (as adjusted pursuant to the terms of this Section 9(p)) is equal to the product of 19.11% and the number of authorized but unissued
Shares of Company that are not reserved for future issuance in connection with transactions in the Shares (other than the Transaction) on the date of the determination of the Maximum Number of Shares (such product, the “Available
Shares”). For the avoidance of doubt, the parties agree that any Shares reserved pursuant to equity options plans, employee benefit plans and convertible notes shall not be considered Available Shares. If at any time the number of Available
Shares increases, Company shall so notify Dealer, and the Maximum Number of Shares shall be automatically increased to equal the Available Shares; provided that the Maximum Number of Shares shall not exceed 1.60 times the Number of Shares.
Company agrees to use its reasonable best efforts to seek approval from its shareholders (i) for the issuance pursuant to the Transaction of a number of Shares equal to two times the Number of Shares in accordance with the requirements of NYSE
Rule 312.03(c), and (ii) to increase the number of authorized but unissued Shares such that the Available Shares shall be greater than or equal to, and the Maximum Number of Shares shall be automatically increased to, two times the Number of
Shares. Company agrees at all times to reserve for issuance in connection with the Transaction a number of Shares equal to the Maximum Number of Shares by all required corporate action of Company. 

  

	 	(q)	Right to Extend. Dealer may postpone, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of
the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Dealer determines, in its commercially reasonable judgment, that such
extension is reasonably necessary or appropriate to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge
unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures
applicable to Dealer. 

  

	 	(r)	 Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against
Company with respect to the Transaction that are senior to the claims of common stockholders of Company in any United States bankruptcy proceedings of Company; provided that nothing herein shall limit or shall be deemed to limit Dealer’s
right to pursue remedies in the event of a breach by Company of its obligations and



  

 18 









 

 
  


	 	 
agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other
than the Transaction. 


  

	 	(s)	Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap
agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6),
362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other
party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement
payment” and a “transfer” as defined in the Bankruptcy Code. 

  

	 	(t)	Early Unwind. Notwithstanding anything in this Confirmation to the contrary, and subject to the immediately succeeding sentence, the respective
obligations of the parties under the Transaction shall become final and binding, and the Transaction shall become effective, on the Premium Payment Date. In the event that (i) the sale of the “Firm Securities” (as defined in the
Underwriting Agreement) is not consummated with the Underwriters for any reason, or Company fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), in each case by 5:00 p.m. (New York City time) on the Premium
Payment Date, or such later date as agreed upon by the parties (the Premium Payment Date or such later date the “Early Unwind Date”) or (ii) the $1,500,000,000 Credit Agreement dated as of January 19, 2007 among Company,
as Borrower, the several lenders from time to time party thereto, Credit Suisse Securities (USA) LLC as Syndication Agent and JPMorgan Chase Bank, N.A., as Administrative Agent is not repaid in full and terminated on prior to the Premium Payment
Date, the Transaction shall automatically terminate (the “Early Unwind”), on the Early Unwind Date and (x) the Transaction and all of the respective rights and obligations of Dealer and Company under the Transaction
shall be cancelled and terminated and (y) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out
of and to be performed in connection with the Transaction either prior to or after the Early Unwind Date; provided that Company shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its
affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer and Company represent and acknowledge to the other that, subject to the proviso included in this Section, upon an Early Unwind, all obligations with
respect to the Transaction shall be deemed fully and finally discharged. 

  

	 	(u)	Payment by Dealer. In the event that (i) an Early Termination Date occurs or is designated with respect to the Transaction as a result of a
Termination Event or an Event of Default (other than an Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as a result, Dealer owes to Company an amount calculated under Section 6(e) of the Agreement, or
(ii) Dealer owes to Company, pursuant to Section 12.7 or Section 12.9 of the Equity Definitions, an amount calculated under Section 12.8 of the Equity Definitions, such amount shall be deemed to be zero. 


 

 19 









 

 
  

 Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this
Confirmation and returning it to EDG Confirmation Group, J.P. Morgan Securities Inc., 277 Park Avenue, 11th Floor, New York, NY 10172-3401, or by fax to (212) 622 8519. 
 Very truly yours, 
  

			
	J.P. Morgan Securities Inc., as agent for
	JPMorgan Chase Bank, National Association
		
	By:	 	 /s/ Jeffrey Zajkowski

	 Authorized Signatory 

	Name:	 	Jeffrey Zajkowski


  

			
	Accepted and confirmed
	as of the Trade Date:
	
	Navistar International Corporation
		
	By:	 	  

	 Authorized Signatory

	Name:	 	

 (Signature Page to Confirmation of Base Warrant Transaction) 








 

 
  

 Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this
Confirmation and returning it to EDG Confirmation Group, J.P. Morgan Securities Inc., 277 Park Avenue, 11th Floor, New York, NY 10172-3401, or by fax to (212) 622 8519. 
 Very truly yours, 
  

			
	J.P. Morgan Securities Inc., as agent for
	JPMorgan Chase Bank, National Association
		
	By:	 	  

	Authorized Signatory
	Name:	 	


  

			
	 Accepted and confirmed
 as of the Trade Date:

	
	Navistar International Corporation
		
	By:	 	 /s/ Jim Moran

	Authorized Signatory
	Name:	 	Jim Moran
		 	VP & Treasurer

 (Signature Page to Confirmation of Base Warrant Transaction)