DEBTOR IN POSSESSION
LOAN AGREEMENT
Dated as of April 16, 1997
among
FRUEHAUF TRAILER CORPORATION,
FGR, INC.,
FRUEHAUF CORPORATION,
MARYLAND SHIPBUILDING & DRYDOCK COMPANY,
THE XXXXXX CO.,
FRUEHAUF INTERNATIONAL LIMITED,
DEUTSCHE-FRUEHAUF HOLDING CORPORATION,
JACKSONVILLE SHIPYARDS, INC.,
X.X. HOLDINGS INC.,
and
E.L. DEVICES, INC.
each as Debtor and Debtor in Possession
as Borrowers
and
BANK OF AMERICA NT&SA
as Bank
i
TABLE OF CONTENTS
1. DEFINITIONS; RULES OF CONSTRUCTION. . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . 1
1.2 Undefined Terms. . . . . . . . . . . . . . . 16
1.3 Matters of Construction. . . . . . . . . . . 16
2. LOAN AND TERMS OF PAYMENT . . . . . . . . . . . . 16
2.1 Loan . . . . . . . . . . . . . . . . . . . . 16
2.2 Reliance on Notices; Appointment of FTC. . . 17
2.3 Prepayment . . . . . . . . . . . . . . . . . 17
2.4 Use of Proceeds. . . . . . . . . . . . . . . 18
2.5 Interest Rate, Payments and Calculations . . 18
2.6 Payments; Application of Collections . . . . 19
2.7 Statements of Obligations. . . . . . . . . . 19
2.8 Fees . . . . . . . . . . . . . . . . . . . . 19
2.9 Capital Adequacy; Increased Costs. . . . . . 20
2.10 Priority of Obligations and Bank's Liens . . 20
3. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . 21
3.1 Conditions to Initial Advance. . . . . . . . 21
3.2 Further Conditions to Each Loan. . . . . . . 22
4. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . 23
4.1 Corporate Existence; Compliance with Law . . 23
4.2 Executive Offices; Collateral Locations; FEIN.23
4.3 Corporate Power, Authorization, Enforceable
Obligations. . . . . . . . . . . . . . . . . 24
4.4 Monthly Forecast . . . . . . . . . . . . . . 24
4.5 Material Adverse Effect. . . . . . . . . . . 24
4.6 Ownership of Property; Liens . . . . . . . . 24
4.7 Labor Matters. . . . . . . . . . . . . . . . 25
4.8 Ventures, Subsidiaries and Affiliates;
Outstanding
Stock and Indebtedness . . . . . . . . . . . 25
4.9 Government Regulation. . . . . . . . . . . . 26
4.10 Employee Benefits. . . . . . . . . . . . . . 26
4.11 Environmental Condition. . . . . . . . . . . 27
4.12 Margin Regulations . . . . . . . . . . . . . 27
4.13 No Litigation. . . . . . . . . . . . . . . . 27
4.14 Brokers. . . . . . . . . . . . . . . . . . . 28
4.15 Intellectual Property. . . . . . . . . . . . 28
4.16 Full Disclosure. . . . . . . . . . . . . . . 28
4.17 Insurance. . . . . . . . . . . . . . . . . . 28
4.18 Deposit Accounts . . . . . . . . . . . . . . 28
5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . 29
5.1 Reporting Requirements . . . . . . . . . . . 29
5.2 Maintenance of Existence . . . . . . . . . . 30
5.3 Payment of Obligations . . . . . . . . . . . 30
5.4 Books and Records. . . . . . . . . . . . . . 31
5.5 Insurance. . . . . . . . . . . . . . . . . . 31
5.6 Compliance with Laws . . . . . . . . . . . . 31
5.7 Intellectual Property. . . . . . . . . . . . 31
5.8 Environmental Matters. . . . . . . . . . . . 31
5.9 Registration of Wabash Stock . . . . . . . . 32
5.10 Further Assurances . . . . . . . . . . . . . 32
ii
6. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . 32
6.1 Mergers, Subsidiaries, Etc . . . . . . . . . 32
6.2 Investments; Loans and Advances. .. . . . . . 32
6.3 Indebtedness . . . . . . . . . . .. . . . . . 32
6.4 Employee Loans and Affiliate Transactions. . 33
6.5 Capital Structure and Business . .. . . . . . 33
6.6 Guaranteed Indebtedness. . . . . . . . . . . 33
6.7 Liens. . . . . . . . . . . . . . . . . . . . 33
6.8 Sale of Stock and Assets . . . . . . . . . . 33
6.9 ERISA. . . . . . . . . . . . . . . . . . . . 34
6.10 Hazardous Materials. . . . . . .. . . . . . . 34
6.11 Cancellation of Indebtedness . . . .. . . . . 34
6.12 Restricted Payments. . . . . . . . .. . . . . 34
6.13 Change of Corporate Name or Location; Change of
Fiscal Year. . . . . . . . . . . .. . . . . . 34
6.14 Leases . . . . . . . . . . . . .. . . . . . . 35
6.15 Prepetition Indebtedness . . . . .. . . . . . 35
6.16 Application to the Court . . . . . .. . . . . 35
7. TERM. . . . . . . . . . . . . . . . . . . . . . . 35
8. EVENTS OF DEFAULT; REMEDIES . . . . . .. . . . . . 36
8.1 Events of Default. . . . . . . .. . . . . . . 36
8.2 Remedies . . . . . . . . . . . .. . . . . . . 38
8.3 Waivers by Borrowers . . . . . .. . . . . . . 38
8.4 Remedies Cumulative. . . .. . . . . . . . . . 38
8.5 Bank's Liability for Collateral. .. . . . . . 38
9. INDEMNIFICATION; FEES AND EXPENSES. . . .. . . . . 39
10. NOTICES . . . . . . . . . . . . . .. . . . . . . . 41
11. MISCELLANEOUS . . . . . . . . . . . .. . . . . . . 42
11.1 Effectiveness. . . . . . . . . .. . . . . . . 42
11.2 Successors and Assigns . . . . . .. . . . . . 42
11.3 Section Headings . . . . . . . . .. . . . . . 42
11.4 Interpretation . . . . . . . . . .. . . . . . 42
11.5 Severability of Provisions . . . . .. . . . . 43
11.6 Amendments in Writing. . . . . . . .. . . . . 43
11.7 Counterparts . . . . . . . . . . . .. . . . . 43
11.8 Integration. . . . . . . . . . . . .. . . . . 43
11.9 Parties Including Trustees; Bankruptcy Court
Proceedings. . . . . . . . . . . . .. . . . . 43
11.10 Additional Waivers by Borrowers. .. . . . . 43
11.11 CHOICE OF LAW AND VENUE. . . . . .. . . . . 45
11.12 JURY TRIAL WAIVER. . . . . . . . .. . . . . 46
iii
EXHIBITS AND SCHEDULES
Exhibit A - Form of Interim Order
Exhibit B - Form of Notice of Revolving
Advance
Exhibit C - Terms of Wabash Preferred Stock
Schedule 1.1 - Permitted Liens
Schedule 3.1 - Schedule of Documents
Schedule 4.2 - Borrower Locations; FEIN
Schedule 4.6 - Real Estate
Schedule 4.7 - Labor Matters
Schedule 4.8 - Affiliate Matters; Outstanding
Stock and Indebtedness
Schedule 4.10 - Employee Benefits
Schedule 4.11 - Environmental Matters
Schedule 4.13 - Litigation
Schedule 4.15 - Intellectual Property
Schedule 4.18 - Deposit Accounts
1
THIS DEBTOR IN POSSESSION LOAN AGREEMENT
("Agreement") is entered into as of April 16, 1997 among
BANK OF AMERICA NT&SA ("Bank"), and FRUEHAUF TRAILER
CORPORATION, a Delaware corporation, FGR, INC., a Michigan
corporation, FRUEHAUF CORPORATION, a Delaware corporation,
MARYLAND SHIPBUILDING & DRYDOCK COMPANY, a Maryland
corporation, THE XXXXXX CO., a Delaware corporation,
FRUEHAUF INTERNATIONAL LIMITED, a Delaware corporation,
DEUTSCHE-FRUEHAUF HOLDING CORPORATION, a Delaware
corporation, JACKSONVILLE SHIPYARDS, INC., a Florida
corporation, X.X. HOLDINGS INC., an Ohio corporation, and
E.L. DEVICES, INC., a Florida corporation, each as debtor
and debtor in possession (each, a "Borrower," and
collectively, "Borrowers"), with respect to the following
facts:
RECITALS
A. On October 7, 1996 (the "Petition Date"),
Borrowers commenced chapter 11 cases numbered 96-1563
(PJW) through 96-1572 (PJW), respectively (each, a
"Chapter 11 Case," and collectively, the "Chapter 11
Cases"), by filing voluntary petitions for reorganization
under chapter 11 of title 11 of the United States Code, 11
U.S.C. Section 101 et seq. (the "Bankruptcy Code"), with the
United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court"). Each Borrower
continues to operate its business and manage its
properties as a debtor and debtor in possession pursuant
to Sections 1107(a) and 1108 of the Bankruptcy Code.
B. Borrowers have requested that Bank provide a
senior secured superpriority revolving credit facility of
up to $12,500,000. Borrowers intend to utilize such
facility to repay a portion of the senior secured
indebtedness owing to Xxxxxxxxx, L.L.C. in the Chapter 11
Cases and to fund their respective general and corporate
working capital requirements during the pendency of the
Chapter 11 Cases.
C. Bank is willing to extend such postpetition
loans to Borrowers in accordance with and on the terms and
conditions set forth herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. DEFINITIONS; RULES OF CONSTRUCTION
1.1 Definitions. As used in this Agreement, the
following terms shall have the following definitions:
"Account Debtor" means any Person who is or who
may become obligated under, with respect to, or on account
of, an Account.
2
"Accounts" means all "accounts," as such term is
defined in the Code, now owned or hereafter acquired by
any Person, including: (i) all accounts receivable, other
receivables, book debts and other forms of obligations
(other than forms of obligations evidenced by Chattel
Paper, Documents or Instruments), whether arising out of
goods sold or services rendered or from any other
transaction (including any such obligations which may be
characterized as an account or contract right under the
Code); (ii) all of such Person's rights in, to and under
all purchase orders or receipts for goods or services;
(iii) all of such Person's rights to any goods represented
by any of the foregoing (including unpaid sellers' rights
of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or repossessed
goods); (iv) all moneys due or to become due to such
Person under all purchase orders and contracts for the
sale of goods or the performance of services or both by
such Person or in connection with any other transaction
(whether or not yet earned by performance on the part of
such Person), including the right to receive the proceeds
of said purchase orders and contracts; and (v) all
collateral security and guarantees of any kind given by
any other Person with respected to any of the foregoing.
"Affiliate" means, as applied to any Person, any
other Person directly or indirectly controlling,
controlled by, or under common control with, that Person.
For purposes of this definition, "control" as applied to
any Person means the possession, directly or indirectly,
of the power to direct or cause the direction of the
management and policies of that Person, whether through
the ownership of voting securities, by contract, or
otherwise.
"Agreement" means this Debtor in Possession Loan
Agreement and all extensions, riders, exhibits, schedules,
supplements, notes, amendments and modifications to or in
connection herewith.
"Avoidance Actions" means any and all rights of
any Borrower or a subsequent chapter 11 or chapter 7
trustee to recover property and to avoid liens or other
property interests under the Bankruptcy Code and all
property interests recovered or obtained thereby under
Sections 544 through 550, inclusive, of the Bankruptcy
Code.
3
"Bank" has the meaning set forth in the preamble
to this Agreement.
"Bankruptcy Code" has the meaning set forth in
the Recitals of this Agreement.
"Bankruptcy Court" has the meaning set forth in
the Recitals of this Agreement.
"Bankruptcy Rules" means the Federal Rules of
Bankruptcy Procedure, as the same may from time to time be
in effect and applicable to the Chapter 11 Cases.
"Books and Records" means all books, records,
board minutes, contracts, licenses, insurance policies,
environmental audits, business plans, files, accounting
books and records, financial statements (actual and pro
forma), and filings with Governmental Authorities.
"Borrower" and "Borrowers" have the respective
meanings set forth in the preamble to this Agreement.
"Business Day" means any day that is not a
Saturday, Sunday, or other day on which national banks are
authorized or required to close.
"Capital Lease" means, with respect to any
Person, any lease of any property (whether real, personal,
or mixed) by such Person as lessee that, in accordance
with GAAP, either would be required to be classified and
accounted for as a capital lease on a balance sheet of
such Person or otherwise be disclosed as such in a note to
such balance sheet, other than any such lease as to
which such Person is the lessor.
"Carve Out" means, as of the date any
determination thereof is to be made, an amount equal at
such time to the sum of, and used for the payment of (i)
any unpaid fees payable pursuant to 28 U.S.C. Section 1930
and any unpaid fees payable to the Clerk of the Bankruptcy
Court or the United States Trustee, and (ii) any allowed
and unpaid fees and disbursements incurred by the
professionals retained pursuant to Bankruptcy Code Section
327 or 1103(a) by Borrowers and the Creditors' Committee,
and the reasonable fees and expenses of each of the
Trustee and counsel to the Noteholder Committee, so long
as the aggregate amount for all such fees and
disbursements under this clause (ii) does not
exceed Two Million Two Hundred Thousand Dollars
($2,200,000); provided, that (A) the allowed and unpaid
fees and expenses covered by this clause (ii) shall not
include any fees and disbursements incurred by any
professional or party in interest in the Chapter 11 Cases
in connection with investigating or asserting any claims,
proceedings or causes of action of any kind or nature
against Bank, the senior noteholders holding Prepetition
Subordinated Debt, or the Trustee (and no proceeds of
the Loan shall be used for any such purpose); and (B) the
"Carve Out" shall not apply prospectively with respect to
such claims that first arise following (1) conversion of
any Chapter 11 Case to a proceeding under chapter 7 of the
Bankruptcy Code, (2) appointment of a trustee in any
Chapter 11 Case, (3) dismissal of any Chapter 11 Case, or
(4) Bank's commencement of foreclosure or disposition of
any Collateral after an Event of Default that does not
generate proceeds sufficient to indefeasibly pay the
Obligations in full.
4
"Cash Collateral" means "cash collateral," as
that phrase is defined in Section 363(a) of the Bankruptcy
Code.
"Chapter 11 Case" and "Chapter 11 Cases" have
the respective meanings assigned to them in the Recitals
of this Agreement.
"Charges" means all federal, state, county,
city, municipal, local, foreign, or other governmental
taxes (including taxes owed to the PBGC at the time due
and payable), levies, assessments, charges, liens, claims,
or encumbrances upon or relating to (i) the Collateral,
(ii) the Obligations, (iii) the employees, payroll, income
or gross receipts of any Borrower, (iv) any Borrower's
ownership or use of any properties or other assets, or (v)
any other aspect of any Borrower's business.
"Chattel Paper" means all "chattel paper," as
such term is defined in the Code, now owned or hereafter
acquired by any Person, wherever located.
"Closing Date" means the Business Day upon which
all of the conditions precedent set forth in Section 3 are
satisfied or waived in writing by Bank and Bank makes the
initial revolving advance hereunder.
"Code" means the Uniform Commercial Code as the
same may from time to time be enacted and in effect in the
State of California; provided, that in the event that, by
reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of Bank's security
interest in any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction
other than the State of California, the term "Code" shall
mean the Uniform Commercial Code as enacted and in effect
in such other jurisdiction solely for purposes of the
provisions hereof relating to such attachment, perfection
or priority and for purposes of definitions related to
such provisions.
"Collateral" means the property covered by the
Pledge and Security Agreement and any other property, real
or personal, tangible or intangible, now existing or
hereafter acquired, that may at any time be or become
subject to a Lien in favor of Bank to secure the
Obligations.
5
"Collection Account" means Bank's account at:
Bank of America NT&SA
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Fed Routing (ABA) #1210-00358
Incoming Wire Transfer #12331-83980
Attention: Xxx Xxxxxx (000) 000-0000
Reference Account: Fruehauf Trailer
Corporation
"Commitment Letter" means that certain
commitment letter between Bank and FTC dated March 19,
1997.
"Contracts" means all the contracts,
undertakings, or agreements (other than rights evidenced
by Chattel Paper, Documents or Instruments) in or under
which any Person may now or hereafter have any right,
title or interest, including any agreement relating to the
terms of payment or the terms of performance of any
Account.
"Conversion Price" has the meaning ascribed to
such term in Section 5 of Exhibit C.
"Conversion Shares" is determined as of any
particular day, as follows: First, add Fifty Dollars
($50.00) plus the amount of any dividend accrued on a
share of Wabash Preferred Stock as of such date; Second,
multiply such sum by the number of shares of Wabash
Preferred Stock then owned by FTC and pledged to Bank as
of such date; Third, divide such remainder by the
Conversion Price. Expressed as a formula:
($50.00 + accrued dividends) x No. of Shares of Wabash
Preferred Stock
------------------------------------------------------
Conversion Price
"Creditors' Committee" means the official
committee of unsecured creditors appointed in the Chapter
11 Cases.
"Default" means an event, condition, or default
which with the giving of notice, the passage of time, or
both, would be an Event of Default.
"Documents" means all "documents," as such term
is defined in the Code, now owned or hereafter acquired by
any Person, wherever located, including all bills of
lading, dock warrants, dock receipts, warehouse receipts,
and other documents of title, whether negotiable or
non-negotiable.
"Dollars" and "$" mean and refer to United
States dollars or such coin or currency of the United
States as at the time of payment shall be legal tender for
payment of public and private debts in the United States.
6
"Environmental Laws" means all applicable
federal, state, local and foreign laws, statutes,
ordinances, codes, rules, standards and regulations, now
or hereafter in effect, and in each case as amended or
supplemented from time to time, and any applicable
judicial or administrative interpretation thereof,
including any applicable judicial or administrative order,
consent decree, order or judgment, imposing liability or
standards of conduct for or relating to the regulation and
protection of human health, safety, the environment and
natural resources (including ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation). The term
"Environmental Laws" includes the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. Section 9601 et seq.) ("CERCLA"); the
Hazardous Materials Transportation Authorization Act of
1994 (49 U.S.C. Section 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.
Section 136 et seq.); the Solid Waste Disposal Act (42
U.S.C. Section 6901 et seq.); the Toxic Substance Control
Act (15 U.S.C. Section 2601 et seq.); the Clean Air Act
(42 U.S.C. Section 7401 et seq.); the Federal Water
Pollution Control Act (33 U.S.C. Section 1251 et seq.);
the Occupational Safety and Health Act (29 U.S.C. Section
651 et seq.); and the Safe Drinking Water Act (42 U.S.C.
Section 300(f) et seq.), and any and all regulations
promulgated thereunder, and all analogous state, local and
foreign counterparts or equivalents and any transfer of
ownership notification or approval statutes.
"Environmental Liabilities" means all
liabilities, obligations, responsibilities, response,
remedial and removal costs, investigation and feasibility
study costs, capital costs, operation and maintenance
costs, losses, damages, punitive damages, property
damages, natural resource damages, consequential damages,
treble damages, costs and expenses (including all fees,
disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest
incurred as a result of or related to any claim, suit,
action, investigation, proceeding or demand by any Person,
whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute or
common law, including any arising under or related to any
Environmental Laws, Environmental Permits, or in
connection with any Release or threatened Release or
presence of a Hazardous Material whether on, at, in,
under, from or about or in the vicinity of any real
or personal property.
"Environmental Permits" means all permits,
licenses, authorizations, certificates, approvals,
registrations or other written documents required by any
Governmental Authority under any Environmental Laws.
"Equipment" means all "equipment," as such term
is defined in the Code, now owned or hereafter acquired by
any Person, wherever located, including any and all
machinery, apparatus, equipment, fittings, furniture,
fixtures, motor vehicles and other tangible personal
property (other than Inventory) of every kind and
description which may be now or hereafter used in such
Person's operations or which are owned by such Person or
in which such Person may have an interest, and all
parts, accessories and accessions thereto and
substitutions and replacements therefor.
7
"ERISA" means the Employee Retirement Income
Security Act of 1974.
"ERISA Affiliate" means any trade or business
(whether or not incorporated) which, within the meaning of
Section 414 of the IRC, is: (i) under common control with
any Borrower; (ii) treated, together with any Borrower, as
a single employer; (iii) treated as a member of an
affiliated service group of which any Borrower is also
treated as a member; or (iv) is otherwise aggregated with
any Borrower for purposes of the employee benefits
requirements listed in IRC Section 414(m)(4).
"ERISA Event" means any one or more of the
following: (i) a Reportable Event with respect to a
Qualified Plan or a Multiemployer Plan; (ii) a Prohibited
Transaction with respect to any Plan; (iii) a complete or
partial withdrawal by any Borrower or any ERISA Affiliate
from a Multiemployer Plan; (iv) the complete or partial
withdrawal of any Borrower or an ERISA Affiliate from a
Qualified Plan during a plan year in which it was, or was
treated as, a "substantial employer" as defined in Section
4001(a)(2) of ERISA; (v) a failure to make full payment
when due of all amounts which, under the provisions of any
Plan or applicable law, any Borrower or any ERISA
Affiliate is required to make; (vi) the filing of a notice
of intent to terminate, or the treatment of a plan
amendment as a termination, under Sections 4041 or 4041A
of ERISA; (vii) an event or condition which might
reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Qualified Plan or
Multiemployer Plan; (viii) the imposition of any liability
under Title IV of ERISA, other than PBGC premiums due but
not delinquent under Section 4007 of ERISA, upon any
Borrower or any ERISA Affiliate; and (ix) a violation of
the applicable requirements of Sections 404 or 405 of
ERISA, or the exclusive benefit rule under Section 403(c)
of ERISA, by any fiduciary or disqualified person with
respect to any Plan for which any Borrower or any ERISA
Affiliate may be directly or indirectly liable.
"Event of Default" has the meaning set forth in
Section 8.
"FEIN" means Federal Employer Identification
Number.
8
"Final Order" means the order of the Bankruptcy
Court entered in the Chapter 11 Cases after a final
hearing pursuant to Section 364 of the Bankruptcy Code and
Bankruptcy Rule 4001, satisfactory in form and substance
to Bank, and from which no appeal has been timely filed,
or if timely filed, no stay pending appeal shall have been
granted, together with all extensions, modifications and
amendments thereto, authorizing each Borrower to obtain
credit, incur indebtedness, and grant liens under this
Agreement and the other Loan Documents and providing for
the superpriority of Bank's claims, all as set forth in
such order.
"Forecast" means the monthly projected forecast
of receipts and disbursements for Borrowers for the period
from the end of the last calendar month prior to the
Closing Date through December 31, 1997 and delivered to
Bank under Item 1.1 of the Schedule of Documents.
"FTC" means Fruehauf Trailer Corporation, a
Delaware corporation, as debtor and debtor in possession.
"GAAP" means generally accepted accounting
principles as in effect from time to time in the United
States, consistently applied.
"General Intangibles" means all "general
intangibles,"as such term is defined in the Code, now
owned or hereafter acquired by any Person, including all
right, title and interest which such Person may now or
hereafter have in or under any Contract, Intellectual
Property, interests in partnerships, joint ventures and
other business associations, permits, knowledge,
know-how, software, data bases, data, skill, expertise,
experience, processes, models, drawings, materials, Books
and Records, Goodwill (including the Goodwill associated
with any Intellectual Property), all rights and claims in
or under insurance policies (including insurance for fire,
damage, loss, and casualty, whether covering personal
property, real property, tangible rights or intangible
rights, all liability, life, key-person, and business
interruption insurance, and all unearned premiums),
uncertificated securities, choses in action, deposit
accounts, rights to receive tax refunds and other payments
and rights of indemnification.
"Goods" means all "goods," as such term is
defined in the Code, now owned or hereafter acquired by
any Person, wherever located, including movables,
fixtures, equipment, inventory, and other tangible
personal property.
"Goodwill" means all goodwill, trade secrets,
proprietary or confidential information, technical
information, procedures, formulae, quality control
standards, designs, operating and training manuals,
customer lists, and distribution agreements now owned or
hereafter acquired by any Person.
9
"Governmental Authority" means any nation or
government, any state or other political subdivision
thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guaranteed Indebtedness" means, as to any
Person, any obligation of such Person guaranteeing any
indebtedness, lease, dividend, or other obligation
("primary obligations") of any other Person (the "primary
obligor") in any manner, including any obligation or
arrangement of such Person (i) to purchase or repurchase
any such primary obligation, (ii) to advance or supply
funds (A) for the purchase or payment of any such primary
obligation or (B) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain
the net worth or solvency or any balance sheet condition
of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of
assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of
such primary obligation, or (iv) to indemnify the owner of
such primary obligation against loss in respect thereof.
The amount of any Guaranteed Indebtedness at any time
shall be deemed to be an amount equal to the lesser at
such time of (x) the stated or determinable amount of the
primary obligation in respect of which such Guaranteed
Indebtedness is made and (y) the maximum amount
for which such Person may be liable pursuant to the terms
of the instrument embodying such Guaranteed Indebtedness;
or, if not stated or determinable, the maximum reasonably
anticipated liability (assuming full performance) in
respect thereof.
"Hazardous Materials" means all or any of the
following: (i) substances that are defined or listed in,
or otherwise classified pursuant to, any applicable laws
or regulations as "hazardous substances," "hazardous
materials," "hazardous wastes," "toxic substances," or any
other formulationintended to define, list, or classify
substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity,
reproductive toxicity, or "EP toxicity"; (ii) oil,
petroleum, or petroleum derived substances,
natural gas, natural gas liquids, synthetic gas, drilling
fluids, produced waters, and other wastes associated with
the exploration, development, or production of crude oil,
natural gas, or geothermal resources; (iii) any flammable
substances or explosives or any radioactive materials; and
(iv) asbestos in any form or electrical equipment which
contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of fifty (50) parts
per million.
"Indebtedness" means: (i) all obligations of any
Borrower for borrowed money; (ii) all obligations of any
Borrower evidenced by bonds, debentures, notes, or other
similar instruments and all reimbursement or other
obligations of any Borrower in respect of letters of
credit, letter of credit guaranties, bankers acceptances,
interest rate swaps, controlled disbursement accounts, or
other financial products; (iii) all obligations of any
Borrower under Capital Leases; (iv) all obligations or
liabilities of others secured by a lien or security
interest on any property or asset of any Borrower,
irrespective of whether such obligation or liability is
assumed; and (v) any obligation of any Borrower
guaranteeing or intended to guarantee (whether guaranteed,
endorsed, co-made, discounted, or sold with recourse to
such Borrower) any indebtedness, lease, dividend, letter
of credit, or other obligation of any other Person.
10
"Instruments" means all "instruments," as such
term is defined in the Code, now owned or hereafter
acquired by any Person, wherever located, including all
certificated securities and all notes and other evidences
of indebtedness, other than instruments that constitute,
or are a part of a group of writings that constitute,
Chattel Paper.
"Intellectual Property" means any and all
Licenses, patents, copyrights and trademarks.
"Interim Order" shall mean the interim order of
the Bankruptcy Court entered in the Chapter 11 Cases after
an interim hearing (assuming satisfaction of the standards
prescribed in Section 364 of the Bankruptcy Code and
Bankruptcy Rule 4001 and other applicable law), together
with all extensions, modifications and amendments thereto,
satisfactory in form and substance to Bank, authorizing,
on an interim basis, each Borrower to execute and perform
under the terms of the Agreement and the other Loan
Documents, substantially in the form of Exhibit A.
"Inventory" means all "inventory," as such term
is defined in the Code, now or hereafter owned or acquired
by any Person, wherever located, including all inventory,
merchandise, goods and other personal property which are
held by or on behalf of such Person for sale or lease or
are furnished or are to be furnished under a contract of
service or which constitute raw materials, work in process
or materials used or consumed or to be used or consumed in
such Person's business or in the processing, production,
packaging, promotion, delivery or shipping of the same,
including other supplies.
"Investment Property" means all "investment
property," as such term is defined in the Code, now owned
or hereafter acquired by any Person, wherever located,
including: (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in
limited liability companies, partnership interests,
treasuries, certificates of deposit, and mutual fund
shares; (ii) all securities entitlements, including
the rights to any securities account and the financial
assets held by a securities intermediary in such
securities account and any free credit balance or other
money owing by any securities intermediary with respect to
that account; (iii) all securities accounts; (iv) all
commodity contracts; and (v) all commodity accounts.
11
"IRC" means the Internal Revenue Code of 1986.
"License" means mean any copyright license,
patent license, trademark license or other license of
rights or interests now held or hereafter acquired by any
Person.
"Lien" means any mortgage or deed of trust,
pledge, hypothecation, assignment, deposit arrangement,
lien, charge, claim, security interest, easement or
encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or
nature whatsoever (including any lease or title retention
agreement, any financing lease having substantially the
same economic effect as any of the foregoing, and the
filing of, or agreement to give, any financing statement
perfecting a security interest under the Code or
comparable law of any jurisdiction).
"Loan" means the outstanding amount of revolving
credit advances hereunder with interest thereon as
prescribed in Section 2.5.
"Loan Documents" means this Agreement, the
Pledge and Security Agreement, the Interim Order, the
Final Order, and any other agreement entered into, now or
in the future, in connection with this Agreement.
"Xxxxxxxxx" means Xxxxxxxxx, L.L.C., a Delaware
limited liability company.
"Xxxxxxxxx Facility" means the $55,000,000
postpetition financing facility provided to Borrowers by
Xxxxxxxxx pursuant to a credit agreement dated October 9,
1996 and approved by the Bankruptcy Court on a final basis
on November 5, 1996.
"Market Value" means, as of any particular day,
the sum of (i) the closing share price for a share of
common Stock of Wabash on the immediately preceding day on
which the New York Stock Exchange was open for trading
(the "Closing Price") multiplied by the number of shares
of such common Stock of Wabash then owned by FTC and
pledged to Bank, plus (ii) the Closing Price multiplied by
the number of Conversion Shares as of such date, minus
(iii) $2,200,000.
"Material Adverse Effect" means: (i) the
material impairment of any Collateral or Bank's Liens on
any Collateral or the priority of such Liens; or (ii) the
impairment of the ability of any Borrower to perform any
of its material obligations under the Loan Documents, or
of Lender to enforce, the Obligations.
12
"Maturity Date" has the meaning set forth in
Section 7.1.
"Maximum Amount" means, at any time of
determination thereof, the lesser of (i) Twelve Million
Five Hundred Thousand Dollars ($12,500,000) or (ii) forty
percent (40%) of the Market Value.
"Multiemployer Plan" means a multiemployer plan
as defined in Sections 3(37) or 4001(a)(3) of ERISA or
Section 414 of the IRC in which employees of any Borrower
or an ERISA Affiliate participate or to which any Borrower
or any ERISA Affiliate contribute or are required to
contribute.
"Noteholder Committee" means the unofficial
committee of senior noteholders holding Prepetition
Subordinated Debt.
"Obligations" means all loans, advances, debts,
principal, interest, premiums, liabilities (including all
amounts charged to Borrowers' loan account as joint and
several obligors pursuant to any agreement authorizing
Bank to charge Borrowers' loan account), obligations,
fees, lease payments, guaranties, covenants, and duties
owing by any Borrower to Bank of any kind and description
(whether pursuant to or evidenced by the Loan Documents,
by any note or other instrument, or pursuant to any
other agreement between Bank and any Borrower, and
irrespective of whether for the payment of money), whether
direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, and
including any debt, liability, or obligation owing from
any Borrower to others that Bank may have obtained by
assignment or otherwise, and further including all
interest not paid when due and all expenses incurred by
Bank that any Borrower is required to pay or reimburse by
the Loan Documents, by law, or otherwise.
"PBGC" means the Pension Benefit Guaranty
Corporation as defined in Title IV of ERISA, or any
successor thereto.
"Permitted Liens" means: (i) liens and security
interests held by Bank; (ii) liens for unpaid taxes that
are not yet due and payable; (iii) liens and security
interests set forth in Schedule 1.1; (iv) easements,
rights of way, reservations, covenants, conditions,
restrictions, zoning variances, and other similar
encumbrances that do not materially interfere with the
use or value of the property subject thereto; (v)
obligations and duties as lessee under any lease existing
on the date of this Agreement; and (vi) mechanics',
materialmen's, warehousemen's, or similar liens that arise
by operation of law.
13
"Person" means and includes natural persons,
corporations, limited partnerships, general partnerships,
joint ventures, limited liability companies, trusts, land
trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and
governments and agencies and political subdivisions
thereof.
"Petition Date" has the meaning set forth in the
Recitals of this Agreement.
"Plan" means an employee benefit plan (as
defined in Section 3(3) of ERISA) which any Borrower or
any ERISA Affiliate sponsors or maintains or to which any
Borrower or any ERISA Affiliate makes, is making, or is
obligated to make contributions, including any
Multiemployer Plan or Qualified Plan.
"Pledge and Security Agreement" means the Pledge
and Security Agreement of even date herewith made by each
Borrower in favor of Bank.
"Prepetition Indebtedness" shall mean all
Indebtedness of any Borrower incurred or assumed prior to
the Petition Date, including the Prepetition Subordinated
Debt.
"Prepetition Subordinated Debt" means the
indebtedness evidenced by that certain Indenture dated as
of May 1, 1995, as amended on June 21, 1996, between
Fruehauf Trailer Corporation and Trustee, pursuant to
which Fruehauf Trailer Corporation issued its 14.75%
Senior Secured Notes due 2002 in an aggregate initial
principal amount of $74,117,000.
"Proceeds" means "proceeds," as such term is
defined in the Code and, in any event, shall include: (i)
any and all proceeds of any insurance, indemnity, warranty
or guaranty payable to any Borrower from time to time with
respect to any Collateral; (ii) any and all payments (in
any form whatsoever) made or due and payable to any
Borrower from time to time in connection with any
requisition, confiscation, condemnation, seizure or
forfeiture of any Collateral by any governmental body,
authority, bureau or agency (or any person acting under
color of governmental authority); (iii) any claim of any
Borrower against third parties (a) for past, present or
future infringement of any Intellectual Property or (b)
for past, present or future infringement or dilution of
any trademark or trademark license or for injury to the
goodwill associated with any trademark, trademark
registration or trademark licensed under any trademark
license; (iv) any recoveries by any Borrower against third
parties with respect to any litigation or dispute
concerning any Collateral; and (v) any and all other
amounts from time to time paid or payable under or in
connection with any Collateral, upon
disposition or otherwise.
14
"Prohibited Transaction" means any transaction
described in Section 406 of ERISA which is not exempt by
reason of Section 408 of ERISA, and any transaction
described in Section 4975(c) or (d) of the IRC which is
not exempt by reason of Section 4975(c) of the IRC.
"Qualified Plan" means a pension plan (as
defined in Section 3(2) of ERISA) intended to be
tax-qualified under Section 401 (a) of the IRC which any
Borrower or any ERISA Affiliate sponsors, maintains, or to
which any such person makes, is making, or is obligated to
make, contributions, or, in the case of a
multiple-employer plan (as described in Section 4064(a) of
ERISA), has made contributions at any time during the
immediately preceding period covering at least five (5)
plan years, but excluding any Multiemployer Plan.
"Reference Rate" means the variable per annum
rate of interest most recently announced by Bank in San
Francisco, California as its "reference rate,"
irrespective of whether such announced rate is the best
rate available from Bank to its customers.
"Release" means any release, threatened release,
spill, emission, leaking, pumping, pouring, emitting,
emptying, escape, injection, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including
the movement of Hazardous Material through or in the air,
soil, surface water, ground water or property.
"Reportable Event" means any event described in
Section 4043 (other than Subsections (c)(7), (9), and
(11)) of ERISA for which notice to the Pension Benefit
Guaranty Corporation is not waived.
"Restricted Payment" means (i) the declaration
or payment of any dividend or the incurrence of any
liability to make any other payment or distribution of
cash or other property or assets in respect of a Person's
Stock, (ii) any payment on account of the purchase,
redemption, defeasance, sinking fund or other retirement
of a Person's Stock or any other payment or distribution
made in respect thereof, either directly or indirectly,
(iii) any payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire Stock of
such Person now or hereafter outstanding; (iv) any payment
of a claim for the rescission of the purchase or sale of,
or for material damages arising from the purchase or sale
of, any shares of such Person's Stock or of a claim for
reimbursement, indemnification or contribution arising out
of or related to any such claim for damages or rescission;
(v) any payment, loan, contribution, or other transfer of
funds or other property to any Stockholder of such Person;
and (vi) any payment of management fees (or other fees of
a similar nature) by such Person to any Stockholder of
such Person or their Affiliates.
15
"Stock" means all shares, options, warrants,
general or limited partnership interests or other
equivalents (regardless of how designated) of or in a
corporation, partnership or equivalent entity whether
voting or nonvoting, including common stock, preferred
stock or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and
Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934).
"Subsidiary" means any corporation, association,
partnership, joint venture, or other business entity of
which an Obligor, directly or indirectly, owns or controls
fifty percent (50%) or more of the voting power and has
the ability to elect at least a majority of the board of
directors or similar managing body, irrespective of
whether a class or classes shall or might have voting
power by reason of the happening of any contingency.
"Trustee" means IBJ Xxxxxxxx Bank & Trust
Company.
"Unfunded Benefit Liability" means the excess of
a Plan's benefit liabilities (as defined in Section
4001(a)(16) of ERISA) over the current value of such
Plan's assets, determined in accordance with the
assumptions used by the Plan's actuaries for funding the
Plan pursuant to Section 412 of the IRC for the
applicable plan year.
"Wabash" means Wabash National Corporation, a
Delaware corporation.
"Wabash Common Stock" means the 1,000,000 shares
of the common Stock issued by Wabash to FTC in connection
with the closing of the Wabash Purchase Agreement (and any
other securities issued in connection with such common
Stock) and pledged by FTC to Bank.
"Wabash Preferred Stock" means the Series A
Cumulative 6% Convertible Exchangeable Preferred Stock
further described in Exhibit C and issued by Wabash to FTC
in connection with the closing of the Wabash Purchase
Agreement (and any other securities issued in connection
with such preferred Stock) and pledged by FTC to Bank.
"Wabash Purchase Agreement" means that certain
Purchase Agreement dated March 13, 1997, as amended,
between FTC and Wabash.
"Wabash Stock" collectively means the Wabash
Common Stock and the Wabash Preferred Stock.
16
1.2 Undefined Terms. All accounting terms not
specifically defined herein shall be construed in
accordance with GAAP. All other undefined terms contained
in any of the Loan Documents shall, unless the context
indicates otherwise, have the meanings provided for by the
Code as in effect in the State of California to the extent
the same are used or defined therein.
1.3 Matters of Construction. Unless otherwise
specified, references in this Agreement to an Exhibit,
Schedule, Recital, Section, subsection or clause refer to
such Exhibit, Recital, Schedule Section, subsection or
clause as attached to or contained in this Agreement. The
words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole,
including all Exhibits and Schedules, as the same may from
time to time be amended, restated, modified or
supplemented, and not to any particular section,
subsection or clause contained in this Agreement or any
such Exhibit or Schedule. Wherever from the context it
appears appropriate, each term stated in either the
singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or
neuter gender shall include the masculine, feminine
and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words
"without limitation"; references to Persons include their
respective successors and assigns (to the extent and only
to the extent permitted by the Loan Documents) or, in the
case of governmental Persons, Persons succeeding to the
relevant functions of such Persons; and all references to
statutes and related regulations shall include any
amendments of the same and any successor statutes and
regulations.
2. LOAN AND TERMS OF PAYMENT
2.1 Loan.
(a) Subject to the terms and conditions hereof,
Bank agrees to make available from time to time from the
Closing Date until the Maturity Date revolving credit
advances to Borrowers in an aggregate amount at any one
time outstanding not to exceed the Maximum Amount.
Borrowers may from time to time borrow, repay and reborrow
under this Section 2.1(a); provided, that each such
revolving credit advance shall be in integral multiples of
Five Hundred Thousand Dollars ($500,000). Each such
revolving credit advance (other than revolving credit
advances made by Bank in accordance with Section 2.5(b))
shall be made on notice by FTC on behalf of Borrowers to
Bank given no later than 5:00 p.m. (California time) on
the Business Day prior to the proposed advance. Each such
notice (a "Notice of Revolving Advance") must be given in
writing (by facsimile or overnight courier) substantially
in the form of Exhibit B, and shall include the
information required in such Exhibit and such other
information as may be required by Bank.
17
(b) The entire unpaid balance of the Loan and
all other non-contingent Obligations shall be immediately
due and payable in full in immediately available funds on
the Maturity Date.
2.2 Reliance on Notices; Appointment of FTC. Bank
shall be entitled to rely upon, and shall be fully
protected in relying upon, any Notice of Revolving Advance
or similar notice believed by Bank to be genuine. Bank
may assume that each Person executing and delivering such
a notice was duly authorized, unless the responsible
individual acting thereon for Bank has actual knowledge to
the contrary. Each Borrower hereby designates FTC as its
representative and agent on its behalf for the purposes of
issuing Notices of Revolving Advances, giving instructions
with respect to the disbursement of the proceeds of the
Loan, giving and receiving all other notices and consents
hereunder or under any of the other Loan Documents and
taking all other actions (including in respect of
compliance with covenants) on behalf of any Borrower or
Borrowers under the Loan Documents. FTC hereby accepts
such appointment. Bank may regard any notice or other
communication pursuant to any Loan Document from FTC as
a notice or communication from all Borrowers, and may give
any notice or communication required or permitted to be
given to any Borrower or Borrowers hereunder to FTC on
behalf of such Borrower or Borrowers. Each Borrower
agrees that each notice, election, representation and
warranty, covenant, agreement and undertaking made on its
behalf by FTC shall be deemed for all purposes to have
been made by such Borrower and shall be binding upon and
enforceable against such Borrower to the same extent as if
the same had been made directly by such Borrower.
2.3 Prepayment.
(a) Voluntary Prepayments. Borrowers may at
any time prepay the Loan on any Business Day in whole or
in part (in integral multiples of Five Hundred Thousand
Dollars ($500,000)) without premium or penalty.
(b) Mandatory Prepayments. If as of the end of
any Business Day a Prepayment Excess (as defined below)
exists, then Borrowers shall by the end of the following
Business Day either (i) repay the Loan to the extent
required to eliminate such Prepayment Excess, or (ii)
deliver to Bank evidence satisfactory to Bank that (A)
Borrowers have caused the sale of Collateral generating
cash proceeds in an amount sufficient to eliminate
such Prepayment Excess and (B) such proceeds are being
delivered directly to the Collection Account.
18
For purposes of this Section 2.3(b),
"Prepayment Excess" means, for any Business Day, the
amount by which the Loan exceeds the lesser of (a) Twelve
Million Five Hundred Thousand Dollars ($12,500,000) or (b)
(i) forty two and one-half percent (42.5%) multiplied by
(ii) the Market Value; provided, that if a Prepayment
Excess has continued for two or more consecutive
Business Days, then the Prepayment Excess, if any, for the
next succeeding Business Day shall be determined by
adjusting the percentage rate set forth in clause (b)(i)
of this definition to forty percent (40.0%).
2.4 Use of Proceeds. Borrowers shall utilize the
proceeds of the Loan for the repayment of a portion of the
Xxxxxxxxx Facility, the payment of costs and expenses of
the transactions contemplated by this Agreement that are
payable by Borrowers, and for other general and corporate
working capital purposes permitted by the terms of this
Agreement, the other Loan Documents, the Bankruptcy Code
and the Bankruptcy Court; provided, that no portion of the
Loan shall be used, directly or indirectly: (a) to
finance or make any Restricted Payment, (b) to pay any
fees or similar amounts payable to any Person who has
proposed or may propose to purchase interests in any
Borrower or otherwise has proposed or may propose to
invest in any Borrower (including so-called "topping
fees," "exit fees" and similar amounts), or (c) to make
any distribution under a plan of reorganization in any
Chapter 11 Case.
2.5 Interest Rate, Payments and Calculations.
(a) All outstanding revolving loans (including
loans made by Bank in accordance with Section 2.5(b))
shall bear interest at a per annum rate equal to the
Reference Rate plus one and one-half percent (1.50%);
provided, that from and after the occurrence and during
the continuance of an Event of Default, such revolving
loans shall bear interest at a per annum rate equal to the
Reference Rate plus three and three-quarters percent
(3.75%).
(b) Interest hereunder shall be due and
payable, in arrears, on the first day of each month and on
the Maturity Date. Borrowers hereby authorize Bank, at
its option, without prior notice to any Borrower, to
charge such interest, all reimbursable expenses (as and
when incurred), and all installments or other payments due
under any Loan Document to Borrowers' loan account as a
revolving loan (even if such revolving loan would cause
the Loan to exceed the Maximum Amount), which amounts
thereafter shall accrue interest at the rate then
applicable hereunder.
(c) In the event the Reference Rate is changed
from time to time hereafter, the applicable rate of
interest hereunder automatically and immediately shall be
increased or decreased by an amount equal to such change
in the Reference Rate. All interest and fees chargeable
under the Loan Documents shall be computed on the basis of
a three hundred sixty (360) day year for the actual number
of days elapsed.
19
(d) In no event shall the interest rate or
rates payable under this Agreement, plus any other amounts
paid in connection herewith, exceed the highest rate
permissible under any law that a court of competent
jurisdiction shall, in a final determination, deem
applicable. Each Borrower and Bank, in executing this
Agreement, intend legally to agree upon the rate
or rates of interest and manner of payment stated within
it; provided, that anything contained herein to the
contrary notwithstanding, if said rate or rates of
interest or manner of payment exceeds the maximum
allowable under applicable law, then, ipso facto as of the
date of this Agreement, Borrowers are and shall be jointly
and severally liable only for the payment of such maximum
as allowed by law, and payment received from Borrowers in
excess of such legal maximum, whenever received, shall be
applied to reduce the principal balance of the Obligations
to the extent of such excess.
2.6 Payments; Application of Collections. For
purposes of computing interest and fees and determining
borrowing availability as of any date, all payments shall
be deemed received by Bank upon (i) receipt of immediately
available funds therefor in the Collection Account prior
to 3:00 p.m. (California time) on any Business Day, and
(ii) notice thereof to Bank by Borrowers. Payments in
immediately available funds received in the Collection
Account after 3:00 p.m. (California time) on any Business
Day shall be deemed to have been received by Bank on the
next succeeding Business Day.
2.7 Statements of Obligations. Bank shall render
statements to Borrowers of the Obligations, including
principal, interest, fees, and including an itemization of
all charges and expenses owing, and such statements shall
be conclusively presumed to be correct and accurate and
constitute an account stated between Borrowers and Bank
unless, within thirty (30) days after receipt thereof by
Borrowers, FTC shall deliver to Bank by registered or
certified mail at its address specified in Section 10,
written objection thereto describing the error or
errors contained in any such statements.
2.8 Fees. Borrowers shall pay to Bank the following
fees:
(a) Closing Fee. On the Closing Date, a
closing fee in the amount of $156,250, against which shall
be credited the prior payment of the $100,000 commitment
fee pursuant to the Commitment Letter.
(b) Unused Line Fee. In arrears, on the first
Business Day of each month and on the Maturity Date, a fee
for Borrowers' non-use of available funds an amount equal
to one-half percent (.50%) per annum (calculated on the
basis of a 360 day year for actual days elapsed) of the
difference between (x) $12,500,000 and (y) the average of
the daily closing balance of the Loan during the previous
month.
20
2.9 Capital Adequacy; Increased Costs.
(a) If Bank shall have determined that the
adoption after the date hereof of any law, treaty,
governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy, reserve
requirements or similar requirements or compliance by Bank
with any request or directive regarding capital adequacy,
reserve requirements or similar requirements (whether or
not having the force of law) from any central bank or
other Governmental Authority increases or would have the
effect of increasing the amount of capital, reserves or
other funds required to be maintained by Bank and thereby
reducing the rate of return on Bank's capital as a
consequence of its obligations hereunder, then Borrowers
shall from time to time upon demand by Bank pay to Bank
additional amounts sufficient to compensate Bank for such
reduction. A certificate as to the amount of that
reduction and showing the basis of the computation
thereof submitted by Bank to Borrowers shall, absent
manifest error, be final, conclusive and binding for all
purposes.
(b) If, due to either (i) the introduction of
or any change in any law or regulation (or any change in
the interpretation thereof) or (ii) the compliance with
any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of
law), there shall be any increase in the cost to Bank of
agreeing to make or making, funding or maintaining the
Loan, then Borrowers shall from time to time, upon demand
by Bank pay to Bank additional amounts sufficient to
compensate Bank for such increased cost. A certificate as
to the amount of such increased cost, submitted to
Borrowers by Bank shall be conclusive and binding on
Borrowers for all purposes, absent manifest error.
2.10 Priority of Obligations and Bank's Liens.
(a) Bank's Liens on the Collateral are and
shall be of first priority, subject to no exceptions other
than the payment of the Carve Out as described in Section
2.10(c). The Liens granted to Bank under the Loan
Documents shall at all times be senior to the rights of
each Borrower and any successor trustee or estate
representative in such Borrower's Chapter 11 Case or
any subsequent case or proceedings under the Bankruptcy
Code. Further, any Lien on the Collateral that is avoided
or otherwise preserved for the benefit of any Borrower's
estate under Section 551 of the Bankruptcy Code shall be
subordinate to Bank's Liens on the Collateral.
21
(b) The Obligations shall have administrative
priority equivalent to a claim under Section 364(c)(1) of
the Bankruptcy Code. Subject to the payment of the Carve
Out as described in Section 2.10(c), such administrative
claim shall have priority over all other costs and
expenses of the kinds specified in, or ordered pursuant
to, Sections 105, 326, 330, 331, 503(b), 506(c),
507(a), 507(b), 726 or any other provision of the
Bankruptcy Code and shall at all times be senior to the
rights of each Borrower, each Borrower's estate, and any
successor trustee or estate representative in the Chapter
11 Case or any subsequent proceedings or case under the
Bankruptcy Code.
(c) In the event of a liquidation of the Wabash
Stock by Bank in accordance with Section 8.2, Bank shall,
at the conclusion of the liquidation proceedings conducted
by Bank, deliver to Borrowers the amount certified by
Borrowers in writing to be the amount of the Carve Out as
of such time, which amount will include a reasonable
estimate of the unbilled fees and disbursements otherwise
covered by the Carve Out and based upon the Forecast and
such other information available to Borrowers and provided
to Bank.
3. CONDITIONS PRECEDENT
3.1 Conditions to Initial Advance. Bank shall not
be obligated to make the initial revolving credit advance
or to take, fulfill, or perform any other action
hereunder, until the following conditions have been
satisfied, in Bank's sole discretion, or waived in writing
by Bank:
(a) Loan Documents. This Agreement shall have
been duly executed by, and delivered to, each Borrower and
Bank; and Bank shall have received such documents,
instruments, agreements and legal opinions as Bank shall
request in connection with the transactions contemplated
by this Agreement and the other Loan Documents, including
all those listed in the Schedule of Documents attached
hereto as Schedule 3.1, each in form and substance
satisfactory to Bank.
(b) Governmental Approvals. Bank shall have
received (i) satisfactory evidence that each Borrower has
obtained all required consents and approvals of all
Persons including all requisite Governmental Authorities,
to the execution, delivery and performance of this
Agreement and the other Loan Documents, or (ii) an
officer's certificate in form and substance satisfactory
to Bank affirming that no such consents or approvals
are required.
(c) Payment of Fees. Borrowers shall have
authorized Bank to charge the loan account for all fees
required to be paid to Bank on the Closing Date and all
other costs and expenses of Bank presented to Borrowers as
of the Closing Date.
22
(d) Compliance with Laws. Each Borrower shall
be in compliance in all material respects with all
applicable foreign, federal, state and local laws and
regulations.
(e) Closing of Wabash Purchase. Prior to or
concurrently with the making of the initial revolving
credit advance hereunder, the "Closing Date" under and as
defined in the Wabash Purchase Agreement shall have
occurred, and Wabash shall have delivered to FTC all of
the documents referred to in Section 3.3 of the Wabash
Purchase Agreement.
(f) Repayment of Xxxxxxxxx Facility. Prior to
or concurrently with the making of the initial revolving
credit advance hereunder, all amounts outstanding under
the Xxxxxxxxx Facility shall have been paid in full, and
all Liens securing Borrowers' obligations thereunder shall
have been extinguished or released by Xxxxxxxxx.
3.2 Further Conditions to Each Loan. Bank shall not
be obligated to fund any revolving credit advance,
including the initial advance made on the Closing Date,
if, as of the date thereof:
(a) any representation or warranty by any
Borrower contained herein or in any of the other Loan
Documents shall be untrue or incorrect as of such date,
except to the extent that such representation or warranty
expressly relates to an earlier date and except for
changes therein expressly permitted or expressly
contemplated by this Agreement; or
(b) except as occasioned by the commencement of
the Chapter 11 Cases and the actions, proceedings,
investigations and other matters related thereto, any
event or circumstance having a Material Adverse Effect
shall have occurred since the date hereof; or
(c) any Default or Event of Default shall have
occurred and be continuing or would result after giving
effect to the revolving credit advance; or
(d) Bank shall not have received a fully
completed Notice of Revolving Advance with respect to such
requested advance; or
(e) (i) The Bankruptcy Court shall not have
entered the Interim Order following the expiration of the
notice period required under Bankruptcy Rule 4001; (ii)
the Bankruptcy Court shall not have entered the Final
Order following the later of (A) the expiration of the
notice period required under Bankruptcy Rule 4001 and (B)
the expiration of the Interim Order; and (iii) the Interim
Order or the Final Order, as the case may be, shall have
been vacated or reversed, or modified or amended without
Bank's consent, and an appeal of such order shall have
been timely filed and, if such an appeal has been taken, a
stay of such order pending appeal shall be presently
effective; or
23
(f) after giving effect to any revolving credit
advance, the Loan would exceed (i) the Maximum Amount, or
(ii) the amount then authorized by the Interim Order or
the Final Order, as applicable.
The request and acceptance by any Borrower of the proceeds
of any revolving credit advance shall be deemed to
constitute, as of the date of such request or acceptance,
(i) a representation and warranty by Borrowers that the
conditions in this Section 3.2 have been satisfied, and
(ii) a reaffirmation by Borrowers of the provisions set
forth in Section 11.10 and of the granting and continuance
of Bank's Liens pursuant to the Loan Documents.
4. REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to Bank as
follows:
4.1 Corporate Existence; Compliance with Law. Each
Borrower (a) is a corporation duly organized, validly
existing and in good standing under the laws of its
jurisdiction of incorporation; (b) is duly qualified to
conduct business and is in good standing in each other
jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification;
(c) subject to compliance with any applicable provisions
of the Bankruptcy Code, has the requisite corporate power
and authority and the legal right to own, pledge, mortgage
or otherwise encumber and operate its properties, to lease
the property it operates under lease and to conduct its
business as now, heretofore and proposed to be conducted;
(d) has all licenses, permits, consents or approvals from
or by, and has made all filings with, and has given all
notices to, all Governmental Authorities having
jurisdiction, to the extent required for such ownership,
operation and conduct; (e) is in compliance with its
charter and bylaws; and (f) subject to specific
representations set forth herein regarding ERISA,
Environmental Laws, tax and other laws, is in compliance
with all applicable provisions of law, except where the
failure to comply, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse
Effect.
4.2 Executive Offices; Collateral Locations; FEIN.
As of the Closing Date (after giving effect to the
consummation of the transactions under the Wabash Purchase
Agreement), the current location of each Borrower's chief
executive office, principal place of business and
locations of any Collateral is set forth in Schedule 4.2.
In addition, Schedule 4.2 lists the FEIN of each Borrower.
24
4.3 Corporate Power, Authorization, Enforceable
Obligations. The execution, delivery and performance by
each Borrower of the Loan Documents to which it is a party
and the creation of all Liens provided for therein: (a)
are within such Borrower's corporate power; (b) have been
duly authorized by all necessary or proper corporate and
shareholder action; (c) have been, or by the Closing Date
will be, duly authorized by the Bankruptcy Court; (d) do
not contravene any provision of such Borrower's charter or
bylaws; (e) subject to approval by the Bankruptcy Court,
do not violate any law or regulation, or any order or
decree of any court or Governmental Authority; (f) do
not conflict with or result in the breach or termination
of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any
indenture, mortgage, deed of trust, lease, agreement or
other instrument to which such Borrower is a party or by
which such Borrower or any of its property is bound; (g)
do not result in the creation or imposition of any Lien
upon any of the property of such Borrower other than those
in favor of Bank pursuant to the Loan Documents; and (h)
do not require the consent or approval of any Governmental
Authority or any other Person, except for the Bankruptcy
Court. On or prior to the Closing Date, each of the
Loan Documents shall have been duly executed and delivered
by each Borrower thereto and, subject to the entry of the
Interim Order or the Final Order, as the case may be, each
such Loan Document shall then constitute a legal, valid
and binding obligation of such Borrower enforceable
against it in accordance with its terms.
4.4 Monthly Forecast. The Forecast has been
prepared by Borrowers based upon the estimates and
assumptions stated therein, all of which Borrowers believe
to be reasonable and fair in light of current conditions
and current facts known to Borrowers and, as of the
Closing Date, reflect Borrowers' good faith and reasonable
estimates of the information projected therein for the
period set forth therein.
4.5 Material Adverse Effect. No event has occurred
and no circumstance exists, which alone or together with
other events or circumstances, could reasonably be
expected to have a Material Adverse Effect.
4.6 Ownership of Property; Liens. As of the Closing
Date (after giving effect to the consummation of the
transactions under the Wabash Purchase Agreement), the
real estate ("Real Estate") listed in Schedule 4.6
constitutes all of the real property owned, leased,
subleased, or used by any Borrower. Each Borrower owns
good and marketable fee simple title to all of its
owned real estate, and valid and marketable leasehold
interests in all of its leased Real Estate, all as
described on Schedule 4.6. Schedule 4.6 further describes
any Real Estate with respect to which any Borrower is a
lessor, sublessor or assignor as of the Closing Date.
Each Borrower also has good and marketable title to, or
valid leasehold interests in, all of its personal
properties and assets. As of the Closing Date (after
giving effect to the consummation of the transactions
under the Wabash Purchase Agreement), none of the
properties and assets of any Borrower are subject to any
Liens other than Permitted Liens and there are no facts,
circumstances or conditions known to any Borrower that may
result in any Liens (including Liens arising under
Environmental Laws) other than Permitted Liens.
4.7 Labor Matters. As of the Closing Date: (a) no
strikes or other material labor disputes against any
Borrower are pending or, to any Borrower's knowledge,
threatened; (b) hours worked by and payment made to
employees of each Borrower comply with the Fair Labor
Standards Act and each other federal, state, local or
foreign law applicable to such matter; (c) all payments
due from any Borrower for employee health and welfare
insurance have been paid or accrued as a liability on the
books of such Borrower; (d) except as set forth in
Schedule 4.7, no Borrower is a party to or bound by any
collective bargaining agreement, management agreement,
consulting agreement or any employment agreement in
each case covering employees of such Borrower after the
Closing Date (and true and complete copies of any
agreements described on Schedule 4.7 have been delivered
to Bank); (e) there is no organizing activity involving
any Borrower pending or, to each Borrower's knowledge,
threatened by any labor union or group of employees; (f)
there are no representation proceedings pending or, to
each Borrower's knowledge, threatened with the National
Labor Relations Board, and no labor organization or group
of employees of any Borrower has made a pending demand for
recognition; and (g) except as set forth in Schedule 4.7,
there are no complaints or charges against any Borrower
pending or threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in
connection with, or otherwise relating to, the employment
or termination of employment by any Borrower of any
individual after the Petition Date.
4.8 Ventures, Subsidiaries and Affiliates;
Outstanding Stock and Indebtedness. Except as set forth
in Schedule 4.8, no Borrower has any Subsidiaries, is
engaged in any joint venture or partnership with any other
Person, or is an Affiliate of any other Person. All of
the issued and outstanding Stock of each Borrower is owned
by each of the stockholders and in the amounts set forth
in Schedule 4.8. There are no outstanding rights to
purchase, options, warrants or similar rights or
agreements pursuant to which any Borrower may be required
to issue, sell, repurchase or redeem any of its Stock or
other equity securities or any Stock or other equity
securities of its Subsidiaries. All outstanding
Indebtedness of each Borrower as of the Closing Date
is described in Section 6.3.
26
4.9 Government Regulation. No Borrower is an
"investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment
Company Act of 1940 as amended. No Borrower is subject to
regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce Act
(to the extent applicable to the transactions contemplated
hereby) or any other federal or state statute that
restricts or limits its ability to incur Indebtedness or
to perform its obligations hereunder. The making of the
Loan by Bank to Borrowers, the application of the proceeds
thereof and repayment thereof will not violate any
provision of any such statute or any rule, regulation or
order issued by the Securities and Exchange Commission.
4.10 Employee Benefits. Except to the extent set
forth in Schedule 4.10, each Plan is in compliance in all
material respects with the applicable provisions of ERISA
and the IRC. Each Qualified Plan and Multiemployer Plan
has been determined by the Internal Revenue Service to
qualify under Section 401 of the IRC, and the trusts
created thereunder have been determined to be exempt from
tax under Section 501 of the IRC, and, to the best
knowledge of each Borrower, nothing has occurred that
would cause the loss of such qualification or tax-exempt
status. Except to the extent set forth in Schedule 4.10,
there are no outstanding liabilities under Title IV of
ERISA with respect to any Plan maintained or sponsored by
any Borrower or any ERISA Affiliate, nor with respect to
any Plan to which any Borrower or any ERISA Affiliate
contributes or is obligated to contribute which could
reasonably be expected to have a Material Adverse Effect.
Except to the extent set forth in Schedule 4.10, no Plan
subject to Title IV of ERISA has any Unfunded Benefit
Liability which could reasonably be expected to have a
Material Adverse Effect. Neither any Borrower nor any
ERISA Affiliate has transferred any Unfunded Benefit
Liability to a person other than any Borrower or an ERISA
Affiliate or has otherwise engaged in a transaction that
could be subject to Sections 4069 or 4212(c) of ERISA
which could reasonably be expected to have a Material
Adverse Effect. Neither any Borrower nor any ERISA
Affiliate has incurred nor reasonably expects to incur (x)
except to the extent set forth in Schedule 4.10, any
liability (and no event has occurred which, with the
giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 or 4243 of
ERISA with respect to a Multiemployer Plan, or (y) any
other liability under Title IV of ERISA (other than
premiums due but not delinquent under Section 4007 of
ERISA) with respect to a Plan, which could, in either
event, reasonably be expected to have a Material Adverse
Effect. No application for a funding waiver or an
extension of any amortization period pursuant to Section
412 of the IRC has been made with respect to any Plan.
Except to the extent set forth in Schedule 4.10, no ERISA
Event has occurred or is reasonably expected to occur with
respect to any Plan which could reasonably be expected to
have a Material Adverse Effect. Except to the extent set
forth in Schedule 4.10, each Borrower and each ERISA
Affiliate have complied in all material respects with the
notice and continuation coverage requirements of Section
4980B of the IRC.
27
4.11 Environmental Condition. Except as set forth in
Schedule 4.11, (a) none of any Borrower's properties or
assets has ever been used by such Borrower or, to the best
of each Borrower's knowledge, by previous owners or
operators in the disposal of, or to produce, store,
handle, treat, release, or transport, any Hazardous
Materials other than in accordance with applicable law in
all material respects, (b) none of any Borrower's
properties or assets has ever been designated or
identified in any manner pursuant to any environmental
protection statute as a Hazardous Materials disposal site,
or a candidate for closure pursuant to any environmental
protection statute, (c) no material lien arising under any
environmental protection statute has attached to any
Collateral, and (d) no Borrower has received a summons,
citation, notice, or directive from the Environmental
Protection Agency or any other federal or state
governmental agency concerning any action or omission by
any Borrower resulting in the releasing or disposing of
Hazardous Materials into the environment.
4.12 Margin Regulations. No Borrower is engaged, nor
will it engage, principally or as one of its important
activities, in the business of extending credit for the
purpose of "purchasing" or "carrying" any "margin
security" as such terms are defined in Regulation U or G
of the Federal Reserve Board as now and from time to time
hereafter in effect (such securities being referred to
herein as "Margin Stock"). No Borrower owns any Margin
Stock (except for the Wabash Stock), and none of the
proceeds of the Loan or other extensions of credit under
this Agreement will be used, directly or indirectly, for
the purpose of purchasing or carrying any Margin Stock,
for the purpose of reducing or retiring any Indebtedness
which was originally incurred to purchase or carry any
Margin Stock or for any other purpose which might cause
any portion of the Loan or other extensions of credit
under this Agreement to be considered a "purpose credit"
within the meaning of Regulation G, T, U or X of the
Federal Reserve Board. No Borrower will take or permit to
be taken any action which might cause any Loan Document to
violate any regulation of the Federal Reserve Board.
4.13 No Litigation. No action, claim, lawsuit,
demand, investigation or proceeding is now pending or, to
each Borrower's knowledge, threatened against any
Borrower, before any court, board, commission, agency or
instrumentality of any federal, state, local or foreign
government or of any agency or subdivision thereof, or
before any arbitrator or panel of arbitrators
(collectively, "Litigation"), (a) which challenges any
Borrower's right or power to enter into or perform any of
its obligations under the Loan Documents to which it is a
party, or the validity or enforceability of any Loan
Document or any action taken thereunder, or (b) which has
a reasonable risk of being determined adversely to any
Borrower and which, if so determined, could have a
Material Adverse Effect. As of the Closing Date, except
as set forth in Schedule 4.13, there is no Litigation
pending or threatened which seeks damages in excess of
$1,000,000 or injunctive relief or alleges criminal
misconduct of any Borrower.
28
4.14 Brokers. No broker or finder acting on behalf
of any Borrower brought about the obtaining, making or
closing of the Loan and no Borrower has any obligation to
any Person in respect of any finder's or brokerage fees in
connection therewith.
4.15 Intellectual Property. As of the Closing Date
(after giving effect to the consummation of the
transactions under the Wabash Purchase Agreement), each
Borrower owns or has rights to use all Intellectual
Property necessary to continue to conduct its business as
now or heretofore conducted by it or proposed to be
conducted by it, and each patent, trademark, copyright and
license is listed, together with application or
registration numbers, as applicable, in Schedule 4.15.
Each Borrower conducts its business and affairs without
infringement of or interference with any Intellectual
Property of any other Person.
4.16 Full Disclosure. No information contained in
this Agreement, any of the other Loan Documents, or other
reports from time to time delivered hereunder or any
written statement furnished by or on behalf of any
Borrower to Bank pursuant to the terms of this Agreement
contains any untrue statement of a material fact or omits
or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading
in light of the circumstances under which they were
made.
4.17 Insurance. Borrowers have liability and other
insurance appropriate to the businesses currently being
conducted by Borrowers.
4.18 Deposit Accounts. Schedule 4.18 lists all banks
and other financial institutions at which each Borrower
maintains deposits and/or other accounts as of the Closing
Date, and such Schedule correctly identifies the name,
address and telephone number of each depository, the name
in which the account is held, a description of the purpose
of the account, and the complete account number.
29
5. AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees that until full
and final payment of the Obligations, and unless Bank
shall otherwise consent in writing:
5.1 Reporting Requirements. Such Borrower shall
deliver the following to Bank:
(a) As soon as available, but in any event
within ten (10) days after the end of each calendar month,
a report showing actual cash receipts and disbursements of
Borrowers for the previous month and showing any
variations from the Forecast.
(b) On each Business Day, a certificate signed
by the responsible officer of FTC setting forth, as of the
end of the immediately preceding Business Day: (i) the
Loan balance; (ii) the calculation set forth in clause (i)
of the definition of "Market Value" hereunder with respect
to the common Stock of Wabash; and (iii) the calculation
set forth in clause (ii) of the definition of "Market
Value" hereunder with respect to the Convertible
Exchangeable Preferred Stock of Wabash, in each case
for such preceding Business Day.
(c) As soon as the same are filed, any Form
10-Q Quarterly Reports, Form 10-K Annual Reports, Form 8-K
Current Reports and any other filings made by any Borrower
with the Securities and Exchange Commission, if any, and
any other information that is provided by any Borrower to
holders of such Borrower's publicly held securities.
(d) Promptly, and in any event no later than
three (3) Business Days after the same becomes available,
copies of all pleadings, motions, applications, judicial
information, financial information and other documents
filed on or behalf of any Borrower with the Bankruptcy
Court or the U.S. Trustee in any Chapter 11 Case, or
distributed by or on behalf of any Borrower to any
official committee appointed in any Chapter 11 Case
(except to the extent any such information is subject to a
confidentiality agreement between any Borrower and any
such committee).
(e) Promptly, and in any event no later than
three (3) Business Days after any Borrower receives the
same, copies of all financial statements and other reports
provided by Wabash to such Borrower and copies of all Form
10-Q Quarterly Reports, Form 10-K Annual Reports, Form 8-K
Current Reports and any other filings made by Wabash with
the Securities and Exchange Commission.
(f) Promptly upon learning thereof, written
notice of any Litigation commenced or threatened against
any Borrower that (i) seeks damages in excess of
$1,000,000, (ii) seeks injunctive relief, (iii) is
asserted or instituted against any Plan, its fiduciaries
or its assets or against any Borrower or ERISA Affiliate
in connection with any Plan, (iv) alleges criminal
misconduct by any Borrower, or (v) alleges the violation
of any law regarding, or seeks remedies in connection
with, any Environmental Liabilities.
30
(g) Immediately after an executive officer of
any Borrower has actual knowledge of the existence of any
Default, Event of Default or other event which has had a
Material Adverse Effect, telephonic or telecopied notice
specifying the nature of such Default or Event of Default
or other event, including the anticipated effect thereof,
which notice, if given telephonically, shall be promptly
confirmed in writing on the next Business Day.
(h) Promptly upon receiving any such notices,
copies of any notices with respect to or from any holder
of, the Prepetition Subordinated Debt.
(i) Such other financial and other information
respecting any Borrower's business or financial condition
as Bank shall, from time to time, request.
5.2 Maintenance of Existence. Each Borrower shall
do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence
and its rights and franchises.
5.3 Payment of Obligations. (a) Except as
nonpayment is permitted or payment is prohibited by the
Bankruptcy Code or the Bankruptcy Court, and subject to
Section 5.3(b), each Borrower shall pay and discharge or
cause to be paid and discharged promptly all Charges
payable by it, including (A) Charges imposed upon it, its
income and profits, or any of its property (real, personal
or mixed), and all Charges with respect to tax, social
security and unemployment withholding with respect to its
employees, and (B) lawful claims for labor, materials,
supplies and services or otherwise, before any thereof
shall become past due.
(b) Each Borrower may in good faith contest, by
appropriate proceedings, the validity or amount of any
Charges or claims described Section 5.3(a); provided, that
(i) at the time of commencement of any such contest no
Default or Event of Default shall have occurred and be
continuing, (ii) adequate reserves with respect to such
contest are maintained on the books of such Borrower, in
accordance with GAAP, (iii) such contest is maintained and
prosecuted continuously and with diligence, (iv) none of
the Collateral becomes subject to forfeiture or loss
as a result of such contest, (v) no Lien shall be imposed
to secure payment of such Charges or claims other than
inchoate tax liens, (vi) such Borrower shall promptly pay
or discharge such contested Charges or claims and all
additional charges, interest, penalties and expenses, if
any, and shall deliver to Bank evidence acceptable to Bank
of such compliance, payment or discharge, if such contest
is terminated or discontinued adversely to such Borrower
or the conditions set forth in this Section 5.3(b) are no
longer met, and (vii) Bank has not advised Borrowers in
writing that Bank reasonably believes that nonpayment or
nondischarge thereof could have or result in a Material
Adverse Effect.
31
5.4 Books and Records. Each Borrower shall keep
adequate Books and Records with respect to its business
activities in which proper entries, reflecting all
financial transactions, are made in accordance with GAAP.
5.5 Insurance. Each Borrower will maintain or cause
to be maintained, with financially sound and reputable
insurers, insurance with respect to its properties and
business appropriate for the businesses then being
conducted by Borrowers.
5.6 Compliance with Laws. Except as noncompliance
is permitted or compliance is prohibited by the Bankruptcy
Code or the Bankruptcy Court, each Borrower shall comply
with all federal, state and local laws and regulations
applicable to it, including those relating to licensing,
ERISA and labor matters and Environmental Laws, except to
the extent that the failure to comply, individually or in
the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
5.7 Intellectual Property. Each Borrower will
conduct its business and affairs without infringement of
or interference with any Intellectual Property of any
other Person.
5.8 Environmental Matters. Each Borrower shall and
shall cause each Person within its control to: (a) except
as provided in Schedule 4.11, conduct its operations and
keep and maintain its Real Estate in compliance with all
Environmental Laws and Environmental Permits other than
noncompliance which could not reasonably be expected to
have a Material Adverse Effect; and (b) promptly forward
to Bank a copy of any order, notice, request for
information or any communication or report received by
such Borrower in connection with any such violation or
Release or any other matter relating to any Environmental
Laws or Environmental Permits that could reasonably be
expected to result in Environmental Liabilities in excess
of $1,000,000, in each case whether or not the
Environmental Protection Agency or any Governmental
Authority has taken or threatened any action in connection
with any such violation, Release or other matter.
32
5.9 Registration of Wabash Stock. Each Borrower
shall provide Wabash with all materials requested by
Wabash in order to effectuate the registration of the
Wabash Stock as contemplated in the Wabash Purchase
Agreement.
5.10 Further Assurances. Each Borrower shall at its
cost and expense, upon request of Bank, duly execute and
deliver, or cause to be duly executed and delivered, to
Bank such further instruments and do and cause to be done
such further acts as may be necessary or proper in the
reasonable opinion of Bank to carry out more effectually
the provisions and purposes of this Agreement or any other
Loan Document.
6. NEGATIVE COVENANTS
Each Borrower covenants and agrees that until full
and final payment of the Obligations, and unless Bank
shall otherwise consent in writing:
6.1 Mergers, Subsidiaries, Etc. No Borrower shall
directly or indirectly, by operation of law or otherwise,
(a) form or acquire any Subsidiary, or (b) merge with,
consolidate with, acquire all or substantially all of the
assets or capital stock of, or otherwise combine with or
acquire, any Person.
6.2 Investments; Loans and Advances. Except as
otherwise expressly permitted by this Section 6, no
Borrower shall make any investment in, or make or accrue
loans or advances of money to, any Person, through the
direct or indirect lending of money, holding of securities
or otherwise, except, so long as Borrowers comply with
Section 345 of the Bankruptcy Code or any order of
the Bankruptcy Court that provides otherwise, each
Borrower may (a) hold investments in the deposit accounts
set forth in Schedule 4.18, (b) maintain its existing
investments in its Subsidiaries as of the Closing Date,
and (c) make expense advances in the ordinary course of
business to employees of such Borrower.
6.3 Indebtedness. (a) No Borrower shall create,
incur, assume or permit to exist any Indebtedness, except,
to the extent not prohibited by the Bankruptcy Code: (i)
Indebtedness secured by Permitted Liens, (ii) the Loan and
the other Obligations, (iii) deferred taxes, (iv) unfunded
pension fund and other employee benefit plan obligations
and liabilities to the extent they are permitted to remain
unfunded under applicable law, (v) Indebtedness existing
as of the Petition Date.
(b) No Borrower shall, directly or indirectly,
voluntarily purchase, redeem, defease or prepay any
principal of, premium, if any, interest or other amount
payable in respect of any Indebtedness, other than (i) the
Obligations, and (ii) Indebtedness, other than the
Prepetition Subordinated Debt, secured by a Permitted Lien
if the asset securing such Indebtedness has been sold or
otherwise disposed of in accordance with Section 6.8(b).
33
6.4 Employee Loans and Affiliate Transactions.
(a) No Borrower shall enter into or be a party
to any transaction with any other Borrower or any
Affiliate thereof except in the ordinary course of and
pursuant to the reasonable requirements of such Borrower's
business and upon fair and reasonable terms that are no
less favorable to such Borrower than would be obtained in
a comparable arm's length transaction with a Person not an
Affiliate of such Borrower, and to the extent not
prohibited by the Bankruptcy Code.
(b) No Borrower shall enter into any lending or
borrowing transaction with any employee of any Borrower.
6.5 Capital Structure and Business. No Borrower
shall (a) make any changes in any of its business
objectives, purposes or operations which could in any way
adversely affect the repayment of the Loan or any of the
other Obligations or could have or result in a Material
Adverse Effect, (b) make any change in its capital
structure as described in Schedule 4.8, including the
issuance of any shares of Stock, warrants or other
securities convertible into Stock or any revision of the
terms of its outstanding Stock, or (c) amend its charter
or bylaws in a manner which would adversely affect Bank or
such Borrower's duty or ability to repay the Obligations.
No Borrower shall engage in any business other than the
winding up of its business.
6.6 Guaranteed Indebtedness. No Borrower shall
incur any Guaranteed Indebtedness except (a) by
endorsement of instruments or items of payment for deposit
to the deposit accounts of any Borrower, and (b) for
Guaranteed Indebtedness incurred for the benefit of any
other Borrower if the primary obligation is expressly
permitted by this Agreement.
6.7 Liens. No Borrower shall create, incur, assume
or permit to exist any Lien on or with respect to any of
its properties or assets (whether now owned or hereafter
acquired) except for Permitted Liens. In addition, no
Borrower shall become a party to any agreement, note,
indenture or instrument, or take any other action, which
would prohibit the creation of a Lien on any of its
properties or other assets in favor of Bank as additional
collateral for the Obligations.
6.8 Sale of Stock and Assets. No Borrower shall
sell, transfer, convey, assign or otherwise dispose of any
of its properties or other assets, including its capital
Stock or the capital Stock of any of its Subsidiaries
(whether in a public or a private offering or otherwise),
including by sale-leaseback, synthetic lease or similar
transaction, other than, to the extent not prohibited by
the Bankruptcy Code: (a) the sale of Inventory in the
ordinary course of business; (b) sales of Wabash Stock in
order to comply with the provisions of Section 2.3(b) or
as otherwise consented to in writing by Bank; and (c)
other sales approved by the Bankruptcy Court, upon prior
notice to Bank. With respect to any disposition of assets
or other properties permitted pursuant to clause (b)
above, (i) Bank shall continue to hold a Lien on the
Proceeds of any such assets and properties, (ii) the
Proceeds of any such assets and properties (including
the Wabash Stock) shall be delivered directly to the
Collection Account in immediately available funds, and
(iii) Bank hereby agrees that on reasonable prior written
notice it shall release its Liens on any such assets or
other properties in order to permit the applicable
Borrower to effect such disposition and shall execute and
deliver to Borrowers, at Borrowers' expense, appropriate
UCC termination statements and other releases as
reasonably requested by Borrowers.
34
6.9 ERISA. Except as set forth in Schedule 4.10, no
Borrower shall, or shall cause or permit any ERISA
Affiliate to, cause or permit to occur an event which
could result in the imposition of a Lien under Section 412
of the IRC or Section 302 or 4068 of ERISA.
6.10 Hazardous Materials. Except as set forth in
Schedule 4.11, no Borrower shall cause or permit a Release
of any Hazardous Material on, at, in, under, above, to,
from or about any of the Real Estate where such Release
would (a) violate in any respect, or form the basis for
any Environmental Liabilities under, any Environmental
Laws or Environmental Permits or (b) otherwise adversely
impact the value or marketability of any of the Real
Estate or any of the Collateral, other than such
violations or impacts which could not reasonably be
expected to have a Material Adverse Effect.
6.11 Cancellation of Indebtedness. No Borrower shall
cancel any claim or debt owing to it, except for
reasonable consideration negotiated on an arm's-length
basis and in the ordinary course of its business
consistent with past practices, or as otherwise approved
by the Bankruptcy Court.
6.12 Restricted Payments. No Borrower shall make any
Restricted Payment.
6.13 Change of Corporate Name or Location; Change of
Fiscal Year. No Borrower shall (a) change its corporate
name, identity or corporate structure, or (b) change its
chief executive office, principal place of business,
corporate offices or warehouses or locations at which
Collateral is held or stored, or the location of its
records concerning the Collateral, in any case without at
least thirty (30) days prior written notice to Bank and
after Bank's written acknowledgment that any reasonable
action requested by Bank in connection therewith,
including to continue the perfection of any Liens in favor
of Bank in any Collateral, has been completed or taken,
and provided that any such new location shall be in the
continental United States.
35
6.14 Leases. No Borrower shall enter into any
operating lease for Equipment or Real Estate , if the
aggregate of all such operating lease payments payable in
any year for Borrowers on a consolidated basis would
exceed $1,000,000.
6.15 Prepetition Indebtedness. No Borrower shall
consent to any amendment, supplement or other modification
of any of the terms or provisions contained in, or
applicable to, any Prepetition Indebtedness if doing so
would violate the provisions of the Bankruptcy Code or an
order of the Bankruptcy Court.
6.16 Application to the Court. No Borrower shall
apply to the Bankruptcy Court for authority to take any
action that is prohibited by the terms of this Agreement
and the other Loan Documents or refrain from taking any
action that is required to be taken by the terms of this
Agreement and the other Loan Documents.
7. TERM
7.1 Term. This Agreement shall become effective
upon the execution and delivery hereof by each Borrower
and Bank and approval by the Bankruptcy Court and shall
continue in full force and effect for a term ending on the
earliest to occur of (i) December 31, 1997, (ii) the date
upon which the Interim Order expires, unless the Final
Order shall have been entered and become effective by such
date, (iii) the effective date of a confirmed plan of
reorganization for any Borrower, (iv) the date
of a prepayment in full of the Loan and all other
Obligations in accordance with Section 2.3(a), and (v) the
termination of this Agreement by Bank after the occurrence
and during the continuation of an Event of Default (such
earliest date being referred to herein as the "Maturity
Date"). On the Maturity Date, all Obligations shall
immediately become due and payable without notice or
demand.
7.2 Effect of Termination. Except as otherwise
expressly provided for in the Loan Documents, no
termination or cancellation (regardless of cause or
procedure) of this Agreement shall in any way affect or
impair the obligations, duties and liabilities of the
Borrowers or the rights of Lender relating to any unpaid
portion of the Obligations or any transaction or event
occurring prior to such termination, or any transaction or
event, the performance of which is required after the
Maturity Date. In all events the provisions of Section 9
shall survive the Maturity Date.
36
8. EVENTS OF DEFAULT; REMEDIES
8.1 Events of Default. Notwithstanding the
provisions of Section 362 of the Bankruptcy Code and
without application or motion to the Bankruptcy Court, the
occurrence of any one or more of the following events
(regardless of the reason therefor) shall constitute an
"Event of Default" hereunder:
(a) Any Borrower fails to make any payment of
principal of, or interest on, or fees or any other amounts
owing in respect of, the Loan or any of the other
Obligations when due and payable.
(b) Any Borrower shall fail or neglect to
perform, keep or observe any of the provisions of Section
6.
(c) Any Borrower shall fail or neglect to
perform, keep or observe any other provision of this
Agreement or of any of the other Loan Documents (other
than any provision embodied in or covered by any other
clause of this Section 8.1) and the same shall remain
unremedied for fifteen (15) days or more.
(d) Any representation or warranty herein or in
any Loan Document or in any written statement, report,
financial statement or certificate made or delivered to
Bank by any Borrower is untrue or incorrect in any
material respect as of the date when made or deemed made.
(e) The bringing of a motion by any Borrower in
the Chapter 11 Case: (i) to obtain working capital
financing from any Person other than Bank under Section
364(c) or 364(d) of the Bankruptcy Code (other than with
respect to a financing used, in whole or in part, to repay
in full the Obligations); or (ii) to grant any Lien other
than Permitted Liens upon or affecting any Collateral; or
(iii) to use Cash Collateral of Bank under Section 363(c)
of the Bankruptcy Code without Bank's prior written
consent; or (iv) to recover from any portions of the
Collateral any costs or expenses of preserving or
disposing of such Collateral under Section 506(c) of the
Bankruptcy Code; or (vi) any other action or actions
adverse to Bank or its rights and remedies hereunder or
their interest in the Collateral that would, individually
or in the aggregate, have a Material Adverse Effect.
(f) The allowance of any claim or claims under
Section 506(c) of the Bankruptcy Code against or with
respect to any Collateral.
37
(g) The occurrence of any postpetition
judgments, liabilities or events that, individually or in
the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(h) The entry by the Bankruptcy Court of an
order authorizing the appointment of an interim or
permanent trustee in any Chapter 11 Case or the
appointment of an examiner in any Chapter 11 Case with
expanded powers to operate or manage the financial
affairs, business, or reorganization of any Borrower.
(i) The dismissal of any Chapter 11 Case, or
the conversion of any Chapter 11 Case from one under
Chapter 11 to one under Chapter 7 of the Bankruptcy Code.
(j) The entry of an order by the Bankruptcy
Court granting relief from or modifying the automatic stay
of Section 362 of the Bankruptcy Code (i) to allow any
creditor (other than Bank) to execute upon or enforce a
Lien on any Collateral if the enforcement of such Lien
could reasonably be expected have a Material Adverse
Effect, or (ii) with respect to any Lien of or the
granting of any Lien on any Collateral to any state or
local environmental or regulatory agency or authority
which could reasonably be expected to have a Material
Adverse Effect.
(k) The modification of the Interim Order or
the Final Order without Bank's prior written consent.
(l) The commencement of a suit or action
against Bank by or on behalf of (i) any Borrower, (ii) the
Environmental Protection Agency, (iii) any state
environmental protection or health and safety agency, or
(iv) any official committee in the Chapter 11 Case, which
asserts a claim or seeks a legal or equitable remedy that
would have the effect of subordinating the claim or Lien
of Bank and, if such suit or action is commenced by
any Person other than any Borrower or any Subsidiary,
officer, or employee of any Borrower, it shall not have
been dismissed within thirty (30) days after service
thereof on Bank.
(m) Any material provision of any Loan Document
shall for any reason cease to be valid, binding and
enforceable in accordance with its terms (or any Borrower
shall challenge the enforceability of any Loan Document or
shall assert in writing, or engage in any action or
inaction based on any such assertion, that any provision
of any of the Loan Documents has ceased to be or otherwise
is not valid, binding and enforceable in accordance
with its terms), or any security interest created under
any Loan Document shall cease to be a valid and perfected
first priority security interest or Lien (except as
otherwise permitted herein or therein) in any of the
Collateral purported to be covered thereby.
38
8.2 Remedies. If any Event of Default shall have
occurred and be continuing, Bank may by written notice to
Borrowers: (a) declare all principal of, and accrued
interest on, the Loan and all other Obligations to be
immediately due and payable; (b) revoke any Borrower's
rights to use Cash Collateral in which Bank has an
interest; and (c) upon five (5) Business Days' prior
written notice to Borrowers, the official committee of
unsecured creditors in the Chapter 11 Cases and the
unofficial committee of senior noteholders in the Chapter
11 Cases, exercise any and all other rights and remedies
under the Loan Documents and applicable law or at equity;
provided, that such five (5) Business Day period shall not
apply with respect to the exercise of Bank's rights and
remedies against the Wabash Stock if Bank determines in
its good faith that there exists a risk of significant
decrease in the value of the Wabash Stock. Pursuant to
the Final Order, or if no Final Order has been entered,
the Interim Order, the automatic stay of Section 362 of
the Bankruptcy Code shall be modified or vacated to permit
Bank to exercise its remedies under this Agreement and the
other Loan Documents, without further application or
motion to, or order from, the Bankruptcy Court.
8.3 Waivers by Borrowers. Except as otherwise
provided for in this Agreement or by applicable law, each
Borrower waives: (a) presentment, demand and protest and
notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default,
nonpayment, maturity, release, compromise, settlement,
extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Bank on which any
Borrower may in any way be liable, and hereby ratifies and
confirms whatever Bank may do in this regard, (b) all
rights to notice and a hearing prior to Bank's taking
possession or control of, or to Bank's replevy, attachment
or levy upon, any Collateral or any bond or security which
might be required by any court prior to allowing Bank to
exercise any of its remedies, and (c) the benefit of all
valuation, appraisal, marshalling and exemption laws.
8.4 Remedies Cumulative. Bank's rights and remedies
under this Agreement, the Loan Documents, and all other
agreements shall be cumulative. Bank shall have all other
rights and remedies not inconsistent herewith as provided
under the Code, by law, or in equity. No exercise by Bank
of one right or remedy shall be deemed an election, and no
waiver by Bank of any Event of Default shall be deemed a
continuing waiver. No delay by Bank shall constitute a
waiver, election, or acquiescence by it.
8.5 Bank's Liability for Collateral. Bank shall use
reasonable care in the custody and preservation of
Collateral in its possession; provided, that in no event
shall Bank be liable or responsible for: (a) the
preservation of rights against third parties with respect
thereto; (b) any diminution in the value thereof; or (c)
any act or default of any carrier, warehouseman, bailee,
forwarding agency, or other Person. All risk of loss,
damage, or destruction of the Collateral shall be borne by
Borrowers.
39
9. INDEMNIFICATION; FEES AND EXPENSES
9.1 Indemnification. Each Borrower agrees to
defend, indemnify, save, and hold Bank and its officers,
employees, and agents harmless against: (a) all
obligations, demands, claims, and liabilities claimed or
asserted by any other Person arising out of or relating to
the transactions contemplated by this Agreement or any
other Loan Document, including any claim of any broker or
finder, (b) all losses (including attorneys fees and
disbursements) in any way suffered, incurred, or paid by
Bank as a result of or in any way arising out of,
following, or consequential to the transactions
contemplated by this Agreement or any other Loan Document,
and (c) any action, suit, proceeding, claim or loss
suffered or incurred under or on account of any
Environmental Laws or Release of any Hazardous Materials
relating to any Real Estate (each, an "Indemnified
Claim"). This provision shall survive the termination of
this Agreement. To the extent it so elects, Borrowers
shall be entitled to assume and control the defense of any
Indemnification Claim that is the subject of this
paragraph with counsel of its choice reasonably
satisfactory to the relevant Indemnified Person. In the
event, however, that such Indemnified Person reasonably
determines that (i) having common counsel would present
such counsel with a conflict of interest, or (ii) there
may be legal defenses available to such Indemnified Person
that are different from or in addition to those available
to Borrowers or other Indemnified Persons, then such
Indemnified Person shall have the right to employ separate
counsel to represent it in defense of such Indemnification
Claim, and Borrowers shall pay all fees and disbursements
related to such counsel to the extent such Indemnified
Person otherwise would be entitled to reimbursement
pursuant to this paragraph.
9.2 Fees and Expenses. Borrowers shall reimburse
Bank for all reasonable fees, costs and expenses incurred
by Bank in connection with the preparation of the Loan
Documents and the obtaining of approval of the Loan
Documents by the Bankruptcy Court (which expenses may
include attorneys fees, including allocated costs of
in-house counsel, consultant and financial advisor fees,
collateral evaluation costs, including allocated costs of
in-house personnel, and travel expenses), and in
connection with:
40
(a) the forwarding to Borrowers or any other
Person on behalf of Borrowers by Bank of the proceeds of
the Loan;
(b) any amendment, modification or waiver of,
or consent with respect to, any of the Loan Documents or
the Obligations or advice in connection with the
administration of the Loan made pursuant hereto or its
rights hereunder or thereunder;
(c) the review of pleadings and documents
related to the Chapter 11 Cases and any subsequent chapter
7 cases, attendance at meetings related to the Chapter 11
Cases and any subsequent chapter 7 cases, and general
monitoring of the Chapter 11 Cases and any subsequent
chapter 7 cases;
(d) any litigation, contest, dispute, suit,
proceeding or action (whether instituted by Bank, any
Borrower or any other Person) in any way relating to the
Collateral, any of the Loan Documents or any other
agreement to be executed or delivered in connection
therewith or herewith, whether as party, witness, or
otherwise, including any litigation, contest, dispute,
suit, case, proceeding or action, and any appeal or review
thereof, in connection with a case commenced by or against
any or all of the Borrowers or any other Person that may
be obligated to Bank by virtue of the Loan Documents;
including any such litigation, contest, dispute, suit,
proceeding or action arising in connection with any
work-out or restructuring of the Loan during the pendency
of one or more Events of Default;
(e) any attempt to enforce any remedies of Bank
against any or all of the Borrowers or any other Person
that may be obligated to Bank by virtue of any of the Loan
Documents; including any such attempt to enforce any such
remedies in the course of any work-out or restructuring of
the Loan during the pendency of one or more Events of
Default;
(f) any work-out or restructuring of the Loan
during the pendency of one or more Events of Default;
(g) efforts to (i) monitor the Loan or any of
the other Obligations, (ii) evaluate, observe or assess
any Borrower or its affairs, and (iii) verify, protect,
evaluate, assess, appraise, collect, sell, liquidate or
otherwise dispose of any of the Collateral;
including all reasonable attorneys' and other professional
and service providers' fees arising from such services,
including those in connection with any appellate
proceedings; and all expenses, costs, charges and other
fees incurred by such counsel and others in any way or
respect arising in connection with or relating to any of
the events or actions described in this Section 9.2 shall
be payable, on demand, by Borrowers to Bank. Without
limiting the generality of the foregoing, such expenses,
costs, charges and fees may include: fees, costs and
expenses of accountants, environmental advisors,
appraisers, investment bankers, management and other
consultants and paralegals; court costs and expenses;
photocopying and duplication expenses; court reporter
fees, costs and expenses; long distance telephone
charges; air express charges; telegram or telecopy
charges; secretarial overtime charges; and expenses for
travel, lodging and food paid or incurred in connection
with the performance of such legal or other advisory
services.
41
10. NOTICES
Unless otherwise provided in this Agreement, all
notices or demands by any party relating to this Agreement
or any other Loan Document shall be in writing and (except
for financial statements and other informational documents
which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by registered or
certified mail, postage prepaid, return receipt requested,
or by prepaid telex, facsimile, or telegram (with
messenger delivery specified) to each Borrower or to Bank,
as the case may be, at its address set forth below:
(a) If to any Borrower:
Fruehauf Trailer Corporation
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
(b) If to Bank:
Bank of America, NT&SA
000 Xxxxx Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Mr. Xxxxx Xx and Xx. Xxxxx
Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx, Xxxx & Xxxxxx
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
42
The parties hereto may change the address at which
they are to receive notices hereunder, by notice in
writing in the foregoing manner given to the other. All
notices or demands sent in accordance with this Section
10, other than notices by Bank in connection with Sections
9504 or 9505 of the Code, shall be deemed received on the
earlier of the date of actual receipt or three (3) days
after the deposit thereof in the mail. Each Borrower
acknowledges and agrees that notices sent by Bank in
connection with Sections 9504 or 9505 of the Code shall be
deemed sent when deposited in the mail or transmitted by
facsimile or other similar method set forth above.
11. MISCELLANEOUS
11.1 Effectiveness. This Agreement shall be binding
and deemed effective when executed by each Borrower and
Bank, as authorized by the Bankruptcy Court.
11.2 Successors and Assigns. This Agreement shall
bind and inure to the benefit of the respective successors
and assigns of each of the parties; provided, that no
Borrower may assign this Agreement or any rights or duties
hereunder without Bank's prior written consent and any
prohibited assignment shall be absolutely void. No
consent to an assignment by Bank shall release any
Borrower from its Obligations. Bank may assign this
Agreement and its rights and duties hereunder and no
consent or approval by any Borrower is required in
connection with any such assignment. Bank reserves the
right to sell, assign, transfer, negotiate, or grant
participations in all or any part of, or any interest in
Bank's rights and benefits hereunder. In connection with
any such assignment or participation, Bank may disclose
all documents and information which Bank now or hereafter
may have relating to each Borrower or each Borrower's
business. To the extent that Bank assigns its rights and
obligations hereunder to a third Person, Bank thereafter
shall be released from such assigned obligations to
Borrowers and such assignment shall effect a novation
between Borrowers and such third Person.
11.3 Section Headings. Headings and numbers have
been set forth herein for convenience only. Unless the
contrary is compelled by the context, everything contained
in each section applies equally to this entire Agreement.
11.4 Interpretation. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or
resolved against Bank or any Borrower, whether under any
rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all parties and shall be
construed and interpreted according to the ordinary
meaning of the words used so as to fairly accomplish the
purposes and intentions of all parties hereto.
43
11.5 Severability of Provisions. Each provision of
this Agreement shall be severable from every other
provision of this Agreement for the purpose of determining
the legal enforceability of any specific provision.
11.6 Amendments in Writing. This Agreement can only
be amended by a writing signed by both Bank and each
Borrower.
11.7 Counterparts. This Agreement may be executed in
any number of counterparts and by different parties on
separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and
the same Agreement.
11.8 Integration. This Agreement, together with the
other Loan Documents, reflects the entire understanding of
the parties with respect to the transactions contemplated
hereby and shall not be contradicted or qualified by any
other agreement, oral or written, before the date hereof,
including the Commitment Letter.
11.9 Parties Including Trustees; Bankruptcy Court
Proceedings. This Agreement, the other Loan Documents,
and all Liens created hereby or pursuant to any other Loan
Document shall be binding upon each Borrower, the estate
of each Borrower, and any trustee or successor in interest
of each Borrower in its Chapter 11 Case or any subsequent
case commenced under Chapter 7 of the Bankruptcy Code.
This Agreement and the other Loan Documents shall be
binding upon, and inure to the benefit of, the
successors of Bank and its assigns, transferees and
endorsees. The security Liens created by this Agreement
and the other Loan Documents shall be and remain valid and
perfected in the event of the conversion of any Chapter 11
Case or any other bankruptcy case of any Borrower to a
case under Chapter 7 of the Bankruptcy Code or in the
event of dismissal of any Chapter 11 Case or the release
of any Collateral from the property of any Borrower or
jurisdiction of the Bankruptcy Court for any reason,
without the necessity that Bank file financing statements
or otherwise perfect its Liens under applicable law.
11.10 Additional Waivers by Borrowers.
(a) Joint and Several Obligations. Each
Borrower hereby agrees that such Borrower is jointly and
severally liable for the full and prompt payment (whether
at stated maturity, by acceleration or otherwise) and
performance of, all Obligations arising under this
Agreement and the other Loan Documents owed or hereafter
owing to Bank by each other Borrower. Each Borrower
agrees that its Obligations hereunder shall be absolute
and unconditional, irrespective of, and unaffected by,
(i) the genuineness, validity, regularity,
enforceability or any future amendment of, or change
in, this Agreement, any other Loan Document or any other
agreement, document or instrument to which any Borrower is
or may become a party;
44
(ii) the absence of any action to enforce
this Agreement or any other Loan Document or the waiver or
consent by Bank with respect to any of the provisions
hereof or thereof;
(iii) the existence, value or condition of,
or failure to perfect its Lien against, any security for
the Obligations or any action, or the absence of any
action, by Bank in respect thereof (including the release
of any such security); or
(iv) any other action or circumstances
which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor.
(b) Waivers by Borrowers. Each Borrower
expressly waives all rights it may have now or in the
future under any statute, or at common law, or at law or
in equity, or otherwise, to compel Bank to marshal assets
or to proceed in respect of the Obligations against any
other Borrower any other party or against any security for
the payment and performance of the Obligations before
proceeding against, or as a condition to proceeding
against, such Borrower. It is agreed among each Borrower
and Bank that the foregoing waivers are of the essence of
the transaction contemplated by this Agreement and the
other Loan Documents and that, but for the provisions of
this Section 11.10 and such waivers, Bank would decline to
enter into this
Agreement.
(c) Benefit of Provisions. Each Borrower
agrees that the provisions of this Section 11.10 are for
the benefit of Bank and its successors, transferees,
endorsees and assigns, and nothing herein contained shall
impair, as between any other Borrower and Bank the
obligations of such other Borrower under the Loan
Documents.
(d) Subordination of Subrogation, Etc.
Notwithstanding anything to the contrary in this Agreement
or in any other Loan Document, each Borrower hereby
expressly and irrevocably subordinates to payment of the
Obligations any and all rights at law or in equity to
subrogation, reimbursement, exoneration, contribution,
indemnification or set off and any and all defenses
available to a surety, guarantor or accommodation
co-obligor until the Obligations are indefeasibly paid in
full in cash. Each Borrower acknowledges and agrees that
this waiver is intended to benefit Bank and shall not
limit or otherwise affect such Borrower's liability
hereunder or the enforceability of this Section 11.10, and
that Bank and its successors and assigns are intended
third party beneficiaries of the waivers and agreements
set forth in this Section 11.10(d).
45
(e) Election of Remedies. If Bank may, under
applicable law, proceed to realize its benefits under any
of the Loan Documents giving Bank a Lien upon any
Collateral, whether owned by any Borrower or by any other
Person, either by judicial foreclosure or by non-judicial
sale or enforcement, Bank may, at its sole option,
determine which of its remedies or rights it may pursue
without affecting any of its rights and remedies under
this Section 11.10. If, in the exercise of any of its
rights and remedies, Bank shall forfeit any of its rights
or remedies, including its right to enter a deficiency
judgment against any Borrower or any other Person, whether
because of any applicable laws pertaining to "election of
remedies" or the like, each Borrower hereby consents to
such action by Bank and waives any claim based upon such
action, even if such action by Bank shall result in a full
or partial loss of any rights of subrogation which each
Borrower might otherwise have had but for such action
by Bank. Any election of remedies which results in the
denial or impairment of the right of Bank to seek a
deficiency judgment against any Borrower shall not impair
any other Borrower's obligation to pay the full amount of
the Obligations. In the event Bank shall bid at any
foreclosure or trustee's sale or at any private sale
permitted by law or the Loan Documents, Bank may bid all
or less than the amount of the Obligations and the amount
of such bid need not be paid by Bank but shall be credited
against the Obligations.
(f) Liability Cumulative. The liability of
Borrowers under this Section 11.10 is in addition to and
shall be cumulative with all liabilities of each Borrower
to Bank under this Agreement and the other Loan Documents
to which such Borrower is a party or in respect of any
Obligations or obligation of the other Borrower, without
any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability
specifically provides to the contrary.
11.11 CHOICE OF LAW AND VENUE. EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF CALIFORNIA (WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS) AND ANY APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA. EACH BORROWER HEREBY CONSENTS TO PERSONAL
JURISDICTION, WAIVES ANY OBJECTION AS TO JURISDICTION OR
VENUE, AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK
OF JURISDICTION OR VENUE, IN THE BANKRUPTCY COURT.
SERVICE OF PROCESS ON ANY BORROWER OR BANK IN ANY ACTION
ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS
SHALL BE EFFECTIVE IF MAILED TO SUCH PARTY AT THE ADDRESS
LISTED IN SECTION 10. NOTHING HEREIN SHALL PRECLUDE OTHER
LEGAL ACTION IN ANY OTHER JURISDICTION.
46
11.12 JURY TRIAL WAIVER. BECAUSE DISPUTES ARISING
IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST
QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE
PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE
APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM
AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT
TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE, BETWEEN BANK AND ANY BORROWER ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH,
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS RELATED THERETO.
IN WITNESS WHEREOF, this Debtor in Possession Loan
Agreement has been duly executed as of the date first
written above.
"Borrowers"
FRUEHAUF TRAILER CORPORATION
Debtor and Debtor in Possession
By: /s/ Xxxxxx Xxxxxx
___________________________
Title: President
FGR, INC.,
Debtor and Debtor in Possession
By: /s/ Xxxxxx Xxxxxx
___________________________
Title: President
FRUEHAUF CORPORATION,
Debtor and Debtor in Possession
By: /s/ Xxxxxx Xxxxxx
___________________________
Title: President
47
MARYLAND SHIPBUILDING & DRYDOCK
COMPANY
Debtor and Debtor in Possession
By: /s/ Xxxxxx Xxxxxx
___________________________
Title: President
THE XXXXXX CO.,
Debtor and Debtor in Possession
By: /s/ Xxxxxx Xxxxxx
___________________________
Title: President
FRUEHAUF INTERNATIONAL LIMITED,
Debtor and Debtor in Possession
By: /s/ Xxxxxx Xxxxxx
___________________________
Title: President
DEUTSCHE-FRUEHAUF HOLDING
CORPORATION,
Debtor and Debtor in Possession
By: /s/ Xxxxxx Xxxxxx
___________________________
Title: President
JACKSONVILLE SHIPYARDS, INC.,
Debtor and Debtor in Possession
By: /s/ Xxxxxx Xxxxxx
___________________________
Title: President
48
X.X. HOLDINGS INC.,
Debtor and Debtor in Possession
By: /s/ Xxxxxx Xxxxxx
___________________________
Title: President
E.L. DEVICES, INC.,
Debtor and Debtor in Possession
By: /s/ Xxxxxx Xxxxxx
___________________________
Title: President
"Bank"
BANK OF AMERICA NT&SA
By: /s/ Xxxxx Xxxxxx
___________________________
Title: Vice President
