Exhibit
4.3


 




 





 


NAVISTAR
INTERNATIONAL CORPORATION


 


93/8%
SENIOR NOTES DUE 2006


 


 












 


SECOND
SUPPLEMENT TO INDENTURE

DATED AS OF JUNE 2, 2004,


 


BY
AND AMONG


 


NAVISTAR
INTERNATIONAL CORPORATION,

AS ISSUER,




INTERNATIONAL
TRUCK AND ENGINE CORPORATION,

AS SUBSIDIARY GUARANTOR,




AND




BNY
MIDWEST TRUST COMPANY,

AS TRUSTEE


 




 





 

















 


SECOND
SUPPLEMENT TO INDENTURE


 


This Second
Supplement to Indenture is dated as of June 2, 2004 (the “Second
Supplement”), by and among Navistar International Corporation, a Delaware corporation
(the “Company”), International Truck and Engine Corporation, a Delaware
corporation (“ITEC”), as Guarantor, and BNY Midwest Trust Company, an Illinois
banking corporation, as trustee (the “Trustee”).  Capitalized terms used but not defined in this Second Supplement
shall have the meanings ascribed to such terms in the Indenture (hereinafter
defined).


 


WHEREAS, the
Company, ITEC and the Trustee are parties to that certain Indenture, dated as
May 31, 2001, and as amended by the First Supplement to Indenture, dated
as of August 21, 2001, (as may be further amended and supplemented from
time to time in accordance with its terms, the “Indenture”), with respect to
the Company’s 93/8% Senior Notes due 2006 (the
“Notes”);


 


WHEREAS,
Section 9.2 of the Indenture provides that, when authorized by resolutions
of its Board of Directors, the Company and the Trustee may, with the consent of
the Holders of not less than a majority in principal amount of the outstanding
Notes, enter into one or more indentures supplemental to the Indenture for the
purpose of, among other things, changing in any manner or eliminating any of
the provisions of the Indenture or of modifying in any manner the rights of the
Holders, subject to certain exceptions set forth therein;


 


WHEREAS, the
Company has solicited consents from the Holders of the Notes with respect to
the amendments to the Indenture effected by this Second Supplement pursuant to
a Consent Solicitation Statement, dated May 11, 2004 (as amended, the
“Consent Statement”);


 


WHEREAS, Holders
of at least a majority in principal amount of the Notes outstanding have
consented to the amendments to the Indenture effected by this Second
Supplement;


 


WHEREAS, pursuant
to Section 9.2 of the Indenture, the Trustee is authorized to execute and
deliver this Second Supplement;


 


NOW, THEREFORE, in
consideration of the premises and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree, for the equal and proportionate benefit of all Holders of the
Securities, as follows:


 


ARTICLE I


INDENTURE
AMENDMENTS


 


Section 1.01  Amendment to Certain Definitions.  (a) The definition of “Cash Equivalents”
shall hereby be added and supplemented to Section 1.1 of the Indenture in
the appropriate alphabetical location and shall read as follows:


 


“Cash Equivalents”
means:


 


(1)  United States dollars or in the case of any Foreign Subsidiary,
such local currencies held by it from time to time in the ordinary course of
business;


 

















 


(2)  securities issued or directly and fully guaranteed or insured by
the United States or Canadian government (both federal and provincial) or any
agency or instrumentality of the United States or Canadian government (provided
that the full faith and credit of the United States or Canada (federal or
provincial, as the case may be), as the case may be, is pledged in support of
those securities) having maturities of not more than twenty-four months from
the date of acquisition;


 


(3)  certificates of deposit and eurodollar time deposits with
maturities of twenty-four months or less from the date of acquisition, bankers’
acceptances with maturities not exceeding twenty-four months and overnight
bank deposits, in each case, with any commercial bank incorporated under the laws
of the United States, any state thereof, the District of Columbia, Canada or
any province or territory thereof having capital and surplus in excess of
$500.0 million and a Thomson Bank Watch Rating of “B” or better;


 


(4)  repurchase obligations or securities lending arrangements for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;


 


(5)  commercial paper having a rating of at least “A-2” from S&P
or “P-2” from Moody’s and in each case maturing within 270 days after the date
of acquisition or asset-backed securities having a rating of at least “A” from
S&P or “A2” from Moody’s and in each case maturing within thirty-six months
after the date of acquisition;


 


(6)  with respect to any Foreign Subsidiary having its principal
operations in Mexico only, (i) Certificados de la Tesoreria de la
Federacion (Cetes), Bonos de Desarrollo del Gobierno Federal (Bondes) or Bonos Adjustables
del Gobierno Federal (Adjustabonos), in each case, issued by the Mexican
government; and (ii) any other instruments issued or guaranteed by Mexico and
denominated and payable in pesos; provided, that, in each case, such
investments under this clause (6) are made in the ordinary course of business
for cash management purposes;


 


(7)  demand or time deposit accounts used in the ordinary course of
business with overseas branches of commercial banks incorporated under the laws
of the United States of America, any state thereof, the District of Columbia,
Canada or any province or territory therof, provided
that such commercial bank has, at the time of NIC’s or such Restricted
Subsidiary’s Investment therein, (1) capital, surplus and undivided
profits (as of the date of such institution’s most recently published financial
statements) in excess of $100.0 million and (2) the long-term
unsecured debt obligations (other than such obligations rated on the basis of
the credit of a Person other than such institution) of such institution, at the
time of NIC’s or any


 


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Restricted Subsidiary’s
Investment therein, are rated at least “A” from S&P or “A2” from Moody’s;


 


(8)  obligations (including, but not limited to demand or time
deposits, bankers’ acceptances and certificates of deposit) issued or
guaranteed by a depository institution or trust company incorporated under the
laws of the United States of America, any state thereof, the District of
Columbia, Canada or any province or territory thereof, provided that (A) such instrument has
a final maturity not more than one year from the date of purchase thereof by
the Company or any Restricted Subsidiary of the Company and (B) such
depository institution or trust company has at the time of the Company’s or
such Restricted Subsidiary’s Investment therein or contractual commitment
providing for such Investment, (x) capital, surplus and undivided profits
(as of the date of such institution’s most recently published financial statements)
in excess of $100.0 million and (y) the long-term unsecured debt
obligations (other than such obligations rated on the basis of the credit of a
Person other than such institution) of such institution, at the time of the
Company’s or such Restricted Subsidiary’s Investment therein or contractual
commitment providing for such Investment, are rated at least “A” from S&P
or “A2” from Moody’s;


 


(9)  in the case of any Foreign Subsidiary, demand or time deposit
accounts used in the ordinary course of business with reputable commercial
banks located in the jurisdiction of organization of such Foreign Subsidiary;
and


 


(10)  money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1) through (5) of this
definition.


 


Notwithstanding the foregoing,
Investments which would otherwise constitute Cash Equivalents of the kinds
described in clauses (2), (3), (4) and (5) that are permitted to have
maturities in excess of twelve months shall only be deemed to be Cash
Equivalents under this definition if and only if the total weighted average
maturity of all Cash Equivalents of the kinds described in clauses (2),
(3), (4) and (5) does not exceed twelve months on an aggregate basis.


 


(b)  The definition of “Permitted Investments”
included in Section 1.1 of the Indenture shall be amended and supplemented
by deleting such definition in its entirety and replacing it to read as
follows:


 


“Permitted Investments”
means:


 


(1)  Investments in Cash Equivalents;


 


(2)  [reserved]


 


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(3)  [reserved]


 


(4)  deposits, including interest-bearing deposits, maintained in the
ordinary course of business in banks;


 


(5)  any acquisition of the Capital Stock of any Person; provided,
that after giving effect to any such acquisition such Person shall become a
Restricted Subsidiary of the Company;


 


(6)  trade receivables and prepaid expenses, in each case arising in
the ordinary course of business; provided, that such receivables and prepaid
expenses would be recorded as assets of such Person in accordance with GAAP;


 


(7)  endorsements for collection or deposit in the ordinary course of
business by such Person of bank drafts and similar negotiable instruments of
such other Person received as payment for ordinary course of business trade
receivables;


 


(8)  any interest swap or hedging obligation with an unaffiliated
Person otherwise permitted by the Indenture (including, without limitation, any
Currency Agreement and any Interest Rate Protection Agreement otherwise
permitted by the Indenture);


 


(9)  Investments received as consideration for an Asset Disposition in
compliance with Section 3.13 herein;


 


(10)  Investments for which the sole consideration provided is
Qualified Capital Stock of the Company; provided, that the issuance of such
Qualified Capital Stock is not included in the calculation set forth in clause (3)
of the first paragraph of Section 3.12 herein;


 


(11)  loans and advances to employees made in the ordinary course of
business in an aggregate amount not to exceed $10.0 million at any one
time outstanding;


 


(12)  Investments outstanding on the Issue Date;


 


(13)  Investments in the Company or a Wholly Owned Subsidiary;


 


(14)  Investments in securities of trade creditors, suppliers or customers
received pursuant to any plan or reorganization or similar arrangement upon
bankruptcy or insolvency of such trade creditor, supplier or customer;


 


(15)  Investments in any Person after the Issue Date in an aggregate
amount not in excess of $20.0 million at any one time outstanding; and


 


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(16)  Investments in publicly traded equity or publicly traded
Investment Grade debt obligations issued by a corporation (other than the
Company or an affiliate of the Company) organized under the laws of any State
of the United States of America and subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act in an aggregate amount not in
excess of $50.0 million at any one time outstanding.


 


Section 1.02  Amendments to Section 3.12 of the
Indenture.


 


(a)  The second clause (iii) of
Section 3.12(a) of the Indenture shall hereby be amended by deleting such
clause (iii) in its entirety and replacing it to read as follows:


 


“(iii) upon giving effect to such
Restricted Payment, the aggregate of all Restricted Payments made on or after
May 1, 2004 exceeds the sum (without duplication) of:


 


(A) 
50% of cumulative Consolidated Net Income of the Company (or, in the
case cumulative Consolidated Net Income of the Company shall be negative, less
100% of such deficit) for the period (treated as an accounting period) from
May 1, 2004 through the last day of the Company’s most recently ended
fiscal quarter for which financial statements are available; plus


 


(B) 
100% of the aggregate net cash proceeds received after May 1, 2004,
including the fair market value of readily marketable securities from the
issuance of Qualified Capital Stock of the Company and warrants, rights or
opinions on Qualified Capital Stock of the Company (other than in respect of
any such issuance to a Subsidiary of the Company) and the principal amount of
Indebtedness of the Company or a Subsidiary of the Company that has been
converted into or exchanged for Qualified Capital Stock of the Company which
Indebtedness was incurred after May 1, 2004; plus


 


(C) 
in the case of the disposition or repayment of any Investment
constituting a Restricted Payment made after May 1, 2004, an amount equal
to the lesser of the return of capital with respect to such Investment and the
cost of such Investment, in either case, less the cost of the disposition of
such Investment; provided, that at the time any such Investment is made the
Company delivers to the Trustee a resolution of the Board of Directors of the Company
to the effect that, for purposes of this Section 3.12, such Investment
constitutes a Restricted Payment made after May 1, 2004; plus


 


(D) 
an amount equal to the sum of (1) the net reduction in Investments
in Unrestricted Subsidiaries resulting from the receipt of dividends,
repayments of loans or advances or other transfers of assets or proceeds from
the disposition of Capital Stock or other distributions or payments, in each
case to the Company or any Restricted Subsidiary from, or with respect to, interests
in Unrestricted Subsidiaries, and (2) the portion (proportionate to the
Company’s equity interest in such Subsidiary) of the fair market value of the
net assets of an Unrestricted


 


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Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary; provided, that the foregoing
sum shall not exceed, in the case of any Unrestricted Subsidiary, the amount of
Investments previously made (and treated as a Restricted Payment) by the
Company or any Restricted Subsidiary in such Unrestricted Subsidiary subsequent
to May 1, 2004; plus


 


(E) 
$100.0 million.”


 


(b)  Section 3.12(b) of the Indenture shall
hereby be amended and supplemented by: 
(i) deleting the “and” following the semicolon in
clause (xiii) thereof, (ii) deleting the “.” at the end of
clause (xiv) and replacing it with “; and” and (iii) adding the
following clause (xv) immediately thereafter:


 


“(xv)  the repurchase, redemption or other acquisition of the 4.75%
Subordinated Exchangeable Notes due 2009 originally issued by Navistar
Financial Corporation to the extent that such 4.75% Subordinated
Exchangeable Notes have been assumed by the Company in accordance with the
terms of the indenture governing such 4.75% Subordinated Exchangeable
Notes.”


 


Section 1.03  Future Calculations of Restricted
Payments.  Notwithstanding any other
provision of the Indenture, none of the (a) the repurchase or redemption
by the Company of its 8% Senior Subordinated Notes due 2008, (b) the
assumption by the Company of all of the obligations of Navistar Financial
Corporation under the 4.75% Subordinated Exchangeable Notes, or (c) the
repurchase or redemption of the 4.75% Subordinated Exchangeable Notes
pursuant to clause (xv) of Section 3.12(b) of the Indenture as
amended by this Second Supplement shall be included in any calculation of the
amount of Restricted Payments the Company or any Restricted Subsidiary is
permitted under Section 3.12 of the Indenture.


 


ARTICLE II


MISCELLANEOUS PROVISIONS


 


Section 2.01  Instruments to be Read Together.  This Second Supplement is an indenture
supplement to and in implementation of the Indenture, and said Indenture and
this Second Supplement shall henceforth be read together.


 


Section 2.02  Confirmation.  The Indenture, as amended and supplemented
by this Second Supplement, is in all respects confirmed and preserved.


 


Section 2.03  Counterparts.  This Second Supplement may be executed in
any number of counterparts, each of which, when so executed, shall be deemed to
be an original, but all of which shall together constitute one and the same
instrument.


 


Section 2.04  Effectiveness.  This Second Supplement shall become
effective immediately upon its execution in accordance with the provisions of
Article IX of the Indenture.


 


Section 2.05  GOVERNING LAW.  THIS SECOND SUPPLEMENT SHALL BE


 


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GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK. THE COMPANY AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK, COUNTY OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS SECOND SUPPLEMENT.


 


Section 2.06  Disclaimer of Trustee’s Responsibility.  In executing this Second Supplement, the
Trustee shall be entitled to all the privileges and immunities afforded to the
Trustee under the terms and conditions of the Indenture.


 


*     *     *     *     *


 


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


 


	
   

  	
  NAVISTAR INTERNATIONAL
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terry M. Endsley

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Terry M. Endsley

  
	
   

  	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INTERNATIONAL TRUCK AND
  ENGINE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Terry M. Endsley

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Terry M. Endsley

  
	
   

  	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BNY MIDWEST TRUST
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ D. G. Donovan

  	
   

  
	
   

  	
   

  	
  Name:

  	
  D. G. Donovan

  
	
   

  	
   

  	
  Title:

  	
  Vice President